Comment by darth_avocado
3 years ago
Fair enough. If you made a million dollars and bought land with it, sure you can tax it. But something as basic as employee salaries that are a cost to any business should definitely be deductible from the profits as cost of running the business. Especially when the company is supposed to pay payroll taxes and the employees themselves pay income tax on their salaries.
I'm with you in that it probably needs more nuance on what exaclty the developpers are doing (TBF I haven't read the details, so maybe there is already a lot of nuance in all of it.)
I kinda see many cases where a salary isn't as clear cut as a simple cost...for instance comparing two cases:
- we buy for a million dollar an exclusive right on an innovative system from a freelance guy that developed it on his own
- we contract for 10k a month the same guy to design and develop the same innovative system, he takes a year or two to develop it.
In one case it's a purchase of an asset, in the other case it's a salary. The resulting asset is the same though.
If you buy something for a million dollar you are buying an asset.
But if you make an employment contract with somebody it is totally unknown what is the value you are or will be getting out of the employee. You are not buying an "asset" because you can not own an employee. They can quit any time.
I'm with you on the unknown part. We could this it as a risk, with the upside that you might have paid less in total by taking the risk and hiring the guy, than buying the proven end result at price reflecting the total value of the asset.
> you can not own an employee.
You own everything the employee produced during the contract, whenever they quit.
3 replies →
First one is a product, second is a service.
Second one you paid a service to get a product.