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Can someone without bias ELI5 on why I pay ~30% in taxes, but Alphabet pays 11%?

by brink 9y ago

DC-3 9y ago
You can't afford to lobby politicians. Alphabet can.
- rlanday 9y ago
  This is not correct. The real reason is capital is more mobile than individuals are. Most Americans won’t (or can’t) leave the country if their taxes go up, but businesses are constantly making decisions about where to invest and hire people. Under the old tax code, the US had the highest corporate income tax rate of any OECD country: https://taxfoundation.org/us-has-highest-corporate-income-tax-rate-oecd/ https://taxfoundation.org/us-has-highest-corporate-income-ta... and also taxed corporations based on their worldwide income, which led to a number of high profile tax inversions.
tedunangst 9y ago
I'd start by revisiting the assumption that individual and corporate tax rates should be similar, or even comparable.
- prewett 9y ago
  Why shouldn't they be similar? Seems reasonable that a "legal person" should be subject to similar taxes as a real person. And from a fairness standpoint, it doesn't seem fair that Google is taxed 11% on $billions of income after expenses while I get taxed 25% on $thousands of income sort-of-before expenses. Fairness is not always best for society, but it does seem like a reasonable default. In my mind, the default is that they should be similar, and any deviation from that requires a reason. This isn't a very helpful comment. The parent presumably doesn't have the information to make a different assumption (or they would have already). Telling them to revisit their assumptions without giving them any additional resources to do so is unhelpful. Besides, the rest of us (me, at least) would like to know your reasons.
  - will4274 9y ago
    The money is taxed when it is transferred from Google to Google's shareholders. Taxing it a second time when it is transferred to Google from other corporations is widely seen by economists as an economic drag and something that drives offshoring.

Can someone without bias ELI5 on why I pay ~30% in taxes, but Alphabet pays 11%?

by brink 9y ago

Can someone without bias ELI5 on why I pay ~30% in taxes, but Alphabet pays 11%?

DC-3 9y ago

You can't afford to lobby politicians. Alphabet can.

rlanday 9y ago
This is not correct. The real reason is capital is more mobile than individuals are. Most Americans won’t (or can’t) leave the country if their taxes go up, but businesses are constantly making decisions about where to invest and hire people. Under the old tax code, the US had the highest corporate income tax rate of any OECD country: https://taxfoundation.org/us-has-highest-corporate-income-tax-rate-oecd/ https://taxfoundation.org/us-has-highest-corporate-income-ta... and also taxed corporations based on their worldwide income, which led to a number of high profile tax inversions.

tedunangst 9y ago

I'd start by revisiting the assumption that individual and corporate tax rates should be similar, or even comparable.

prewett 9y ago
Why shouldn't they be similar? Seems reasonable that a "legal person" should be subject to similar taxes as a real person. And from a fairness standpoint, it doesn't seem fair that Google is taxed 11% on $billions of income after expenses while I get taxed 25% on $thousands of income sort-of-before expenses. Fairness is not always best for society, but it does seem like a reasonable default. In my mind, the default is that they should be similar, and any deviation from that requires a reason. This isn't a very helpful comment. The parent presumably doesn't have the information to make a different assumption (or they would have already). Telling them to revisit their assumptions without giving them any additional resources to do so is unhelpful. Besides, the rest of us (me, at least) would like to know your reasons.
- will4274 9y ago
  The money is taxed when it is transferred from Google to Google's shareholders. Taxing it a second time when it is transferred to Google from other corporations is widely seen by economists as an economic drag and something that drives offshoring.