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Much of the EU has similarly high tax rates on capital. I haven’t found figures on China, but I have a hard time believing their growth is simply a matter of ta
by wbsss4412 6y ago
Much of the EU has similarly high tax rates on capital. I haven’t found figures on China, but I have a hard time believing their growth is simply a matter of tax policy.
Arguing about taxes is a race to the bottom in any case. What matters is returns on capital invested, which of course is affected by tax rates but not exclusively by them. There’s a reason Silicon Valley exists and it’s not because it’s always been cheap to produce there.
- valuearb 6y agoIt’s not a race to the bottom. Taxes on reinvested capital should be zero, you don’t eat your seed corn. Eating less of it than another country doesn’t hurt them or you. We should tax distributions that aren’t reinvested, and do it progressively.
- xxpor 6y agoMaybe I don't understand, isn't that already true? Companies pay taxes on net (profit), not gross (revenue), outside of some state tax systems like Washington's.
- valuearb 6y agoProfit is the net result of investing capital. Revenues don’t matter. If your startup turns a profit but still wants or needs to reinvest those profits in hiring more or more equipment, they still have to pay taxes on those earnings and only can reinvest half of them (there are some provisions to shield some reinvested profits from being taxed, but they are limited). I’m all for taxing dividends and capital gains when investors cash out, I’m just saying don’t do it on profits that are reinvested.