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If you are gonna have a form of corporate tax, a tax on revenue is the best way to do it. This will raise prices of goods the least and directly target the lar

If you are gonna have a form of corporate tax, a tax on revenue is the best way to do it. This will raise prices of goods the least and directly target the largest companies.

Shivetya 9y ago
well many people unfortunately do not understand that taxes like this get past on to everyone. most only see the tax on their receipt. embedded taxes are the greatest tool of the tax collector
- bluecalm 9y ago
  And where do you think money for corporate tax on profits come from?
  - thaumasiotes 9y ago
    Rolled into the "price" of the item on the receipt, rather than being itemized like the sales tax is.
- throwaway2048 9y ago
  this is something that gets thrown around a lot, but its manifestly untrue, if corporations could easily charge more, they would, and they would pocket the difference as profit. Taxes in general reduce profit, they do not increase prices.
  - conanbatt 9y ago
    The nuance of passing down taxes is that it depends on the elasticity, which generally is about the capacity for the consumer to substitute the goods. If you put a tax on tobacco or alcohol, it definitely gets to the consumer. If you put a tax on pork, then people switch to chicken and the producer gets hit.
harryh 9y ago
This is 100% wrong. Walmart buys[1] goods for 97 cents and sells them for a dollar. Google produces technology for 50 cents and sells it for a dollar. A 5% tax on revenue would make Walmart a money losing enterprise while being a minor annoyance for Google. This is why we tax profit and not revenue. Different industries have radically different cost structures.
- bluecalm 9y ago
  The lower margin businesses will raise prices, and higher margin businesses will be forced to lower prices long term as people will have less money it's not a problem. Taxing profits encourages all kinds of undesirable behavior: buying expensive company cars, conferences in exotic locations, other perks because you get a huge discount (tax deduction) on them. I would argue it's immoral because you're taxing both efficiency and honesty. There is no reason that out of two companies producing the same thing you tax the one being more prudent with their expenses more. Tax pollution, land, access to local work force or revenue. You can just raise personal income tax as well. They are all better and more just taxes than loop sided incentive wise tax on profit.
  - candiodari 9y ago
    And taxing revenue punishes economic activity per se. For small firms, it will force them out of business, and only high margin ones will remain (as explained). In other words, for the 2/3rds or so of the economy that is small and medium businesses this will be a tax on having economic activity at all. That's why it'll never fly (or should I say never be enforced). And don't worry, as usual, for large businesses there's an easy way out : simply don't transact in money. Then negotiate what the value is of the transaction with the tax department. For instance, buy Disney Club 33 access for all executives and their family in trade for 10% cheaper plumbing for the park. Do huge transactions for suspiciously low monetary value, and they won't get counted in revenue, or only partially. Problem solved. In case people doubt that such negotiation works, I would like to point out that the most powerful man in Europe, the president of the European commission, Jean Claude Juncker, got where he is by negotiating preferential tax deals with large international corporations. I'd say for years, but the guy is no spring chicken. For decades. All taxes that are less than 100% enforced (all of them, but these revenue taxes are a particularly bad example. Utterly unrealistic to do this for small businesses) are a tax on honesty. Thing is, you can't have global supply chains without "taxing honesty". And without global supply chains, you won't get an iPad.

If you are gonna have a form of corporate tax, a tax on revenue is the best way to do it. This will raise prices of goods the least and directly target the largest companies.

Shivetya 9y ago

well many people unfortunately do not understand that taxes like this get past on to everyone. most only see the tax on their receipt. embedded taxes are the greatest tool of the tax collector

bluecalm 9y ago
And where do you think money for corporate tax on profits come from?
- thaumasiotes 9y ago
  Rolled into the "price" of the item on the receipt, rather than being itemized like the sales tax is.
throwaway2048 9y ago
this is something that gets thrown around a lot, but its manifestly untrue, if corporations could easily charge more, they would, and they would pocket the difference as profit. Taxes in general reduce profit, they do not increase prices.
- conanbatt 9y ago
  The nuance of passing down taxes is that it depends on the elasticity, which generally is about the capacity for the consumer to substitute the goods. If you put a tax on tobacco or alcohol, it definitely gets to the consumer. If you put a tax on pork, then people switch to chicken and the producer gets hit.

harryh 9y ago

This is 100% wrong. Walmart buys[1] goods for 97 cents and sells them for a dollar. Google produces technology for 50 cents and sells it for a dollar. A 5% tax on revenue would make Walmart a money losing enterprise while being a minor annoyance for Google. This is why we tax profit and not revenue. Different industries have radically different cost structures.

bluecalm 9y ago
The lower margin businesses will raise prices, and higher margin businesses will be forced to lower prices long term as people will have less money it's not a problem. Taxing profits encourages all kinds of undesirable behavior: buying expensive company cars, conferences in exotic locations, other perks because you get a huge discount (tax deduction) on them. I would argue it's immoral because you're taxing both efficiency and honesty. There is no reason that out of two companies producing the same thing you tax the one being more prudent with their expenses more. Tax pollution, land, access to local work force or revenue. You can just raise personal income tax as well. They are all better and more just taxes than loop sided incentive wise tax on profit.
- candiodari 9y ago
  And taxing revenue punishes economic activity per se. For small firms, it will force them out of business, and only high margin ones will remain (as explained). In other words, for the 2/3rds or so of the economy that is small and medium businesses this will be a tax on having economic activity at all. That's why it'll never fly (or should I say never be enforced). And don't worry, as usual, for large businesses there's an easy way out : simply don't transact in money. Then negotiate what the value is of the transaction with the tax department. For instance, buy Disney Club 33 access for all executives and their family in trade for 10% cheaper plumbing for the park. Do huge transactions for suspiciously low monetary value, and they won't get counted in revenue, or only partially. Problem solved. In case people doubt that such negotiation works, I would like to point out that the most powerful man in Europe, the president of the European commission, Jean Claude Juncker, got where he is by negotiating preferential tax deals with large international corporations. I'd say for years, but the guy is no spring chicken. For decades. All taxes that are less than 100% enforced (all of them, but these revenue taxes are a particularly bad example. Utterly unrealistic to do this for small businesses) are a tax on honesty. Thing is, you can't have global supply chains without "taxing honesty". And without global supply chains, you won't get an iPad.