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> We should be taxing wealth and not income (or roughly speaking, unearned instead of earned income). You'll see most economists advocating a consumption tax,
by VodkaHaze 10y ago
> We should be taxing wealth and not income (or roughly speaking, unearned instead of earned income).
You'll see most economists advocating a consumption tax, instead.
> quantitive easing pumping up asset prices while doing nothing for the real economy
Both the "pumping up asset prices" and "while doing nothing for the real economy" is extremely disputable. It's kind of pompous of you to think you know better than the team of PhDs at the Fed, too.
> global corporate tax avoidance
The corporate tax should be 0%. No, I'm not kidding; hear me out.
Corporations aren't people; they don't ever actually pay taxes. People pay taxes. Yes, I know corporations are legal entities, but they're owned and managed by people, somewhere down the line. Those are the people the corporate tax is intended to target.
Presumably, the "goal" here is to get the corporations with scale economies, negotiation power, etc. to be taxed and use this to redistribute economic gains.
But what happens is that instead the burden of these taxes fall onto the shoulders of non-management workers in the firms and the people who buy what the firm produces. Because the incidence of a tax is indirectly distributed by a mechanism which depends itself on the negotiation power of the actors in the system.
That is the exact opposite group of the original intention (you'd want the burden to be as much as possible on managerial staff and shareholders -- eg. the people running the corporations). Also, the tax is distortionary and incentivizes all sorts of unproductive practices.
Of course, the tax would have to be replaced with something. That something should target the people owning and running the companies to make sure the tax burden is actually bore by them.
Consumption taxes can do that.
> the rise of the low-paid 'gig' economy and under-employment; fewer high paid jobs all demanding workers with ever higher levels of education (unattainable-for-many)
What you'll see with automation is a polarization of the labor market [1]. So what you said is not false, but not spot on. There are going to be more of both low and high paying jobs, and fewer middle paying jobs.
> A crisis is brewing. They leave us no option but to make changes.
Things are better than they've ever been, on average.
I don't think we should make any sweeping revolution, but smart, targeted changes. Of course, not all of those are pollitically feasible (imagine politically advocating for a 0% corporate tax replaced by a consumption tax and targeted taxes on shareholders and CEOs/board members).
[1] http://economics.mit.edu/files/9835 http://economics.mit.edu/files/9835
- jabl 10y agoIn some sense I agree with you. And it seems that, anyway, the big multinationals can find ways to squirrel away their profits without having to pay much, if any, taxes anyway. So in this way corporate taxes hit the SMB's while the big boys get a free pass.. However, one argument against lowering corporate taxes I've seen is that it would incentivize people to skirt around their personal taxes by "using" corporations. Instead of buying your own car, let a corporation (maybe your employer, maybe your own 1-person corporation that everybody would set up in a system like this?) own the car and you just use it. So somehow you'd need to prevent that kind of behavior. Perhaps shifting the tax burden from income to consumption would do that, IDK and I'm too tired to think about it now. Another tax that economists generally seem to think well of, is land value taxes (originally by Henry George, IIRC). But these seem more or less impossible politically, as the politicians are generally better of than the average Joe and tend to own more land/property..
- eru 10y agoIt's not just the politicians: home owners---which are the majority of landowners---vote more than renters.
- Negitivefrags 10y agoI don't know how it works in the USA, but under the NZ tax system you can't just have your company buy a car for you to use personally. If you use a company car for any private use then you have to pay Fringe Benefit Tax. http://www.ird.govt.nz/business-income-tax/expenses/vehicle-exp/bit-expenses-vehicleexp.html http://www.ird.govt.nz/business-income-tax/expenses/vehicle-...
- witty_username 10y agoI'm not sure about corporate law, but I think you'd have to pay your corporation to access the car; otherwise you're violating the fiduciary duty (and also piercing the corporate veil).
- stinkytaco 10y ago> You'll see most economists advocating a consumption tax, instead. The problem with that is that it affects the poor more than the wealthy. Buying the same thing will hurt one person much more than another and will do little to ease inequality, it may exacerbate it. Additionally, it puts us in the position of making judgments about what should and should not be taxed and how much. > Corporations aren't people; they don't ever actually pay taxes. People pay taxes. I would buy this if we didn't give corporations so many rights. Indeed, their purpose is tools to shield individuals. Sometimes this is good; if I create a corporation and my business fails, they cannot come after my personal assets and that encourages economic investment. But it can also be bad when the corporation becomes a place to hide my assets from taxation or even to avoid personal responsibility. They can engage in speech, litigate in court, and even get government benefits such as grants or funding. Because of this, we should tax them.