3 ms·

If my stock portfolio already funds my lifestyle, marginal dollars earned by the companies I own don't affect how much stock I need to sell. Because I don't sel

If my stock portfolio already funds my lifestyle, marginal dollars earned by the companies I own don't affect how much stock I need to sell. Because I don't sell, they're not subject to capital gains. They just accumulate in my portfolio tax-free. The more unequal the society, the greater the share of economic activity that is like this. In ours, probably a lot. Corporate taxes are the only opportunity to get anything from this kind of wealth creation.

roenxi 6y ago
Take a few steps back and think through that again from a whole system perspective. Corporations are the supports of the entire way of life that people enjoy. They are the only mechanism we've figured out that can sustain complex, interconnected and rather privileged modern lifestyles. That money being untaxed isn't some sort of loss - these businesses are substantially better than the government at getting people food, clothing, shelter, entertainment and comfort. That is genearlly stuff we all want to encourage. If you take money out of them, there will be less of all those things. You aren't getting anything out of that invested money, you're just trying to set the economy up for a future where more people get more stuff. I'll accept that theory isn't the best way to run a tax system, but "oh no we aren't taxing the engines of prosperity" isn't, in itself, a decent argument. Corporations are a long way down the list of things that are good tax targets.
- closeparen 6y ago
  That money being untaxed means the government has to be funded on the backs of workers instead. We have a progressive tax on labor, we squeeze the crap out of specialists and management, and then we leave owners alone. This is crazy.
  - roenxi 6y ago
    Corporations aren't a real thing, they're an abstraction. You'll noted that the money isn't being spent by the very wealthy (otherwise they'd be paying CGT or Income tax). In the financial world, the money will be coming from them. In the real world, the money is coming out of systems that support the lifestyle of workers. Look at it this way - you can't point to something that the business owners had to give up (because they didn't access the money, if they had they'd be paying CGT or Income tax). But the government is diverting real resources somewhere. In practice, those resources are going to be coming from the workers! Which is why taxing corporations is not the best idea, once you follow the real flows of goods and services. It is a stealth tax on income, a bit like payroll tax. Better to make these taxes direct so people understand what they are paying.
    - maybelsyrup 6y ago
      > Corporations aren't a real thing, they're an abstraction. Margaret Thatcher is that you
    - ablekh 6y ago
      > Corporations aren't a real thing, they're an abstraction. Sorry, but this is a ridiculous statement. If corporations are an abstraction, how come they are allowed to have and use millions and often billions of real U.S. dollars (or relevant equivalents in other currencies) in/from their cash reserves?
    - closeparen 6y ago
      The virtue of voters knowing what they’re paying is that this awareness can inform policy. And indeed it has. They want to “tax the rich.” That’s how we arrive at this question. I agree that it’s not without side effects - the rich are capital, taxing away capital means less good cheap stuff to buy. But we can also quite reasonably decide that there is more than enough good cheap stuff to buy, and not nearly enough healthcare. Or education, or housing, or whatever else. And that we need to tap the wealth associated with providing iPhones and cheeseburgers and handbags, in order to afford those things.
      - roenxi 6y ago
        > And that we need to tap the wealth associated with providing iPhones and cheeseburgers and handbags.. Well, we could do that by adjusting the income tax rate and capital gains tax rate. That is going to my central point here, the outcome looks a lot like an income tax, except instead of targeting rich people we're targeting the systems that support people who eat cheeseburgers and think iPhones & handbags are signs of being classy. You're describing a world here where resources are directed towards healthcare and I'm pretty sure the rich aren't actually going to give anything up from their lifestyles. Where are these resources coming from? It is better to stick to CGT and income tax. And a land tax if you want to soak the rich. Maybe the low hanging fruit of stopping the printing of money and giving it the the rich too, most everyone agrees on that point in practice.
- redis_mlc 6y ago
  Every sentence you wrote is also true when you negate it. The reason for that is the word "corporation" isn't some magical shield. A corporation is just a legal fiction, not some noble, untouchable entity as you attempted to depict them. Frankly, if a corporation can't contribute to society by paying taxes, then it should be shut down. That's actually how it works in most of Asia - when a state auditor looks at your books and you're paying less than 10% of revenue in tax, you're given a bill and told to pay it or close by the end of the month. The assumption is that if you can't pay taxes, you're a failure and the next company will be more efficient.

roenxi 6y ago

Take a few steps back and think through that again from a whole system perspective. Corporations are the supports of the entire way of life that people enjoy. They are the only mechanism we've figured out that can sustain complex, interconnected and rather privileged modern lifestyles. That money being untaxed isn't some sort of loss - these businesses are substantially better than the government at getting people food, clothing, shelter, entertainment and comfort. That is genearlly stuff we all want to encourage. If you take money out of them, there will be less of all those things. You aren't getting anything out of that invested money, you're just trying to set the economy up for a future where more people get more stuff. I'll accept that theory isn't the best way to run a tax system, but "oh no we aren't taxing the engines of prosperity" isn't, in itself, a decent argument. Corporations are a long way down the list of things that are good tax targets.

closeparen 6y ago
That money being untaxed means the government has to be funded on the backs of workers instead. We have a progressive tax on labor, we squeeze the crap out of specialists and management, and then we leave owners alone. This is crazy.
- roenxi 6y ago
  Corporations aren't a real thing, they're an abstraction. You'll noted that the money isn't being spent by the very wealthy (otherwise they'd be paying CGT or Income tax). In the financial world, the money will be coming from them. In the real world, the money is coming out of systems that support the lifestyle of workers. Look at it this way - you can't point to something that the business owners had to give up (because they didn't access the money, if they had they'd be paying CGT or Income tax). But the government is diverting real resources somewhere. In practice, those resources are going to be coming from the workers! Which is why taxing corporations is not the best idea, once you follow the real flows of goods and services. It is a stealth tax on income, a bit like payroll tax. Better to make these taxes direct so people understand what they are paying.
  - maybelsyrup 6y ago
    > Corporations aren't a real thing, they're an abstraction. Margaret Thatcher is that you
  - ablekh 6y ago
    > Corporations aren't a real thing, they're an abstraction. Sorry, but this is a ridiculous statement. If corporations are an abstraction, how come they are allowed to have and use millions and often billions of real U.S. dollars (or relevant equivalents in other currencies) in/from their cash reserves?
  - closeparen 6y ago
    The virtue of voters knowing what they’re paying is that this awareness can inform policy. And indeed it has. They want to “tax the rich.” That’s how we arrive at this question. I agree that it’s not without side effects - the rich are capital, taxing away capital means less good cheap stuff to buy. But we can also quite reasonably decide that there is more than enough good cheap stuff to buy, and not nearly enough healthcare. Or education, or housing, or whatever else. And that we need to tap the wealth associated with providing iPhones and cheeseburgers and handbags, in order to afford those things.
    - roenxi 6y ago
      > And that we need to tap the wealth associated with providing iPhones and cheeseburgers and handbags.. Well, we could do that by adjusting the income tax rate and capital gains tax rate. That is going to my central point here, the outcome looks a lot like an income tax, except instead of targeting rich people we're targeting the systems that support people who eat cheeseburgers and think iPhones & handbags are signs of being classy. You're describing a world here where resources are directed towards healthcare and I'm pretty sure the rich aren't actually going to give anything up from their lifestyles. Where are these resources coming from? It is better to stick to CGT and income tax. And a land tax if you want to soak the rich. Maybe the low hanging fruit of stopping the printing of money and giving it the the rich too, most everyone agrees on that point in practice.
redis_mlc 6y ago
Every sentence you wrote is also true when you negate it. The reason for that is the word "corporation" isn't some magical shield. A corporation is just a legal fiction, not some noble, untouchable entity as you attempted to depict them. Frankly, if a corporation can't contribute to society by paying taxes, then it should be shut down. That's actually how it works in most of Asia - when a state auditor looks at your books and you're paying less than 10% of revenue in tax, you're given a bill and told to pay it or close by the end of the month. The assumption is that if you can't pay taxes, you're a failure and the next company will be more efficient.