4 ms·

Perhaps it would be sustainable if most of the wealth wasn't going to a few people with little redistribution. I'm not even talking about communism, just fair t

by lz400 9y ago

Perhaps it would be sustainable if most of the wealth wasn't going to a few people with little redistribution. I'm not even talking about communism, just fair taxation and contributing and no loop holes (double irish tricks and the like).

ekianjo 9y ago
> most of the wealth wasn't going to a few people with little redistribution What are you talking about? Corporate profits are nothing compared to the national budget for redistribution. Check your figures.
- lz400 9y ago
  US Corporate profits are about 1.6 trillion, total national budget is 3.8 trillion. Looks very comparable numbers, don't they? And this is profit, after everyone already got paid and all the tricks have been performed in the books. I think definitely globalization and global tax dodging is affecting the ability of states to support a welfare state.
  - sien 9y ago
    And corporations paid 770Bn in taxes in the US according to USA facts. http://usafacts.org/the-big-picture/revenue?return_to=%2F http://usafacts.org/the-big-picture/revenue?return_to=%2F In addition they employ a lot of the people who pay the 1.7Trn in Income and 1 Trn in payroll tax the US government gets.
    - lz400 9y ago
      Yes. I'm not sure what your point is. Do you mean "they already pay a lot of tax!". I think things like this: https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement Point to the fact that global corporations spend a lot of effort making sure they get away with paying less than they should. If there was a fair taxation of corps at the level they should be taxed, they would be paying more. Obviously the corporations keep getting bigger and richer, and the 1% wealthier, yet we see countries struggling with welfare state. Doesn't seem right.
      - candiodari 9y ago
        Nope, this is tax avoidance, not tax evasion. In practice, of course, the law across different countries effectively allows for different tax rates. This was decided and entered into law. Of course all of these tax rates are agreed to be what the corporation "should" pay. Corporations simply select the lowest of the choices available to them. Is that not what they "should" pay ? Not a problem: congress can vote laws that make these constructions impossible. They are not doing so. Don't blame corporations here, they're simply responding to incentives congress put there for them. Instead, blame congress. They can change the tax rate, even for international profits and revenues (in fact the US is infamous for doing that in several ways already), and they make the rules about what can be tax deferred and what can't. They're not changing those rules, and you can bet they know what they're doing. I think the bigger issue is that because states are paying for things that are unsustainable (ie. the welfare state, even in the US, is unsustainable) the tax level doesn't matter : it's too low. Changing the tax level simply changes the point in time where the system crashes, but fixing is not possible. We simply cannot put the current level of economic activity into elder care in the future.
        lz400 9y ago
        I agree that corporations behave rationally avoiding tax. I agree it's the government's (global gov not just US) fault. I agree it's a complex problem because it probably needs a global, not local/nation level solution. But yes basically those tax avoidance tricks loopholes should be closed. I disagree that a welfare state is unsustainable. I think it's not and if anything, seems most of the thinking of the future once automation and ML take over most of the world is that some type of UBI will be necessary. I don't know the exact form but I agree. The brutal increase in productivity and value added by technology will have to be offset with a redistribution of that wealth if we want a functioning society. We might start now and fix the welfare state.
        candiodari 9y ago
        The problem is that you sidestep the obvious issue as if it doesn't exist. Money represents economic activity. Healthcare and elderly care currently consumes 20% of all economic activity. That is what's unsustainable. This is out of the question towards the future, since those people do not contribute 20% of GDP in the first place (and they'd need to contribute almost 40% to justify that). I guess the question I'm asking is simple: you want to increase this expenditure ... ok. What do you drop ? Please pick other parts of the economy that we can just drop ... Please don't just handwave "just automate it and save 50%" but ...
  - ekianjo 9y ago
    > US Corporate profits are about 1.6 trillion, total national budget is 3.8 trillion. Yeah, and military spending is at 600 billion dollars a year. Don't you think that ought to be cut first instead of starting to attack profits from companies? Profitable companies reinvest their gains back into the market anyway, which is essential for a functioning economy. Military spending is almost pure loss in comparison.
    - lz400 9y ago
      I don't disagree with that, but they are not incompatible measures. If it was up to me, military spending would be slashed, taxation loopholes closed and healthcare and other welfare programs revised to be more efficient. Profitable companies seem to be increasingly spending a disproportionate large amount of their profits in making a few people richer and richer. New companies like tech don't even create that many jobs to begin with, in fact they tend to destroy them. We are moving into a new paradigm where something will need to be done so everyone and not just 4 guys in Silicon Valley partake of the benefits of tech.

by lz400 9y ago

ekianjo 9y ago

> most of the wealth wasn't going to a few people with little redistribution What are you talking about? Corporate profits are nothing compared to the national budget for redistribution. Check your figures.

lz400 9y ago
US Corporate profits are about 1.6 trillion, total national budget is 3.8 trillion. Looks very comparable numbers, don't they? And this is profit, after everyone already got paid and all the tricks have been performed in the books. I think definitely globalization and global tax dodging is affecting the ability of states to support a welfare state.
- sien 9y ago
  And corporations paid 770Bn in taxes in the US according to USA facts. http://usafacts.org/the-big-picture/revenue?return_to=%2F http://usafacts.org/the-big-picture/revenue?return_to=%2F In addition they employ a lot of the people who pay the 1.7Trn in Income and 1 Trn in payroll tax the US government gets.
  - lz400 9y ago
    Yes. I'm not sure what your point is. Do you mean "they already pay a lot of tax!". I think things like this: https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement Point to the fact that global corporations spend a lot of effort making sure they get away with paying less than they should. If there was a fair taxation of corps at the level they should be taxed, they would be paying more. Obviously the corporations keep getting bigger and richer, and the 1% wealthier, yet we see countries struggling with welfare state. Doesn't seem right.
    - candiodari 9y ago
      Nope, this is tax avoidance, not tax evasion. In practice, of course, the law across different countries effectively allows for different tax rates. This was decided and entered into law. Of course all of these tax rates are agreed to be what the corporation "should" pay. Corporations simply select the lowest of the choices available to them. Is that not what they "should" pay ? Not a problem: congress can vote laws that make these constructions impossible. They are not doing so. Don't blame corporations here, they're simply responding to incentives congress put there for them. Instead, blame congress. They can change the tax rate, even for international profits and revenues (in fact the US is infamous for doing that in several ways already), and they make the rules about what can be tax deferred and what can't. They're not changing those rules, and you can bet they know what they're doing. I think the bigger issue is that because states are paying for things that are unsustainable (ie. the welfare state, even in the US, is unsustainable) the tax level doesn't matter : it's too low. Changing the tax level simply changes the point in time where the system crashes, but fixing is not possible. We simply cannot put the current level of economic activity into elder care in the future.
      - lz400 9y ago
        I agree that corporations behave rationally avoiding tax. I agree it's the government's (global gov not just US) fault. I agree it's a complex problem because it probably needs a global, not local/nation level solution. But yes basically those tax avoidance tricks loopholes should be closed. I disagree that a welfare state is unsustainable. I think it's not and if anything, seems most of the thinking of the future once automation and ML take over most of the world is that some type of UBI will be necessary. I don't know the exact form but I agree. The brutal increase in productivity and value added by technology will have to be offset with a redistribution of that wealth if we want a functioning society. We might start now and fix the welfare state.
        candiodari 9y ago
        The problem is that you sidestep the obvious issue as if it doesn't exist. Money represents economic activity. Healthcare and elderly care currently consumes 20% of all economic activity. That is what's unsustainable. This is out of the question towards the future, since those people do not contribute 20% of GDP in the first place (and they'd need to contribute almost 40% to justify that). I guess the question I'm asking is simple: you want to increase this expenditure ... ok. What do you drop ? Please pick other parts of the economy that we can just drop ... Please don't just handwave "just automate it and save 50%" but ...
- ekianjo 9y ago
  > US Corporate profits are about 1.6 trillion, total national budget is 3.8 trillion. Yeah, and military spending is at 600 billion dollars a year. Don't you think that ought to be cut first instead of starting to attack profits from companies? Profitable companies reinvest their gains back into the market anyway, which is essential for a functioning economy. Military spending is almost pure loss in comparison.
  - lz400 9y ago
    I don't disagree with that, but they are not incompatible measures. If it was up to me, military spending would be slashed, taxation loopholes closed and healthcare and other welfare programs revised to be more efficient. Profitable companies seem to be increasingly spending a disproportionate large amount of their profits in making a few people richer and richer. New companies like tech don't even create that many jobs to begin with, in fact they tend to destroy them. We are moving into a new paradigm where something will need to be done so everyone and not just 4 guys in Silicon Valley partake of the benefits of tech.