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There was a convincing op-ed in WSJ a few years ago about how in all the states that are facing public sector defaults, the ultimate payer of these debts will b

There was a convincing op-ed in WSJ a few years ago about how in all the states that are facing public sector defaults, the ultimate payer of these debts will be homeowners. Since basically the only place left for most governments to go is property value (unless they have huge businesses they can tax). And it is worse in the poorer states, because they don't have high home values to cushion the blow to the individual taxpayer.

ocdtrekkie 6y ago
There are big huge businesses we aren't adequately taxing: Big tech. When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more. And Jeff Bezos does not need more money.
- dehrmann 6y ago
  Which jurisdiction to tax large companies in, even without doing the double Irish trick, is complicated. The question was talking about state income, and taxing all of Amazon's profits in Washington doesn't really make sense. Amazon also doesn't make that much money; its profit margin is 5%; Apple's is more like 21%. It's also not like the money is never taxed. If Jeff Bezos wants to turn his AMZN shares into dollars, he'll federal capital gains on the appreciation. He pays nothing in Washington state because it has no income or capital gains tax, and that's Washington's choice. Corporate taxes are also a form of double taxation for this reason; the profits are taxed when the company makes the money, and taxed when investors realize gains. Amazon also indirectly pays taxes in ways you're not thinking about. There's sales tax on sales, taxes on all the supplies it buys, property tax on all the land it owns, payroll tax for employees, and its employees also pay income tax (except in Washington), property tax, etc. Taxes are actually getting collected pretty much everywhere along that chain. The usual criticism is with tax inversions, and even those mostly defer taxes, and because dividends and capital gains are taxed, I'm not convinced it makes sense to tax corporation.
  - OldHand2018 6y ago
    > Which jurisdiction to tax large companies in, even without doing the double Irish trick, is complicated Certainly, but many of the tricks involve licensing IP between subsidiaries in different tax regimes. So create an IP tax. Declare the value of your IP and pay an annual tax on it. If you ever go to court to claim infringement, this is the maximum value you can claim.
- mullingitover 6y ago
  > When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more. Agreed. We should be ruthlessly taxing capital gains, and in general should look upon money earned without laboring for it with scorn.
  - throwaway201103 6y ago
    So taking an investment risk so that a startup can grow is to be looked on with scorn? You might be posting in the wrong community.
    - mullingitover 6y ago
      Really there just shouldn't be any privileged category for capital gains and it should be taxed like regular income, progressively.
      - throwaway201103 6y ago
        Well that's a bit different than your earlier statement that we should "ruthlessly tax" capital gains. Capital gains get a favorable treatment because we want to encourage investment that creates economic growth, but comes with risk of loss.
        mullingitover 6y ago
        I mean, we ruthlessly tax working for a living, I just don't see why we don't tax speculation gains the same.
        apta 6y ago
        Two wrongs don't make a right.
      - valuearb 6y ago
        The reason for giving capital gains a preferred long term rate is inflation. If you invest in business for 10 years and double your money, you've made a 7% annual return. But if inflation averaged 7% during that time you actually made zero economic gains. A better way to restore progressively to capital gains is to index them for inflation, and then you can tax them at ordinary income rates.
- pdonis 6y ago
  > When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more. The problem is that increasing the corporate income tax rate just doesn't provide enough revenue. Corporate income taxes are only 7% of the US government's annual tax revenue, for example. Even if we doubled the corporate income tax rate, that's still only another 7% of the total tax revenue, which is way too small to make up for the annual US budget deficit. > Jeff Bezos does not need more money. While I don't disagree with this, taxing the wealth of the rich also just doesn't provide enough revenue. Suppose we set a hard cap on personal wealth of $1 billion--everything over that, the government takes in tax at a rate of 100%. The net worth of the 400 richest people in the world is around $3 trillion, so we'd be taking $2.6 trillion of it. And that would fund...the US government for about 6 months. Or all 50 US states for...a little more than a year. And then the wealth is gone, and what do you do next? In other words, all the complaining about low corporate tax rates and wealth inequality is complaining about something that, even if it were "fixed" (and fixed without depressing wealth creation, which is highly implausible), would not do much of anything about the real problem: that we expect governments to do far too much and give them far too much power. And that translates into chronic overspending and deficits, which end up being paid by the middle class, because that's the only source of revenue large enough to pay it.
  - chrismcb 6y ago
    It is even more complicated than that. Suppose you take the $3T. How do you convert that wealth into money? You essentially can't, and if you try to do it so at once you'll end up with much less than $3T.
- asah 6y ago
  wrong! Bezos wouldn't have founded Amazon if he could only make $50 billion. /s
Ericson2314 6y ago
I wish, but household owners are so politically powerful I doubt it will happen.
- dantheman 6y ago
  Maybe those to whom the debt is owned won't get paid or won't get paid completely -- these debts aren't valid. Taking debt in someone elses name is immoral - especially when most of it public sector unions voting in those across the negotiating table.

ocdtrekkie 6y ago

There are big huge businesses we aren't adequately taxing: Big tech. When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more. And Jeff Bezos does not need more money.

dehrmann 6y ago
Which jurisdiction to tax large companies in, even without doing the double Irish trick, is complicated. The question was talking about state income, and taxing all of Amazon's profits in Washington doesn't really make sense. Amazon also doesn't make that much money; its profit margin is 5%; Apple's is more like 21%. It's also not like the money is never taxed. If Jeff Bezos wants to turn his AMZN shares into dollars, he'll federal capital gains on the appreciation. He pays nothing in Washington state because it has no income or capital gains tax, and that's Washington's choice. Corporate taxes are also a form of double taxation for this reason; the profits are taxed when the company makes the money, and taxed when investors realize gains. Amazon also indirectly pays taxes in ways you're not thinking about. There's sales tax on sales, taxes on all the supplies it buys, property tax on all the land it owns, payroll tax for employees, and its employees also pay income tax (except in Washington), property tax, etc. Taxes are actually getting collected pretty much everywhere along that chain. The usual criticism is with tax inversions, and even those mostly defer taxes, and because dividends and capital gains are taxed, I'm not convinced it makes sense to tax corporation.
- OldHand2018 6y ago
  > Which jurisdiction to tax large companies in, even without doing the double Irish trick, is complicated Certainly, but many of the tricks involve licensing IP between subsidiaries in different tax regimes. So create an IP tax. Declare the value of your IP and pay an annual tax on it. If you ever go to court to claim infringement, this is the maximum value you can claim.
mullingitover 6y ago
> When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more. Agreed. We should be ruthlessly taxing capital gains, and in general should look upon money earned without laboring for it with scorn.
- throwaway201103 6y ago
  So taking an investment risk so that a startup can grow is to be looked on with scorn? You might be posting in the wrong community.
  - mullingitover 6y ago
    Really there just shouldn't be any privileged category for capital gains and it should be taxed like regular income, progressively.
    - throwaway201103 6y ago
      Well that's a bit different than your earlier statement that we should "ruthlessly tax" capital gains. Capital gains get a favorable treatment because we want to encourage investment that creates economic growth, but comes with risk of loss.
      - mullingitover 6y ago
        I mean, we ruthlessly tax working for a living, I just don't see why we don't tax speculation gains the same.
        apta 6y ago
        Two wrongs don't make a right.
    - valuearb 6y ago
      The reason for giving capital gains a preferred long term rate is inflation. If you invest in business for 10 years and double your money, you've made a 7% annual return. But if inflation averaged 7% during that time you actually made zero economic gains. A better way to restore progressively to capital gains is to index them for inflation, and then you can tax them at ordinary income rates.
pdonis 6y ago
> When your sector makes up like three of the five most valuable companies on the planet, we probably should be taxing it more. The problem is that increasing the corporate income tax rate just doesn't provide enough revenue. Corporate income taxes are only 7% of the US government's annual tax revenue, for example. Even if we doubled the corporate income tax rate, that's still only another 7% of the total tax revenue, which is way too small to make up for the annual US budget deficit. > Jeff Bezos does not need more money. While I don't disagree with this, taxing the wealth of the rich also just doesn't provide enough revenue. Suppose we set a hard cap on personal wealth of $1 billion--everything over that, the government takes in tax at a rate of 100%. The net worth of the 400 richest people in the world is around $3 trillion, so we'd be taking $2.6 trillion of it. And that would fund...the US government for about 6 months. Or all 50 US states for...a little more than a year. And then the wealth is gone, and what do you do next? In other words, all the complaining about low corporate tax rates and wealth inequality is complaining about something that, even if it were "fixed" (and fixed without depressing wealth creation, which is highly implausible), would not do much of anything about the real problem: that we expect governments to do far too much and give them far too much power. And that translates into chronic overspending and deficits, which end up being paid by the middle class, because that's the only source of revenue large enough to pay it.
- chrismcb 6y ago
  It is even more complicated than that. Suppose you take the $3T. How do you convert that wealth into money? You essentially can't, and if you try to do it so at once you'll end up with much less than $3T.
asah 6y ago
wrong! Bezos wouldn't have founded Amazon if he could only make $50 billion. /s

Ericson2314 6y ago

I wish, but household owners are so politically powerful I doubt it will happen.

dantheman 6y ago
Maybe those to whom the debt is owned won't get paid or won't get paid completely -- these debts aren't valid. Taking debt in someone elses name is immoral - especially when most of it public sector unions voting in those across the negotiating table.