It's easy for someone to fall into the trap of believing this horseradish.
One thing that we have all heard people say again and again about a business is "Well, they will just write it off anyway." Can someone please tell me what in the world that means? It is often used in relationship to charitable giving or maybe obsolete inventory or maybe being taken advantage of by a customer, or a customer going bankrupt. But what does it mean? Can anyone tell me?
This reference to "write offs" is always made as though "writing something off" means the financial loss goes away ... that the government steps in and takes care of it or something. At least that is what I think people are thinking.
Well, it isn't true! If a company suffers a loss of money for any reason, intentional or unintentional, it is not a "write off"! There is no such thing. It is a loss of revenue and that company has to go back and earn that money back in terms of profit if they're going to get it back. there is not some magical tax thing that happens that gives them their money back.
Now, it does lower their profitability and lower profitability means they pay less tax but it is still, pure and simple, a loss of revenue. Nothing magical happens to restore it. they do not get a tax credit or something to cover it.
And did you know that when you see the profitability of a company, that says nothing about how much they invested in capital expenditures that year? Things like that are capitalized and expensed out over time, not in one fell swoop.
But, let's go back to the evil corporations and businesspeople who are supposedly hording all this money. Do you really believe that? Again, for the most part, it is horseradish. Thank goodness there are people who are gifted in the area of finance and can make a company turn a profit because it is only through profits that a business can continue to prosper and grow and employ people. There is nothing evil about profits as long as they are not gained through dishonesty. Profits are what keep businesses strong and growing. If businesses no longer make a profit, we can all say good-bye to our jobs.
But, when a business does earn a profit, what happens to it? Like I said, some goes to grow and sustain the business but other parts of the profit end up being contributed to those who need them. God gifts some people with a spirit of giving. Well, we'd better hope that those who are so gifted actually do a little "getting," or else there is nothing to give.
Now, granted, you look at the list of America's wealthiest and there are a lot of businesspeople on their. Quite a number of them are "old money" and some are more recent big money from the technology sector. But, you don't have to go too far down the list and you also find lots of people from sports and entertainment, the very group that the left in our country has courted heavily in recent years.
All I am saying, I guess, is this ... when thinking about who you will vote for in November, you'd better take a hard look at their stance on businesses. Lots of the figures and things you hear are either misleading or plain old wrong. And if we don't have businesses making money out there, things go south real real quick.