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It's not that simple. Companies lobby to keep, even coerce, laws that benefit them and allow these sorts of things to happen. What is the common person, or coll

It's not that simple. Companies lobby to keep, even coerce, laws that benefit them and allow these sorts of things to happen. What is the common person, or collection of persons, supposed to do when they are against that kind of force? I believe one way is to actually be involved in politics and get into the seats that govern and make the laws. But it's easier said than done.

refurb 8y ago
Honest question - can you give an example of a tax law that was lobbied for that benefited corporations? And I mean beyond just a decrease in tax rate which businesses would be expected to lobby for.
- elcomet 8y ago
  Big companies lobby every law for their benefits. They hire full time lobyists. Big companies can pay million $ a year for lobbying. Then the question is, does it really influence laws? Well I think if it didn't, they wouldn't spend so much money.
  - rayiner 8y ago
    I think your last point is precisely backwards. Total annual lobbying spending is just $3.7 billion a year, in a $19 trillion economy. It's a tiny amount of money compared to the stakes. If lobbying was so effective companies would spend way more money on it. It's also notable that you couldn't point to a specific tax law, like OP asked for. Lower taxes in general--nobody needs to lobby for that, there is a large contingent of people who favor that just on principle.
    - smt88 8y ago
      We don't know how much companies spend in secret through dark money, individual contributions, holding companies, bribes, etc., so that $3.7B is likely very low.
    - standerman 8y ago
      Maybe most companies can get the results that they want with small, strategic lobbying. It could be both effective and efficient, from an economic standpoint. Why else would organizations like ALEC exist? https://en.wikipedia.org/wiki/American_Legislative_Exchange_Council https://en.wikipedia.org/wiki/American_Legislative_Exchange_...
      - tptacek 8y ago
        Why shouldn't ALEC exist? There is a sizable fraction of our polity that believes in the principles underlying ALEC proposals. Are you upset that those people are organized enough to write model legislation, or are you upset that the countervailing forces in the US don't have something as effective as ALEC? We have the same thing for judges. The conservatives have the Federalist Society. The liberals have the ACS. But for whatever reason, the Federalists have better branding, and are a perennial bogeyman. But all either organization does is keep track of judges that fit their policy goals. What's wrong with that?
        standerman 8y ago
        I am not upset. Points 5 and 6 on that article detail what I believe are legitimate criticisms about the lack of transparency in the process and how ALEC is used to bypass what I view as reasonable requirements for lobbying the government.
        tptacek 8y ago
        Why would a private organization that exists to write draft legislation need to be open and transparent? The legislation is public when it's proposed, and it's the task of legislators to evaluate it on its merits.
    - close04 8y ago
      What you're willing to pay to get something and you actually pay to get something are 2 completely different things. You will pay as little as you can to get to the result but you may be willing to pay a lot more. It's also a matter of perception. Keeping the lobbying sums low(ish) also helps keep a lower profile. You don't want to draw too much attention to the fact that you're paying to get something done your way. Plus, how much can you reasonably spend? In the end you're still trying to influence the same (relatively few) people, spending a considerable percentage of that "$19 trillion economy" is hard to make look legitimate.
    - manux 8y ago
      $3.7 billion a year is a lot. There aren't that many politicians to bribe.
      - elliekelly 8y ago
        >There aren't that many politicians to bribe. I think this is really the crux of the issue. If a CEO met with a politician and said "I've talked to all my CEO buddies and if you do XYZ we're all going to make substantial contributions to your campaign and PACs" that's clear-cut bribery and honest services fraud. But if the same CEO hires a lobbyist to say the exact same thing to a politician suddenly it's "free speech" and we're expected to believe the government can't do anything to reign it in.
        chimeracoder 8y ago
        > But if the same CEO hires a lobbyist to say the exact same thing to a politician suddenly it's "free speech" and we're expected to believe the government can't do anything to reign it in. This is not what happens during lobbying. If you have any concrete evidence of this sort of exchange happening, please report it, since it's a blatant violation of federal law.
        elliekelly 8y ago
        It's absolutely how it works: https://www.vox.com/first-person/2017/6/29/15886936/political-lobbying-lobbyist-big-money-politics https://www.vox.com/first-person/2017/6/29/15886936/politica...
      - justrudd 8y ago
        If you keep it only at the federal level and assume that staff isn't being "lobbied", 100 senators 435 representatives 1 President 1 Vice President ~7 million dollars per person per year :)
        refurb 8y ago
        You do realize those aren't cash payments to the politician, right?
    - wolco 8y ago
      3.7 billion is an industry thay produces 100 times the value on investment on average.
  - rudolph9 8y ago
    I think that person was asking what one example is.
- jaltekruse 8y ago
  Maybe the reduction of the corporate rate during the trump tax cuts? The defense of this change, was that it was going to bring home money stashed in foreign tax havens. During the bush tax cuts, there was also a tax holiday that allowed money to be brought back into the US at a very low tax rate. Can't imagine that 0 corporate lobbyists were involved in the process of creating these laws. from wikipedia: "In 2004, the United States Congress enacted such a tax holiday for U.S. multinational companies in the American Jobs Creation Act of 2004 (AJCA)) section 965, allowing them to repatriate foreign profits to the United States at a 5.25% tax rate, rather than the existing 35% corporate tax rate."
- humblebee 8y ago
  I don't have a source on this, but I've commonly heard that tax software companies (intuit, hrblock, etc) lobby for not having simpler taxes because it would take away from a large part of their business. Again, no sources. Just something that is commonly thrown around. Here is a HN discussion on it though: https://news.ycombinator.com/item?id=16841449 https://news.ycombinator.com/item?id=16841449
  - baddox 8y ago
    Several links here that look reputable: https://www.propublica.org/article/filing-taxes-could-be-free-simple-hr-block-intuit-lobbying-against-it https://www.propublica.org/article/filing-taxes-could-be-fre...
  - graeme 8y ago
    This is a different thing: more of a tax regulation. This thread is about reducing tax payable. The intuit story is about making it harder for citizens to file taxes.
- elliekelly 8y ago
  The carried-interest loophole was purchased and paid for by hedge funds. Edit: From this[1] Bloomberg article: > Under pressure from industry lobbyists and exploiting a split among White House advisers, the Republican Congress in December failed to fulfill Trump’s promise to end the tax windfall enjoyed by money managers. And lawmakers seemed to stumble in trying to narrow their tax advantage, writing the new carried-interest rule in a way that provided firms an easy escape. Closing the loophole actually has bi-partisan support... except among those who spend a lot of time with industry lobbyists. [1] https://www.bloomberg.com/news/articles/2018-02-14/mnuchin-says-irs-to-ban-hedge-fund-tax-dodge-on-carried-interest https://www.bloomberg.com/news/articles/2018-02-14/mnuchin-s...
- mcny 8y ago
  > Honest question - can you give an example of a tax law that was lobbied for that benefited corporations? I don't know the answer so this is just speculation and five seconds of Googling (but I am writing this regardless because I hope someone knowledgeable will see this and correct me so I actually learn something) My first stop was https://www.investopedia.com/terms/c/corporatetax.asp https://www.investopedia.com/terms/c/corporatetax.asp > Corporations are permitted to reduce taxable income by certain necessary and ordinary business expenditures. All current expenses required for the operation of the business are fully tax deductible. Investments and real estate purchased for the intent of generating income for the business are also deductible. A corporation can deduct employee salaries, health benefits, tuition reimbursement and bonuses. In addition, a corporation can reduce its taxable income by insurance premiums, travel expenses, bad debts, interest payments, sales taxes, fuel taxes and excise taxes. Tax preparation fees, legal services, bookkeeping and advertising costs are also used to reduce business income. So here is my interpretation: Let us say for ease of math, I am Pupflix and I have 100 customers who pay $10 per month. I have an annual income of $100 * 10 * 12 = $12,000. Let us say I pay salary of $20 a month, so $12 * 20 = $240. I can deduct that. So my income is now $1200 - $240 = $960. Lets say my operating expenses are $10 a month. I can deduct that as well, so deduct $120 from $960, which leaves me with $840. Now all this is relatively straight forward. From what I've learned from previous conversations, corporation tax is on profits, and not in revenue. Apparently, this is essential because some businesses are very low margin. Apparently, when all is said and done, a retail grocery store typically has under 5% profit (before any shenanigans). However, what happens when our Pupflix pays Disney Corporation $1000 in licensing fees for the right to stream Disney content for the next ten years? Does our Pupflix deduct $1000 this year? That would be very wasteful because our income at this point is only $840. I believe this is where Loss Carryforward comes in. https://www.investopedia.com/terms/l/losscarryforward.asp https://www.investopedia.com/terms/l/losscarryforward.asp > For example, if a company experiences negative net operating income (NOI) in year one, but positive NOI in subsequent years, it can reduce the amount of future profits it reports using a loss carryforward to report some or all of the loss from the first year in the subsequent years. This results in lower taxable income in positive NOI years, and reduces the amount the company owes the government in taxes. Imagine a company lost $5 million one year and earned $6 million the next. The loss from the first year can be carried forward and included in the current balance sheet for the second year, lowering the profits, and therefore the taxable income, for that year to $1 million. I am not an accountant. My guess is that the accounting people will somehow run multiple possible execution paths and choose the "best" one. I think the tax field is very nuanced and just being able to classify an expense as either operating vs capital can make a difference in the amount of taxes a corporation has to pay: https://www.investopedia.com/ask/answers/042415/what-difference-between-operating-expense-and-capital-expense.asp https://www.investopedia.com/ask/answers/042415/what-differe... For example, when I was a contractor my boss told me that I am a "cap ex" which is OK but for some reason he couldn't bring me on as full time because reasons. Not that this would change my work at all. I was working with the team just like any full-time employee would. I just wasn't their employee. How this makes sense, I have no idea. I doubt he lied to me. There are probably hundreds of things like this where you could argue an expense is one way or another depending on what suits a company the best at that time. I welcome all corrections and additions to eliminate omissions and especially concrete examples that refurb asked for
chanandler_bong 8y ago
The answer is to outlaw lobbyists, it would fix a lot of problems. That, and enact term limits for Congress. That will fix even more.
- macintux 8y ago
  The world is a crazy complex place. Like them or not, lobbyists are useful for helping lawmakers understand the implications of laws, and eliminating lobbyists (setting aside the impracticality of such a task) and imposing term limits (thus reducing the level of institutional knowledge in Congress) would mean that lawmakers would often be flying completely blind.
  - throw_away2 8y ago
    So let them get bought off instead? I refuse to believe that the only two options are widespread graft or poor ignorant lawmakers who have no other way of obtaining information.
    - macintux 8y ago
      We could also elect people with integrity, as unlikely as that seems in our current environment. My point is that hard problems rarely have simple solutions, as much as populist politicians might like to pretend otherwise. “Ban lobbyists” is a great soundbite but would introduce all sorts of negative consequences (like driving them underground and introducing more potential for corruption).
  - lostapathy 8y ago
    There is of course a middle ground between no terms limits and super short term limits. The longest serving member of congress made it over 59 years - I think most everyone would agree that's excessive.
- smt88 8y ago
  I'd love it if we outlawed lobbyists, but that'll never happen. It's a clear-cut 1st Amendment issue. Imagine, for example, that all the fast-food workers unionized and wanted to get the minimum wage raised. How would they do that when most live outside DC and have to work 1-2 shifts per day to keep their jobs? They hire professionals -- lobbyists. Unfortunately any unregulated system benefits the powerful, and we have the heavily abused lobbying system of today.
theevilsharpie 8y ago
> What is the common person, or collection of persons, supposed to do when they are against that kind of force? Vote. All sorts of interests lobby, all the time. These include consumer-focused interest groups, as well as corporations. But, at the end of the day, politicians gain (and keep) office based on the votes of their constituents. These politicians are (generally) not going to vote on bills that they think might get them kicked out of office.
- markovbot 8y ago
  I've voted in every election I since I turned 18 and nothing seems to have been done about this and many other things. But issues that megacorps care about happen right away. Voting isn't a real solution to unchecked corporate lobbying.
  - xenophon 8y ago
    The solution is reversing Citizen's United, when the Supreme Court held 5-4 that campaign contributions represented "freedom of speech" and could not be limited. In a literal sense, Citizen's United enshrined the idea that your voice (and vote) are proportional to the amount of money you can bring to bear. One of the lessons I've taken from this case and others related to gerrymandering and voter suppression, for instance, is how deeply the integrity our democracy depends on tactical execution of the broader ideals at stake. It's our ability to handle issues at the margin that will determine whether the whole thing works or falls apart.
    - parineum 8y ago
      Citizen's United affirmed that an individual's rights to make political speech isn't lost when that individual forms a corporation for the sole purpose of amplifying that speech. It's equivalent (this isn't an analogy, it's literally equivalent) to allowing a person to spend money to buy a megaphone to make their speech literally louder than everyone else's. Not everyone can afford a megaphone.
  - sosborn 8y ago
blunte 8y ago
If you look at the histories of many politicians, you see them making honest efforts to represent their people... in the beginning of their careers. A major problem is that there's so much money in campaigns that in order to get enough money to compete, a politician must make deals with donors. Often these donors are small groups of high wealth individuals or industries. Now the politician is effectively in the pocket of the monied interests, or else they are out of government cone next election cycle. Until campaigns are equally financed by "the people", the results will not have a chance of being representative of what the people want. But ironically, to make that change would require the current government to take action that most of the big industries do not want. Thus, it will not happen.
- crankylinuxuser 8y ago
  That's why I'm watching the new crop of Congresspeople like AOC, to see if we can spot if/when that change does occur. I know for folks like Sanders, it might have switched early on, but he's getting more and more curmudgeonly about corporate thievery, eco-destruction, and worker rights.
- gutnor 8y ago
  When you spend most of you working day and a lot of your personal time mingling with high worth individual, it is only a matter of time before you lose sight of what is their interest and your people interest. Also those high worth individual are not bad person or repulsive. I'm sure a lot have good intention but are too sheltered. They can become your circle of friend and there is no way back from there. There is also the plain political game. You can't make a political career alone, you need allies, people that trust you and support you within the party, above and under. Over the years, you get stuck in a network of dependencies that ties your hands. And there is the sad reality that no single decision is going to improve anything. You need continuous and consistent effort in one direction for years. So even if you are aware of all that I listed above, the truth is that you can't go fully lose cannon and actually achieve anything lasting.
sbahr001 8y ago
It is a double edge sword. The tax laws that help business fewer taxes help small businesses too. Companies are allowed to carry over losses for five years, and since a lot of the streaming business operate at a loss, they can subsidize their future. Ideally, this allows you to spend a lot of money to gain growth and then profit from it. Preferably, after you start to profit you pay your taxes, but a lot of these businesses are public companies and have to maximize their stock price or give dividends. Very few tech companies pay dividends so it is all about there stock price. Typically, the stock price is linked to the revenue/profit growth. Apple, for example, took a beating because iPhone sales are normalizing and not growing, over a billion devices sold and Apple is still making record amounts of profit/revenue, and that is still not good enough. Unfortunately, it is a societal/human/capitalist problem, how do you keep the majority happy? That is typically through expansion, not contraction. Usually, contraction results in limited moral and over time that ends of cause governments and economies to fall.
SilasX 8y ago
It is that simple (in the sense of the parent's post): you need to know the specifics of why they were paying no taxes. If, as in the comment, they were carrying over losses, then there's nothing really objectionable. You lost $10 million last year. You profited $10 million this year. Over a reasonable horizon, you weren't profitable. Did they get a specific exemption against the public interest that no one else got? Great! Let's talk about that! Did they deduct 100% of their costs for sham "IP licensing" from a foreign subsidiary? Great! Let's talk about that! But you need to know the why before you conclude there's something objectionable going on. Edit: More generally, every headline of this form comes with an implicit statement like "By my model, <company> should be regarded as having a profit of X dollars, but tax law views them as having a taxable profit of Y < X." That necessitates a good explanation of why you think X is the right value.
- anth_anm 8y ago
  > If, as in the comment, they were carrying over losses, then there's nothing really objectionable I find that objectionable.
  - theartfuldodger 8y ago
    Why? Profits should follow arbitrary calendar years?
    - arkades 8y ago
      Because private citizens aren’t given the same affordances. The double standard is objectionable.
      - usaar333 8y ago
        Yes they can. Carry-forward losses exist with capital gains losses as well as net operating losses from self-employment.
      - gojomo 8y ago
        They can't treat their living expenses exceeding income as deductions, no. But if: * their sole proprietorship loses money in one year, it can be carried forward to offset taxes the next year * they have net losses in investments, those can be carried-over to offset gains in other years * any LLCs in which they are members have allocated losses, those can be carried-over against profits in later years These are the ways a private individual engages in economic activity that are analogous to what a C-Corp does, and for these, the standard is essentially the same.
gnicholas 8y ago
> Companies lobby to keep, even coerce, laws that benefit them This is true. But politicians are playing the exact same game. Back when I was a tax lawyer, I asked my boss why the R&D credit was temporary but always renewed. Why not just make it permanent? He said it was because then the companies had to keep donating to the politicians in order to maintain the status quo. If they'd made it permanent, there would be very little chance of repeal, and therefore much less need to stay cozy with the politicians. It's a 2-sided game.
scarface74 8y ago
Corporate taxes are value destructive. A company is either going to use that money to expand, creating a more jobs, paying employees more - who will pay taxes, or buy back stock or pay dividends. The only real issue I have is the difference between capital gains taxes and income taxes.
- checkyoursudo 8y ago
  "Value destructive" to whom? I don't want all the companies in my area to pay excessive taxes, but they also don't otherwise pay for any negative externalities that they cause or contribute to, except through taxes. I don't want to shoulder the burden alone for their roads and traffic and pollution and power-grid-improvement requirements et cetera. Maybe the system could be different where companies directly pay for the road upgrades they need and the power infrastructure upgrades they need, etc, but that's not the system we have where I live.
  - scarface74 8y ago
    That’s simple to solve via property taxes, gas taxes, yearly car registration fees, and even toll roads.
  - anonuser123456 8y ago
    >Maybe the system could be different where companies directly pay for the road upgrades they need and the power infrastructure upgrades they need, etc... This is the solution most economists would suggest.
- pbhjpbhj 8y ago
  Or do some bullshit accounting to move the money off-shore, like pay billions to use their own trademark to a country in which they bought off politicians to get low taxes; so they can pay out the money without paying in to the governmental system in the country in which the money was raised.
  - scarface74 8y ago
AlexTWithBeard 8y ago
It indeed may be not that simple, but I think the key point of the driverdan's message is: could the article please have provided a little bit more actual detail in addition to rage and emotions?
qaq 8y ago
The thing that common person is unlikely to do care enough to allocate time and money to this.
saosebastiao 8y ago
The big problem is the corporate tax itself. It's incredibly hard to tax corporations fairly and efficiently, and as a result the corporate tax code is way more complex than any practical citizen could ever understand. It's hard enough for tax accountants and lawyers that have dedicated their entire profession to understanding it. The whole reason we have a corporate tax is because we feel rich people need to be taxed more, but the association between corporation and rich person is fuzzy at best. More nefariously, you are taxing pools of organizational and financial capital as opposed to individuals...which means that their ability to fight the tax code is amplified with pooled resources. It's regulatory capture waiting to happen. The better option would be to dump the corporate tax entirely, and have all capital gains and dividends taxed as income. I know it can't be that simple because they're not the same as income, but working out those details would be a hell of a lot easier than trying to figure out how to get corporations to repatriate income after their international tax arbitrage schemes.
- int_19h 8y ago
  Firstly, capital gains and dividends are income. They're not taxed as personal income because of how our tax law is worded, but that law is not set in stone, and the way it is right now is, shall we say, intentionally favorable to certain people. Your better option doesn't actually work, though, because the really rich can dodge it by borrowing money against their wealth as collateral, and because once stock (and other capital) is inherited, the new owner doesn't pay taxes on its appreciation before acquiring it - so most of it is essentially untaxed entirely.
- dragonwriter 8y ago
  > The whole reason we have a corporate tax is because we feel rich people need to be taxed more No, it's because without either having it or treating all corps as pass-through entities (which becomes problematic when you've got layers of ownership before tracing back to individual taxpayers) corporations become abusable as tax shelters.
pathseeker 8y ago
>>If you don't like the law elect different politicians. Don't get mad at companies that follow the law. >I believe one way is to actually be involved in politics and get into the seats that govern and make the laws.
standardUser 8y ago
To be fair, at least 40% of the "common" people reliably vote for candidates that are very up front about that fact that they will support low taxes for businesses. This isn't some conspiracy of giant corporations and lobbyists beating down the will of the people. This IS the will of the people. In many regions it's the overwhelming majority of the people.
stevenalowe 8y ago
Funny how removing the government's ability to interfere in our lives was not mentioned as a solution. Public brainwashing complete.

refurb 8y ago

Honest question - can you give an example of a tax law that was lobbied for that benefited corporations? And I mean beyond just a decrease in tax rate which businesses would be expected to lobby for.

elcomet 8y ago
Big companies lobby every law for their benefits. They hire full time lobyists. Big companies can pay million $ a year for lobbying. Then the question is, does it really influence laws? Well I think if it didn't, they wouldn't spend so much money.
- rayiner 8y ago
  I think your last point is precisely backwards. Total annual lobbying spending is just $3.7 billion a year, in a $19 trillion economy. It's a tiny amount of money compared to the stakes. If lobbying was so effective companies would spend way more money on it. It's also notable that you couldn't point to a specific tax law, like OP asked for. Lower taxes in general--nobody needs to lobby for that, there is a large contingent of people who favor that just on principle.
  - smt88 8y ago
    We don't know how much companies spend in secret through dark money, individual contributions, holding companies, bribes, etc., so that $3.7B is likely very low.
  - standerman 8y ago
    Maybe most companies can get the results that they want with small, strategic lobbying. It could be both effective and efficient, from an economic standpoint. Why else would organizations like ALEC exist? https://en.wikipedia.org/wiki/American_Legislative_Exchange_Council https://en.wikipedia.org/wiki/American_Legislative_Exchange_...
    - tptacek 8y ago
      Why shouldn't ALEC exist? There is a sizable fraction of our polity that believes in the principles underlying ALEC proposals. Are you upset that those people are organized enough to write model legislation, or are you upset that the countervailing forces in the US don't have something as effective as ALEC? We have the same thing for judges. The conservatives have the Federalist Society. The liberals have the ACS. But for whatever reason, the Federalists have better branding, and are a perennial bogeyman. But all either organization does is keep track of judges that fit their policy goals. What's wrong with that?
      - standerman 8y ago
        I am not upset. Points 5 and 6 on that article detail what I believe are legitimate criticisms about the lack of transparency in the process and how ALEC is used to bypass what I view as reasonable requirements for lobbying the government.
        tptacek 8y ago
        Why would a private organization that exists to write draft legislation need to be open and transparent? The legislation is public when it's proposed, and it's the task of legislators to evaluate it on its merits.
  - close04 8y ago
    What you're willing to pay to get something and you actually pay to get something are 2 completely different things. You will pay as little as you can to get to the result but you may be willing to pay a lot more. It's also a matter of perception. Keeping the lobbying sums low(ish) also helps keep a lower profile. You don't want to draw too much attention to the fact that you're paying to get something done your way. Plus, how much can you reasonably spend? In the end you're still trying to influence the same (relatively few) people, spending a considerable percentage of that "$19 trillion economy" is hard to make look legitimate.
  - manux 8y ago
    $3.7 billion a year is a lot. There aren't that many politicians to bribe.
    - elliekelly 8y ago
      >There aren't that many politicians to bribe. I think this is really the crux of the issue. If a CEO met with a politician and said "I've talked to all my CEO buddies and if you do XYZ we're all going to make substantial contributions to your campaign and PACs" that's clear-cut bribery and honest services fraud. But if the same CEO hires a lobbyist to say the exact same thing to a politician suddenly it's "free speech" and we're expected to believe the government can't do anything to reign it in.
      - chimeracoder 8y ago
        > But if the same CEO hires a lobbyist to say the exact same thing to a politician suddenly it's "free speech" and we're expected to believe the government can't do anything to reign it in. This is not what happens during lobbying. If you have any concrete evidence of this sort of exchange happening, please report it, since it's a blatant violation of federal law.
        elliekelly 8y ago
        It's absolutely how it works: https://www.vox.com/first-person/2017/6/29/15886936/political-lobbying-lobbyist-big-money-politics https://www.vox.com/first-person/2017/6/29/15886936/politica...
    - justrudd 8y ago
      If you keep it only at the federal level and assume that staff isn't being "lobbied", 100 senators 435 representatives 1 President 1 Vice President ~7 million dollars per person per year :)
      - refurb 8y ago
        You do realize those aren't cash payments to the politician, right?
  - wolco 8y ago
    3.7 billion is an industry thay produces 100 times the value on investment on average.
- rudolph9 8y ago
  I think that person was asking what one example is.
jaltekruse 8y ago
Maybe the reduction of the corporate rate during the trump tax cuts? The defense of this change, was that it was going to bring home money stashed in foreign tax havens. During the bush tax cuts, there was also a tax holiday that allowed money to be brought back into the US at a very low tax rate. Can't imagine that 0 corporate lobbyists were involved in the process of creating these laws. from wikipedia: "In 2004, the United States Congress enacted such a tax holiday for U.S. multinational companies in the American Jobs Creation Act of 2004 (AJCA)) section 965, allowing them to repatriate foreign profits to the United States at a 5.25% tax rate, rather than the existing 35% corporate tax rate."
humblebee 8y ago
I don't have a source on this, but I've commonly heard that tax software companies (intuit, hrblock, etc) lobby for not having simpler taxes because it would take away from a large part of their business. Again, no sources. Just something that is commonly thrown around. Here is a HN discussion on it though: https://news.ycombinator.com/item?id=16841449 https://news.ycombinator.com/item?id=16841449
- baddox 8y ago
  Several links here that look reputable: https://www.propublica.org/article/filing-taxes-could-be-free-simple-hr-block-intuit-lobbying-against-it https://www.propublica.org/article/filing-taxes-could-be-fre...
- graeme 8y ago
  This is a different thing: more of a tax regulation. This thread is about reducing tax payable. The intuit story is about making it harder for citizens to file taxes.
elliekelly 8y ago
The carried-interest loophole was purchased and paid for by hedge funds. Edit: From this[1] Bloomberg article: > Under pressure from industry lobbyists and exploiting a split among White House advisers, the Republican Congress in December failed to fulfill Trump’s promise to end the tax windfall enjoyed by money managers. And lawmakers seemed to stumble in trying to narrow their tax advantage, writing the new carried-interest rule in a way that provided firms an easy escape. Closing the loophole actually has bi-partisan support... except among those who spend a lot of time with industry lobbyists. [1] https://www.bloomberg.com/news/articles/2018-02-14/mnuchin-says-irs-to-ban-hedge-fund-tax-dodge-on-carried-interest https://www.bloomberg.com/news/articles/2018-02-14/mnuchin-s...
mcny 8y ago
> Honest question - can you give an example of a tax law that was lobbied for that benefited corporations? I don't know the answer so this is just speculation and five seconds of Googling (but I am writing this regardless because I hope someone knowledgeable will see this and correct me so I actually learn something) My first stop was https://www.investopedia.com/terms/c/corporatetax.asp https://www.investopedia.com/terms/c/corporatetax.asp > Corporations are permitted to reduce taxable income by certain necessary and ordinary business expenditures. All current expenses required for the operation of the business are fully tax deductible. Investments and real estate purchased for the intent of generating income for the business are also deductible. A corporation can deduct employee salaries, health benefits, tuition reimbursement and bonuses. In addition, a corporation can reduce its taxable income by insurance premiums, travel expenses, bad debts, interest payments, sales taxes, fuel taxes and excise taxes. Tax preparation fees, legal services, bookkeeping and advertising costs are also used to reduce business income. So here is my interpretation: Let us say for ease of math, I am Pupflix and I have 100 customers who pay $10 per month. I have an annual income of $100 * 10 * 12 = $12,000. Let us say I pay salary of $20 a month, so $12 * 20 = $240. I can deduct that. So my income is now $1200 - $240 = $960. Lets say my operating expenses are $10 a month. I can deduct that as well, so deduct $120 from $960, which leaves me with $840. Now all this is relatively straight forward. From what I've learned from previous conversations, corporation tax is on profits, and not in revenue. Apparently, this is essential because some businesses are very low margin. Apparently, when all is said and done, a retail grocery store typically has under 5% profit (before any shenanigans). However, what happens when our Pupflix pays Disney Corporation $1000 in licensing fees for the right to stream Disney content for the next ten years? Does our Pupflix deduct $1000 this year? That would be very wasteful because our income at this point is only $840. I believe this is where Loss Carryforward comes in. https://www.investopedia.com/terms/l/losscarryforward.asp https://www.investopedia.com/terms/l/losscarryforward.asp > For example, if a company experiences negative net operating income (NOI) in year one, but positive NOI in subsequent years, it can reduce the amount of future profits it reports using a loss carryforward to report some or all of the loss from the first year in the subsequent years. This results in lower taxable income in positive NOI years, and reduces the amount the company owes the government in taxes. Imagine a company lost $5 million one year and earned $6 million the next. The loss from the first year can be carried forward and included in the current balance sheet for the second year, lowering the profits, and therefore the taxable income, for that year to $1 million. I am not an accountant. My guess is that the accounting people will somehow run multiple possible execution paths and choose the "best" one. I think the tax field is very nuanced and just being able to classify an expense as either operating vs capital can make a difference in the amount of taxes a corporation has to pay: https://www.investopedia.com/ask/answers/042415/what-difference-between-operating-expense-and-capital-expense.asp https://www.investopedia.com/ask/answers/042415/what-differe... For example, when I was a contractor my boss told me that I am a "cap ex" which is OK but for some reason he couldn't bring me on as full time because reasons. Not that this would change my work at all. I was working with the team just like any full-time employee would. I just wasn't their employee. How this makes sense, I have no idea. I doubt he lied to me. There are probably hundreds of things like this where you could argue an expense is one way or another depending on what suits a company the best at that time. I welcome all corrections and additions to eliminate omissions and especially concrete examples that refurb asked for

chanandler_bong 8y ago

The answer is to outlaw lobbyists, it would fix a lot of problems. That, and enact term limits for Congress. That will fix even more.

macintux 8y ago
The world is a crazy complex place. Like them or not, lobbyists are useful for helping lawmakers understand the implications of laws, and eliminating lobbyists (setting aside the impracticality of such a task) and imposing term limits (thus reducing the level of institutional knowledge in Congress) would mean that lawmakers would often be flying completely blind.
- throw_away2 8y ago
  So let them get bought off instead? I refuse to believe that the only two options are widespread graft or poor ignorant lawmakers who have no other way of obtaining information.
  - macintux 8y ago
    We could also elect people with integrity, as unlikely as that seems in our current environment. My point is that hard problems rarely have simple solutions, as much as populist politicians might like to pretend otherwise. “Ban lobbyists” is a great soundbite but would introduce all sorts of negative consequences (like driving them underground and introducing more potential for corruption).
- lostapathy 8y ago
  There is of course a middle ground between no terms limits and super short term limits. The longest serving member of congress made it over 59 years - I think most everyone would agree that's excessive.
smt88 8y ago
I'd love it if we outlawed lobbyists, but that'll never happen. It's a clear-cut 1st Amendment issue. Imagine, for example, that all the fast-food workers unionized and wanted to get the minimum wage raised. How would they do that when most live outside DC and have to work 1-2 shifts per day to keep their jobs? They hire professionals -- lobbyists. Unfortunately any unregulated system benefits the powerful, and we have the heavily abused lobbying system of today.

theevilsharpie 8y ago

> What is the common person, or collection of persons, supposed to do when they are against that kind of force? Vote. All sorts of interests lobby, all the time. These include consumer-focused interest groups, as well as corporations. But, at the end of the day, politicians gain (and keep) office based on the votes of their constituents. These politicians are (generally) not going to vote on bills that they think might get them kicked out of office.

markovbot 8y ago
I've voted in every election I since I turned 18 and nothing seems to have been done about this and many other things. But issues that megacorps care about happen right away. Voting isn't a real solution to unchecked corporate lobbying.
- xenophon 8y ago
  The solution is reversing Citizen's United, when the Supreme Court held 5-4 that campaign contributions represented "freedom of speech" and could not be limited. In a literal sense, Citizen's United enshrined the idea that your voice (and vote) are proportional to the amount of money you can bring to bear. One of the lessons I've taken from this case and others related to gerrymandering and voter suppression, for instance, is how deeply the integrity our democracy depends on tactical execution of the broader ideals at stake. It's our ability to handle issues at the margin that will determine whether the whole thing works or falls apart.
  - parineum 8y ago
    Citizen's United affirmed that an individual's rights to make political speech isn't lost when that individual forms a corporation for the sole purpose of amplifying that speech. It's equivalent (this isn't an analogy, it's literally equivalent) to allowing a person to spend money to buy a megaphone to make their speech literally louder than everyone else's. Not everyone can afford a megaphone.
- sosborn 8y ago

blunte 8y ago

If you look at the histories of many politicians, you see them making honest efforts to represent their people... in the beginning of their careers. A major problem is that there's so much money in campaigns that in order to get enough money to compete, a politician must make deals with donors. Often these donors are small groups of high wealth individuals or industries. Now the politician is effectively in the pocket of the monied interests, or else they are out of government cone next election cycle. Until campaigns are equally financed by "the people", the results will not have a chance of being representative of what the people want. But ironically, to make that change would require the current government to take action that most of the big industries do not want. Thus, it will not happen.

crankylinuxuser 8y ago
That's why I'm watching the new crop of Congresspeople like AOC, to see if we can spot if/when that change does occur. I know for folks like Sanders, it might have switched early on, but he's getting more and more curmudgeonly about corporate thievery, eco-destruction, and worker rights.
gutnor 8y ago
When you spend most of you working day and a lot of your personal time mingling with high worth individual, it is only a matter of time before you lose sight of what is their interest and your people interest. Also those high worth individual are not bad person or repulsive. I'm sure a lot have good intention but are too sheltered. They can become your circle of friend and there is no way back from there. There is also the plain political game. You can't make a political career alone, you need allies, people that trust you and support you within the party, above and under. Over the years, you get stuck in a network of dependencies that ties your hands. And there is the sad reality that no single decision is going to improve anything. You need continuous and consistent effort in one direction for years. So even if you are aware of all that I listed above, the truth is that you can't go fully lose cannon and actually achieve anything lasting.

sbahr001 8y ago

It is a double edge sword. The tax laws that help business fewer taxes help small businesses too. Companies are allowed to carry over losses for five years, and since a lot of the streaming business operate at a loss, they can subsidize their future. Ideally, this allows you to spend a lot of money to gain growth and then profit from it. Preferably, after you start to profit you pay your taxes, but a lot of these businesses are public companies and have to maximize their stock price or give dividends. Very few tech companies pay dividends so it is all about there stock price. Typically, the stock price is linked to the revenue/profit growth. Apple, for example, took a beating because iPhone sales are normalizing and not growing, over a billion devices sold and Apple is still making record amounts of profit/revenue, and that is still not good enough. Unfortunately, it is a societal/human/capitalist problem, how do you keep the majority happy? That is typically through expansion, not contraction. Usually, contraction results in limited moral and over time that ends of cause governments and economies to fall.

SilasX 8y ago

It is that simple (in the sense of the parent's post): you need to know the specifics of why they were paying no taxes. If, as in the comment, they were carrying over losses, then there's nothing really objectionable. You lost $10 million last year. You profited $10 million this year. Over a reasonable horizon, you weren't profitable. Did they get a specific exemption against the public interest that no one else got? Great! Let's talk about that! Did they deduct 100% of their costs for sham "IP licensing" from a foreign subsidiary? Great! Let's talk about that! But you need to know the why before you conclude there's something objectionable going on. Edit: More generally, every headline of this form comes with an implicit statement like "By my model, <company> should be regarded as having a profit of X dollars, but tax law views them as having a taxable profit of Y < X." That necessitates a good explanation of why you think X is the right value.

anth_anm 8y ago
> If, as in the comment, they were carrying over losses, then there's nothing really objectionable I find that objectionable.
- theartfuldodger 8y ago
  Why? Profits should follow arbitrary calendar years?
  - arkades 8y ago
    Because private citizens aren’t given the same affordances. The double standard is objectionable.
    - usaar333 8y ago
      Yes they can. Carry-forward losses exist with capital gains losses as well as net operating losses from self-employment.
    - gojomo 8y ago
      They can't treat their living expenses exceeding income as deductions, no. But if: * their sole proprietorship loses money in one year, it can be carried forward to offset taxes the next year * they have net losses in investments, those can be carried-over to offset gains in other years * any LLCs in which they are members have allocated losses, those can be carried-over against profits in later years These are the ways a private individual engages in economic activity that are analogous to what a C-Corp does, and for these, the standard is essentially the same.

gnicholas 8y ago

> Companies lobby to keep, even coerce, laws that benefit them This is true. But politicians are playing the exact same game. Back when I was a tax lawyer, I asked my boss why the R&D credit was temporary but always renewed. Why not just make it permanent? He said it was because then the companies had to keep donating to the politicians in order to maintain the status quo. If they'd made it permanent, there would be very little chance of repeal, and therefore much less need to stay cozy with the politicians. It's a 2-sided game.

scarface74 8y ago

Corporate taxes are value destructive. A company is either going to use that money to expand, creating a more jobs, paying employees more - who will pay taxes, or buy back stock or pay dividends. The only real issue I have is the difference between capital gains taxes and income taxes.

checkyoursudo 8y ago
"Value destructive" to whom? I don't want all the companies in my area to pay excessive taxes, but they also don't otherwise pay for any negative externalities that they cause or contribute to, except through taxes. I don't want to shoulder the burden alone for their roads and traffic and pollution and power-grid-improvement requirements et cetera. Maybe the system could be different where companies directly pay for the road upgrades they need and the power infrastructure upgrades they need, etc, but that's not the system we have where I live.
- scarface74 8y ago
  That’s simple to solve via property taxes, gas taxes, yearly car registration fees, and even toll roads.
- anonuser123456 8y ago
  >Maybe the system could be different where companies directly pay for the road upgrades they need and the power infrastructure upgrades they need, etc... This is the solution most economists would suggest.
pbhjpbhj 8y ago
Or do some bullshit accounting to move the money off-shore, like pay billions to use their own trademark to a country in which they bought off politicians to get low taxes; so they can pay out the money without paying in to the governmental system in the country in which the money was raised.
- scarface74 8y ago

AlexTWithBeard 8y ago

It indeed may be not that simple, but I think the key point of the driverdan's message is: could the article please have provided a little bit more actual detail in addition to rage and emotions?

qaq 8y ago

The thing that common person is unlikely to do care enough to allocate time and money to this.

saosebastiao 8y ago

The big problem is the corporate tax itself. It's incredibly hard to tax corporations fairly and efficiently, and as a result the corporate tax code is way more complex than any practical citizen could ever understand. It's hard enough for tax accountants and lawyers that have dedicated their entire profession to understanding it. The whole reason we have a corporate tax is because we feel rich people need to be taxed more, but the association between corporation and rich person is fuzzy at best. More nefariously, you are taxing pools of organizational and financial capital as opposed to individuals...which means that their ability to fight the tax code is amplified with pooled resources. It's regulatory capture waiting to happen. The better option would be to dump the corporate tax entirely, and have all capital gains and dividends taxed as income. I know it can't be that simple because they're not the same as income, but working out those details would be a hell of a lot easier than trying to figure out how to get corporations to repatriate income after their international tax arbitrage schemes.

int_19h 8y ago
Firstly, capital gains and dividends are income. They're not taxed as personal income because of how our tax law is worded, but that law is not set in stone, and the way it is right now is, shall we say, intentionally favorable to certain people. Your better option doesn't actually work, though, because the really rich can dodge it by borrowing money against their wealth as collateral, and because once stock (and other capital) is inherited, the new owner doesn't pay taxes on its appreciation before acquiring it - so most of it is essentially untaxed entirely.
dragonwriter 8y ago
> The whole reason we have a corporate tax is because we feel rich people need to be taxed more No, it's because without either having it or treating all corps as pass-through entities (which becomes problematic when you've got layers of ownership before tracing back to individual taxpayers) corporations become abusable as tax shelters.

pathseeker 8y ago

>>If you don't like the law elect different politicians. Don't get mad at companies that follow the law. >I believe one way is to actually be involved in politics and get into the seats that govern and make the laws.

standardUser 8y ago

To be fair, at least 40% of the "common" people reliably vote for candidates that are very up front about that fact that they will support low taxes for businesses. This isn't some conspiracy of giant corporations and lobbyists beating down the will of the people. This IS the will of the people. In many regions it's the overwhelming majority of the people.

stevenalowe 8y ago

Funny how removing the government's ability to interfere in our lives was not mentioned as a solution. Public brainwashing complete.