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"If you really want you can tax companies' revenue (not profits)." How would that work if a company isn't profitable? Sounds like taxing profit makes more sens
by edanm 10y ago
"If you really want you can tax companies' revenue (not profits)."
How would that work if a company isn't profitable? Sounds like taxing profit makes more sense, although I agree that it does give ambiguity. But then, it also allows the government to incentivize certain kinds of spending over others by allowing it to be counted (or not) towards the tax bill.
- bluecalm 10y agoThat's prime argument for taxing revenue actually. Imagine you have two companies doing the same thing. They have the same product, use the same amount of resources, infrastructure, pollute at the same rate etc. The only difference is that one operates under famous trademark from country X which it licenses for 100M/year and brings 0$ profits while the other one developed its own trademark which it owns therefore making 100M/year in profit. What kind of justification (moral, utilitarian, economic) do you see for charging 2nd company 100M * tax rate more than the first company?
- mjmahone17 10y agoTacking on: sales tax is essentially a tax on revenue, just such that it only applies to retailers and is transparent to the consumer at the point of sale.
- derefr 10y agoWhile I find the idea of killing unprofitable commodity suppliers by taxing them to death aesthetically pleasing, it's probably not good for GDP.