6 ms·

> Let’s ask the largest companies in the tech sector, which are the largest employers of high-skilled talent, to do a bit more I do not understand how people c

> Let’s ask the largest companies in the tech sector, which are the largest employers of high-skilled talent, to do a bit more I do not understand how people can not understand that a percentage tax, by it's definition, does have the largest companies pay more.

wlesieutre 8y ago
I'm quite sure that the President and CLO of Microsoft who said that understands exactly what he said. "More" in context means more than they're doing now. Not "do more than a lemonade stand that made $200 last quarter," which no shit, they're doing already.
ABCLAW 8y ago
>I do not understand how people can not understand that a percentage tax, by it's definition, does have the largest companies pay more. They don't understand it because it isn't true on a proportional basis (and in some cases on an absolute dollar value basis, too). Larger companies have access to tax avoidance strategies which are unavailable to smaller companies[1] which substantially changes the calculus. I've gone through the books of plenty LargeCos. The playing field is not even. [1] issues include inability to finance high-end tax structuring advice, writing of grants or negotiate valuations, lack of ability to amortize risk associated with an unfavourable tax ruling, lack of capital to access directorship services in tax havens etc.
- RHSeeger 8y ago
  There seems to be a repeated response to what I said, so I'll just respond once. The fix for companies using loopholes to avoid taxes is not to raise the tax rate. The fix is to remove the loopholes.
  - ceejayoz 8y ago
    A decent chunk of the tax savings from loopholes is channeled back into preventing those loopholes from closing.
  - bairrd 8y ago
    Why not both? People selling physical goods bake a certain percentage of shrinkange into the price of their goods whilst also finding new ways to prevent theft.
  - ABCLAW 8y ago
    >The fix is to remove the loopholes. Is it, though? This is a situation where Chesterton's Fence is important to consider. No single government regulates tax worldwide, and each is iteratively attempting to balance a multitude of concerns, while remaining competitive to capital. Additionally, many of the loopholes aren't legislative tax exemptions on the books. They're determinations regarding how and when certain things are recognized on the books. 'Fixing' those problems doesn't 'remove' loopholes. It just creates new rules which are then exploited. Finally, with respect to tax simplification in general: Simplifying the tax code is akin to refactoring code. Sure, there are some areas where it could be engaged in without causing problems (and which would result in efficiency gains!), but much of the appeal of refactoring code lies in how we ignore the tricky edge cases when designing a new utopic system in our heads. The legal project of re-digesting a highly complicated body of law and producing a more functional version would take, at the very least, a decade of work. So now we're hitting the complexity limits of an administration's compute ability too. Shit. All in all: it's a bit harder than that. I wish you were right, though.
    - 1123581321 8y ago
      Chesterton’s Fence would apply to tax rates and new taxes as well.
  - deleted 8y ago
    [deleted]
- roenxi 8y ago
  Why is that important? I have two taxpayers, Roy the rich ($1000 / month) and Peter the poor ($100 / month). Today we will have a 10% flat tax. Peter pays $10. Roy pays $100. The total tax take is $110 and Roy is paying 91% of it. If we imagine a 'comfortable' lifestyle costs $200/month then there is an argument against using this flat tax system, but it is difficult to escape from the fact that Roy is doing almost all the heavy lifting from the who-is-funding-society perspective. Even if Roy has a very good team of accountants and is managing to only pay 5% of his income in tax (grossly unfair!) he would still be paying 83% of the total tax take (50 / 60). If we use percentages, the rich are going to be paying for most of what the government does, whether they pay personally or through corporate tax. Most people overestimate how profitable companies are, the economics of business tend to squeeze margins. I've seen a lot of arguments in Australia whinging that not enough taxes are paid by companies like Quantas because they don't understand concepts like depreciation and carrying losses forward. Those concepts are quite fair once it is accepted that maybe assets take a few years life in them before they need to be replaced. EDIT Bit slow this morning, I figured out what you meant by proportional basis.
  - gentaro 8y ago
    There's multiple glaring problems with your example, but the main issue for the economy is that Peter the poor spends a much larger proportion of his income as a necessity to survive. Society as a whole benefits from Peter the poor paying proportionally less in taxes because Roy the rich simply does not consume the same proportion of his income (let's keep in mind, that in real life, Roy is 100,000 times richer than Pete, not 10x). Taxing Roy proportionately more is not only the ethical thing to do, but also the rational thing to do if you want a strong economy. These policies aren't about what you find fair, they're in place because they are what make society prosperous.
gamblor956 8y ago
I do not understand how people can not understand that a percentage tax, by it's definition, does have the largest companies pay more. I do not understand how people can not understand that the largest companies pay a lot of money to structure their taxes so that they pay proportionately less of their income in taxes than smaller companies do despite deriving significantly more economic benefits from the stable economic system those taxes enable. Also, the percentage tax does not by definition mean that the largest companies pay more. It means that the most profitable companies (on an income tax basis) pay more taxes on an absolute basis than a similarly-sized company that makes less profit. However, Apple, Google, and GE are all (or at least in GE's case, was) highly-profitable companies that pay ridiculously low taxes for their profit because their "taxable" income is significantly less than their economic income.
- RHSeeger 8y ago
  > I do not understand how people can not understand that the largest companies pay a lot of money to structure their taxes so that they pay proportionately less of their income in taxes than smaller companies do despite deriving significantly more economic benefits from the stable economic system those taxes enable. I understand it that just fine. I just prefer to fix the problem, not the symptom.
- repsilat 8y ago
  With apologies to Tony Hoare: > There are two ways of constructing a corporate tax system: One way is to make it so simple that there are obviously no loopholes, and the other way is to make it so complicated that there are no obvious loopholes.
- deleted 8y ago
  [deleted]
brianberns 8y ago
Amazon nearly doubled its profits to $11.2 billion in 2018 from $5.6 billion the previous year and didn’t pay a single cent of federal income taxes.
- Rapzid 8y ago
  They will have paid a lot in payroll taxes and sales taxes. Their employees will have paid taxes on their income as well. I say this because when people make a simplistic statement about a company not paying much or any taxes on profits a lot of people are mislead into believing the company is somehow not contributing to government revenue. Which is obviously not the case at all.
  - chii 8y ago
    Why is personal taxes of the employee considered taxes paid by the company? If it's fair for a company to have the legal rights of a person, it's only fair they pay the same rate of taxes as a natural person. If the share holders of the company is legally indemnify against the debts/risks of the company, then they shall also pay their fair share of taxes, and should not deduct it from the already paid portion of company tax. So this way, if you want legal protection of a limited liability corp, you have to pay double taxes. But if you accept legal responsibility if the company, then you don't get double taxed.
    - Rapzid 8y ago
      I'm simply putting out there that a ton of the revenue Amazon takes in ends up as government revenue. I don't really have an opinion on anything else you're talking about.
  - masonic 8y ago
    The buyer pays the sales tax, not Amazon. Of course, even that assumes that Amazon properly forwards all the sales taxes they collect and don't keep any.
    - 8y ago
mnm1 8y ago
Maybe because they see that Amazon (and other companies) paid nothing in federal taxes last year despite federal taxes being a percentage tax.

wlesieutre 8y ago

I'm quite sure that the President and CLO of Microsoft who said that understands exactly what he said. "More" in context means more than they're doing now. Not "do more than a lemonade stand that made $200 last quarter," which no shit, they're doing already.

ABCLAW 8y ago

>I do not understand how people can not understand that a percentage tax, by it's definition, does have the largest companies pay more. They don't understand it because it isn't true on a proportional basis (and in some cases on an absolute dollar value basis, too). Larger companies have access to tax avoidance strategies which are unavailable to smaller companies[1] which substantially changes the calculus. I've gone through the books of plenty LargeCos. The playing field is not even. [1] issues include inability to finance high-end tax structuring advice, writing of grants or negotiate valuations, lack of ability to amortize risk associated with an unfavourable tax ruling, lack of capital to access directorship services in tax havens etc.

RHSeeger 8y ago
There seems to be a repeated response to what I said, so I'll just respond once. The fix for companies using loopholes to avoid taxes is not to raise the tax rate. The fix is to remove the loopholes.
- ceejayoz 8y ago
  A decent chunk of the tax savings from loopholes is channeled back into preventing those loopholes from closing.
- bairrd 8y ago
  Why not both? People selling physical goods bake a certain percentage of shrinkange into the price of their goods whilst also finding new ways to prevent theft.
- ABCLAW 8y ago
  >The fix is to remove the loopholes. Is it, though? This is a situation where Chesterton's Fence is important to consider. No single government regulates tax worldwide, and each is iteratively attempting to balance a multitude of concerns, while remaining competitive to capital. Additionally, many of the loopholes aren't legislative tax exemptions on the books. They're determinations regarding how and when certain things are recognized on the books. 'Fixing' those problems doesn't 'remove' loopholes. It just creates new rules which are then exploited. Finally, with respect to tax simplification in general: Simplifying the tax code is akin to refactoring code. Sure, there are some areas where it could be engaged in without causing problems (and which would result in efficiency gains!), but much of the appeal of refactoring code lies in how we ignore the tricky edge cases when designing a new utopic system in our heads. The legal project of re-digesting a highly complicated body of law and producing a more functional version would take, at the very least, a decade of work. So now we're hitting the complexity limits of an administration's compute ability too. Shit. All in all: it's a bit harder than that. I wish you were right, though.
  - 1123581321 8y ago
    Chesterton’s Fence would apply to tax rates and new taxes as well.
- deleted 8y ago
  [deleted]
roenxi 8y ago
Why is that important? I have two taxpayers, Roy the rich ($1000 / month) and Peter the poor ($100 / month). Today we will have a 10% flat tax. Peter pays $10. Roy pays $100. The total tax take is $110 and Roy is paying 91% of it. If we imagine a 'comfortable' lifestyle costs $200/month then there is an argument against using this flat tax system, but it is difficult to escape from the fact that Roy is doing almost all the heavy lifting from the who-is-funding-society perspective. Even if Roy has a very good team of accountants and is managing to only pay 5% of his income in tax (grossly unfair!) he would still be paying 83% of the total tax take (50 / 60). If we use percentages, the rich are going to be paying for most of what the government does, whether they pay personally or through corporate tax. Most people overestimate how profitable companies are, the economics of business tend to squeeze margins. I've seen a lot of arguments in Australia whinging that not enough taxes are paid by companies like Quantas because they don't understand concepts like depreciation and carrying losses forward. Those concepts are quite fair once it is accepted that maybe assets take a few years life in them before they need to be replaced. EDIT Bit slow this morning, I figured out what you meant by proportional basis.
- gentaro 8y ago
  There's multiple glaring problems with your example, but the main issue for the economy is that Peter the poor spends a much larger proportion of his income as a necessity to survive. Society as a whole benefits from Peter the poor paying proportionally less in taxes because Roy the rich simply does not consume the same proportion of his income (let's keep in mind, that in real life, Roy is 100,000 times richer than Pete, not 10x). Taxing Roy proportionately more is not only the ethical thing to do, but also the rational thing to do if you want a strong economy. These policies aren't about what you find fair, they're in place because they are what make society prosperous.

gamblor956 8y ago

I do not understand how people can not understand that a percentage tax, by it's definition, does have the largest companies pay more. I do not understand how people can not understand that the largest companies pay a lot of money to structure their taxes so that they pay proportionately less of their income in taxes than smaller companies do despite deriving significantly more economic benefits from the stable economic system those taxes enable. Also, the percentage tax does not by definition mean that the largest companies pay more. It means that the most profitable companies (on an income tax basis) pay more taxes on an absolute basis than a similarly-sized company that makes less profit. However, Apple, Google, and GE are all (or at least in GE's case, was) highly-profitable companies that pay ridiculously low taxes for their profit because their "taxable" income is significantly less than their economic income.

RHSeeger 8y ago
> I do not understand how people can not understand that the largest companies pay a lot of money to structure their taxes so that they pay proportionately less of their income in taxes than smaller companies do despite deriving significantly more economic benefits from the stable economic system those taxes enable. I understand it that just fine. I just prefer to fix the problem, not the symptom.
repsilat 8y ago
With apologies to Tony Hoare: > There are two ways of constructing a corporate tax system: One way is to make it so simple that there are obviously no loopholes, and the other way is to make it so complicated that there are no obvious loopholes.
deleted 8y ago
[deleted]

brianberns 8y ago

Amazon nearly doubled its profits to $11.2 billion in 2018 from $5.6 billion the previous year and didn’t pay a single cent of federal income taxes.

Rapzid 8y ago
They will have paid a lot in payroll taxes and sales taxes. Their employees will have paid taxes on their income as well. I say this because when people make a simplistic statement about a company not paying much or any taxes on profits a lot of people are mislead into believing the company is somehow not contributing to government revenue. Which is obviously not the case at all.
- chii 8y ago
  Why is personal taxes of the employee considered taxes paid by the company? If it's fair for a company to have the legal rights of a person, it's only fair they pay the same rate of taxes as a natural person. If the share holders of the company is legally indemnify against the debts/risks of the company, then they shall also pay their fair share of taxes, and should not deduct it from the already paid portion of company tax. So this way, if you want legal protection of a limited liability corp, you have to pay double taxes. But if you accept legal responsibility if the company, then you don't get double taxed.
  - Rapzid 8y ago
    I'm simply putting out there that a ton of the revenue Amazon takes in ends up as government revenue. I don't really have an opinion on anything else you're talking about.
- masonic 8y ago
  The buyer pays the sales tax, not Amazon. Of course, even that assumes that Amazon properly forwards all the sales taxes they collect and don't keep any.
  - 8y ago

mnm1 8y ago

Maybe because they see that Amazon (and other companies) paid nothing in federal taxes last year despite federal taxes being a percentage tax.