Quote:
Originally Posted by Rathji
So I buy a server for $4000 to install for a client.
I charge them $20,000 in total, and I should be paying taxes on the whole $20,000 and not just on the $16,000 I actually earned after paying for my expenses (the server)?
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Just the opposite. You should be able to deduct the cost of the server (it's on income account) and the client should be able to deduct the amount of the bill allocated to the server (say $7500 after markup) over time as capital cost allowance. Both parties should get an input tax credit on any GST charged.
I am agreeing with you. Characterizing "deductions" as a bad word is insane. Hell, the use of "tax avoidance" as a buzzword to lob at Romney in the Presidential election was a shameful example of preying on ignorance. That stat is just nonsense.