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> The money has always been into technology being a big lever for > profit, but it has never been accountable for the social cost Totally. A good start might b

> The money has always been into technology being a big lever for > profit, but it has never been accountable for the social cost Totally. A good start might be large companies paying equitable taxes.

paulhauggis 11y ago
Companies already pay a huge amount of taxes. When you see that ge didnt pay taxes, its because of loss rollover.
- logfromblammo 11y ago
  In other words, it is because the tax code allows those with a greater investment in studying the tax code and in playing stupid accounting shell games to pay less in taxes. It would likely be preferable to instead tie the effective tax rate more directly to those activities that actually address useful economic activity. I am leaning increasingly towards the fairest tax being a function based upon one's increase in wealth (subtracting some fixed amount for actual humans--probably median household income) that asymptotically approaches 50% as your positive change in wealth approaches infinity. If you earned $10000 and spent $10000, any tax would just have to be offset by a subsidy somewhere else. If you earned $100000 and spent $100000, you're at least stimulating your local economy, and probably making wiser choices while spending your own money than anyone else would in spending other people's money. If you earn $100000 and spend $20000, that leaves $80000 that you didn't actually need to use this year. Everyone else would probably prefer that you had spent it. So maybe you're allowed a tax-free increase of $50000, and you lose $10000 of the remaining $30000 to taxes. If you earned $10M and only spent $100k, you might pay $4.925M for the tax. The same equation would still work for corporations, because paying dividends would count as spending for them. You end up only taxing the winners in the economy--those who are getting richer--and never more than they could reasonably afford to lose. How could such a system be subverted? You would have to set up a system where you could control property for your own benefit without legally owning it. You'd probably see a resurgence in executive perks, such as company-provided housing and cars. It would definitely blow more air into the education bubble.
  - paulhauggis 11y ago
    "In other words, it is because the tax code allows those with a greater investment in studying the tax code and in playing stupid accounting shell games to pay less in taxes." No. It means, you don't pay taxes on a loss. "You end up only taxing the winners in the economy--those who are getting richer--and never more than they could reasonably afford to lose." You mean the people making a profit? Yes, this is how it should work...and who really cares if they can 'reasonably afford' to lose it? Taxes aren't punishment..but the tone of your post makes me feel like that's what you think it is. The US already has one of the highest corporate tax rates in the world. If many corporations are trying to subvert it, it's a message to lower that rate. The top 10% pay ~90% of the all the federal taxes. I'm not sure why there continues to be complaints about not paying a person's "fair share". It's already more than fair.
    - logfromblammo 11y ago
      Your GE defense doesn't mean much without referencing the tall pile of pages from the tax code that redefine the dictionary meaning of "loss" to a specific set of circumstances that a business can satisfy via accounting tricks. GE pays less in taxes because they employ a legion of experts that know the code and can follow the proper rituals. They are not taxed proportionally to their ability to pay, or the degree to which they enjoy the benefits of a well-funded government, but proportionally to their ignorance of the tax code. They know it well, so they pay relatively little in taxes. They are acting appropriately in the interests of their business in light of the circumstances they face. It isn't GE's fault that they can legally pay so little. Nor should we shame them for doing so. They are merely an illustrative example that the US corporate tax code is broken beyond any reasonable expectation of repair. The "fair share" of taxes is zero. All taxation is inherently unfair, as a violation of one's right to property. The unfairness is [sometimes] justified by spending the tax revenue upon preservation of the commons and projects that serve the common good. But collection is more often motivated by whether it can be done rather than whether it should be done. There is no absolutely fair way to levy a tax, but some taxes are still more unfair than others. Taxation is not necessarily similar to punishment. It is merely an economic discouragement, with an unavoidable deadweight loss from economic distortion. The net effect is largely the same. People avoid doing the thing that triggers the tax, because the tax makes it more costly or less beneficial. Income taxes and sales taxes punish useful commerce. Property taxes punish land improvements. Liquor taxes punish recreational drug use. Poll taxes punish being black in the South. Congestion taxes punish driving downtown at the wrong time. Recreation taxes punish having fun in Chicago. Hotel room taxes punish tourism. So what behaviors would everyone want to discourage by levying a tax? Which of those could actually yield a significant amount of revenue? Those would be the "fairer" taxes. I'm not sure why you're talking about the top 10% at all. The breakdown of who pays the most is not relevant to what I was saying.
Thriptic 11y ago
The United States already has one of the highest corporate tax rates in the entire world. We also spend more on education per capita than almost any other country. The problem isn't necessarily lack of money. The problem is that our conceptual model of the economy isn't correct anymore. The idea that low skill work will yield a middle class lifestyle is fundamentally not valid anymore; globalization put an end to that model. We have yet to reconcile this fact at a national level or figure out how to deal with it.
prostoalex 11y ago
> Totally. A good start might be large companies paying equitable taxes. That might not be the panacea it's cracked up to be. Most of the US corporate tax argument revolves around the foreign profits US companies stash abroad hoping for a corporate tax holiday, which the government is known to throw in every now and then. In a fair tax system, profits earned in Italy and Hong Kong would be taxed in Italy and Hong Kong, so the net positive for the US would not add to much.

paulhauggis 11y ago

Companies already pay a huge amount of taxes. When you see that ge didnt pay taxes, its because of loss rollover.

logfromblammo 11y ago
In other words, it is because the tax code allows those with a greater investment in studying the tax code and in playing stupid accounting shell games to pay less in taxes. It would likely be preferable to instead tie the effective tax rate more directly to those activities that actually address useful economic activity. I am leaning increasingly towards the fairest tax being a function based upon one's increase in wealth (subtracting some fixed amount for actual humans--probably median household income) that asymptotically approaches 50% as your positive change in wealth approaches infinity. If you earned $10000 and spent $10000, any tax would just have to be offset by a subsidy somewhere else. If you earned $100000 and spent $100000, you're at least stimulating your local economy, and probably making wiser choices while spending your own money than anyone else would in spending other people's money. If you earn $100000 and spend $20000, that leaves $80000 that you didn't actually need to use this year. Everyone else would probably prefer that you had spent it. So maybe you're allowed a tax-free increase of $50000, and you lose $10000 of the remaining $30000 to taxes. If you earned $10M and only spent $100k, you might pay $4.925M for the tax. The same equation would still work for corporations, because paying dividends would count as spending for them. You end up only taxing the winners in the economy--those who are getting richer--and never more than they could reasonably afford to lose. How could such a system be subverted? You would have to set up a system where you could control property for your own benefit without legally owning it. You'd probably see a resurgence in executive perks, such as company-provided housing and cars. It would definitely blow more air into the education bubble.
- paulhauggis 11y ago
  "In other words, it is because the tax code allows those with a greater investment in studying the tax code and in playing stupid accounting shell games to pay less in taxes." No. It means, you don't pay taxes on a loss. "You end up only taxing the winners in the economy--those who are getting richer--and never more than they could reasonably afford to lose." You mean the people making a profit? Yes, this is how it should work...and who really cares if they can 'reasonably afford' to lose it? Taxes aren't punishment..but the tone of your post makes me feel like that's what you think it is. The US already has one of the highest corporate tax rates in the world. If many corporations are trying to subvert it, it's a message to lower that rate. The top 10% pay ~90% of the all the federal taxes. I'm not sure why there continues to be complaints about not paying a person's "fair share". It's already more than fair.
  - logfromblammo 11y ago
    Your GE defense doesn't mean much without referencing the tall pile of pages from the tax code that redefine the dictionary meaning of "loss" to a specific set of circumstances that a business can satisfy via accounting tricks. GE pays less in taxes because they employ a legion of experts that know the code and can follow the proper rituals. They are not taxed proportionally to their ability to pay, or the degree to which they enjoy the benefits of a well-funded government, but proportionally to their ignorance of the tax code. They know it well, so they pay relatively little in taxes. They are acting appropriately in the interests of their business in light of the circumstances they face. It isn't GE's fault that they can legally pay so little. Nor should we shame them for doing so. They are merely an illustrative example that the US corporate tax code is broken beyond any reasonable expectation of repair. The "fair share" of taxes is zero. All taxation is inherently unfair, as a violation of one's right to property. The unfairness is [sometimes] justified by spending the tax revenue upon preservation of the commons and projects that serve the common good. But collection is more often motivated by whether it can be done rather than whether it should be done. There is no absolutely fair way to levy a tax, but some taxes are still more unfair than others. Taxation is not necessarily similar to punishment. It is merely an economic discouragement, with an unavoidable deadweight loss from economic distortion. The net effect is largely the same. People avoid doing the thing that triggers the tax, because the tax makes it more costly or less beneficial. Income taxes and sales taxes punish useful commerce. Property taxes punish land improvements. Liquor taxes punish recreational drug use. Poll taxes punish being black in the South. Congestion taxes punish driving downtown at the wrong time. Recreation taxes punish having fun in Chicago. Hotel room taxes punish tourism. So what behaviors would everyone want to discourage by levying a tax? Which of those could actually yield a significant amount of revenue? Those would be the "fairer" taxes. I'm not sure why you're talking about the top 10% at all. The breakdown of who pays the most is not relevant to what I was saying.

Thriptic 11y ago

The United States already has one of the highest corporate tax rates in the entire world. We also spend more on education per capita than almost any other country. The problem isn't necessarily lack of money. The problem is that our conceptual model of the economy isn't correct anymore. The idea that low skill work will yield a middle class lifestyle is fundamentally not valid anymore; globalization put an end to that model. We have yet to reconcile this fact at a national level or figure out how to deal with it.

prostoalex 11y ago

> Totally. A good start might be large companies paying equitable taxes. That might not be the panacea it's cracked up to be. Most of the US corporate tax argument revolves around the foreign profits US companies stash abroad hoping for a corporate tax holiday, which the government is known to throw in every now and then. In a fair tax system, profits earned in Italy and Hong Kong would be taxed in Italy and Hong Kong, so the net positive for the US would not add to much.