[roflmao123]

> Post Section 174, the profit is now $160,000 each year. Now they pay taxes on $160,000, even though they literally have no money left over because revenues equaled expenditures.

They have the $200k they pulled from their startup, far more than what most people earn. If you make enough to pay yourself $100k then you make enough to pay taxes.

[runeks]

The amounts are irrelevant. It would be the exact same situation if all amounts were divided by e.g. 10: paying taxes on non-existent profits.

[ccleve]

They do pay taxes. They each pay personal income tax on their $100k.

[roflmao123]

Still plenty left to pay their business taxes.