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This part of the reason I think there should be no corporate income tax.

jpgvm 11y ago
Income tax as a whole is the problem I feel. We should tax wealth instead. By not taxing income you avoid placing the burden on those that don't have and thus avoid needing to create loopholes for them.
- LordKano 11y ago
  Taxing wealth suffers from the same problem. People who have a lot of wealth will move that wealth to places with the lowest tax burden. Basically, the truly wealthy will start living in luxury apartments while shuttling their wealth to the Costa Rican villa in which they are planning to reside during retirement.
  - jpgvm 11y ago
    That relies again on making exceptions for wealth held outside of the country. Not providing these exceptions and just making it flat wealth no matter were it resides fixes this problem too.
    - LordKano 11y ago
      No, it doesn't fix the problem and it creates several others. That's the biggest problem with all of these quick-fix new tax ideas, the proponents never think them through. 1. What jurisdiction does one country have to tax assets held in another country? 2. Why wouldn't the country where the assets are located be the one to tax them? 3. How would you address the possibility of double-taxation? 4. How would you prevent the wealthy from shifting ownership of these assets to corporations or family trusts that are incorporated in that foreign country. Assets located in a foreign country, owned by an entity in the country would be taxed in that country.
joosters 11y ago
We can see the tax loopholes for that in action today, people already set up spurious companies in order to shift income tax into lower rate corporation tax. With no corporate income taxes, I expect there would be a sudden burst of very dodgy single-person 'companies'.
- drumdance 11y ago
  Of course, but it would be offset by literally billions of dollars in profits that would not have to be hidden and gamed. Much of it would be distributed as dividends which would then be taxed as ordinary income. Thousands of companies spend millions on accountants to avoid taxes. Getting rid of the corporate tax would change the economics. Instead of one company hiring accountants to save them millions in taxes, you would have millions of shareholders needing to hire accountants to save them thousands. Edit: And it's easier to police the single-person companies. They can't afford the army of lawyers and accountants the large enterprises can.

jpgvm 11y ago

Income tax as a whole is the problem I feel. We should tax wealth instead. By not taxing income you avoid placing the burden on those that don't have and thus avoid needing to create loopholes for them.

LordKano 11y ago
Taxing wealth suffers from the same problem. People who have a lot of wealth will move that wealth to places with the lowest tax burden. Basically, the truly wealthy will start living in luxury apartments while shuttling their wealth to the Costa Rican villa in which they are planning to reside during retirement.
- jpgvm 11y ago
  That relies again on making exceptions for wealth held outside of the country. Not providing these exceptions and just making it flat wealth no matter were it resides fixes this problem too.
  - LordKano 11y ago
    No, it doesn't fix the problem and it creates several others. That's the biggest problem with all of these quick-fix new tax ideas, the proponents never think them through. 1. What jurisdiction does one country have to tax assets held in another country? 2. Why wouldn't the country where the assets are located be the one to tax them? 3. How would you address the possibility of double-taxation? 4. How would you prevent the wealthy from shifting ownership of these assets to corporations or family trusts that are incorporated in that foreign country. Assets located in a foreign country, owned by an entity in the country would be taxed in that country.

joosters 11y ago

We can see the tax loopholes for that in action today, people already set up spurious companies in order to shift income tax into lower rate corporation tax. With no corporate income taxes, I expect there would be a sudden burst of very dodgy single-person 'companies'.

drumdance 11y ago
Of course, but it would be offset by literally billions of dollars in profits that would not have to be hidden and gamed. Much of it would be distributed as dividends which would then be taxed as ordinary income. Thousands of companies spend millions on accountants to avoid taxes. Getting rid of the corporate tax would change the economics. Instead of one company hiring accountants to save them millions in taxes, you would have millions of shareholders needing to hire accountants to save them thousands. Edit: And it's easier to police the single-person companies. They can't afford the army of lawyers and accountants the large enterprises can.