3 ms·
Abolishing corporation tax has always seemed to me like something that makes sense only in a quite naive view of the world. The idea is always just to tax met
by zimablue 8y ago
Abolishing corporation tax has always seemed to me like something that makes sense only in a quite naive view of the world.
The idea is always just to tax methods of getting income out of a corporation instead, (income, dividends) but there's a problem with this idea.
There are infinite ways to get your money out of a corporation.
If you start off with:
power is power
all forms of power can be transferred into money somehow
Then you realize that allowing someone to put their income into a company and only pay tax on DIRECTLY taking it out, there's hundreds of ways to get around that.
My company employs your son, then you give me a kickback in whatever form
My company buys from your company, you give me a kickback somehow
My company invests in something related to another investment that I hold and pushes the value of it up.
My company employs me on minimum wage for 80 years instead of employing me on a high wage for 40 years, halving the tax that I pay through income
My company employs my own son, girlfriend, relative
If I have access to and control over an entity that can swing a million pounds around you can guarantee I can find an indirect way to get paid from that which you can't prevent/tax/foresee. The only reasonable way to mitigate that is to slap some level of tax on me putting money into my proxy.
- phkahler 8y agoMost importantly. If you only tax money coming out of the company to individuals, any savings within the company can be invested tax-free.
- saalweachter 8y agoNot to mention, it assumes a priori that double taxation is bad. Double taxation has consequences, which may be bad or good in different situations, but isn’t itself bad or good. Hell, I’m now getting double taxed, through the adjustment to the SALT deductions.
- test6554 8y agoI don't think there is anything wrong with someone hiring people as a favor or someone selecting a specific vendor as a favor. As long as the company's owner knows what's going on and is ok with it. And as far as kickbacks go or repaying those favors, if it's money, that's taxable. If it's more favors, well that's merely bartering. When it comes to stock manipulation, I think that's a crime. But if not, I can't see it being profitable. It would most likely result in a net loss unless there was some inside information being shared.
- conanbatt 8y agoCorporate taxes suck because they are a bad method of levying taxes, and also because its hard to know who is actually paying them. The taxes can fall on investores, on the workers or consumers, and that changes based on the market the company operates in. I dont think I understood your proposed schemes: all those individuals you mention pay income taxes. Income taxes always have the shortcomings you mention, particularly because there are different rates to different types of income. If you made income tax a flat rate it would be infinitely smaller.