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It's good that multinationals are forced to pay taxes. Otherwise they get an unfair advantage over small companies (since only large ones can afford to pay lawy

It's good that multinationals are forced to pay taxes. Otherwise they get an unfair advantage over small companies (since only large ones can afford to pay lawyers and accountants to help them cheat on taxes). A common scheme is that companies pretend to have 0 profit in a market (using various tricks) and then argue they shouldn't pay any tax on their profit in said country, because they don't have any profit there. But it doesn't make any sense. If Apple actually made 0 profit in Europe for the past 10 years, it wouldn't stick around. But they have opened hundreds of new stores and hired scores of people. Everyone know they make boatloads of money in Europe (just as everywhere else). Of course they should pay taxes on this profit.

oconnor663 10y ago
> Everyone know they make boatloads of money in Europe (just as everywhere else). Of course they should pay taxes on this profit. The difference between revenue and profit is really important here. You can have a lot of revenue without any profits if you're reinvesting the money, I think? So even if there are a lot of games you can play in terms of which profits you reinvested, I don't think it's as simple as "doing lots of business = owing lots of taxes".
- sandstrom 10y ago
  Yes, totally, this is the trick. They come up with bogus costs, usually something vague. "We have to pay our headquarters Y billion to use 'their' very valuable logo". And this amount Y just so happened to match our gross profit X in market A. So X - Y = 0 profit in market A. My point is that this doesn't make any sense. If the company actually didn't make any profit year after year they wouldn't stay. Everyone knows this is true. Any other argument is just PR-bullshit to justify the tax dodging. ––– Another common trick is to buy something with intangible assets, for example software, in a market where you have untaxed profits (as described above). Then you wait a few months and suddenly realize that this was a stupid mistake and that all this software is now worth zero. You make a huge write-down (which is a cost) that can help you reduce your (bookkeeping) profit to 0. You still actually made money though + your 'worthless' asset [the software] is still around, and will keep generating money in the future.
  - bcheung 10y ago
    There's something called an Arms Length Test. Basically the criterion is that a business can not set up an arrangement purely for tax benefits if they wouldn't be willing to make the same arrangement with another company they didn't own. It is designed to prevent abusive income shifting practices. They might be able to make this case for Apple but it's really a subjective call. Apple can argue that any other company would agree to the same Ireland IP licensing because they can make a profit. It really comes down to a subjective argument of how much profit is needed to make it attractive to 3rd parties at arms length.
  - danudey 10y ago
    I think the best known example for this is Hollywood Accounting, which is how a $19m movie with $150m worldwide can 'lose money'. https://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml https://www.techdirt.com/articles/20121018/01054720744/holly... I've also seen this happen in real estate. You can make a ton of profit, but if your on-paper amortizations outweigh your in-real-life profit then you on-paper lose money even though in the real world you're richer than you were before.
- Maarten88 10y ago
  They also make boatloads of profits. Somehow they argue that those profits are largely happening in the Bermuda's, not in the EU and also not in the US. How convenient for them, that there's no corporate tax in the Bermuda's, and also no transparency. Everyone can see that these are all tax avoidance tricks that may or may not be legal, but they certainly are not based on economic reality, they are not in line with the intentions of law and can't be defended to public opinion. These companies get access to markets, use public infrastructure and get support of the US and EU governments. They should simply pay the taxes where they are due, mostly in the US and also in the EU.
  - bluecalm 10y ago
    Then introduce a tax they will pay. Otherwise you will always be in the business of "how much that investment strategy/brand/trips" to Bermuda were really worth. It's the game that can't be won. It's frustrating to me that this point is missed. I suspect it's because people who write tax law rarely has any meaningful business experience and little understanding of economic reality.
    - Maarten88 10y ago
      > It's the game that can't be won. Only as long as countries and politicians don't really try you are right. Giving up on trying to make corporations pay taxes they should pay because "you can't win" seems like a very weak way to handle this. Corporations will immediately start discussing income tax or VAT and invent avoidance schemes on that, playing countries against each other, and that game also can't be won. There's no end. The big economic regions like EU and US should completely stop accepting all these transfer pricing and IP deals, and tax these multinational companies on something that is based on the profit that they report to their shareholders, divided by the approximate regional share of the company's total market.
  - caminante 10y ago
    Insurance companies keep re-domiciling to Bermuda and Ireland. Hedge funds have preserved material gains via Bermudan tax laws for years. They park money in Bermudan insurance companies whose investment arms manage the funds, while deferring tax payment on trading profits. Eye-opening to learn about...
- bcheung 10y ago
  To be more specific, what they are doing is called income shifting, not reinvesting. Tax agencies typically use the Arm's Length Test to determine if this income shifting is allowed. The basics of the test come down to: Would another company agree to the same arrangement if they weren't owned by the same company / person.
  - bluecalm 10y ago
    Only Ivory Tower mad scientist can come up with idea like that. I mean, it's not at all realistic to assess "real value" of those transactions. Investment strategy from Bermuda for 5M, are you going to argue it should really be 3.5M? How are you going to go around proving it? Is this really something public resources should be dedicated to? I mean it just can't work and is ridiculous idea.
    - bcheung 10y ago
      This is not some proposed idea from an Ivory Tower, this is common practice and common sense, practiced by pretty much every tax agency in the world. Like many laws, there are subjective components and that is what precedents and courts are for. Tax agencies understand that businesses exist to make a profit and try to come up with systems that are compatible with that.
      - bluecalm 10y ago
        Just because everyone is doing it doesn't mean it's a sensible idea. It's a huge failure which makes honest ethical people to pay more in a world where everyone else "optimizes" to bigger or lesser degree. It's a system where the only question is how much you go into shady area. This is a problem at every scale from micro companies to big corps. >>Like many laws, there are subjective components and that is what precedents and courts are for. But this is not similar to subjective laws where you need to come-up with interpretation for some case. Here you would need to assess "real value" of every transaction out there which is just not possible. >>Tax agencies understand that businesses exist to make a profit and try to come up with systems that are compatible with that. This is not an argument. There exist taxes which are simple in structure and which are not possible to evade without committing forgery. VAT is one such tax, taxing revenue (but not income) is another idea. Income tax isn't like that.
muninn_ 10y ago
Nah it's not really good. We need to just tax rich people if that's what we're going to do. Taxing a corporation takes operating money away from that corporation to spend on other things. Normally this is where people say "they'll just enrich their shareholders", to which I reply, then tax rich people.
- sandstrom 10y ago
  This isn't about taxing individuals vs. taxing corporations. The unfair part is that small companies (startups and others) can't do any of this fancy tax-dodging. (there are many arguments for/against taxing individuals/corporations; I think there are good arguments on both sides, but this isn't about that)
  - muninn_ 10y ago
    You're right. It's about fixing the corporate tax problem.
- davidw 10y ago
  I mostly agree with that answer, although think that there are virtually no politicians pushing it: those that want to cut one tax want to cut the other two, rather than a revenue neutral adjustment. Doesn't it create some kind of weird cross-border investing incentives though? I.e. we drop the corporate tax in the US, we could raise the income tax to recoup some of that, but not all of it, due to foreign investors who get taxed in their home countries.
- paulddraper 10y ago
  > Taxing a corporation takes operating money away from that corporation to spend on other things. (1) Does that mean rich people should incorporate? (2) Taxing a rich person takes operating money away from that rich person to spend on other things. https://en.wikipedia.org/wiki/Luxury_tax#Luxury_tax_in_the_United_States https://en.wikipedia.org/wiki/Luxury_tax#Luxury_tax_in_the_U... Rich people were taxed, the industries that depended on them suffered (I'm from Florida, and yacht manufacturing industry alone laid off tens of thousands in the state). --- Your distinction is arbitrary (especially considering point #1).
Pungsnigel 10y ago
Your conclusion does not follow from your the issue you outline. The unfair advantage could easily be removed by simply not taxing corporations at all. Taxing someone (or in this case, a whole bunch of people) just to keep them down seems like quite a bad motivation.
- legulere 10y ago
  So governments should print the money they need instead?
  - Pungsnigel 10y ago
    I've made no arguments about if its right or wrong to collect taxes.
    - legulere 10y ago
      But you assume that not taxing companies is an option.
      - Pungsnigel 10y ago
        Sure. Because it is. Alternatives could be to simply tax transactions, tax capital, tax people or not taxing anyone at all.
- sandstrom 10y ago
  That's a separate argument. Laissez-faire vs. government (or the optimal level of taxation). My argument is that a set of tax laws exist today and as long as they do all companies should be treated the same. > just to keep them down As an aside, Ireland's corporate tax is 12.5%, roughly 1/3 of the US corporate tax rate (35%). So it's not like Apple is being horribly 'kept down' here.
  - Pungsnigel 10y ago
    Doesn't have to be, no. There are other things to tax than corporations, people and transactions being the obvious candidates.
bluecalm 10y ago
You are describing the failure of an idea of corporate income tax. I mean, it should be completely obvious that tax doesn't work by considering this example: Two companies A and B work in the same market, produce the same thing of the same quality and have the same labor/material costs and revenue. Both companies make 100M in the market. The difference is that A is a local company and pay corporate tax on that 100M and B is buys "brand" or "marketing strategy" from a company located somewhere else (maybe on some island in the middle of Caribbean Sea or something). The rights to use the brand cost 100M/year. Company B pays 0 income tax in the country it operates. This is an obvious failure of the tax system. The solution is quite simple: get rid of corporate income tax, focus on consumption taxes. Then you won't need to chase anyone around trying to prove they overpayed or "hid" income. You just don't care at all about those things. You also invite other corporations to come to your country and pay salaries and then you get consumption/real estate/land taxes on that salaries as well (and maybe personal income taxes as well if you are into that). I mean it seems so obvious for anyone who ever did any business on any scale where international sales are involved and who has seen how easy it is to avoid paying income taxes and how it really is a tax on honesty and on how ethical you want to be.
- sandstrom 10y ago
  I agree, I think corporate taxation has many flaws (especially in a global context). But as long as it's in place it should be applied equally and fairly. Most countries struggle only to make small changes to their tax-systems (just look at all the loopholes and flaws most countries have sprinkled throughout their tax code). Or India, they've spent some ~25 years working on an update[1]. A global, synchronised overhaul of the tax-system would be very hard. Most likely, it'll have to be a gradual change. I also think more emphasis on consumption tax (VAT) and real-estate taxes would be good. But any change will take time. [1] http://www.nytimes.com/2016/08/04/world/asia/india-goods-and-services-tax.html http://www.nytimes.com/2016/08/04/world/asia/india-goods-and...
  - cyberpunk 10y ago
    The problem as I see it is that it's actually impossible to enforce when we're talking Google, Facebook, etc scale.... Let's take BigCorp'inc or whoever which is selling stuff in the UK and not paying any corp tax; should the uk govt take them to court and try to reclaim money it feels its owed? The govt doesn't really have the teeth for that fight; it's in BigCorp's interest to fight incredibly hard and throw vast sums at that kind of problem.. I'm feeling like the endless pockets of these companies would force the govt to drop any case when the costs get high enough (with enough lawyers, how many years do you think even the frist phases of such a case could be drawn out, and at what taxpayer cost?) that would be a huge embarrassment and would mean publically admitting we can't actually enfore this and so we don't even try to do it... So what's another option? We could attempt a sales ban, but that's a simple bit of math from BigCorp's side which makes it also pointless to attempt: If losing access said market forever costs less than paying taxes in all other countries where you are doing that kind of advoidance is, then goodbye to that market.. Right? If a sales ban on the UK worked, then the same thing would start happening everywhere -- it makes sense for them then to just walk away (certainly, it'll be cheaper). So we can't force them to pay, and we can't threaten them with exclusion unless everyone else does too, so what else is possible? Drop corp tax and double vat?
weaksauce 10y ago
I read an article that said we should move away from all taxes except for one tax on moving money around. Something like 0.01% on all transactions(bank to bank, c2b, b2c, etc.). The taxes would be taken at the point of use and wouldn't need to be progressive because for most people it wouldn't cost much for typical use. Large businesses or very rich people would have to pay that tax to move money off shore etc. Not sure how feasible it would be, but it's an idea to ponder at least.
- korethr 10y ago
  Wouldn't such a policy disincentivize transactions, at least to a degree? I thought the whole reason for the federal reserve bank's monkeying with interest rates was to keep money in motion and being used, instead of just sitting piled idle in various accounts, because the former is better. In my mind money in motion necessarily implies lots and lots of transactions. Taxing transactions seems like it would make people want to keep money in their accounts instead of using it.
  - weaksauce 10y ago
    It would, yes, I'd imagine. I looked up what it's called and it's the Financial transaction tax[1]. What some propose is to make it 0.3% on all transfers of money. Right now it costs $21.80 to send $1,000,000. The same payment under the new scheme would be $3,000. I have no idea what can of worms it would open up but it's an interesting thought experiment. 1. https://en.wikipedia.org/wiki/Financial_transaction_tax#United_States https://en.wikipedia.org/wiki/Financial_transaction_tax#Unit...
- bcheung 10y ago
  Ideally we should tax things that take us away from our collective values and reward or leave alone things that contribute to it. IMO, we should tax things that don't contribute to actual growth. Basically companies that merely extract wealth from the system without contributing anything of value like high frequency trading and predatory patent trolls. Taxing income makes no sense to me. Isn't that a disincentive to work? Work is one of the primary drivers of creating prosperity.

oconnor663 10y ago

> Everyone know they make boatloads of money in Europe (just as everywhere else). Of course they should pay taxes on this profit. The difference between revenue and profit is really important here. You can have a lot of revenue without any profits if you're reinvesting the money, I think? So even if there are a lot of games you can play in terms of which profits you reinvested, I don't think it's as simple as "doing lots of business = owing lots of taxes".

sandstrom 10y ago
Yes, totally, this is the trick. They come up with bogus costs, usually something vague. "We have to pay our headquarters Y billion to use 'their' very valuable logo". And this amount Y just so happened to match our gross profit X in market A. So X - Y = 0 profit in market A. My point is that this doesn't make any sense. If the company actually didn't make any profit year after year they wouldn't stay. Everyone knows this is true. Any other argument is just PR-bullshit to justify the tax dodging. ––– Another common trick is to buy something with intangible assets, for example software, in a market where you have untaxed profits (as described above). Then you wait a few months and suddenly realize that this was a stupid mistake and that all this software is now worth zero. You make a huge write-down (which is a cost) that can help you reduce your (bookkeeping) profit to 0. You still actually made money though + your 'worthless' asset [the software] is still around, and will keep generating money in the future.
- bcheung 10y ago
  There's something called an Arms Length Test. Basically the criterion is that a business can not set up an arrangement purely for tax benefits if they wouldn't be willing to make the same arrangement with another company they didn't own. It is designed to prevent abusive income shifting practices. They might be able to make this case for Apple but it's really a subjective call. Apple can argue that any other company would agree to the same Ireland IP licensing because they can make a profit. It really comes down to a subjective argument of how much profit is needed to make it attractive to 3rd parties at arms length.
- danudey 10y ago
  I think the best known example for this is Hollywood Accounting, which is how a $19m movie with $150m worldwide can 'lose money'. https://www.techdirt.com/articles/20121018/01054720744/hollywood-accounting-how-19-million-movie-makes-150-million-still-isnt-profitable.shtml https://www.techdirt.com/articles/20121018/01054720744/holly... I've also seen this happen in real estate. You can make a ton of profit, but if your on-paper amortizations outweigh your in-real-life profit then you on-paper lose money even though in the real world you're richer than you were before.
Maarten88 10y ago
They also make boatloads of profits. Somehow they argue that those profits are largely happening in the Bermuda's, not in the EU and also not in the US. How convenient for them, that there's no corporate tax in the Bermuda's, and also no transparency. Everyone can see that these are all tax avoidance tricks that may or may not be legal, but they certainly are not based on economic reality, they are not in line with the intentions of law and can't be defended to public opinion. These companies get access to markets, use public infrastructure and get support of the US and EU governments. They should simply pay the taxes where they are due, mostly in the US and also in the EU.
- bluecalm 10y ago
  Then introduce a tax they will pay. Otherwise you will always be in the business of "how much that investment strategy/brand/trips" to Bermuda were really worth. It's the game that can't be won. It's frustrating to me that this point is missed. I suspect it's because people who write tax law rarely has any meaningful business experience and little understanding of economic reality.
  - Maarten88 10y ago
    > It's the game that can't be won. Only as long as countries and politicians don't really try you are right. Giving up on trying to make corporations pay taxes they should pay because "you can't win" seems like a very weak way to handle this. Corporations will immediately start discussing income tax or VAT and invent avoidance schemes on that, playing countries against each other, and that game also can't be won. There's no end. The big economic regions like EU and US should completely stop accepting all these transfer pricing and IP deals, and tax these multinational companies on something that is based on the profit that they report to their shareholders, divided by the approximate regional share of the company's total market.
- caminante 10y ago
  Insurance companies keep re-domiciling to Bermuda and Ireland. Hedge funds have preserved material gains via Bermudan tax laws for years. They park money in Bermudan insurance companies whose investment arms manage the funds, while deferring tax payment on trading profits. Eye-opening to learn about...
bcheung 10y ago
To be more specific, what they are doing is called income shifting, not reinvesting. Tax agencies typically use the Arm's Length Test to determine if this income shifting is allowed. The basics of the test come down to: Would another company agree to the same arrangement if they weren't owned by the same company / person.
- bluecalm 10y ago
  Only Ivory Tower mad scientist can come up with idea like that. I mean, it's not at all realistic to assess "real value" of those transactions. Investment strategy from Bermuda for 5M, are you going to argue it should really be 3.5M? How are you going to go around proving it? Is this really something public resources should be dedicated to? I mean it just can't work and is ridiculous idea.
  - bcheung 10y ago
    This is not some proposed idea from an Ivory Tower, this is common practice and common sense, practiced by pretty much every tax agency in the world. Like many laws, there are subjective components and that is what precedents and courts are for. Tax agencies understand that businesses exist to make a profit and try to come up with systems that are compatible with that.
    - bluecalm 10y ago
      Just because everyone is doing it doesn't mean it's a sensible idea. It's a huge failure which makes honest ethical people to pay more in a world where everyone else "optimizes" to bigger or lesser degree. It's a system where the only question is how much you go into shady area. This is a problem at every scale from micro companies to big corps. >>Like many laws, there are subjective components and that is what precedents and courts are for. But this is not similar to subjective laws where you need to come-up with interpretation for some case. Here you would need to assess "real value" of every transaction out there which is just not possible. >>Tax agencies understand that businesses exist to make a profit and try to come up with systems that are compatible with that. This is not an argument. There exist taxes which are simple in structure and which are not possible to evade without committing forgery. VAT is one such tax, taxing revenue (but not income) is another idea. Income tax isn't like that.

muninn_ 10y ago

Nah it's not really good. We need to just tax rich people if that's what we're going to do. Taxing a corporation takes operating money away from that corporation to spend on other things. Normally this is where people say "they'll just enrich their shareholders", to which I reply, then tax rich people.

sandstrom 10y ago
This isn't about taxing individuals vs. taxing corporations. The unfair part is that small companies (startups and others) can't do any of this fancy tax-dodging. (there are many arguments for/against taxing individuals/corporations; I think there are good arguments on both sides, but this isn't about that)
- muninn_ 10y ago
  You're right. It's about fixing the corporate tax problem.
davidw 10y ago
I mostly agree with that answer, although think that there are virtually no politicians pushing it: those that want to cut one tax want to cut the other two, rather than a revenue neutral adjustment. Doesn't it create some kind of weird cross-border investing incentives though? I.e. we drop the corporate tax in the US, we could raise the income tax to recoup some of that, but not all of it, due to foreign investors who get taxed in their home countries.
paulddraper 10y ago
> Taxing a corporation takes operating money away from that corporation to spend on other things. (1) Does that mean rich people should incorporate? (2) Taxing a rich person takes operating money away from that rich person to spend on other things. https://en.wikipedia.org/wiki/Luxury_tax#Luxury_tax_in_the_United_States https://en.wikipedia.org/wiki/Luxury_tax#Luxury_tax_in_the_U... Rich people were taxed, the industries that depended on them suffered (I'm from Florida, and yacht manufacturing industry alone laid off tens of thousands in the state). --- Your distinction is arbitrary (especially considering point #1).

Pungsnigel 10y ago

Your conclusion does not follow from your the issue you outline. The unfair advantage could easily be removed by simply not taxing corporations at all. Taxing someone (or in this case, a whole bunch of people) just to keep them down seems like quite a bad motivation.

legulere 10y ago
So governments should print the money they need instead?
- Pungsnigel 10y ago
  I've made no arguments about if its right or wrong to collect taxes.
  - legulere 10y ago
    But you assume that not taxing companies is an option.
    - Pungsnigel 10y ago
      Sure. Because it is. Alternatives could be to simply tax transactions, tax capital, tax people or not taxing anyone at all.
sandstrom 10y ago
That's a separate argument. Laissez-faire vs. government (or the optimal level of taxation). My argument is that a set of tax laws exist today and as long as they do all companies should be treated the same. > just to keep them down As an aside, Ireland's corporate tax is 12.5%, roughly 1/3 of the US corporate tax rate (35%). So it's not like Apple is being horribly 'kept down' here.
- Pungsnigel 10y ago
  Doesn't have to be, no. There are other things to tax than corporations, people and transactions being the obvious candidates.

bluecalm 10y ago

You are describing the failure of an idea of corporate income tax. I mean, it should be completely obvious that tax doesn't work by considering this example: Two companies A and B work in the same market, produce the same thing of the same quality and have the same labor/material costs and revenue. Both companies make 100M in the market. The difference is that A is a local company and pay corporate tax on that 100M and B is buys "brand" or "marketing strategy" from a company located somewhere else (maybe on some island in the middle of Caribbean Sea or something). The rights to use the brand cost 100M/year. Company B pays 0 income tax in the country it operates. This is an obvious failure of the tax system. The solution is quite simple: get rid of corporate income tax, focus on consumption taxes. Then you won't need to chase anyone around trying to prove they overpayed or "hid" income. You just don't care at all about those things. You also invite other corporations to come to your country and pay salaries and then you get consumption/real estate/land taxes on that salaries as well (and maybe personal income taxes as well if you are into that). I mean it seems so obvious for anyone who ever did any business on any scale where international sales are involved and who has seen how easy it is to avoid paying income taxes and how it really is a tax on honesty and on how ethical you want to be.

sandstrom 10y ago
I agree, I think corporate taxation has many flaws (especially in a global context). But as long as it's in place it should be applied equally and fairly. Most countries struggle only to make small changes to their tax-systems (just look at all the loopholes and flaws most countries have sprinkled throughout their tax code). Or India, they've spent some ~25 years working on an update[1]. A global, synchronised overhaul of the tax-system would be very hard. Most likely, it'll have to be a gradual change. I also think more emphasis on consumption tax (VAT) and real-estate taxes would be good. But any change will take time. [1] http://www.nytimes.com/2016/08/04/world/asia/india-goods-and-services-tax.html http://www.nytimes.com/2016/08/04/world/asia/india-goods-and...
- cyberpunk 10y ago
  The problem as I see it is that it's actually impossible to enforce when we're talking Google, Facebook, etc scale.... Let's take BigCorp'inc or whoever which is selling stuff in the UK and not paying any corp tax; should the uk govt take them to court and try to reclaim money it feels its owed? The govt doesn't really have the teeth for that fight; it's in BigCorp's interest to fight incredibly hard and throw vast sums at that kind of problem.. I'm feeling like the endless pockets of these companies would force the govt to drop any case when the costs get high enough (with enough lawyers, how many years do you think even the frist phases of such a case could be drawn out, and at what taxpayer cost?) that would be a huge embarrassment and would mean publically admitting we can't actually enfore this and so we don't even try to do it... So what's another option? We could attempt a sales ban, but that's a simple bit of math from BigCorp's side which makes it also pointless to attempt: If losing access said market forever costs less than paying taxes in all other countries where you are doing that kind of advoidance is, then goodbye to that market.. Right? If a sales ban on the UK worked, then the same thing would start happening everywhere -- it makes sense for them then to just walk away (certainly, it'll be cheaper). So we can't force them to pay, and we can't threaten them with exclusion unless everyone else does too, so what else is possible? Drop corp tax and double vat?

weaksauce 10y ago

I read an article that said we should move away from all taxes except for one tax on moving money around. Something like 0.01% on all transactions(bank to bank, c2b, b2c, etc.). The taxes would be taken at the point of use and wouldn't need to be progressive because for most people it wouldn't cost much for typical use. Large businesses or very rich people would have to pay that tax to move money off shore etc. Not sure how feasible it would be, but it's an idea to ponder at least.

korethr 10y ago
Wouldn't such a policy disincentivize transactions, at least to a degree? I thought the whole reason for the federal reserve bank's monkeying with interest rates was to keep money in motion and being used, instead of just sitting piled idle in various accounts, because the former is better. In my mind money in motion necessarily implies lots and lots of transactions. Taxing transactions seems like it would make people want to keep money in their accounts instead of using it.
- weaksauce 10y ago
  It would, yes, I'd imagine. I looked up what it's called and it's the Financial transaction tax[1]. What some propose is to make it 0.3% on all transfers of money. Right now it costs $21.80 to send $1,000,000. The same payment under the new scheme would be $3,000. I have no idea what can of worms it would open up but it's an interesting thought experiment. 1. https://en.wikipedia.org/wiki/Financial_transaction_tax#United_States https://en.wikipedia.org/wiki/Financial_transaction_tax#Unit...
bcheung 10y ago
Ideally we should tax things that take us away from our collective values and reward or leave alone things that contribute to it. IMO, we should tax things that don't contribute to actual growth. Basically companies that merely extract wealth from the system without contributing anything of value like high frequency trading and predatory patent trolls. Taxing income makes no sense to me. Isn't that a disincentive to work? Work is one of the primary drivers of creating prosperity.