4 ms·

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.
- prostoalex 11y ago
  > I am leaning increasingly towards the fairest tax being a function based upon one's increase in wealth Tax system are lenient on the wealth (vs income) as one is expected to accumulate wealth and exit the workforce. Taxing wealth seems like a working idea when you're 20 and have job offers chasing you, less so when you're 70 and plan to spend the next 20-30 years in retirement.
  - logfromblammo 11y ago
    Taxing the increase in one's wealth is neither a property tax nor an income tax. The taxable amount would be income minus consumption. The deduction for living people was intended to account for a reasonable rate of retirement/emergency saving. Corporations don't need to retire, so they don't get it.
    - prostoalex 11y ago
      > The taxable amount would be income minus consumption. Doesn't this result in all sorts of bubbles, as people scramble to manufacture consumption, from real estate to precious metals? Also, taxing the increase seems to benefit wealthy offsprings and trust fund babies in general. For most Americans a change in wealth is also tied up to non-liquid assets, like their house. Let's say you're a retiree living in an area that's been lucky to undergo a real estate boom this specific year. Your house wealth went up 7-10%, yet there's no extra cash flowing in to account for this tax bill, now what? Moreover, with housing being the focal point of wealth accumulation, the government would receive its tax revenue when the things are up in economic cycle, but come the first recession/correction, and not only there are problems with the economy, the source of government revenues has dried up as well.
      - logfromblammo 11y ago
        If you buy gold, you have the gold as an asset. If you buy real estate, you have the property as an asset. That's not consumption. If you buy a steak and eat it, that's consumption. You no longer have the steak, and the butcher doesn't owe you anything else. To avoid stupid government accounting rules, the value of assets would have to be fixed at what you paid for them until they are sold in an arm's-length sale on the open market. So if you're a retiree and you never sell your home, you would not be taxed on its increase in value. There would probably be something made available like a less-parasitic version of a reverse mortgage, to absorb increases in value gradually, so that it could work with the annual real person deduction.

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.
prostoalex 11y ago
> I am leaning increasingly towards the fairest tax being a function based upon one's increase in wealth Tax system are lenient on the wealth (vs income) as one is expected to accumulate wealth and exit the workforce. Taxing wealth seems like a working idea when you're 20 and have job offers chasing you, less so when you're 70 and plan to spend the next 20-30 years in retirement.
- logfromblammo 11y ago
  Taxing the increase in one's wealth is neither a property tax nor an income tax. The taxable amount would be income minus consumption. The deduction for living people was intended to account for a reasonable rate of retirement/emergency saving. Corporations don't need to retire, so they don't get it.
  - prostoalex 11y ago
    > The taxable amount would be income minus consumption. Doesn't this result in all sorts of bubbles, as people scramble to manufacture consumption, from real estate to precious metals? Also, taxing the increase seems to benefit wealthy offsprings and trust fund babies in general. For most Americans a change in wealth is also tied up to non-liquid assets, like their house. Let's say you're a retiree living in an area that's been lucky to undergo a real estate boom this specific year. Your house wealth went up 7-10%, yet there's no extra cash flowing in to account for this tax bill, now what? Moreover, with housing being the focal point of wealth accumulation, the government would receive its tax revenue when the things are up in economic cycle, but come the first recession/correction, and not only there are problems with the economy, the source of government revenues has dried up as well.
    - logfromblammo 11y ago
      If you buy gold, you have the gold as an asset. If you buy real estate, you have the property as an asset. That's not consumption. If you buy a steak and eat it, that's consumption. You no longer have the steak, and the butcher doesn't owe you anything else. To avoid stupid government accounting rules, the value of assets would have to be fixed at what you paid for them until they are sold in an arm's-length sale on the open market. So if you're a retiree and you never sell your home, you would not be taxed on its increase in value. There would probably be something made available like a less-parasitic version of a reverse mortgage, to absorb increases in value gradually, so that it could work with the annual real person deduction.