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The argument I have heard is corporate profits are already taxed. The capital gains tax + corporate profit tax roughly equals normal income tax. Personally, I'

The argument I have heard is corporate profits are already taxed. The capital gains tax + corporate profit tax roughly equals normal income tax. Personally, I'd prefer higher capital gains tax and lower corporate tax. I think it would be more transparent and easier to collect.

jjoonathan 5y ago
Ah, yes, double taxed: once at 0%, due to Ireland, and once at 15%, due to the special capital gains rate. I wish my income was double taxed like that! Where do I sign up?
- zepto 5y ago
  What proportion of businesses are taxed like that?
  - klyrs 5y ago
    Better question: what proportion of corporate profits are taxed like that? Because the cheesemonger down the street isn't pulling a Double Irish to avoid taxes on the ~0% of GDP that they're generating.
    - zepto 5y ago
      Agreed - I would like to know what the effect would be on regular businesses are growing, not a few giant multinationals. If people care about this loophole, how about just closing it, rather than taxing everyone else?
      - deleted 5y ago
        [deleted]
      - klyrs 5y ago
        How do you close a loophole without bought politicians replacing one loophole with ten? A bit of an "angels dancing on a pinhead" question, I'll admit
  - User23 5y ago
    Look up double Irish with a Dutch sandwich. Not really my area of expertise, but in the past at least basically all big tech companies used that strategy.
    - zepto 5y ago
      I don’t need to look it up, I know what it is. The proposal would hit every business not just a few tech giants.
      - jjoonathan 5y ago
        Yeah, everyone knows what it is, and has known for a long time. It goes to show that the loophole is not an accident but rather an intentional result of our political process. Unfortunately.
  - lostlogin 5y ago
    Different scenario, but tech giants in the US have some amazing arrangements. I’m in New Zealand and their clever arrangements here see them paying minuscule bills on massive revenue “In 2018 Google NZ Ltd (an entity of Alphabet group) paid income tax of NZ$398,341 – about 0.055 per cent of the estimated gross ad revenue “extracted” from the New Zealand market.” Facebook, Apple and Amazon have all been in and out of the news here for their arrangements too. https://i.stuff.co.nz/business/121505796/google-and-facebook-pay-way-less-tax-in-new-zealand-than-in-australia--and-were-paying-the-price https://i.stuff.co.nz/business/121505796/google-and-facebook...
    - zepto 5y ago
      You have to be a multinational by definition to do this, and yet the proposed taxes will hit most medium sized businesses. “It will hurt Apple and Amazon” is not a problem. “It will hurt most growing businesses”, is.
      - jjoonathan 5y ago
        On account of where campaign finance comes from, I'm afraid politicians see it the other way around.
- jariel 5y ago
  True - but of the business activity is in EU, then really it's Ireland's issue to sort out with the EU, it's a separate issue from the 'other side' of the taxation in the US. What they should do is sort it out.
anonAndOn 5y ago
> capital gains tax + corporate profit tax roughly equals normal income tax Doesn't this apply exclusively to the corporate profits not shielded in a Double Irish (or it's latest incarnation) arrangement [0]? [0]https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement
walshemj 5y ago
shifting even more the tax burden to the citizen why?
- lwansbrough 5y ago
  To improve society.
  - moyasari 5y ago
    Society won't improve if the financial system is fundamentally broken, and the people running it are explicitly against fixing it. Don't let these circus shows let you believe otherwise.
- throwaway8581 5y ago
  No, corporate tax is of corporate profits, which is just capital gains that haven't been dispersed and may be dispersed in the future (or may be reinvested). Salaries and wages are not profits, so they are not subject to the corporate tax. In theory, the sum of the capital gains rate + corporate tax rate is supposed to approximate the individual income tax rate. But because most people will never understand this, we can't have a tax code that makes sense. Mass democracy is incompatible with sensible rulemaking in this area.
- closeparen 5y ago
  The argument is that dragging on corporations hurts customers and staff as well as owners. It's better to precisely target the owners. However, I think it misses that most of the benefit to owners is in the form of unrealized gains, not subject to any of the tax rates that people talk about tweaking.
  - throwaway8581 5y ago
    It's not a gain if you don't realize it.
    - closeparen 5y ago
fighterpilot 5y ago
> Personally, I'd prefer higher capital gains tax and lower corporate tax. Same, but it'd mean more tax money for foreign governments, too, since those untaxed profits would be contributing to cap gains tax in another country (in the case of foreign investors) instead of domestic corporate tax.
trhway 5y ago
That doesn't make sense. Those are taxes with different bases. It would make sense to talk that way about corporate profit tax and corporate dividend tax for example.
klyrs 5y ago
> The argument I have heard is corporate profits are already taxed I've heard time and time again that it's a moral imperative for corporations to reduce their tax burden to zero using every loophole available. Are big corporations actually paying tax?
- bolasanibk 5y ago
  https://www.washingtonpost.com/business/2021/04/05/corporations-federal-taxes/ https://www.washingtonpost.com/business/2021/04/05/corporati... >55 corporations had zero federal tax liability in 2020, including household names like Nike, FedEx and Dish Network, analysis finds
- akvadrako 5y ago
  That's not relevant. If you pay out dividends, you cant evade those taxes. Capitol gains is supposed to be based on expected future dividends.
XorNot 5y ago
And that argument is complete junk: https://i.imgur.com/QpvGlnV.gif https://i.imgur.com/QpvGlnV.gif The money I spend of my income buying goods from other businesses is "already taxed" and then when those businesses collect it from me its "taxed again". Mysteriously, the one form of taxation the already wealthy benefit from is very concerned about this happening.
- jariel 5y ago
  The argument is not junk, there's value in understanding how taxes work through the value chain. A little bit like a VAT, we don't want to tax, tax and tax some product that has a long and complicated line of distributors, rather, tax the final product, either using VAT rebates etc.. This is more economically beneficial. With corporate and individual incomes, we think at little bit the same way - i.e. how the taxation will flow through via corp tax, income tax, dividend tax and cap gains. In Ontario, if you pay small business corp tax and then a dividend, it's pretty much the same as if you were to take a salary and pay income tax. Obviously, this because the million or so small businesses out there would rig their outgoing cash flows one way or the other, depending on tax treatment. While cap gains is a special situation, it does still form part of those block of taxes that should naturally relate to one another in terms of how net surpluses are taxed. When you spend your 'already taxed income' on an entirely new product or service, then that's separate economic activity, and so it's taxed without consideration to your 'previously taxed income'.

jjoonathan 5y ago

Ah, yes, double taxed: once at 0%, due to Ireland, and once at 15%, due to the special capital gains rate. I wish my income was double taxed like that! Where do I sign up?

zepto 5y ago
What proportion of businesses are taxed like that?
- klyrs 5y ago
  Better question: what proportion of corporate profits are taxed like that? Because the cheesemonger down the street isn't pulling a Double Irish to avoid taxes on the ~0% of GDP that they're generating.
  - zepto 5y ago
    Agreed - I would like to know what the effect would be on regular businesses are growing, not a few giant multinationals. If people care about this loophole, how about just closing it, rather than taxing everyone else?
    - deleted 5y ago
      [deleted]
    - klyrs 5y ago
      How do you close a loophole without bought politicians replacing one loophole with ten? A bit of an "angels dancing on a pinhead" question, I'll admit
- User23 5y ago
  Look up double Irish with a Dutch sandwich. Not really my area of expertise, but in the past at least basically all big tech companies used that strategy.
  - zepto 5y ago
    I don’t need to look it up, I know what it is. The proposal would hit every business not just a few tech giants.
    - jjoonathan 5y ago
      Yeah, everyone knows what it is, and has known for a long time. It goes to show that the loophole is not an accident but rather an intentional result of our political process. Unfortunately.
- lostlogin 5y ago
  Different scenario, but tech giants in the US have some amazing arrangements. I’m in New Zealand and their clever arrangements here see them paying minuscule bills on massive revenue “In 2018 Google NZ Ltd (an entity of Alphabet group) paid income tax of NZ$398,341 – about 0.055 per cent of the estimated gross ad revenue “extracted” from the New Zealand market.” Facebook, Apple and Amazon have all been in and out of the news here for their arrangements too. https://i.stuff.co.nz/business/121505796/google-and-facebook-pay-way-less-tax-in-new-zealand-than-in-australia--and-were-paying-the-price https://i.stuff.co.nz/business/121505796/google-and-facebook...
  - zepto 5y ago
    You have to be a multinational by definition to do this, and yet the proposed taxes will hit most medium sized businesses. “It will hurt Apple and Amazon” is not a problem. “It will hurt most growing businesses”, is.
    - jjoonathan 5y ago
      On account of where campaign finance comes from, I'm afraid politicians see it the other way around.
jariel 5y ago
True - but of the business activity is in EU, then really it's Ireland's issue to sort out with the EU, it's a separate issue from the 'other side' of the taxation in the US. What they should do is sort it out.

anonAndOn 5y ago

> capital gains tax + corporate profit tax roughly equals normal income tax Doesn't this apply exclusively to the corporate profits not shielded in a Double Irish (or it's latest incarnation) arrangement [0]? [0]https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement

walshemj 5y ago

shifting even more the tax burden to the citizen why?

lwansbrough 5y ago
To improve society.
- moyasari 5y ago
  Society won't improve if the financial system is fundamentally broken, and the people running it are explicitly against fixing it. Don't let these circus shows let you believe otherwise.
throwaway8581 5y ago
No, corporate tax is of corporate profits, which is just capital gains that haven't been dispersed and may be dispersed in the future (or may be reinvested). Salaries and wages are not profits, so they are not subject to the corporate tax. In theory, the sum of the capital gains rate + corporate tax rate is supposed to approximate the individual income tax rate. But because most people will never understand this, we can't have a tax code that makes sense. Mass democracy is incompatible with sensible rulemaking in this area.
closeparen 5y ago
The argument is that dragging on corporations hurts customers and staff as well as owners. It's better to precisely target the owners. However, I think it misses that most of the benefit to owners is in the form of unrealized gains, not subject to any of the tax rates that people talk about tweaking.
- throwaway8581 5y ago
  It's not a gain if you don't realize it.
  - closeparen 5y ago

fighterpilot 5y ago

> Personally, I'd prefer higher capital gains tax and lower corporate tax. Same, but it'd mean more tax money for foreign governments, too, since those untaxed profits would be contributing to cap gains tax in another country (in the case of foreign investors) instead of domestic corporate tax.

trhway 5y ago

That doesn't make sense. Those are taxes with different bases. It would make sense to talk that way about corporate profit tax and corporate dividend tax for example.

klyrs 5y ago

> The argument I have heard is corporate profits are already taxed I've heard time and time again that it's a moral imperative for corporations to reduce their tax burden to zero using every loophole available. Are big corporations actually paying tax?

bolasanibk 5y ago
https://www.washingtonpost.com/business/2021/04/05/corporations-federal-taxes/ https://www.washingtonpost.com/business/2021/04/05/corporati... >55 corporations had zero federal tax liability in 2020, including household names like Nike, FedEx and Dish Network, analysis finds
akvadrako 5y ago
That's not relevant. If you pay out dividends, you cant evade those taxes. Capitol gains is supposed to be based on expected future dividends.

XorNot 5y ago

And that argument is complete junk: https://i.imgur.com/QpvGlnV.gif https://i.imgur.com/QpvGlnV.gif The money I spend of my income buying goods from other businesses is "already taxed" and then when those businesses collect it from me its "taxed again". Mysteriously, the one form of taxation the already wealthy benefit from is very concerned about this happening.

jariel 5y ago
The argument is not junk, there's value in understanding how taxes work through the value chain. A little bit like a VAT, we don't want to tax, tax and tax some product that has a long and complicated line of distributors, rather, tax the final product, either using VAT rebates etc.. This is more economically beneficial. With corporate and individual incomes, we think at little bit the same way - i.e. how the taxation will flow through via corp tax, income tax, dividend tax and cap gains. In Ontario, if you pay small business corp tax and then a dividend, it's pretty much the same as if you were to take a salary and pay income tax. Obviously, this because the million or so small businesses out there would rig their outgoing cash flows one way or the other, depending on tax treatment. While cap gains is a special situation, it does still form part of those block of taxes that should naturally relate to one another in terms of how net surpluses are taxed. When you spend your 'already taxed income' on an entirely new product or service, then that's separate economic activity, and so it's taxed without consideration to your 'previously taxed income'.