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Taxes should not be decided through a popularity contest and enforced through the court of public opinion. After the financial crisis, bankers were unpopular,

Taxes should not be decided through a popularity contest and enforced through the court of public opinion. After the financial crisis, bankers were unpopular, so politicians in the U.K. curried favour with the public by bringing in a banker bonus tax. Tech companies were once the pride of the nation in the U.S. and the notion of creating tax incentives for tech investment in the U.S. was highly popular. Nowadays, they are no longer popular, so there is now a public outcry for taxing them more. Tax can't be like that, because investments don't go to where there is a lot of uncertainty. I do agree that Amazon not paying any tax is an indicator of a broken system that needs fixing. But politicians coming out and saying "I'm going to tax Amazon" is not right either. They should say what the system should be, bring it in, and then stick with it, making sure there is proper enforcement. They can't just come out during each electoral cycle and say "This year, we like Tesla, so whatever system doesn't have Tesla paying any taxes, that's the right system. And this year, we dislike Amazon, so whatever system levies a lot of taxes on Amazon, that's the system we're going to have. Not sure if the same will still be true next year, but we'll cross that bidge once we get to it."

Nasrudith 7y ago
Really the aspect which taxes in theory should be "biased" towards is accounting for externalities positive and negative. If mines, banks, or any other industry risks needing expensive public remediation they /should/ be taxed more than mere profit margins. If they cannot afford it - well that is the point neither can we. In practice it is a complete mess of special interests paying money to insist that the government's highest priority should be getting people to drink more Ovaltine. The issues of that tax code are systemic but that level of abstraction is seldom understood.
- stakhanov 7y ago
  Well: The bonus tax wasn't actually a tax on the amount of risk-taking that a bank was doing (with the understanding that some of that risk would land on the government balance sheet because of the too-big-to-fail effect). It was neither designed to be that, nor was the income that the exchequer earned from that in any way related to what it costs the government to cover that risk. It could be argued that by discouraging remuneration models whereby decision makers share in profits (and therefore also in downside risks), this tax might have even had the opposite effect of increasing risk-taking by increasing moral hazard. So, really, what it was was plainly and simply: "Here are a bunch of people who are disliked by the majority of the electorate. Therefore, let's have them give us some money." EDIT: This was the story I was talking about: https://www.nytimes.com/2009/12/10/business/global/10pound.html https://www.nytimes.com/2009/12/10/business/global/10pound.h...

Nasrudith 7y ago

Really the aspect which taxes in theory should be "biased" towards is accounting for externalities positive and negative. If mines, banks, or any other industry risks needing expensive public remediation they /should/ be taxed more than mere profit margins. If they cannot afford it - well that is the point neither can we. In practice it is a complete mess of special interests paying money to insist that the government's highest priority should be getting people to drink more Ovaltine. The issues of that tax code are systemic but that level of abstraction is seldom understood.

stakhanov 7y ago
Well: The bonus tax wasn't actually a tax on the amount of risk-taking that a bank was doing (with the understanding that some of that risk would land on the government balance sheet because of the too-big-to-fail effect). It was neither designed to be that, nor was the income that the exchequer earned from that in any way related to what it costs the government to cover that risk. It could be argued that by discouraging remuneration models whereby decision makers share in profits (and therefore also in downside risks), this tax might have even had the opposite effect of increasing risk-taking by increasing moral hazard. So, really, what it was was plainly and simply: "Here are a bunch of people who are disliked by the majority of the electorate. Therefore, let's have them give us some money." EDIT: This was the story I was talking about: https://www.nytimes.com/2009/12/10/business/global/10pound.html https://www.nytimes.com/2009/12/10/business/global/10pound.h...