I feel like if a small business made you tax exempt, it may be too ripe for abuse from regular people. I even think I would be too tempted to start deducting everything I do as a "business expense". I definitely pay a ton in taxes! We all do!
You are viewing a single comment's thread from:
Very good point and this would need to be taken into account.
You make a good point. Additionally, you should see a huge incentive for companies to ditch employment arrangements for contractor arrangements (e.g., independent contractors in the US) because they could sell it to employees as a tax savings. That would result in even fewer taxes, so the revenue hit to the State would be even larger.
I don't know about every country, but the US treats LLCs (Limited Liability Companies). There is no corporate tax; profits are passed through to each member (the LLC equivalent of a shareholder) [source: http://www.nolo.com/legal-encyclopedia/how-llcs-are-taxed-29675.html]. The passed-through profits are treated as self-employed income and taxed as such.