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I'm growing increasingly weary about the cult of "reinvestment", which is also visible in some new corporate tax complications in my country. As sibling comment

I'm growing increasingly weary about the cult of "reinvestment", which is also visible in some new corporate tax complications in my country. As sibling comments point out, this "reinvestment" can be phony IP purchases in tax havens. On the other hand, even if reinvestment is genuine, there's a question whether further concentration of capital and power in that one corporation is good for society. People say: wow, Amazon got people stuff delivered during lockdown. Truth is, even in a region where e-commerce and delivery markets are far more fragmented, it somehow happened. Pay the damn wages and dividends, I'd say. The former will go into consumption, the latter will go probably into other companies, especially if we discourage less productive uses of capital (like real estate). And also getting taxes from these is more straightforward. Maybe they don't even have to be that high percentage-wise, if there is less possibility of avoidance.

lotsofpulp 6y ago
> Pay the damn wages and dividends, I'd say. If the goal is to increase wages, then government should lower the supply of labor and increase the demand for labor. Provide minimum x weeks of vacation, parental leave, maximum 8 hours per day until overtime rates kick in, free higher education, etc. As for forcing companies to pay dividends, I’d rather the government not be able to tell me what to do with my company’s funds. If the government wants control of the funds, they should raise the tax rates.
- stereolambda 6y ago
  My comment was more about popular mindset than specific policy solutions. I was trying to say that maybe reinvestment is not always an unquestionably good/best thing. > As for forcing companies to pay dividends, I’d rather the government not be able to tell me what to do with my company’s funds I don't want to digress too much, but limited liability corporation and more complex structures with shareholders are creations of the government. You used to have to obtain a specific charter from the sovereign for each one of them. So unless you're an individual doing business with unlimited liability, it's debatable whether government (or the lawgiver, to be more specific) shouldn't get to make the rules for you.
  - lotsofpulp 6y ago
    The government can make rules, but I don’t see why it has to do with how a company chooses to spend money. If the government wants more funds, then increase the taxes. Government can remove deductions for business expenses, raise tax rates, etc. But there’s no reason for government to tell a company what to do with its excess cash.
    - jessaustin 6y ago
      The corporation is a creation of the state. The state has obligations to humans, not to corporations. If the lives of humans to whom the state is obligated would be improved by any number of onerous requirements imposed on corporations, the state certainly should impose those onerous requirements. Of course, the idea that states are created for the benefit of humans is bullshit, but it's nice to dream of something better...
      - lotsofpulp 6y ago
        > If the lives of humans to whom the state is obligated would be improved by any number of onerous requirements imposed on corporations, the state certainly should impose those onerous requirements. I agree with this. Which is why I wrote the state can choose to increase taxes. I have yet to be shown how requiring a company to pay dividends accomplishes the goal of improving the lives of humans.
        jessaustin 6y ago
        Dividends are taxable, and they're often paid to entities that are unable to structure "profits" as carefully as the largest corporations can. So, in this discussion in which everyone (even Jeff B!) seems to agree that more taxes should be collected, dividend requirements would be a way to do that. Of course, that's too tame. We'd be better off eliminating the most common forms of incorporation, or severely curtailing them e.g. maximum revenue limits. All the things that corporations can do, individuals, partnerships, mutual-benefit firms, etc. can also do, except often more carefully.

lotsofpulp 6y ago

> Pay the damn wages and dividends, I'd say. If the goal is to increase wages, then government should lower the supply of labor and increase the demand for labor. Provide minimum x weeks of vacation, parental leave, maximum 8 hours per day until overtime rates kick in, free higher education, etc. As for forcing companies to pay dividends, I’d rather the government not be able to tell me what to do with my company’s funds. If the government wants control of the funds, they should raise the tax rates.

stereolambda 6y ago
My comment was more about popular mindset than specific policy solutions. I was trying to say that maybe reinvestment is not always an unquestionably good/best thing. > As for forcing companies to pay dividends, I’d rather the government not be able to tell me what to do with my company’s funds I don't want to digress too much, but limited liability corporation and more complex structures with shareholders are creations of the government. You used to have to obtain a specific charter from the sovereign for each one of them. So unless you're an individual doing business with unlimited liability, it's debatable whether government (or the lawgiver, to be more specific) shouldn't get to make the rules for you.
- lotsofpulp 6y ago
  The government can make rules, but I don’t see why it has to do with how a company chooses to spend money. If the government wants more funds, then increase the taxes. Government can remove deductions for business expenses, raise tax rates, etc. But there’s no reason for government to tell a company what to do with its excess cash.
  - jessaustin 6y ago
    The corporation is a creation of the state. The state has obligations to humans, not to corporations. If the lives of humans to whom the state is obligated would be improved by any number of onerous requirements imposed on corporations, the state certainly should impose those onerous requirements. Of course, the idea that states are created for the benefit of humans is bullshit, but it's nice to dream of something better...
    - lotsofpulp 6y ago
      > If the lives of humans to whom the state is obligated would be improved by any number of onerous requirements imposed on corporations, the state certainly should impose those onerous requirements. I agree with this. Which is why I wrote the state can choose to increase taxes. I have yet to be shown how requiring a company to pay dividends accomplishes the goal of improving the lives of humans.
      - jessaustin 6y ago
        Dividends are taxable, and they're often paid to entities that are unable to structure "profits" as carefully as the largest corporations can. So, in this discussion in which everyone (even Jeff B!) seems to agree that more taxes should be collected, dividend requirements would be a way to do that. Of course, that's too tame. We'd be better off eliminating the most common forms of incorporation, or severely curtailing them e.g. maximum revenue limits. All the things that corporations can do, individuals, partnerships, mutual-benefit firms, etc. can also do, except often more carefully.