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I don’t get the whole issue with low coporate taxes. I get why people should be taxed so as to reduce consumption and increase production, but a coporation is n

I don’t get the whole issue with low coporate taxes. I get why people should be taxed so as to reduce consumption and increase production, but a coporation is not a person, so why hinder their ability to further productivity and economic output? It’s redirecting money earned that could be used to further economic activity and redirecting it to the hands of some highly corruptable bureaucrat in public office given the responsibility to handle way more money than their pay-grade should allow. I understand if the government is hurting for money, they may have to reach into coporations, but fundamentally corporations should not be the primary source of government income (or else government would be even more beholden to coporations instead of citizens). Maybe I’m missing something here (and I’m totally willing to admit that), so if someone can enlighten me behind the rationale please do so.

Diederich 9y ago
I get your argument, but consider this. Corporations generate activity that taxes support, such as the use of roads. That's really what it comes down to I think. > or else government would be even more beholden to coporations instead of citizens This is a real problem...perhaps one of the biggest problems we face, and I really don't have any reasonable ideas on how to fix it.
- chrischen 9y ago
  > Corporations generate activity that taxes support, such as the use of roads. That's really what it comes down to I think. For roads specifically, if a corporation causes increased usage of roads from say, more employees, the employees already pay for it through their personal income taxes (off of salary). If it's a trucking company, then there are weigh stations that weigh these commercial users and charge them extra for road maintenance.
robryan 9y ago
Regardless of the theoretical efficiency the US will be taking less in corporate taxes and we will have to wait and see if economic output increases enough to make up for it with other taxes.
bearjaws 9y ago
It simply doesn't work that way, maybe for a small business they reinvest all or most of their earnings (Amazon being the exception). For someone like Apple or Google, they have made it very clear their policy is to hoard as much money as possible (and as much of it offshore as possible too). This is a main reason why a corporation SHOULD be taxed, you only get taxed on PROFIT as a corporation. If a company was truly increasing their "productivity" and "output" they would have much less profit quarter over quarter. As far as the government being owned by corporations, that already happens because we allow them to directly fund politicians. With or without taxes.
spbaar 9y ago
Your concerns make sense for considering things like payroll taxes and taxing other operating expenses. But if we consider taxing corporate profits that go to shareholders, taxing here is a very relatively painless place to tax, as opposed to, say sales tax. This is doubly so when corporations are already sitting in hoards of cash and not investing, due to lack of opportunity or demand, interest rates are low, productivity gains are going towards the top, etc. I'm not quite as cynical when it comes to bureaucrats (military contractors aside), because as we can see in some of the recent teachers strikes, it makes sense to tax oil/gas corporations who are making full use of states infrastructure to for the benefit of themselves (and workers etc). The tax rate is not really affecting how much they invest. [1] I'm with you on corporate influence though. However, I think the answer there is to limit corporate influence of elections, say by disallowing funding of candidate specific ads and limiting the $ they can put towards issue lobbying. [1]https://qz.com/1243098/oklahoma-teachers-strike-how-income-tax-cuts-and-oil-industry-giveaways-created-an-education-crisis/ https://qz.com/1243098/oklahoma-teachers-strike-how-income-t...
- chrischen 9y ago
  > But if we consider taxing corporate profits that go to shareholders, taxing here is a very relatively painless place to tax, as opposed to, say sales tax. Aren't stock dividends taxed when it hits the individual? I can understand profit taxing to incentivize spending.
s2g 9y ago
Well for one thing, they aren't the primary source. For another, reinvesting into the business lowers your tax burden.
- chrischen 9y ago
  Yes I agree the tax has a positive benefit of incentivizing re-investment (payroll, or other spending) to avoid paying taxes, BUT it seems like this has a high risk of causing companies to focus on short term re-investments. Famously, companies with thin profit margins from constant reinvestment become less resilient to economic downturns and shifting industry trends, like defunct retailers like Circuit City. Having no saved up capital means companies like that are completely unable to properly reinvent themselves if market shifts happen relatively fast and they have no reserve capital.

Diederich 9y ago

I get your argument, but consider this. Corporations generate activity that taxes support, such as the use of roads. That's really what it comes down to I think. > or else government would be even more beholden to coporations instead of citizens This is a real problem...perhaps one of the biggest problems we face, and I really don't have any reasonable ideas on how to fix it.

chrischen 9y ago
> Corporations generate activity that taxes support, such as the use of roads. That's really what it comes down to I think. For roads specifically, if a corporation causes increased usage of roads from say, more employees, the employees already pay for it through their personal income taxes (off of salary). If it's a trucking company, then there are weigh stations that weigh these commercial users and charge them extra for road maintenance.

robryan 9y ago

Regardless of the theoretical efficiency the US will be taking less in corporate taxes and we will have to wait and see if economic output increases enough to make up for it with other taxes.

bearjaws 9y ago

It simply doesn't work that way, maybe for a small business they reinvest all or most of their earnings (Amazon being the exception). For someone like Apple or Google, they have made it very clear their policy is to hoard as much money as possible (and as much of it offshore as possible too). This is a main reason why a corporation SHOULD be taxed, you only get taxed on PROFIT as a corporation. If a company was truly increasing their "productivity" and "output" they would have much less profit quarter over quarter. As far as the government being owned by corporations, that already happens because we allow them to directly fund politicians. With or without taxes.

spbaar 9y ago

Your concerns make sense for considering things like payroll taxes and taxing other operating expenses. But if we consider taxing corporate profits that go to shareholders, taxing here is a very relatively painless place to tax, as opposed to, say sales tax. This is doubly so when corporations are already sitting in hoards of cash and not investing, due to lack of opportunity or demand, interest rates are low, productivity gains are going towards the top, etc. I'm not quite as cynical when it comes to bureaucrats (military contractors aside), because as we can see in some of the recent teachers strikes, it makes sense to tax oil/gas corporations who are making full use of states infrastructure to for the benefit of themselves (and workers etc). The tax rate is not really affecting how much they invest. [1] I'm with you on corporate influence though. However, I think the answer there is to limit corporate influence of elections, say by disallowing funding of candidate specific ads and limiting the $ they can put towards issue lobbying. [1]https://qz.com/1243098/oklahoma-teachers-strike-how-income-tax-cuts-and-oil-industry-giveaways-created-an-education-crisis/ https://qz.com/1243098/oklahoma-teachers-strike-how-income-t...

chrischen 9y ago
> But if we consider taxing corporate profits that go to shareholders, taxing here is a very relatively painless place to tax, as opposed to, say sales tax. Aren't stock dividends taxed when it hits the individual? I can understand profit taxing to incentivize spending.

s2g 9y ago

Well for one thing, they aren't the primary source. For another, reinvesting into the business lowers your tax burden.

chrischen 9y ago
Yes I agree the tax has a positive benefit of incentivizing re-investment (payroll, or other spending) to avoid paying taxes, BUT it seems like this has a high risk of causing companies to focus on short term re-investments. Famously, companies with thin profit margins from constant reinvestment become less resilient to economic downturns and shifting industry trends, like defunct retailers like Circuit City. Having no saved up capital means companies like that are completely unable to properly reinvent themselves if market shifts happen relatively fast and they have no reserve capital.