4 ms·

Big companies have more levers to pull. I’m not sure why everyone gets hung up on the tax number. Employing people, providing service, all contribute. And if

by aantix 7y ago

Big companies have more levers to pull. I’m not sure why everyone gets hung up on the tax number. Employing people, providing service, all contribute. And if a state sees a deal where they can keep X citizens busy, contributing and Y services for their people, that’s part of the aggregate result. “Taxes” is one of many chips on the table for the deal making. If there’s not a net gain, then don’t take the deal.

thinkingkong 7y ago
That's interesting logic. In aggregate small businesses employ more people, so why are they paying effective higher rates? Because the label of the employment is from the a larger entity? Why not all just band together and create an even larger company of every SMB and pay 0 taxes. Free money!
- aantix 7y ago
  They could. But with such a large, diverse pool of companies, I highly doubt they could get their interests to align. But it’s not uncommon to see lobby groups for specific industries lobbying for favorable legislation.
  - mLuby 7y ago
    I bet they could get their interests to align behind zero taxes. So something else is at play.
    - kube-system 7y ago
      Yes, the fact that there's not much tax efficiencies to gain out of cramming Jim's Car Wash and Susan's Bakery into one legal entity, and a lot to lose out of it. Now, when the companies are such that it makes some amount of sense to merge them together, that often does happen, and it can lead to tax efficiencies. https://www.pwc.com/th/en/deals/transaction.html https://www.pwc.com/th/en/deals/transaction.html > M&A transactions provide unique opportunities to improve tax efficiency.
      - pas 7y ago
        On the entry level (a simple car wash, a bakery) almost everything is a simple linear thing. There's simply no big benefit to creating a holding/unified company. M&A helps eliminating inefficiencies in cases where there are huge redundancies and excess capacity. (For example two big multinational conglomerates, both have at least one of eeeeeverything, HR, law, finance (bonds, insurance, stocks, investments, controlling interests), payroll, VAT/CIT/sales tax, supply chain management, operational risk management, security/compliance, IT. Plus all the actual business units, and usually big companies have some competing interests here and there, and simply eliminating one or the other (through unification, acquisition, or just closing the less profitable one) frees up resources and leads to better profitability.
jjoonathan 7y ago
Being able to negotiate (or lobby, or coerce, or bribe -- pick your term) lower taxes does not justify lower taxes. Economies of scale create value when leveraged to, say, produce more goods with less effort, but they do not create value when they are leveraged in zero sum games against customers, workers, or society. > If there’s not a net gain, then don’t take the deal. The thing about deals is that what happens between deals is always more important than the deal itself. Focusing on the value flow exclusively at the point of exchange is a terrible mistake. Otherwise highway robbery would be a value-creating activity: "Hey, I'm offering you your life in exchange for everything you own, that's a great deal! If you don't like the deal, don't take the deal!"
- aantix 7y ago
  >Being able to negotiate (or lobby, or coerce, or bribe -- pick your term) lower taxes does not justify lower taxes Agree. >Economies of scale create value when leveraged to, say, produce more goods with less effort, but they do not create value when they are leveraged in zero sum games against customers, workers, or society. Both sides have to arrive at a value where it makes sense for them to move forward. Subjective value judgements have to occur. >"Hey, I'm offering you your life in exchange for everything you own" Sounds like a bad deal. Don't take it.
Krasnol 7y ago
The state does contribute too. Your business uses the state financed infrastructure to exist. Just like your employers do. Not paying for those contributions is anti social behaviour.
- aantix 7y ago
  “Not paying” Again, you’re fixated on a single dimension. Keeping people employed with quality jobs is a hard problem to solve. People demand jobs. And demand them from elected officials to “fix this”, even though they have little to do with creating efficient, viable businesses. So lost tax revenue from the business. Balanced against a larger, working class that pays taxes. Depending on the terms and needs of the community, there’s a threshold where the deal will always make sense.
  - deleted 7y ago
    [deleted]
  - Krasnol 7y ago
    If the mass of employers has more money to spend, they automatically create more jobs because they spend it. This is a no-brainer. They are the relevant part of every country out there and the whole system. This is why companies like Walmart are so huge. Many people spending small amounts of money generating huge revenue. Your rich investor who gains a little bit more due to tax evasion of the company they invested in gives you nothing most of the time because they just reinvest it elsewhere and even if he buys one more yacht with it, they are so few, that their impact on the job market is negligible. Now the fact that the company which does not pay the taxes for the infrastructure they freely use to generate their revenue can go to a politician and tell him: "give me taxpayer money/let me pay less tax or I go to the county next door" does not have anything to do with employment. It's a hole in national law. If there would be no politician who's allowed to throw money at those already wealthy companies, they would have null leverage, the subsidies would go to those who really need it, the companies would have to pay their taxes (you can't outsource everything) and the mass of citizens would profit from more money in their pocket, a properly maintained infrastructure and money the state has in emergencies like we're witnessing today. Your "single dimension" view on the situation is the old prayer those who steal taxpayer money/not pay for what they use have told us for years. It's a ridiculously shitty story nobody buys, so please get a dimension.
jungturk 7y ago
> If there's not a net gain, then don't take the deal. A gain for the dealmaker isn't necessarily a gain for other stakeholders.
- aantix 7y ago
  Agree. Either (or both) sides can walk away. That's negotiation.

by aantix 7y ago

thinkingkong 7y ago

That's interesting logic. In aggregate small businesses employ more people, so why are they paying effective higher rates? Because the label of the employment is from the a larger entity? Why not all just band together and create an even larger company of every SMB and pay 0 taxes. Free money!

aantix 7y ago
They could. But with such a large, diverse pool of companies, I highly doubt they could get their interests to align. But it’s not uncommon to see lobby groups for specific industries lobbying for favorable legislation.
- mLuby 7y ago
  I bet they could get their interests to align behind zero taxes. So something else is at play.
  - kube-system 7y ago
    Yes, the fact that there's not much tax efficiencies to gain out of cramming Jim's Car Wash and Susan's Bakery into one legal entity, and a lot to lose out of it. Now, when the companies are such that it makes some amount of sense to merge them together, that often does happen, and it can lead to tax efficiencies. https://www.pwc.com/th/en/deals/transaction.html https://www.pwc.com/th/en/deals/transaction.html > M&A transactions provide unique opportunities to improve tax efficiency.
    - pas 7y ago
      On the entry level (a simple car wash, a bakery) almost everything is a simple linear thing. There's simply no big benefit to creating a holding/unified company. M&A helps eliminating inefficiencies in cases where there are huge redundancies and excess capacity. (For example two big multinational conglomerates, both have at least one of eeeeeverything, HR, law, finance (bonds, insurance, stocks, investments, controlling interests), payroll, VAT/CIT/sales tax, supply chain management, operational risk management, security/compliance, IT. Plus all the actual business units, and usually big companies have some competing interests here and there, and simply eliminating one or the other (through unification, acquisition, or just closing the less profitable one) frees up resources and leads to better profitability.

jjoonathan 7y ago

Being able to negotiate (or lobby, or coerce, or bribe -- pick your term) lower taxes does not justify lower taxes. Economies of scale create value when leveraged to, say, produce more goods with less effort, but they do not create value when they are leveraged in zero sum games against customers, workers, or society. > If there’s not a net gain, then don’t take the deal. The thing about deals is that what happens between deals is always more important than the deal itself. Focusing on the value flow exclusively at the point of exchange is a terrible mistake. Otherwise highway robbery would be a value-creating activity: "Hey, I'm offering you your life in exchange for everything you own, that's a great deal! If you don't like the deal, don't take the deal!"

aantix 7y ago
>Being able to negotiate (or lobby, or coerce, or bribe -- pick your term) lower taxes does not justify lower taxes Agree. >Economies of scale create value when leveraged to, say, produce more goods with less effort, but they do not create value when they are leveraged in zero sum games against customers, workers, or society. Both sides have to arrive at a value where it makes sense for them to move forward. Subjective value judgements have to occur. >"Hey, I'm offering you your life in exchange for everything you own" Sounds like a bad deal. Don't take it.

Krasnol 7y ago

The state does contribute too. Your business uses the state financed infrastructure to exist. Just like your employers do. Not paying for those contributions is anti social behaviour.

aantix 7y ago
“Not paying” Again, you’re fixated on a single dimension. Keeping people employed with quality jobs is a hard problem to solve. People demand jobs. And demand them from elected officials to “fix this”, even though they have little to do with creating efficient, viable businesses. So lost tax revenue from the business. Balanced against a larger, working class that pays taxes. Depending on the terms and needs of the community, there’s a threshold where the deal will always make sense.
- deleted 7y ago
  [deleted]
- Krasnol 7y ago
  If the mass of employers has more money to spend, they automatically create more jobs because they spend it. This is a no-brainer. They are the relevant part of every country out there and the whole system. This is why companies like Walmart are so huge. Many people spending small amounts of money generating huge revenue. Your rich investor who gains a little bit more due to tax evasion of the company they invested in gives you nothing most of the time because they just reinvest it elsewhere and even if he buys one more yacht with it, they are so few, that their impact on the job market is negligible. Now the fact that the company which does not pay the taxes for the infrastructure they freely use to generate their revenue can go to a politician and tell him: "give me taxpayer money/let me pay less tax or I go to the county next door" does not have anything to do with employment. It's a hole in national law. If there would be no politician who's allowed to throw money at those already wealthy companies, they would have null leverage, the subsidies would go to those who really need it, the companies would have to pay their taxes (you can't outsource everything) and the mass of citizens would profit from more money in their pocket, a properly maintained infrastructure and money the state has in emergencies like we're witnessing today. Your "single dimension" view on the situation is the old prayer those who steal taxpayer money/not pay for what they use have told us for years. It's a ridiculously shitty story nobody buys, so please get a dimension.

jungturk 7y ago

> If there's not a net gain, then don't take the deal. A gain for the dealmaker isn't necessarily a gain for other stakeholders.

aantix 7y ago
Agree. Either (or both) sides can walk away. That's negotiation.