5 ms·

> 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 we

> 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 ago
Shareholders 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 ago
  Oh 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 ago
    So 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 ago
  If 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.
- ethbro 10y ago
  Bargain: - Abolish corporate taxes - Increase minimum wage (including an automatic inflation adjustment) - Increase estate taxes and private corporate transfer taxes (intergenerational) - Heavily tax (90%) all corporate spending in politics, using revenues to fund educational news sources Everybody gets something that they want.
  - deleted 10y ago
    [deleted]
  - darpa_escapee 10y ago
    The last three are already being attacked on separate fronts, a compromise would be hard to make. My state just eliminated its estate tax and Republicans have been clamoring to attack it at the federal level as well.
    - vacri 10y ago
      It's weird how much the Republican side of politics is against the estate tax, given the high level of 'founding fathers desire!' rhetoric coming from that side. The estate tax was put in place for a philosophical reason, not a revenue-raising one, so it is part of the mosaic of the 'ff desires'...
  - douche 10y ago
    Estate taxes are evil. It's money that has already been taxed at least once as income or capital gains.
    - Avshalom 10y ago
      >taxed at least once as income or capital gains for some one who is now dead and thus very very unlikely to give a shit.
    - vacri 10y ago
      The same can be said of any tax on individuals (sales tax, rates, etc), given that income tax has already been paid.
- Applejinx 10y ago
  Only if it's not more profitable to invent financial instruments. So, 'too late' basically. That world is long gone now.
beachstartup 10y ago
employers pay payroll taxes. not the tax that gets taken out of your check -- there's an additional tax they pay for every dollar they pay you.
- Sindisil 10y ago
  Those taxes are for Medicare and Social Security. That money has to come from somewhere, or those programs fall apart. Even if other corporate taxes were reduced or eliminated, payroll taxes would need to continue.
  - jacalata 10y ago
    It could come from income taxes though.
  - Godel_unicode 10y ago
    > payroll taxes would need to continue. I believe you mean that the revenue currently generated by payroll taxes would need to continue.
- karlshea 10y ago
  But they aren't taxed on the additional tax, that's part of their expenses.

charlesdm 10y ago

Shareholders 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 ago
Oh 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 ago
  So 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 ago
If 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.
ethbro 10y ago
Bargain: - Abolish corporate taxes - Increase minimum wage (including an automatic inflation adjustment) - Increase estate taxes and private corporate transfer taxes (intergenerational) - Heavily tax (90%) all corporate spending in politics, using revenues to fund educational news sources Everybody gets something that they want.
- deleted 10y ago
  [deleted]
- darpa_escapee 10y ago
  The last three are already being attacked on separate fronts, a compromise would be hard to make. My state just eliminated its estate tax and Republicans have been clamoring to attack it at the federal level as well.
  - vacri 10y ago
    It's weird how much the Republican side of politics is against the estate tax, given the high level of 'founding fathers desire!' rhetoric coming from that side. The estate tax was put in place for a philosophical reason, not a revenue-raising one, so it is part of the mosaic of the 'ff desires'...
- douche 10y ago
  Estate taxes are evil. It's money that has already been taxed at least once as income or capital gains.
  - Avshalom 10y ago
    >taxed at least once as income or capital gains for some one who is now dead and thus very very unlikely to give a shit.
  - vacri 10y ago
    The same can be said of any tax on individuals (sales tax, rates, etc), given that income tax has already been paid.
Applejinx 10y ago
Only if it's not more profitable to invent financial instruments. So, 'too late' basically. That world is long gone now.

beachstartup 10y ago

employers pay payroll taxes. not the tax that gets taken out of your check -- there's an additional tax they pay for every dollar they pay you.

Sindisil 10y ago
Those taxes are for Medicare and Social Security. That money has to come from somewhere, or those programs fall apart. Even if other corporate taxes were reduced or eliminated, payroll taxes would need to continue.
- jacalata 10y ago
  It could come from income taxes though.
- Godel_unicode 10y ago
  > payroll taxes would need to continue. I believe you mean that the revenue currently generated by payroll taxes would need to continue.
karlshea 10y ago
But they aren't taxed on the additional tax, that's part of their expenses.