this post was submitted on 06 Jun 2026
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I totally get what you're saying... but to be fair if you did allow people to deduct all the money they spent in a year from their income, it would specifically encourage a lot of people to spend every single dollar they earned just to avoid the taxes.
They'd be like "hang on, if I spend $3000 a month on rent I get taxed on the $1000 I have left over? What if I move to a place that costs $4000 a month? No taxes? That's what I've got to do then!"
Is that sensible? No. The tax they'd pay on the $1000 is way less than the extra $1000 they're planning on spending to avoid it, but people seem to have a real aversion to a little tax, and many would feel they "got something" for the extra money they spent on groceries or restaurants or rent, compared to the taxes which are simply taken from them.
I'm not saying it couldn't work, I'm not saying there aren't better ways to do it, and I'm definitely not saying there aren't weird cliffs in programs like this that lock people into poverty. But I'd be worried that people who are already wrong about graduated tax brackets, for example, would make a lot dumber choices if they felt they could spend $40 on fancier bread to avoid "$40 of taxes"
This just sounds to me like a strong argument for not letting corporations deduct expenditures from taxable revenue.
Wouldn't spending every last dollar result is more sales tax?
Isn’t this what business do to avoid paying taxes also?
Yes.
Company A gets 1k. 1k is revenue.
Company A spends 1K at Company B. 1k is expense.
Company A has made 0 profit. 0 taxes.
Now if Company A owns Company B did it really lose 1k?
This is how money laundering works. More money more problems. You just have to leave a convincing paper trail an accountant will follow. Eventually they won't be able to follow that the flour supplier Company Z that Company B buys from for it's cookies is funneling Company B's money back into Company A. The accountant doesn't know that B isn't buying flour or making cookies. Sometimes they even make cookies...
nO YoU dONt unDErsTAnD iTS a ComPAnY iT sHOuldNT pAy TaXEs!!!
They make older people spend all their money to get long term care with Medicare.
Nursing home care is incredibly expensive but Medicare will only help you pay for it if you get rid of all your income and assets until you get to their deadline before they’ll help you pay for it.
There is a whole industry built in helping older people spend their money so they can get health care.
Or, hear me out, corporations pay taxes on their total income as well.
Business spent 3.9B dollars on vaporware. That's the problem. Or stock buybacks. Or settlements or CEO bonuses. Not on better wages or anything opex related. Basic capex to keep things up to code/inspection/regulation/etc.
It's where the money is going that makes it a scam.
No business would survive without doubling or tripling their profit margins, and we'd all suffer insanely high prices
What do you think all that tax revenue is for?
A corporate environment without wiggle room for excess would also shake out a lot of grifters.