3 ms·

Convince me, why should I buy that argument? I've not seen any compelling justification that reducing the corporate tax would do anything but create a further

Convince me, why should I buy that argument? I've not seen any compelling justification that reducing the corporate tax would do anything but create a further deficit which would need to be filled with a much more direct tax on people less able to pay. What precedent is there for this sort of strategy actually showing long term benefit across the broad economic spectrum, and not just to the upper percentile? (This is fantastic, I can't even get 2 seconds into asking for discussion without being in the negative. This is not the HN I normally applaud. I'd hope readers recognize that I'm actually looking to have my opinion changed here and not just spark an unproductive argument, and am saddened that I have to clarify this.)

harryh 9y ago
Yes, if we eliminated corporate taxes we would need to raise individual taxes in order to maintain government revenue. But we could do so in a way that was: A) Far more efficient - The deadweight loss of corporate taxes is higher than individual taxes. Corporate taxes are crazy complicated by necessity and lead to all sorts of crazy behaviors. B) More fair - A millionaire should pay higher taxes on his profits from stock ownership than a middle class person. When a corporation pays its taxes those two people are taxed at the same rate.
- existencebox 9y ago
  A sister poster suggests offsetting with higher cap gains, which could be a component of what you're suggesting and I could see how that would work as a concept, but I have issue with pragmatism within the US. As far as I understand it, didn't both the prior tax holiday come essentially in isolation of balancing factors, alongside a broader tax plan that de-emphesized the higher tax brackets and cap gains? (and from a brief reading, seems to have added a significant amount to the national debt via lost tax revenue, during a period of drastically increasing inequality) This was my original concern when posting earlier, that I haven't seen a history of positive outcomes, or strategies that offset like you're suggesting.
  - unexpected 9y ago
    Oh I agree with you - the current tax holiday plan is just a dramatic wealth transfer from the rich to the poor. In an increasingly globalized environment, trickle down economic gains are diffused over investors all over the world. The current Republican tax plan has a 1950's era view of the world. With the current proposal, the only way to sustain the middle class is to close our border and become more nativistic - which is what happening.
  - harryh 9y ago
    I agree that a "tax holiday" is a bad plan. I also agree that from a political standpoint my plan might be unworkable. I think it's a good plan from an economic standpoint though.
unexpected 9y ago
I have some thoughts about this. If we think about the strengths of the U.S. economy, it's the transparency, rule of law, and easy access to capital that U.S. companies have. We should encourage all companies to be formed here. I would drop corporate taxes as much as possible. Now, let's say we've done this. What next? In this age of the global economy, I think the problem with trickle down economics is that while companies are localized, the trickle down is globalized. Investors from overseas take their gains and re-invest it into their own economies at a much higher rate than the U.S. economy. So, I would tax them on the way out. Make corporate tax rate low, but capital gains higher. This encourages companies to stay here, re-invest their profits here, and investors "pay their fair share" when they take their profits out.

harryh 9y ago

Yes, if we eliminated corporate taxes we would need to raise individual taxes in order to maintain government revenue. But we could do so in a way that was: A) Far more efficient - The deadweight loss of corporate taxes is higher than individual taxes. Corporate taxes are crazy complicated by necessity and lead to all sorts of crazy behaviors. B) More fair - A millionaire should pay higher taxes on his profits from stock ownership than a middle class person. When a corporation pays its taxes those two people are taxed at the same rate.

existencebox 9y ago
A sister poster suggests offsetting with higher cap gains, which could be a component of what you're suggesting and I could see how that would work as a concept, but I have issue with pragmatism within the US. As far as I understand it, didn't both the prior tax holiday come essentially in isolation of balancing factors, alongside a broader tax plan that de-emphesized the higher tax brackets and cap gains? (and from a brief reading, seems to have added a significant amount to the national debt via lost tax revenue, during a period of drastically increasing inequality) This was my original concern when posting earlier, that I haven't seen a history of positive outcomes, or strategies that offset like you're suggesting.
- unexpected 9y ago
  Oh I agree with you - the current tax holiday plan is just a dramatic wealth transfer from the rich to the poor. In an increasingly globalized environment, trickle down economic gains are diffused over investors all over the world. The current Republican tax plan has a 1950's era view of the world. With the current proposal, the only way to sustain the middle class is to close our border and become more nativistic - which is what happening.
- harryh 9y ago
  I agree that a "tax holiday" is a bad plan. I also agree that from a political standpoint my plan might be unworkable. I think it's a good plan from an economic standpoint though.

unexpected 9y ago

I have some thoughts about this. If we think about the strengths of the U.S. economy, it's the transparency, rule of law, and easy access to capital that U.S. companies have. We should encourage all companies to be formed here. I would drop corporate taxes as much as possible. Now, let's say we've done this. What next? In this age of the global economy, I think the problem with trickle down economics is that while companies are localized, the trickle down is globalized. Investors from overseas take their gains and re-invest it into their own economies at a much higher rate than the U.S. economy. So, I would tax them on the way out. Make corporate tax rate low, but capital gains higher. This encourages companies to stay here, re-invest their profits here, and investors "pay their fair share" when they take their profits out.