Talk:Income

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I removed this paragraph:

In corporations, income is not exactly synonymous with the way most people think of profit. In the minds of most people, if a person selling lemonade that costs him 3 dollars and which he sells for 5 dollars, he makes a profit of 2 dollars which he keeps himself. Lets say that he decided to make his business a corporation and sell all of it, but became CEO. The next year he sells 5 dollars worth of lemonade, his salary (what he gets paid by the company) is one dollar, and the cost per lemonade is still 3 dollars. Now the income is the 1 dollar left over. Critics of the concept of a corporation says that in practise they must still pay the guy 2 dollars, the same as he would make if he fully owned the company, otherwise he would leave. This would force the company to raise costs or introduce other means to keep his pay the same, and critics argue that this is a fatal flaw in the concept of a publicly traded corporation.

This long story is unnecessary; distilled, I think it is saying CEOs think they own the company, and should be compensated accordingly. I don't actually know any critics who make this rather naive argument at all. Tempshill 01:27, 14 Feb 2004 (UTC)

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No this is not the point Im trying to make at all. Rather, it is trying to show the disconnect between what people normally think of as "profit" and what is known as income. The main issue is with the economic efficiency of a corperation. Lets take for example that a corperation buys out a local run bakery. Whereas the profit was essentially the "pay" for the guy who owned it, now the guy who runs it is probably going to be getting that amount of pay anyway, and the shareholders are going to be getting their cut. In order for them to get anything, either the price has to go up, or they have to be doing something more efficient. This paragraph is just trying to put the system into perspective, most people colliqually have a very wrong understanding of companies, corperations, publically traded corperations, etc.

If I understand you correctly, you seem to be saying that a corporation has more overhead to pay, in the form of shareholders, CEO, etc. than a sole proprietorship and also that these corporate expenses disguise reported income relative to the income of a sole propriator. Both of your claims could be true under certain circumstances, but I don't think we can make them as general claims. What we are seeing is a division of labour. A sole proprietor if performing the dual function of managing the enterprise and contributing investment money. In a corporation the CEO does the management while shareholders invest most of the money. In your example above, the $2 earned by the sole proprietor should be seen as $1 for his management activities and $1 for his financial investment that makes the business possible. mydogategodshat 10:24, 18 Feb 2004 (UTC)

Different definitions for personal/corporate income

This page appears to offer two different definitions of "income": a definition of the income of an individual person, on one hand, and a definition of the income of a corporation, on the other. I'm wondering if people take this perception to be correct, and, if so, if there should indeed be two different definitions.

To make things concrete, let's consider an individual living in a tax-free society whose paychecks sum to $10,000 per year. Let's say that said individual spends $5,000 per year on rent, $4,000 per year on food, and saves $1,000 per year.

Now the article defines what an individual person's income is by example: "For example, most individuals' income is the money they receive from their regular paychecks." Under this definition, our individual's "income" equals the value of the paychecks, or $10,000.

On the other hand, the article defines a corporation's income as follows: "the amount of money that a company earns after paying for all its costs." Now it appears that our individual is paying housing costs of $5,000 and food costs $4,000, which total to $9,000 in total costs. If we apply the corporate definition to our individual, then, his "income" is earnings - costs = $10,000 - $9,000 = $1,000.

Is there something wrong with the latter calculation? --Ryguasu 02:49, 27 Nov 2004 (UTC)

Merge tags

I am going to remove the mergefrom tags (unearned income and passive income). While the organization between the three articles might not be great, passive and unearned income are specific topics and, more importantly, aspects only of personal income which is not really discussed in this article now anyway... I don't think the articles as they stand belong in this -- a general discussion of income as an accounting concept, clarifying the usage of the term income in accountancy from that regarding wages. More important than my feelings, though, is the fact that the tags have been up for two months and no one has argued for or against them, justified their emplacement, or actually performed the merge. BryanHolland

Here are some more pages that have been tagged "for two months and no one has argued for or against them, justified their emplacement, or actually performed the merge": Jamaican People and Washout and Washout#Jamaican culture. Perhaps you'd like to remove those tags, too? Ewlyahoocom 05:45, 16 April 2006 (UTC)