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That's not the choice either. How about no tax breaks for companies, we enforce existing corporate taxes on those companies, and we raise the marginal income ta

That's not the choice either. How about no tax breaks for companies, we enforce existing corporate taxes on those companies, and we raise the marginal income tax rate on very high earning individuals?

rayiner 8y ago
At the state and local level, that just means companies will leave your state and go somewhere else. In a globalized world, the same thing is true for countries. There is a reason France has an effective 11% corporate tax rate: https://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world https://www.npr.org/2017/08/07/541797699/fact-check-does-the... (Chart 2). If you want to pay for the safety net, do what Europe does and tax middle class people who can't just move to a lower-tax jurisdiction. E.g. in Germany, the 42% tax bracket (just shy of the top 45% bracket) kicks in at around $70,000, and there is a 20% VAT.
- perfmode 8y ago
  The fundamental problem is that capital is permitted to cross borders, but people are not. Not in the same way. So, corporations can vote with their feet, but people cannot.
  - rayiner 8y ago
    The U.S. and the Schengen Area each comprise regions of 300-400 million people where people are free to move internally. You would think that would create a similar pressure to reduce internal income taxes to attract residents, but it does not. People, unlike corporations, have roots in places and by and large don't want to move to chase lower tax rates.
    - perfmode 8y ago
      Corporations don’t have to physically move when they move. They just file paperwork elsewhere.
      - rayiner 8y ago
        That's not really true. You can't just decide to be an Irish company if you have no presence in Ireland. The wave of corporate inversions in the U.S. was accompanied by lots of companies moving their headquarters (and their top executives) to Switzerland, the U.K., etc.
        perfmode 8y ago
        Tim Cook doesn't need to live in Ireland to benefit from its tax code.
        rayiner 8y ago
        Income from capital gains is taxed at the rate of where the person lives. Tim Cook is a great example: it was reported that one of his recent bonuses was taxed at 50%. Not that many people, even ones who make a lot of money, can take advantage of various tax avoidance measures. (That’s why e.g. getting rid of the preferential treatment of capital gains would raise less tax money than getting rid of the mortgage interest deduction.) CEOs mostly cannot, unless they run investment companies.
        perfmode 8y ago
        My point is that Apple can take advantage of Ireland for tax purposes but Tim Cook doesn’t need to live in Ireland. The corporation enjoys benefits not conferred to people. This is why there is consternation and conflict around Apple’s repatriation of capital.
- minikites 8y ago
  https://www.theguardian.com/inequality/2017/nov/20/if-you-tax-the-rich-they-wont-leave-us-data-contradicts-millionaires-threats https://www.theguardian.com/inequality/2017/nov/20/if-you-ta... >Only about 2.4% of US-based millionaires change their state of residence in a given year. Interstate migration is actually more common among the US middle class, and almost twice as common among its poorest residents, who have an annual interstate migration rate of 4.5%. Companies follow people, not the other way around.
- 6cd6beb 8y ago
  >do what Europe does and tax middle class people who can't just move to a lower-tax jurisdiction Well, that's why Europe is blanketed in riots right now. Disenfranchised people enraged at the governing concept of "taxing middle class people who can't just move to a lower-tax jurisdiction" Taxing the hell out of foreign goods would just mean the company now plays a two pronged game - manufacturing where the least regulation is present, and selling at the country with the highest price point who doesn't outright refuse to let you extract their nation's wealth. It's a tricky problem but your answer to it is untenable unless you want people to riot more.
  - moorhosj 8y ago
    >Well, that's why Europe is blanketed in riots right now. Can you provide a source for this claim? I know of the riots in France (a country well known for civil disobedience/riots), but haven't heard of the entire continent being "blanketed".
- unethical_ban 8y ago
  Then punish the corporations that abandon countries to avoid taxes. Life and society is about the people. Corporations shouldn't be respected like people.
- gok 8y ago
  …and much higher social insurance taxes.
- bunnycorn 8y ago
  You are totally right. 45% tax bracket at $70K? That's cute. In my country (Portugal, which is also in the Eu), it kicks right in the 40.5k€ for 45%. And we have a VAT of 23%. https://www.economias.pt/escaloes-de-irs/ https://www.economias.pt/escaloes-de-irs/

rayiner 8y ago

At the state and local level, that just means companies will leave your state and go somewhere else. In a globalized world, the same thing is true for countries. There is a reason France has an effective 11% corporate tax rate: https://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world https://www.npr.org/2017/08/07/541797699/fact-check-does-the... (Chart 2). If you want to pay for the safety net, do what Europe does and tax middle class people who can't just move to a lower-tax jurisdiction. E.g. in Germany, the 42% tax bracket (just shy of the top 45% bracket) kicks in at around $70,000, and there is a 20% VAT.

perfmode 8y ago
The fundamental problem is that capital is permitted to cross borders, but people are not. Not in the same way. So, corporations can vote with their feet, but people cannot.
- rayiner 8y ago
  The U.S. and the Schengen Area each comprise regions of 300-400 million people where people are free to move internally. You would think that would create a similar pressure to reduce internal income taxes to attract residents, but it does not. People, unlike corporations, have roots in places and by and large don't want to move to chase lower tax rates.
  - perfmode 8y ago
    Corporations don’t have to physically move when they move. They just file paperwork elsewhere.
    - rayiner 8y ago
      That's not really true. You can't just decide to be an Irish company if you have no presence in Ireland. The wave of corporate inversions in the U.S. was accompanied by lots of companies moving their headquarters (and their top executives) to Switzerland, the U.K., etc.
      - perfmode 8y ago
        Tim Cook doesn't need to live in Ireland to benefit from its tax code.
        rayiner 8y ago
        Income from capital gains is taxed at the rate of where the person lives. Tim Cook is a great example: it was reported that one of his recent bonuses was taxed at 50%. Not that many people, even ones who make a lot of money, can take advantage of various tax avoidance measures. (That’s why e.g. getting rid of the preferential treatment of capital gains would raise less tax money than getting rid of the mortgage interest deduction.) CEOs mostly cannot, unless they run investment companies.
        perfmode 8y ago
        My point is that Apple can take advantage of Ireland for tax purposes but Tim Cook doesn’t need to live in Ireland. The corporation enjoys benefits not conferred to people. This is why there is consternation and conflict around Apple’s repatriation of capital.
minikites 8y ago
https://www.theguardian.com/inequality/2017/nov/20/if-you-tax-the-rich-they-wont-leave-us-data-contradicts-millionaires-threats https://www.theguardian.com/inequality/2017/nov/20/if-you-ta... >Only about 2.4% of US-based millionaires change their state of residence in a given year. Interstate migration is actually more common among the US middle class, and almost twice as common among its poorest residents, who have an annual interstate migration rate of 4.5%. Companies follow people, not the other way around.
6cd6beb 8y ago
>do what Europe does and tax middle class people who can't just move to a lower-tax jurisdiction Well, that's why Europe is blanketed in riots right now. Disenfranchised people enraged at the governing concept of "taxing middle class people who can't just move to a lower-tax jurisdiction" Taxing the hell out of foreign goods would just mean the company now plays a two pronged game - manufacturing where the least regulation is present, and selling at the country with the highest price point who doesn't outright refuse to let you extract their nation's wealth. It's a tricky problem but your answer to it is untenable unless you want people to riot more.
- moorhosj 8y ago
  >Well, that's why Europe is blanketed in riots right now. Can you provide a source for this claim? I know of the riots in France (a country well known for civil disobedience/riots), but haven't heard of the entire continent being "blanketed".
unethical_ban 8y ago
Then punish the corporations that abandon countries to avoid taxes. Life and society is about the people. Corporations shouldn't be respected like people.
gok 8y ago
…and much higher social insurance taxes.
bunnycorn 8y ago
You are totally right. 45% tax bracket at $70K? That's cute. In my country (Portugal, which is also in the Eu), it kicks right in the 40.5k€ for 45%. And we have a VAT of 23%. https://www.economias.pt/escaloes-de-irs/ https://www.economias.pt/escaloes-de-irs/