11 ms·
This rhetoric is ridiculous. If I were to stash trillions of income overseas to evade taxes, I'd go to jail, not have the law changed. > It may look unfair to
by nightcracker 10y ago
This rhetoric is ridiculous. If I were to stash trillions of income overseas to evade taxes, I'd go to jail, not have the law changed.
> It may look unfair to tax consumers to compensate for a major business tax holiday -- but then such a move would give businesses a strong incentive to keep prices lower to avoid a drop in demand.
A drop in demand? People are going to eat less food because taxes are now lower? Need less healthcare? Will move to a cheaper home? Just not use internet? Drive the car less to work and sit more at home?
Supply/demand is crooked. It doesn't work for the majority of the goods the majority of the people purchase. Demand is fairly fixed and based on population, and supply is provided by the only bidder in your area.
> Besides, liberated from corporate taxes, they'd have more freedom to increase wages.
Does anyone still believe this 'trickle-down' hogwash?
I really wonder when America will have its wake up call during its third part-time job to pay the rent that maybe change is needed, and that your government has no intention of making it.
- beat 10y agoIf you had millions (much less trillions) in income to stash overseas, you wouldn't go to jail for it, even if it was flagrantly illegal. People don't go to jail for white-collar crime, generally. If you want to go to jail, try shoplifting.
- alphabettsy 10y agohttps://www.theguardian.com/film/2013/apr/08/wesley-snipes-released-prison https://www.theguardian.com/film/2013/apr/08/wesley-snipes-r...
- cheez 10y agoBlack guy. Different thing. I've noticed that many of the scapegoats for the flash crash, and other similar things are not white.
- MustardTiger 10y agohttps://en.wikipedia.org/wiki/Confirmation_bias https://en.wikipedia.org/wiki/Confirmation_bias
- cheez 10y agoI think you're actually right. I looked up some stats.
- esrauch 10y agoA rich celebrity who paid zero taxes only getting 2 years seems to be confirming that white collar crime is largely unpunished, not a counterexample.
- nitwit005 10y agoIf he'd paid a fine after they caught him, he wouldn't have gone to jail. He very openly refused to pay. He effectively went to jail for refusing to pay a fine.
- blahi 10y agoWhat is your proposed change?
- nightcracker 10y agoAmerica (as a whole) needs to shed its sense of superiority and its traditionalism. For the record: I'm Dutch. I have free healthcare, good infrastructure, fast and cheap internet, sensible employment law, no police abuse, etc. All for ~40% tax (http://www.expatax.nl/tax-rates-2016.php http://www.expatax.nl/tax-rates-2016.php). Why? Because our government actually works. Why? I don't really know. It's a compound of hundreds of little effects. The solution isn't 'less government', it's 'a working government'. Every time I learn something new about how the U.S. government is structured I shake my head a little. First-past-the-post voting of a single president that holds way too much power. A congress with life time based assignment that interpret a 200 year old document to their wishes to structure law. Case based law with uninformed juries, where the selection of the jury is optimized for maximum disinformation. It goes on. On top of that there are financial taboos with origins that as a 199x er I do not understand: 'socialism', 'communism', 'higher taxes'. These ideologies (just like a free market) do not work on their own. Both ideologies have good ideas, and you need to take the best of both to make it work. But the American public is brainwashed. I'm rambling a bit. There is no easy solution from what I can see. The U.S. government is structurally flawed and only massive changes can fix that. On top of that the public is misinformed and does not have its own best interests in mind.
- beat 10y agoSpeaking as an American, I'm terrified of the "massive changes" that would be required to "fix" (replace, really) the Constitution. It could mean civil war or the disintegration of the nation into a bunch of probably-warring nation-states. Moreover, I'm not convinced our current problems are purely local. Trump followed on the heels of Brexit, and right-wing nationalist/populist movements are on the rise across Europe. The world is going through some weird changes right now, an angry reaction to future shock, and recent US politics are just a symptom.
- 10y ago
- dingdingdang 10y ago> Besides, liberated from corporate taxes, they'd have more freedom to increase wages. That would be impossible unless the law itself changes from the way it is currently interpreted: https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
- coredog64 10y agoDodge v. Ford is garbage and has been understood to be garbage for a long time. If you need convincing, please provide a link to the shareholder lawsuit filed against Costco management for not paying Sam's Club wages.
- parenthephobia 10y agoGoogle turns up nothing on that case, which is making it hard to become convinced. Why not provide the link yourself? :) From what I can find, Dodge v. Ford isn't considered "garbage", but it is often misrepresented. Directors have a primary responsibility to work for the benefit of the shareholders, but they also have virtually total discretion in how to achieve that. In the absence of clear evidence of the intention to shirk the responsibility - such as, in Dodge v. Ford, telling the shareholders you're putting public interests ahead of their profits - the onus is on the shareholders to prove that the directors aren't fulfilling their fiduciary duty.
- jhvjvjhchgchgc 10y agoThere is no link. It never happened. That was the point.
- 77pt77 10y ago> If I were to stash trillions of income overseas to evade taxes, I'd go to jail, not have the law changed. Yes. But you see, if the state did that to you there would be no unpleasant consequences, whereas doing that to a big corporation will bring on a wold of pain.
- nxc182 10y agoFood, healthcare, housing, land, education, etc. are almost always taxed differently from everything else, so changing the corporate tax reality should have no effect there. Also note that healthcare and food, (food especially) are heavily subsidized by the government already. While I personally believe that distorts the market and should probably stop, even in some doomsday tax-burden-shift scenario that you fear, a bump to subsidies could resolve the worst effects. Really this is just like any other situation where the government due to structural weaknesses can't set/enforce policy effectively. Just like in the Prohibition or the War on Drugs, neither of which the government was equipped to make happen, the solution is to remove the problematic policies and take a more realistic approach.
- pikzen 10y ago>healthcare and food, (food especially) are heavily subsidized by the government already. While I personally believe that distorts the market and should probably stop If you want to see riots in the streets because people literally can't afford food and healthcare, yeah, sure, go for it.
- MichaelBurge 10y agoObamacare is quite recent, and Medicaid has only been available in all states since 1982. There are some tax deductions for medical care, though those usually only apply to middle-class workers with benefits anyways. Which healthcare subsidy would result in riots in the streets? Also keep in mind that the US has been without the 16th amendment longer than it has been with it, so anything based off of an income tax must not be intrinsically important enough to automatically result in street riots. Though of course an irresponsible and sudden withdrawal could certainly cause problems.
- extra88 10y ago> Which healthcare subsidy would result in riots in the streets? Off the top of my head, Medicare and veteran's health benefits. I don't know that ceasing flexible spending accounts (money put in an account, pre-tax, just for medical/health expenses) and the tax deduction for medical expenses above a certain amount would be riot-worthy.
- JonFish85 10y ago"If I were to stash trillions of income overseas to evade taxes" Evade, or avoid? It's a big difference--as I'm sure has been said, tax evasion is illegal. Tax avoidance is not.
- karlshea 10y ago> Besides, liberated from corporate taxes, they'd have more freedom to increase wages. Can someone explain this to me? I was under the impression that wages were expenses and non-taxable. So if they paid higher wages so they ended up with no profits they would have to pay no tax.
- charlesdm 10y agoShareholders want a certain amount of profit on their invested capital, say 10%. The exact percentage depends on type of company and the industry it's operating in. Tax is an expense, one that comes after all other expenses are paid, but an expense nevertheless. If I have $100 in profit, and I have to pay 30% tax, I'm left with $70. If a company today is returning 10% to its shareholders per annum (and is paying, say 30% tax), then reducing the tax rate to 15% frees up additional cash to reinvest in the business that wouldn't have been available / would've otherwise gone to taxes. Or that money could flow back to shareholders, who could then reinvest it in other businesses.
- Avshalom 10y agoOh well thats easy fix: require companies to be employee owned if they want the legal protection limited liability incorporation. Now the workers are the share holders and reinvesting in other businesses is called consuming. God I'm good at this.
- charlesdm 10y agoSo I'd actually have to share my profits? I'm being incentivized to create value for others already. Damn, you're good at this.
- eli_gottlieb 10y ago(Democratically) seize the means of production!
- JamesBarney 10y agoIf I'm a shareholder I don't want 10%, I want as much profit as possible. This is why economics is based around the assumption that stakeholders are profit maximizing.
- ominous 10y ago> stash trillions of income overseas You mean, if you went abroad, produced trillions of income, left said income there and came back to your country?
- outside1234 10y agoYes, in the United States, even if you don't come back, you have to file income taxes on that foreign income. There is no differentiation between foreign and domestic income (although you can get tax credits for foreign taxes paid).
- drdeadringer 10y agoIs this another one of those "only America" activities?
- tzs 10y agoThat's true if the "you" we are talking about is an individual. If the "you" is a corporation, they are taxed by the US when they bring that money back to the US, not when they earn it abroad. They can defer the tax arbitrarily by not bringing back the money.
- jjoonathan 10y agoI was under the impression that the trillions in question were made here, accounting tricks (e.g. IP licensing) were used to pretend that the money was made overseas, and then it was left overseas until the political system could be bribed into allowing a tax holiday. CMV.
- KKKKkkkk1 10y agoCorporations are not people.
- darawk 10y agoThe real argument for abolishing the corporate tax is not that they avoid it and therefore its worthless (though that is true). It's that taxing corporations doesn't really make sense. Corporations don't want things. Taxing them is just another way of taxing their customers and employees indirectly. And if you want to do that, why not just tax the customers and employees more in the first place?
- heavenlyhash 10y agoBecause if you tax the margins (as opposed to the revenue, which would be patently absurd), you're not passing on the tax directly: you're incentivizing the corporation to move money smoothly through itself rather than stockpiling.
- notahacker 10y agoBecause corporations then become vehicles for the wealthiest in society to hide virtually their entire income from tax authorities - whilst still being able to enjoy most of its benefits, and the problem of corporations hoarding huge moats of competition-intimidating money rather than paying out dividends gets even bigger.
- prostoalex 10y agoCan you be more specific about the benefits? Every potentially benificial outflow of cash from a corporation to a person (dividend, distribution, RSUs, options, company car, corporate housing, phone bill paid by the company) is taxed as personal income to the recipient. Two exemptions I can think of are health/dental insurance (exempted by law) and free food at Silicon Valley campuses (highly contestable benefit as far as IRS is concerned, the jury is still out on treatment of that). How can one hide virtually their entire income while still being able to enjoy most of the benefits? A large group of people (plumbers, electricians, landscapers, solo real estate agents) are actually incorporated and self-employed under this model, and yet are not massively wealthier in comparison to the rest of the population.
- RealGeek 10y ago
- WillPostForFood 10y agoWhen you say the majority of goods people purchase are fixed in demand, and there is only one bidder (supplier?), can you give a few examples of what you had in mind?
- wdr1 10y ago> This rhetoric is ridiculous Here's what I honestly don't understand about HN: Climate change has near unanimous support from climatologists. Most (rightly, imho) point that as a reason why it should be accepted by the general public. And those doubting the experts are considered ridiculous. Here, however, we have an issue to drop corporate taxes which has near unanimous support from economists (across the political spectrum). Yet we call the experts ridiculous. Why the flip? Why should the general public accept the expert advice in one field, but then turn around & call it ridiculous in another?
- tpeo 10y agoIt's easier to convince people who have no priors. The majority of people doesn't ever consider the temperature at the polar ice caps unless they are climate scientists, so they'll take accept it easily. But lots of people with a folkish understanding of local weather, specially after some huge snow storm, will mumble something like "so much for global warming". Even if you put all methodological issues (and citations from Richard Feynman) aside or even whether corporate taxes work or not, lots of social science findings would seem dubious simply because they deal with human behavior, which is something which is almost impossible to not have an opinion on, specially because it attempts to describe our own behavior. The problem is that, if I were to understand reality through my own behavior, it would be through an unwarranted generalization of my own conditions to the population as a whole. It's like that joke of "why don't they just buy themselves some money?". That's one of the issues, at least.
- Robin_Message 10y agoScientists are often correct in their predictions, whereas economists sort of aren't. It's an epistemology question; these experts are not the same as those experts.
- deleted 10y ago[deleted]
- nightcracker 10y agoActually, I'm not 100% opposed to abolishing corporate tax altogether and finding other ways to structure tax. I'm not an expert, so I wouldn't know what the most robust structure is. But I am calling the arguments that they use in the article ridiculous, and in particular the parts that I've quoted in my post above.
- vorotato 10y agolol more freedom to increase wages.
- drieddust 10y ago> Does anyone still believe this 'trickle-down' hogwash? Absolutely not. Corporation will choke employees and consumers alike if they are allowed to have their way. This quarter my company decided to cut the quarterly bonuses to zero because Y-oY growth targets were not met. Although profits were higher then last year. Now it looks ridiculous to me to expect an fixed pefcentshe growth forever and then punishment employees who didn't even knew that increasing Y-oY growth is part of their responsibility. If at all anybody should have been punished, it should have been the top management. But since they make the rules, there is no downside.