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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
by 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 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.
- ethbro 10y agoBargain: - 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 agoThe 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 agoIt'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 agoEstate 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 agoThe same can be said of any tax on individuals (sales tax, rates, etc), given that income tax has already been paid.
- notahacker 10y agoThe same can be said of any tax, period, corporation tax included. Money that some person or corporate entity has paid tax on gets taxed again at or after the point it changes hands; estate tax is no different in that respect,
- Applejinx 10y agoOnly if it's not more profitable to invent financial instruments. So, 'too late' basically. That world is long gone now.