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The problem with that is that changes in market cap don't directly translate to taxable income -- and when they do, they do already get taxed through capital ga
by xixi77 11y ago
The problem with that is that changes in market cap don't directly translate to taxable income -- and when they do, they do already get taxed through capital gains.
- fauigerzigerk 11y agoCapital gains tax is paid by the owners of the company when they dispose of shares, not by the corporation itself. But I agree that using market cap is not a good basis for taxation. Most companies don't even have a market cap as they are not publicly traded. And among those that do it would hurt the most innovative companies disproportionatly. Companies would start paying dividends way too early to keep the share price low instead of investing and growing the business. Tesla has a market cap of $27bn. They would pay more than half of what GM pays in taxes if market cap was used as a basis. I'd rather they use that money to keep innovating and tax them later on when they make a real profit and use a greater share of public infrastructures.
- deleted 11y ago[deleted]
- datashovel 11y agoI'm definitely not suggesting it's necessarily the correct way to approach taxation. I think it's probably a "more fair" alternative to the current state of things. And perhaps worthy of being part of the discussion.