4 ms·

Set the corporate tax rate to 0. US companies hold trillions in profit overseas which could be used to invest or be taxed when it's distributed to shareholders.

Set the corporate tax rate to 0. US companies hold trillions in profit overseas which could be used to invest or be taxed when it's distributed to shareholders. Edit: If the rich shareholders disproportionately benefit from this then raise capital gains. I'd wonder though what proportion of shares are actually held by the 1% though, I'd think a large amount of shares are held in people's pensions/ETFS/401k etc. Theres always calls for taxing the evil corporations more but in the end all taxes are paid by people - either shareholders or employees.

mdorazio 7y ago
Did you seriously just read the article and conclude that the problem is we didn't push hard enough for trickle-down economics?
- jlmorton 7y ago
  Cutting corporate taxes to zero does not necessarily mean trickle-down economics. We could cut the corporate tax rate to zero, tax capital at a rate slightly higher than labor (in exchange for using a corporation as a tax-free investment vehicle). We could have a carbon tax and a VAT, with all the proceeds refunded equally to households, which would serve as a UBI. Eliminating the corporate tax would remove all manner of distortions from our economy, and would free-up huge amounts of resources currently allocated towards avoiding taxation. Instead of offering insidious tax credits/expenditures to support industries we want, we could offer an equivalent amount of subsidies, which would be on balance sheet, and much easier to judge their effectiveness. There's no particular reason we must tax corporations, and there are a lot of reasons why it makes sense not to. But certainly we should not cut corporate taxes without capturing that revenue elsewhere in a progressive way.
  - mdorazio 7y ago
    Or we could fix the tax code so that avoiding taxation is simply not possible instead of hoping that altruistic policies will be enacted to help the working class. I'd love for it to be otherwise, but judging by the last several decades of policy and trends, the most likely outcome of cutting corporate taxes is more inequality and very little meaningful help to most Americans.
    - luxuryballs 7y ago
      What I am curious about is why corporations need to pay “bonus” tax at all (other than on imports/exports or purchases of commodities/equipment), the employees and the stakeholders of the corporations (the actual people) already pay income tax, why isn’t that fair enough?
      - runako 7y ago
        IANAL and this isn't the legal justification. But US corporations are treated with rights similar to actual people with slightly better treatment in some ways, slightly worse in others. So: morally corporations should pay income tax because all persons are subject to income tax. And we have decided that corporations are persons. It's no more a "bonus" tax than it is a bonus tax when I pay my accountant and she also has to pay tax on that income (even though I have already paid tax on the money).
      - didibus 7y ago
        Lots of companies have employees and stakeholders in diferent countries that do not pay any taxes, yet profit from operating here. That's one reason. Another reason is distribution. You might want employees to pay no taxes at all on their salaries. And you might want shareholders to pay no money at all on their capital gains or dividends, and yet you'd want company revenue to be taxed. The big difference is in theory, a company can just rotate money within itself forever, take revenue and use it for expansion, or investment, or whatever. So all that money only gets taxed once a shareholder sells, or an employee gets paid, but a large portion gets re-invested in the company itself, which you'd want taxed as well, in order to get a steady flow of cash and also capture its real value.
dkarras 7y ago
Ah you say it will trickle down. What a genius idea.

mdorazio 7y ago

Did you seriously just read the article and conclude that the problem is we didn't push hard enough for trickle-down economics?

jlmorton 7y ago
Cutting corporate taxes to zero does not necessarily mean trickle-down economics. We could cut the corporate tax rate to zero, tax capital at a rate slightly higher than labor (in exchange for using a corporation as a tax-free investment vehicle). We could have a carbon tax and a VAT, with all the proceeds refunded equally to households, which would serve as a UBI. Eliminating the corporate tax would remove all manner of distortions from our economy, and would free-up huge amounts of resources currently allocated towards avoiding taxation. Instead of offering insidious tax credits/expenditures to support industries we want, we could offer an equivalent amount of subsidies, which would be on balance sheet, and much easier to judge their effectiveness. There's no particular reason we must tax corporations, and there are a lot of reasons why it makes sense not to. But certainly we should not cut corporate taxes without capturing that revenue elsewhere in a progressive way.
- mdorazio 7y ago
  Or we could fix the tax code so that avoiding taxation is simply not possible instead of hoping that altruistic policies will be enacted to help the working class. I'd love for it to be otherwise, but judging by the last several decades of policy and trends, the most likely outcome of cutting corporate taxes is more inequality and very little meaningful help to most Americans.
  - luxuryballs 7y ago
    What I am curious about is why corporations need to pay “bonus” tax at all (other than on imports/exports or purchases of commodities/equipment), the employees and the stakeholders of the corporations (the actual people) already pay income tax, why isn’t that fair enough?
    - runako 7y ago
      IANAL and this isn't the legal justification. But US corporations are treated with rights similar to actual people with slightly better treatment in some ways, slightly worse in others. So: morally corporations should pay income tax because all persons are subject to income tax. And we have decided that corporations are persons. It's no more a "bonus" tax than it is a bonus tax when I pay my accountant and she also has to pay tax on that income (even though I have already paid tax on the money).
    - didibus 7y ago
      Lots of companies have employees and stakeholders in diferent countries that do not pay any taxes, yet profit from operating here. That's one reason. Another reason is distribution. You might want employees to pay no taxes at all on their salaries. And you might want shareholders to pay no money at all on their capital gains or dividends, and yet you'd want company revenue to be taxed. The big difference is in theory, a company can just rotate money within itself forever, take revenue and use it for expansion, or investment, or whatever. So all that money only gets taxed once a shareholder sells, or an employee gets paid, but a large portion gets re-invested in the company itself, which you'd want taxed as well, in order to get a steady flow of cash and also capture its real value.

dkarras 7y ago

Ah you say it will trickle down. What a genius idea.