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Corporations have similar legal rights to corporeal persons. Freedom of speech, access to the legal system, etc. As a result of having similar rights, they shou

by jdkee 7y ago

Corporations have similar legal rights to corporeal persons. Freedom of speech, access to the legal system, etc. As a result of having similar rights, they should be taxed as corporeal persons. It is not rocket science to conclude that corporations in the U.S. should be taxed at the same effective tax rate as real persons.

dodobirdlord 7y ago
Corporations are just bundles of stuff that people own. They have legal personhood as a convenient legal fiction because it would be obnoxious if all of the owners had to get together to sign things, and they have rights because people don't lose any of their individual rights just because they happened to form a corporation together. But at the end of the day, bundles of stuff. Economists seem to be broadly in agreement that tax systems would work better if corporations didn't pay income tax.
- dnautics 7y ago
  What about the inverse. What if individuals didn't pay an income tax but corporations did, kind of as a "user fee" for the privilege of having limited liability.
  - dodobirdlord 7y ago
    Mostly because corporations are pretty different from people. They can own each other, buy and sell each other, split in two or be combined, etc. And they they can deduct business expenses in ways that people can’t deduct living expenses, because we rationally recognize that corporations mostly have lower profit margins than the tax bill would be on total revenue (and some always will at any tax level).
- james1071 7y ago
  Maybe I am wrong on this, but I doubt that you have studied economics or have any idea what economists think. The people that you are talking about are effectively lobbyists - policy entrepreneurs is the phrase, who appear in the media advocating for policies that benefit their clients.
  - dodobirdlord 7y ago
    Feels like an aggressive response to what I said. Feel free to look it up, the statement is noncontroversial. There are regularly conducted surveys of the field that include questions on this topic.
- BurningFrog 7y ago
  Yeah, this "corporate personhood" issue is so dumb. All it is is that the legal system decided it would make sense to apply the same laws in some areas to both companies and humans, rather than design completely separate frameworks for each case. In HN terms: This is code reuse/refactoring.
stkdump 7y ago
Corporations just tax their profit. Persons have to tax all their income (with minimal exceptions). How is that fair?
- mrep 7y ago
  For individual capital income, you are also only taxed on profit (although some presidential candidate are trying to change that with wealth taxes).
- harryh 7y ago
  Because different industries have wildly different profit margins so if you taxed revenue instead of profit, companies in some industries would be wildly undertaxed while others would instantly go out of business. Humans, on the other hand, all work mostly the same.
SkyBelow 7y ago
And just like the real person cannot get a write off for things required to live or things that make them more attractive on the market, neither should businesses. If I have to pay taxes on the income I spent to repaint my house, why shouldn't a business have to pay taxes on the revenue they spent to repaint their building?
- harryh 7y ago
  Because of this: https://news.ycombinator.com/item?id=22370387 https://news.ycombinator.com/item?id=22370387
  - SkyBelow 7y ago
    Wouldn't the costs be updated to reflect the difference in profit margins. If the tax is 10%, then in cases where the profit margin is razor thin prices would rise by about 10%, but life would otherwise keep on going. If an entire industry would die from such, then doesn't that mean that currently tax payers are subsidizing that industry to keep it alive by having uneven taxes, if the standard of equal taxes is the purposed change?
    - harryh 7y ago
      Are you trying to say that tax payers are subsidizing the entire retail industry? No, that is definitely not the case. Different amounts of value are added at different stages of the product pipeline. These different amounts of value are reflected in different profit margins. Forcing uniformity here via the tax code would be massively distortionary.

by jdkee 7y ago

dodobirdlord 7y ago

Corporations are just bundles of stuff that people own. They have legal personhood as a convenient legal fiction because it would be obnoxious if all of the owners had to get together to sign things, and they have rights because people don't lose any of their individual rights just because they happened to form a corporation together. But at the end of the day, bundles of stuff. Economists seem to be broadly in agreement that tax systems would work better if corporations didn't pay income tax.

dnautics 7y ago
What about the inverse. What if individuals didn't pay an income tax but corporations did, kind of as a "user fee" for the privilege of having limited liability.
- dodobirdlord 7y ago
  Mostly because corporations are pretty different from people. They can own each other, buy and sell each other, split in two or be combined, etc. And they they can deduct business expenses in ways that people can’t deduct living expenses, because we rationally recognize that corporations mostly have lower profit margins than the tax bill would be on total revenue (and some always will at any tax level).
james1071 7y ago
Maybe I am wrong on this, but I doubt that you have studied economics or have any idea what economists think. The people that you are talking about are effectively lobbyists - policy entrepreneurs is the phrase, who appear in the media advocating for policies that benefit their clients.
- dodobirdlord 7y ago
  Feels like an aggressive response to what I said. Feel free to look it up, the statement is noncontroversial. There are regularly conducted surveys of the field that include questions on this topic.
BurningFrog 7y ago
Yeah, this "corporate personhood" issue is so dumb. All it is is that the legal system decided it would make sense to apply the same laws in some areas to both companies and humans, rather than design completely separate frameworks for each case. In HN terms: This is code reuse/refactoring.

stkdump 7y ago

Corporations just tax their profit. Persons have to tax all their income (with minimal exceptions). How is that fair?

mrep 7y ago
For individual capital income, you are also only taxed on profit (although some presidential candidate are trying to change that with wealth taxes).
harryh 7y ago
Because different industries have wildly different profit margins so if you taxed revenue instead of profit, companies in some industries would be wildly undertaxed while others would instantly go out of business. Humans, on the other hand, all work mostly the same.

SkyBelow 7y ago

And just like the real person cannot get a write off for things required to live or things that make them more attractive on the market, neither should businesses. If I have to pay taxes on the income I spent to repaint my house, why shouldn't a business have to pay taxes on the revenue they spent to repaint their building?

harryh 7y ago
Because of this: https://news.ycombinator.com/item?id=22370387 https://news.ycombinator.com/item?id=22370387
- SkyBelow 7y ago
  Wouldn't the costs be updated to reflect the difference in profit margins. If the tax is 10%, then in cases where the profit margin is razor thin prices would rise by about 10%, but life would otherwise keep on going. If an entire industry would die from such, then doesn't that mean that currently tax payers are subsidizing that industry to keep it alive by having uneven taxes, if the standard of equal taxes is the purposed change?
  - harryh 7y ago
    Are you trying to say that tax payers are subsidizing the entire retail industry? No, that is definitely not the case. Different amounts of value are added at different stages of the product pipeline. These different amounts of value are reflected in different profit margins. Forcing uniformity here via the tax code would be massively distortionary.