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As I look at schemes to prevent this, it's pretty obvious that a low gross tax rate on exported goods is a net positive for a nation. But that leaves the questi
by exelius 9y ago
As I look at schemes to prevent this, it's pretty obvious that a low gross tax rate on exported goods is a net positive for a nation. But that leaves the question of how/whether to tax companies with comparatively few exports (think of telecoms as an example, where the majority of a company's total capital is physically located and impossible to move).
I don't think there's much argument that a near-zero corporate tax rate is ideal; unfortunately wealthy individuals would simply take advantage of that to lower their individual taxes and the country would end up with a revenue crisis.
I would actually argue that the largest contributing factor to the success of the US over the last 80 years has been our ability to consistently collect tax revenue. Many other countries are not nearly as successful at enforcing and collecting on their tax code as the US is (but then, their tax agencies don't have nearly as much power as the IRS).
- osteele 9y agoThere actually is a fair amount of argument [1-4] that a near-zero corporate tax rate is ideal. [5-6] argue that it isn't. (These are all, except [2], popular press articles. I imagine that there's more considered discussion in the academic literature.) [1] "Six Policies Economists Love (And Politicians Hate)", Planet Money (podcast). http://www.npr.org/sections/money/2012/07/19/157047211/six-policies-economists-love-and-politicians-hate http://www.npr.org/sections/money/2012/07/19/157047211/six-p.... This contains interviews with Dean Baker (co-director of the Center for Economic and Policy Research in Washington, D.C.); Russ Roberts (George Mason University economics professor); Katherine Baicker (professor of health economics at Harvard University's Department of Health Policy and Management); Luigi Zingales (professor of entrepreneurship and finance and the University of Chicago's Booth School of Business); and Robert Frank (professor of management and economics at Cornell University's Johnson Graduate School of Management). [2] "Simulating the Elimination of the U.S. Corporate Income Tax", Hans Fehra, Sabine Jokischb, Ashwin Kambhampatic and Laurence J. Kotlikoff. NBER Working Paper No. 19757. Issued in December 2013, Revised in April 2014. [3] "Abolish the Corporate Income Tax", Laurence J. Kotlikoff (Economics @ U. Boston), New York Times, Jan 5, 2014. https://www.nytimes.com/2014/01/06/opinion/abolish-the-corporate-income-tax.html https://www.nytimes.com/2014/01/06/opinion/abolish-the-corpo... [4] "Let's Abolish The Corporate Income Tax", John C. Goodman, Forbes. Aug 26, 2014. https://www.forbes.com/sites/johngoodman/2014/08/26/lets-abolish-the-corporate-income-tax/#397ac4682793 https://www.forbes.com/sites/johngoodman/2014/08/26/lets-abo... [5] "Why Do We Tax Corporations?: Wouldn't it be easier just to tax individuals?", Christopher Beam, Slate, Oct 17 2008. http://www.slate.com/articles/news_and_politics/explainer/2008/10/why_do_we_tax_corporations.html http://www.slate.com/articles/news_and_politics/explainer/20... [6] "10 reasons we should tax corporations", Nicholas Shaxson, The Guardian, March 15 2011. https://www.theguardian.com/commentisfree/2011/mar/15/tax-corporations-treasury-large-companies https://www.theguardian.com/commentisfree/2011/mar/15/tax-co...
- exelius 9y agoI'm speaking of a near-zero corporate tax rate more from a game theory perspective -- if you look at the game from the perspective of a central government, and your competitors are both the corporations and the other countries. In this case, your goal is to maximize tax revenue while minimizing "brain drain" and "legal" tax loop holes. But regardless of what system we choose, wealth redistribution needs to be a primary goal before inequality reaches "torches and pitchforks" levels.