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I listened to that episode and if I recall correctly, economists agreed that corporation taxes should be abolished because they want corporations to reinvest pr

I listened to that episode and if I recall correctly, economists agreed that corporation taxes should be abolished because they want corporations to reinvest profits and prefer to shift the taxes to shareholders/income. Also mentioned on the podcast is abolishing all deductibles, including mortgage interest.

crdoconnor 10y ago
>they want corporations to reinvest profits and prefer to shift the taxes to shareholders/income Which is dumb because the tax incidence of corporate tax already lands on shareholders and corporations aren't reinvesting profits because of anemic demand.
dingaling 10y ago
But they can reinvest 'profits' today, for free, by running internal R&D programs, acquisitions, sponsoring a charity and investing in its staff, all of which are deducted from revenue as costs of running-a-company before calculation of taxable profit. Look at Amazon as a famous example which grew enormously year-on-year by reinvesting and thus generating zero profit. 'Profit' is primarily a signalling mechanism to indicate to the market as a whole, and potential investors in particular, that a company is 'successful'; it has so much revenue and such low costs that it can't find a way to spend the money . But it's basically a waste as that money could be achieving something for the company or its staff. Thus Governments punish companies by taking a slice of that profit as a way of saying 'if you don't use the money productively, we will'. Which is a very generous form of taxation compared that to personal income taxation, which comes out of gross revenue before the costs of being-a-person have been met.
- subhobroto 10y ago
  > compared that to personal income taxation, which comes out of gross revenue before the costs of being-a-person have been met. I agree. Sounds like a use tax would be more beneficial? The taxable income computations and standard deductions seem to be a complicated way to what a use tax could solve efficiently. The possible downside is that a use tax could bring in a recession (people stop spending to stop paying tax) I have no formal economics training and would love to hear from the more educated.
  - snuxoll 10y ago
    A use tax is basically sales tax, and the problem with them is they are regressive by nature (people with less income spend proportionally more of it on taxable goods). This is basically Gary Johnson's "Fair Tax" proposal, and it ultimately hurts the poor and allows the millionaires to pay less.

crdoconnor 10y ago

>they want corporations to reinvest profits and prefer to shift the taxes to shareholders/income Which is dumb because the tax incidence of corporate tax already lands on shareholders and corporations aren't reinvesting profits because of anemic demand.

dingaling 10y ago

But they can reinvest 'profits' today, for free, by running internal R&D programs, acquisitions, sponsoring a charity and investing in its staff, all of which are deducted from revenue as costs of running-a-company before calculation of taxable profit. Look at Amazon as a famous example which grew enormously year-on-year by reinvesting and thus generating zero profit. 'Profit' is primarily a signalling mechanism to indicate to the market as a whole, and potential investors in particular, that a company is 'successful'; it has so much revenue and such low costs that it can't find a way to spend the money . But it's basically a waste as that money could be achieving something for the company or its staff. Thus Governments punish companies by taking a slice of that profit as a way of saying 'if you don't use the money productively, we will'. Which is a very generous form of taxation compared that to personal income taxation, which comes out of gross revenue before the costs of being-a-person have been met.

subhobroto 10y ago
> compared that to personal income taxation, which comes out of gross revenue before the costs of being-a-person have been met. I agree. Sounds like a use tax would be more beneficial? The taxable income computations and standard deductions seem to be a complicated way to what a use tax could solve efficiently. The possible downside is that a use tax could bring in a recession (people stop spending to stop paying tax) I have no formal economics training and would love to hear from the more educated.
- snuxoll 10y ago
  A use tax is basically sales tax, and the problem with them is they are regressive by nature (people with less income spend proportionally more of it on taxable goods). This is basically Gary Johnson's "Fair Tax" proposal, and it ultimately hurts the poor and allows the millionaires to pay less.