4 ms·

Or just introduce 1% revenue tax, get rid of all other taxes and tax credits?

by funkyy 11y ago

funkyy 11y ago
I would like the person that downvoted this to speak up, after all HN is conversation driven community. Whenever I see someone mentioning revenue tax for corporations I see those posts being downvoted a lot and I never see anyone ever explaining why.
- IanCal 11y ago
  I didn't downvote, but you seem to have put basically no thought into this or have at least not shown any in your comment. Why 1%? How would that work? What are the downsides, etc? Why is VAT in the EU not the right way?
  - funkyy 11y ago
    1% would mean there would be increase in revenue to the government. For example Adam Smith Foundation in Poland have calculated that introducing revenue tax of 1% would increase revenue to the country budget, remove black market and allow country to tax international corporations easily. Also savings from tax collection process would be huge and there would be no place to manipulate with tax credits. At the moment in Poland 0.44% of revenue gets to the budget through corporate taxes which is really low. Then additional benefit is that business owners will not need to worry about bad decisions by tax office. The institute found that around 60% of companies in Poland do not pay any kind of corporate tax at all meaning all of them - at least on paper - are loosing money. Google has not paid any tax in Poland in last years despite owning 80% of ad market. The research on the new tax was done by the brightest economist and they are hoping it will be introduced at least for foreign corporations. The VAT is OK as long as it is fixed and low (10-12% without discounts etc.), the issue is with corporate taxes. Source: http://wyborcza.biz/biznes/1,100896,15540136,Podatek_od_przychodu__czyli_bat_na_korporacje.html http://wyborcza.biz/biznes/1,100896,15540136,Podatek_od_przy...
    - IanCal 11y ago
      > 1% would mean there would be increase in revenue to the government. For all governments? UK corporation tax receipts were £40B in 2013-2014, to be matched there would have to be over 4 trillion pounds in revenue to tax. GDP seems to be less than half of that. While you're providing a source, does this extend to other countries? What other impacts are there? Does everyone need to switch over to this approach at the same time? Are small businesses selling in a chain hurt because there are multiple sales, therefore promoting huge single companies where there's only one sale? > The VAT is OK as long as it is fixed and low (10-12% without discounts etc.) Well, that's not what happens now (UK is between 0 and 20%), so again you're glibly making huge changes to large tax setups without looking at the consequences. Increases to basic staples would hit the poorest harder, for example.
      - funkyy 11y ago
        > GDP seems to be less than half of that GDP is total INCOME not revenue. GDP is total value of FINAL product, so all steps in the shipping chain are not calculated, just the last one. >Are small businesses selling in a chain hurt because there are multiple sales, therefore promoting huge single companies where there's only one sale? SMBs are actually the ones that will profit from this the most. Since the tax is on all revenues and there is no tax credit, the tax amount on final product between large shopping chain and small shop is rather small. Large chains undercut small shops now by using advanced accounting, something that small shops cannot afford to do. This way of taxation was used before in communism to some extent to help to ease tax burden. It was quite successful - and now would be even better with country-wide usage of banking to handle revenues rather than cash. The amount of sales does not matter - only thing that matters is the amount of middle man in the shipping chain. Small shops would be encouraged to get products from local producers and directly from warehouses that avoid middle man in order to save on taxes. This would encourage direct transactions between farmers and vegetable shop owners for example boosting local markets and distributing employment more evenly. Large companies would need to fight the market with higher quality products, better marketing and unique products - driving technology up. >Increases to basic staples would hit the poorest harder, for example. With overall products being cheaper and local markets being boosted, the distribution of wealth would be easier. Also government instead of reducing VAT on certain products which creates a lot of creative accounting by corporations, could for example provide "food stamps" for certain products to the poorest. Additional £25 a week in food stamps for groceries from government to poorest families would have way better affect than decreasing tax equivalent to £25.

Or just introduce 1% revenue tax, get rid of all other taxes and tax credits?

by funkyy 11y ago

Or just introduce 1% revenue tax, get rid of all other taxes and tax credits?

I would like the person that downvoted this to speak up, after all HN is conversation driven community. Whenever I see someone mentioning revenue tax for corporations I see those posts being downvoted a lot and I never see anyone ever explaining why.

IanCal 11y ago
I didn't downvote, but you seem to have put basically no thought into this or have at least not shown any in your comment. Why 1%? How would that work? What are the downsides, etc? Why is VAT in the EU not the right way?
- funkyy 11y ago
  1% would mean there would be increase in revenue to the government. For example Adam Smith Foundation in Poland have calculated that introducing revenue tax of 1% would increase revenue to the country budget, remove black market and allow country to tax international corporations easily. Also savings from tax collection process would be huge and there would be no place to manipulate with tax credits. At the moment in Poland 0.44% of revenue gets to the budget through corporate taxes which is really low. Then additional benefit is that business owners will not need to worry about bad decisions by tax office. The institute found that around 60% of companies in Poland do not pay any kind of corporate tax at all meaning all of them - at least on paper - are loosing money. Google has not paid any tax in Poland in last years despite owning 80% of ad market. The research on the new tax was done by the brightest economist and they are hoping it will be introduced at least for foreign corporations. The VAT is OK as long as it is fixed and low (10-12% without discounts etc.), the issue is with corporate taxes. Source: http://wyborcza.biz/biznes/1,100896,15540136,Podatek_od_przychodu__czyli_bat_na_korporacje.html http://wyborcza.biz/biznes/1,100896,15540136,Podatek_od_przy...
  - IanCal 11y ago
    > 1% would mean there would be increase in revenue to the government. For all governments? UK corporation tax receipts were £40B in 2013-2014, to be matched there would have to be over 4 trillion pounds in revenue to tax. GDP seems to be less than half of that. While you're providing a source, does this extend to other countries? What other impacts are there? Does everyone need to switch over to this approach at the same time? Are small businesses selling in a chain hurt because there are multiple sales, therefore promoting huge single companies where there's only one sale? > The VAT is OK as long as it is fixed and low (10-12% without discounts etc.) Well, that's not what happens now (UK is between 0 and 20%), so again you're glibly making huge changes to large tax setups without looking at the consequences. Increases to basic staples would hit the poorest harder, for example.
    - funkyy 11y ago
      > GDP seems to be less than half of that GDP is total INCOME not revenue. GDP is total value of FINAL product, so all steps in the shipping chain are not calculated, just the last one. >Are small businesses selling in a chain hurt because there are multiple sales, therefore promoting huge single companies where there's only one sale? SMBs are actually the ones that will profit from this the most. Since the tax is on all revenues and there is no tax credit, the tax amount on final product between large shopping chain and small shop is rather small. Large chains undercut small shops now by using advanced accounting, something that small shops cannot afford to do. This way of taxation was used before in communism to some extent to help to ease tax burden. It was quite successful - and now would be even better with country-wide usage of banking to handle revenues rather than cash. The amount of sales does not matter - only thing that matters is the amount of middle man in the shipping chain. Small shops would be encouraged to get products from local producers and directly from warehouses that avoid middle man in order to save on taxes. This would encourage direct transactions between farmers and vegetable shop owners for example boosting local markets and distributing employment more evenly. Large companies would need to fight the market with higher quality products, better marketing and unique products - driving technology up. >Increases to basic staples would hit the poorest harder, for example. With overall products being cheaper and local markets being boosted, the distribution of wealth would be easier. Also government instead of reducing VAT on certain products which creates a lot of creative accounting by corporations, could for example provide "food stamps" for certain products to the poorest. Additional £25 a week in food stamps for groceries from government to poorest families would have way better affect than decreasing tax equivalent to £25.