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>> It would be perfectly fine for corporations to pay comically low taxes No it wouldn't

crispyambulance 6y ago
I am just trying to highlight the fact that corporations have a double advantage: Low-to-no taxes + oversized political influence. It would be an almost level playing field if they had only ONE of those advantages.
- harperlee 6y ago
  To me, it seems that discussing about corporations vs. individuals is the wrong kind of discussion to have. At the end corporations are groups of individuals, and whenever someone argues about unfairness of different treatment, there's an implicit "and that's bad because some individuals end up on a better position than others" that, I think, should be talked more explicitly. At the end of the day, a corporation is an instrument, and its wealth is the wealth of some individuals. Corporations are instruments to coordinate wealth creation, so perhaps the issue is how/whether rich people are profiting too much from "The System" we have in place, be it through an excessive command of corporations (which are allowed certain things) or through other means. I mean, if wealth inequality among individuals were close to nil, then it would not be too polemic to raise taxes if we need more public budget, or lower them if we need to push the economy forward - the issue when taxes need to increase or decrease is where do you cut / take. So perhaps we're focusing our analysis on optimizing the wrong thing.
thehappypm 6y ago
Why should corporations pay taxes on their profits? What's the argument for it?
- webinvest 6y ago
  For the privilege of continued access to a workforce that was educated by public schooling For access to roads that are maintained by tax dollars For environmental damages and other negative externalities that the tax payer has to pay to clean up For an army and police system that allows the flow of commerce to continue without attacks and interruption For a sovereign wealth fund if there is a surplus of tax revenue one year For a court system so that corporations can continue to sue each other To secure the population access to vaccines to reduce the spread of Covid and other diseases To fund libraries that help the local population To build sea ports and airports that provide the economy with better trade and transportation These are some common things taxes are spent on but they are not reasons why corporations shouldn’t pay taxes on their free cash flow, revenue, or some other financial statement line item (FSLI) instead of their profit.
  - thehappypm 6y ago
    You’re describing taxes. But why specifically taxes on profits? Why not taxes on things like property? Payroll? Sales taxes on things they buy? The myriad of taxes their employees pay? Why tax profits?
    - crispyambulance 6y ago
      We now have a situation were the tax code is intractably complex because of DECADES of finagling by the wealthy and their corporations to set things up strictly and shamelessly in their favor. Sorry, but I just can't feel any sympathy for corporations and the wealthy who reap massive profit, in part, because they've long ago set up loopholes and laws to avoid paying a fair share. So what is a fair share? Well, for starters, one that doesn't rely on a 2+ million word tax code and reams of related laws most of which serve to make exceptions for the wealthy.
      - thehappypm 6y ago
        You're dodging the question: why tax profits?
        crispyambulance 6y ago
        Why not? If you strictly and only tax consumption and property, you will have large segments of the population living hand-to-mouth, trapped in a vicious cycle of poverty and and hard labor in a hole that requires super-human or generational effort to get out of. Meanwhile, those who started with a leg up will continue to accelerate their net-worth. There are people who "make money" by "having money" and under your rules those people would only pay taxes on the fees they pay to their money manager. We aren't THAT far from that now were it not for the miserly 15% investment income tax. I realize the typical HN-libertarian-calvinist view is that everything needs to be transactional. Transactional down to the level that the taxes someone pays would ideally go towards the services that they as an individual use, and that everyone needs to work in order order to be "worthy" of a social-safety-net (assuming a safety-net has to exist, which isn't a given in such points of view). It doesn't have to be that way but sadly there are motions in that direction.
gher-shyu3i 6y ago
Of course it would, the government is already taking taxes from employees by means of income tax. Double dipping by taking from the company means less money for the employees.
- listenallyall 6y ago
  No, employee compensation is an expense to the company, the more they pay the employees, the lower the eventual profit, which is the basis upon which income tax is determined.
  - gher-shyu3i 6y ago
    Still, this left over money will be available to spend in other areas like R&D, marketing, etc. The government does not have a right to 30% of it or whatever the corporate tax rate is.
    - listenallyall 6y ago
      No, you are repeating your mistake. Companies are free to spend on marketing or R&D, which are common expenses, thereby reducing their profit and by extension, reducing the amount upon which they are taxed. >> The government does not have a right to 30% Apparently it does, since governments all over the globe have been levying taxes on corporations for decades. Unless you think the Cayman Islands, Bahrain, and Isle of Man should be the model for industrial countries.
      - gher-shyu3i 6y ago
        The Gulf countries don't charge corporate taxes as far as I'm aware, not just Bahrain. Also, the company might want to spend the money on R&D and marketing the following year, so having a spend it or lose it model is backward. And, just because the rest of the world's governments are stealing does not make it ok.

I am just trying to highlight the fact that corporations have a double advantage: Low-to-no taxes + oversized political influence. It would be an almost level playing field if they had only ONE of those advantages.

harperlee 6y ago
To me, it seems that discussing about corporations vs. individuals is the wrong kind of discussion to have. At the end corporations are groups of individuals, and whenever someone argues about unfairness of different treatment, there's an implicit "and that's bad because some individuals end up on a better position than others" that, I think, should be talked more explicitly. At the end of the day, a corporation is an instrument, and its wealth is the wealth of some individuals. Corporations are instruments to coordinate wealth creation, so perhaps the issue is how/whether rich people are profiting too much from "The System" we have in place, be it through an excessive command of corporations (which are allowed certain things) or through other means. I mean, if wealth inequality among individuals were close to nil, then it would not be too polemic to raise taxes if we need more public budget, or lower them if we need to push the economy forward - the issue when taxes need to increase or decrease is where do you cut / take. So perhaps we're focusing our analysis on optimizing the wrong thing.

thehappypm 6y ago

Why should corporations pay taxes on their profits? What's the argument for it?

webinvest 6y ago
For the privilege of continued access to a workforce that was educated by public schooling For access to roads that are maintained by tax dollars For environmental damages and other negative externalities that the tax payer has to pay to clean up For an army and police system that allows the flow of commerce to continue without attacks and interruption For a sovereign wealth fund if there is a surplus of tax revenue one year For a court system so that corporations can continue to sue each other To secure the population access to vaccines to reduce the spread of Covid and other diseases To fund libraries that help the local population To build sea ports and airports that provide the economy with better trade and transportation These are some common things taxes are spent on but they are not reasons why corporations shouldn’t pay taxes on their free cash flow, revenue, or some other financial statement line item (FSLI) instead of their profit.
- thehappypm 6y ago
  You’re describing taxes. But why specifically taxes on profits? Why not taxes on things like property? Payroll? Sales taxes on things they buy? The myriad of taxes their employees pay? Why tax profits?
  - crispyambulance 6y ago
    We now have a situation were the tax code is intractably complex because of DECADES of finagling by the wealthy and their corporations to set things up strictly and shamelessly in their favor. Sorry, but I just can't feel any sympathy for corporations and the wealthy who reap massive profit, in part, because they've long ago set up loopholes and laws to avoid paying a fair share. So what is a fair share? Well, for starters, one that doesn't rely on a 2+ million word tax code and reams of related laws most of which serve to make exceptions for the wealthy.
    - thehappypm 6y ago
      You're dodging the question: why tax profits?
      - crispyambulance 6y ago
        Why not? If you strictly and only tax consumption and property, you will have large segments of the population living hand-to-mouth, trapped in a vicious cycle of poverty and and hard labor in a hole that requires super-human or generational effort to get out of. Meanwhile, those who started with a leg up will continue to accelerate their net-worth. There are people who "make money" by "having money" and under your rules those people would only pay taxes on the fees they pay to their money manager. We aren't THAT far from that now were it not for the miserly 15% investment income tax. I realize the typical HN-libertarian-calvinist view is that everything needs to be transactional. Transactional down to the level that the taxes someone pays would ideally go towards the services that they as an individual use, and that everyone needs to work in order order to be "worthy" of a social-safety-net (assuming a safety-net has to exist, which isn't a given in such points of view). It doesn't have to be that way but sadly there are motions in that direction.

gher-shyu3i 6y ago

Of course it would, the government is already taking taxes from employees by means of income tax. Double dipping by taking from the company means less money for the employees.

listenallyall 6y ago
No, employee compensation is an expense to the company, the more they pay the employees, the lower the eventual profit, which is the basis upon which income tax is determined.
- gher-shyu3i 6y ago
  Still, this left over money will be available to spend in other areas like R&D, marketing, etc. The government does not have a right to 30% of it or whatever the corporate tax rate is.
  - listenallyall 6y ago
    No, you are repeating your mistake. Companies are free to spend on marketing or R&D, which are common expenses, thereby reducing their profit and by extension, reducing the amount upon which they are taxed. >> The government does not have a right to 30% Apparently it does, since governments all over the globe have been levying taxes on corporations for decades. Unless you think the Cayman Islands, Bahrain, and Isle of Man should be the model for industrial countries.
    - gher-shyu3i 6y ago
      The Gulf countries don't charge corporate taxes as far as I'm aware, not just Bahrain. Also, the company might want to spend the money on R&D and marketing the following year, so having a spend it or lose it model is backward. And, just because the rest of the world's governments are stealing does not make it ok.