Trickle down is bullshit

fortsbest

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That has nothing to do with what I am advocating.

I am not saying give away all of your profits to employees just share more of the record profits, what are shareholders doing to benefit the business.

You are going to extremes to make a point my neighbors are doing nothing to expand my coffers, unlike the employees of these businesses.

That analogy is plain stupid.

You do actually understand what shares and shareholders are don't you?
 

fortsbest

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Pre tax profit has everything to do with that. As long as the accounting is in a pre tax mode a company can continue to expense items to the profit such as benefits bonuses etc. Once the books are closed out and the bottom line moves to the net profit nothing further can be expended against it because it is now declared the amount of taxable profits. From this point the profits can only be distributed to ownership or retained.

If the net profits are retained the company pays the taxes on that amount. If the net profit Is distributed the individual owners pay the proportionate share on the taxes.
Give it up LT, he's never going to get the common sense argument.
See if I can simplify it for him.

Everything spent to run the company including giving wages, purchasing materials, paying employees, benefit packages etc is charged against earnings. Once all the out going costs have been paid, and there is nothing left to pay out to anyone, you have net profit which can only be paid to people who are declared legally part of ownership, be they stock holders or whatever. Is that the gist or am I mistaken somewhere.
The term "profit sharing" for employees in any company I have ever heard of involves employees being given stock in the company so they actually have an ownership stake.
 

Jiggyfly

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Give it up LT, he's never going to get the common sense argument.
See if I can simplify it for him.

Everything spent to run the company including giving wages, purchasing materials, paying employees, benefit packages etc is charged against earnings. Once all the out going costs have been paid, and there is nothing left to pay out to anyone, you have net profit which can only be paid to people who are declared legally part of ownership, be they stock holders or whatever. Is that the gist or am I mistaken somewhere.
The term "profit sharing" for employees in any company I have ever heard of involves employees being given stock in the company so they actually have an ownership stake.
What does any of that have to do with giving employees higher wages or bigger bonuses when a company is getting record profits.

This net profit argument is a strawman, everything I have talked about can happen and is happening currently.

And profit sharing can happen multiple was and is can be changed yearly, why can't it be increased?

profit-sharing

Definition
An arrangement in which an employer shares some of its profits with its employees. The compensation can be stocks, bonds, or cash, and can be immediate or deferred until retirement. Profit-sharing allows for changing contributions each year. Contributions are determined by a formula to allocate the overall contribution and distribution of accumulated funds after the retirement age. Unless the plans are defined as an elective deferral plan, the contributions are not tax deductible. Contributions and earnings can grow tax-deferred until withdrawal


Read more: http://www.investorwords.com/3887/profit_sharing.html#ixzz48YqNfn8C
So tell me again how I am wrong?
 

L.T. Fan

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What does any of that have to do with giving employees higher wages or bigger bonuses when a company is getting record profits.

This net profit argument is a strawman, everything I have talked about can happen and is happening currently.

And profit sharing can happen multiple was and is can be changed yearly, why can't it be increased?



So tell me again how I am wrong?
No one ever said a company couldn't make a determination to offer compensation or other considerations to employees. The discussion has been how to do it. You are advocating it be done with the companies profits. That isn't an option. These programs have to be agreed on by the owners then expended to the company because the profits belongs to the ownership and since they will have to pay taxes on that portion they aren't going to also then give it away. It's a matter of how it's done that is at the heart of the discussion. Your approach of splitting profits to non owners isn't viable nor would an owner do it because of tax reasons if nothing else. If you change your proposal to allocating for a profit sharing program at the companies expense then it's a possibility.
 

Jiggyfly

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No one ever said a company couldn't make a determination to offer compensation or other considerations to employees. The discussion has been how to do it. You are advocating it be done with the companies profits. That isn't an option. These programs have to be agreed on by the owners then expended to the company because the profits belongs to the ownership and since they will have to pay taxes on that portion they aren't going to also then give it away. It's a matter of how it's done that is at the heart of the discussion. Your approach of splitting profits to non owners isn't viable nor would an owner do it because of tax reasons if nothing else. If you change your proposal to allocating for a profit sharing program at the companies expense then it's a possibility.
No that was not the discussion was, that's were you took it after making a false statement about why it could not happen.
 

L.T. Fan

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No that was not the discussion was, that's were you took it after making a false statement about why it could not happen.
Maybe you should go back and review before you look even more foolish. The why it could not happen way what it was about trying to tell you why your proposal couldn't come out of the profits.
 

Jiggyfly

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Maybe you should go back and review before you look even more foolish.
I have already and posted showing how you moved the goalpost but let me do it again.

You said.

How do you know that some companies aren't already doing this? The example isn't stupid. It's intent is to show that there is no entitlement due an employee other than what is agreed to by the employer. You seem to think that it's proper to share profits to non owners just because a company may make high profits. It not sensible in a capitalist economic structure to even entertain that idea as being reasonable because that is invalid to entrepreneurship. The determination of how profits are handled is strictly the owners decison. There is no "they should" in the equation.

What is ownership doing to enhance profits? How about risking capital.
So your initial argument was something-something about companies already doing what I advocated for amd then saying it was not sensible capitalism and even admitting companies have the discretion todo it.

I said.
There are companies that do this and they still have good profit margins.

I am saying this should be the norm instead of outliers.

All that other stuff you are spouting is bullshit, Capitalism and entrepreneurship is not based on having the largest profit margins.
And gave you examples of it actually happening.

And then you said

I
n addition I see I am going to have to go simplistic again to make the point.

First of all accounting principles prohibit profits being shared by anyone except ownership. If an owner pays profits to anyone other than ownership they will be paying the taxes as well and take a double hit.

Owners can declare benefits and wages with increases to employees and charge them as expenses to the business but they cannot share profits with employees unless the are part of ownership. If there were other owners or stockholders they could bring legal action for such an act as giving their profits to non ownership. Anything given to an employee must be done before profits are declared because once declared they are the sole property of ownership.

By accounting and by law profits cannot be distributed to anyone other than stockholders or owners without penalty of taxation or risk of civil litigation.

So simply stated owners are not allowed to share profits with employees. They are only allowed to pay wages and benefits before profits are declared. Profits belong to ownership.
So what is it?

At the discretion of companies or prohibited or is it just not good capitalism?

You then decided to throw in net profits to try and save face it was never the original topic.
 

L.T. Fan

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I have already and posted showing how you moved the goalpost but let me do it again.

You said.



So your initial argument was something-something about companies already doing what I advocated for amd then saying it was not sensible capitalism and even admitting companies have the discretion todo it.

I said.


And then you said

I

So what is it?

At the discretion of companies or prohibited or is it just not good capitalism?

You then decided to throw in net profits to try and save face it was never the original topic.
Jiggy; Sometimes when you are in water over your head keeping your mouth closed comes as silence is golden. You are in that spot because you are completely under water about this. It has always been about when and how a company can do this not if they can. Profits cannot be used to do what you are advocating. That's the long and short of it. It isn't hard. You say you know something about accounting but I had to identify for you the various stages of profits. You are completely lost and under water. It would be a good time to just be still and evoke the silence is golden rule.
 

Jiggyfly

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Jiggy; Sometimes when you are in water over your head keeping your mouth closed comes as silence is golden. You are in that spot because you are completely under water about this. It has always been about when and how a company can do this not if they can. Profits cannot be used to do what you are advocating. That's the long and short of it. It isn't hard. You say you know something about accounting but I had to identify for you the various stages of profits. You are completely lost and under water. It would be a good time to just be still and evoke the silence is golden rule.
I see you are in complete denial.

Even posting the actual words spoken will not bring you back to reality.

I even posted the part where said companies could do it and I am the one under water.:lol
 

L.T. Fan

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I see you are in complete denial.

Even posting the actual words spoken will not bring you back to reality.

I even posted the part where said companies could do it and I am the one under water.:lol
Now would be a good time to evok the silence is golden rule. Shall we run a poll of how many seemed to have difficulty with this conversation besides you?
 

Clay_Allison

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Now would be a good time to evok the silence is golden rule. Shall we run a poll of how many seemed to have difficulty with this conversation besides you?
Dude, you've changed the subject like three times. You went from whether it's ethical to pay more when your company is posting record profits to the difference between gross and net profits when nobody was interested in that or even remotely talking about whether the money would come from pre or post tax profit. All of the discussion about accounting has just been an attempt to muddy the waters.
 

L.T. Fan

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Dude, you've changed the subject like three times. You went from whether it's ethical to pay more when your company is posting record profits to the difference between gross and net profits when nobody was interested in that or even remotely talking about whether the money would come from pre or post tax profit. All of the discussion about accounting has just been an attempt to muddy the waters.
If you care to go back and review you will see that the only thing I was talking about was why a company couldn't pay out of profits to employees and the reasons why. Jiggy kept insisting a company could pay from the profits and I kept having to reel him in with reasons they couldn't. That is still the jist of this conversation. The companies cannot split or pay employees from the profits because the profits belong to the owners. The ethical stuff you are talking about didn't happen by me. All the other Ares were trying to say why profits couldn't be used for what he was advocating.
 
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Clay_Allison

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If you care to go back and review you will see that the only thing I was talking about was why a company couldn't pay out of profits to employees and the reasons why. Jiggy kept insisting a company could pay from the profits and I kept having to reel him in with reasons they couldn't. That is still the jist of this conversation. The companies cannot split or pay employees from the profits because the profits belong to the owners. The ethical stuff you are talking about didn't happen by me.
There's no reason they couldn't pay employees out of gross profits, by setting up a profit sharing or bonus system. Your habit of using profits as shorthand for net profits is dishonest and an unnecessary distraction from the point.
 

L.T. Fan

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There's no reason they couldn't pay employees out of gross profits, by setting up a profit sharing or bonus system. Your habit of using profits as shorthand for net profits is dishonest and an unnecessary distraction from the point.
Of course they can from gross ( pre tax) profits and I indicated as much. It was at this point where I differentiated between pre tax and net profits.
 

L.T. Fan

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There's no reason they couldn't pay employees out of gross profits, by setting up a profit sharing or bonus system. Your habit of using profits as shorthand for net profits is dishonest and an unnecessary distraction from the point.
This was the point I was making from the start. All the benefits have to be expensed before the net profit is declared because once that happens it belongs to the owners and company expenses can no longer be charged. This the basis of my original statement. You can't pay for employee benefits from company profits. Profits belongs to the owners.
 
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