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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 i

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.

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.