5 ms·

Virtually every item on the list is categorized as a "tax abatement", "tax deferral", or "tax exemption". I think it's misleading to call those 'subsidies'. A

by kogus 5y ago

Virtually every item on the list is categorized as a "tax abatement", "tax deferral", or "tax exemption". I think it's misleading to call those 'subsidies'. As always, the existence of such taxes gives politicians a tool to amplify their corruption and incompetence. The right answer is to take such tools out of politician's hands by ending the taxes in the first place. It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level.

mikece 5y ago
> It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. It's also worth pointing out that a business is subject to a number of taxes: property tax, income tax, various fees for operating a business, infrastructure upgrades (to support the tonnage of Amazon trucks), and more. I would like to think that the complete re-build of a highway interchange and re-placement of a normal asphalt street to a heavy-duty concrete road meant for hauling tons of freight, the installation of water and power connections, and everything else a company would need for a large installation would be paid for by them. But we all know these are seen as infrastructure investments that will (hopefully) lure more companies to the area (companies that WON'T be given all of the breaks) now that an anchor tenant is there and justifying a long-term investment.
Loughla 5y ago
>It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. That is a very, very bold claim. Please provide bold evidence or reasoning. >The right answer is to take such tools out of politician's hands by ending the taxes in the first place. So there is a corrupt system, and the only solution is to just destroy it? I don't get it.
- jdasdf 5y ago
  [Eliminating or severely reducing corporate taxation is a fairly mainstream idea in economics](https://www.econlib.org/library/Enc/CorporateTaxation.html https://www.econlib.org/library/Enc/CorporateTaxation.html)
  - ceejayoz 5y ago
    That's the website of a conservative think-tank.
    - hn_ta 5y ago
      Why don't you argue the point and offer an alternative opinion or rebuttal instead of profiling the messenger?
      - ceejayoz 5y ago
        The messenger is relevant, at times, and is at least worth mentioning. I'm skeptical of "everyone agrees with me!" coming from any think tank, left or right. https://taxfoundation.org/case-not-eliminating-corporate-income-tax/ https://taxfoundation.org/case-not-eliminating-corporate-inc..., for example, argues that relying on taxing shareholders instead of the corporation ignores foreign shareholders whose income isn't subject to US taxation. (For similar disclosure, they're generally considered right-leaning.)
        hn_ta 5y ago
        > for example, argues that relying on taxing shareholders instead of the corporation ignores foreign shareholders whose income isn't subject to US taxation. And that is a good point to discuss/argue, regardless of the messenger. You could do the same with the previous resource as well; pull out points that you like/dislike and we discuss around that as opposed to shooting down any discussion because you don't like the messenger.
        gruez 5y ago
        >argues that relying on taxing shareholders instead of the corporation ignores foreign shareholders whose income isn't subject to US taxation. They aren't? What about withholding tax?
        ceejayoz 5y ago
        That's on income, not capital gains. https://www.investopedia.com/ask/answers/06/nonusresidenttax.asp https://www.investopedia.com/ask/answers/06/nonusresidenttax... > Nonresident aliens are subject to no U.S. capital gains tax, but capital gains taxes will likely be paid in your country of origin. > Nonresident aliens are subject to a dividend tax rate of 30% on dividends paid out by U.S. companies.
- calpaterson 5y ago
  > That is a very, very bold claim. Please provide bold evidence or reasoning. A selection of common reasons to oppose corporation tax: - It encourages financing via debt instead of equity (debt payments come of pre-tax profit, equity dividends do not). Debt financing is far more systemically unstable than equity financing. - Corp tax applies to profits that will be reinvested as well as those that will be withdrawn via dividends, buybacks, etc. Taxing reinvestment (eg in equipment, premises, etc) is very undesirable. - Companies are highly motivated and well able to avoid it, which means, eg that corp tax falls on small companies more than bigger ones, and that it's administratively complicated to collect (litigation is often required) In short, corp tax is a tax on money that companies often invest and leads to the most phenomenal hijinks to get out of it. IMO would be better to lower it and raise other taxes instead (eg capital gains, dividend tax).
- CapitalistCartr 5y ago
  The general principle is that corporate taxations are merely a concealed tax on the Public, as corporations merely pass all expenses, including taxes, on to their customers. Except Silicon Valley Startups, they run on VC money indefinitely, so can afford to sell at any loss.
- kogus 5y ago
  User jdasdf already responded with an excellent resource on the economic arguments. I can add this link as well, which you may find interesting: https://www.europeanceo.com/finance/zero-corporation-tax-the-arguments-for-and-against/ https://www.europeanceo.com/finance/zero-corporation-tax-the... In short, corporate taxes are going to be passed on the shareholders or consumers. So just tax them instead. Why is that better? For one thing, those individuals get to vote, so they can object in a legitimate way if they feel the taxes are unjust. For another, it removes a vehicle for government mismanagement and corruption. As for your last sentence: So there is a corrupt system, and the only solution is to just destroy it? I don't get it. I'd prefer to think about systems on a spectrum of their vulnerability to corruption, and what mitigations to corruption are feasible. In the current framework of regulation and taxation, we have a situation where corporations are, on paper, liable for huge tax burdens, and politicians can choose to lighten that load at their discretion. That's a recipe for extreme favoritism and corruption, especially when you consider most of these decisions are made at a local or state level, where media scrutiny and public awareness is especially weak. In this case, in my opinion, the best answer is to take the sharp-edged toys away from the children, by which I mean eliminate the possibility of corporate taxes (and therefore favoritism) in favor of more direct and fair taxation on the individuals who end up paying them anyway.
- proxyon 5y ago
  > That is a very, very bold claim. Please provide bold evidence or reasoning. No it's not. This is common knowledge in the economics world. Corporations can dodge taxes in ways individuals mostly can't.
- marcosdumay 5y ago
  > So there is a corrupt system, and the only solution is to just destroy it? There's merit to this idea. Often enough the correct fix for a broken system is to throw it away and replace it with something more resilient, even if you lose some theoretical optimality. This is similar to the people that want to legalize all drugs to reduce crime.
jdasdf 5y ago
This is exactly right. Corporate taxation is not a good thing in general, and makes everyone poorer.
f6v 5y ago
Suppose someone in the EU rents a VM from AWS. How does the US government tax that?
- kogus 5y ago
  In theory, that's income to a US Corporation, which is subject to US corporate income tax. In practice, Amazon will find a way to offset that "income" with some tax-deductible claim of loss or investment and pay little or nothing on it. I'm happy to be corrected if I've misunderstood.
- fallingknife 5y ago
  He's probably not renting if from "AWS" but instead from "AWS Ireland" or some subsidiary like that. If the VM is located in us-west-1, AWS Ireland probably then rents the VM from AWS USA for a price designed to minimize profit in the high tax (USA) jurisdiction and maximize it in the low tax jurisdiction (Ireland). This is called transfer pricing.
dionidium 5y ago
> I think it's misleading to call those 'subsidies'. In ordinary language we all understand that giving someone money and asking for less of their money are not equivalent, but referring to both as subsidies in terms of tax policy is pretty standard. See, for example, the debate about the mortgage interest deduction: https://www.taxpolicycenter.org/taxvox/who-benefits-tax-subsidies-home-ownership https://www.taxpolicycenter.org/taxvox/who-benefits-tax-subs...
- sokoloff 5y ago
  I think there's a strong argument that we should permit the mortgage interest deduction in order to keep owner-occupied real estate on equal footing with commercially-owned real estate (the expenses of which are inherently deductible by profit-seeking corporations). Otherwise, we create financial hurdles for people to buy houses that don't exist for landlords, which I think is poor policy.
bregma 5y ago
I'm all in favour of eliminating taxes on corporate revenue. Income taxes should be paid by those earning income (the dividend recipients, the capitalists making gains). Progressive taxes on executive compensation is a good idea for keeping those ridiculously excessive C-level benefits lower. Property taxes, on the other hand, should be paid by the landowner and recipient of municipal services. If Amazon wants to build a warehouse on its land and expects services like water and sewer, police and fire coverage, roads, snow and rain clearance, and many other things that property taxes pay for, they need to pay property taxes. Any property tax abatement or exemption is just taxing the local residents to help pay the exorbitant salaries of the people who go from junket to junket scooping up these delicious subsidies. I do not think it is really in the best interest of regular local citizens and for that reason it should be regulated.
AnIdiotOnTheNet 5y ago
> It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. Yes, lets continue to turn all responsibility into externalities for our corporate overlords.
tasty_freeze 5y ago
I'm not an economist, but not taxing corporations leads to increasing income inequality, and gives companies the wrong economic signals. It costs money to run the government -- the court system, the armed forces, the legislatures, the police and fire departments, etc. Companies consume these resources and that cost should be factored into the cost of their products. In fact, it seems pretty obvious to me that especially large corporations use these resources far more than individuals. When was the last time you were able to lobby congress to write laws to your liking, or create trade agreements, or author a bill to advantage your financial interests? Back in the 50s in the US, companies paid about 30-35% of total tax revenue and the gears of industry still turned fine. Now it is about 7%, and people complain that it is too much and is harming the economy and stifling progress. If companies were taxed at a higher rate, yes, it would change things. There would be winners and losers, but a new equilibrium would be established soon enough. Dividends would be lower -- yes, so what? The economy is already too geared towards rewarding unproductive stock market games and the lopsided part of that goes to the people who are already well off. Dropping taxes to zero for companies would make things worse. Rich people wouldn't consume more and would just reinvest their increased dividends, while working people would have to make up the loss of tax revenues either through increased personal tax or loss of services.
- kogus 5y ago
  When was the last time you were able to lobby congress to write laws to your liking, or create trade agreements, or author a bill to advantage your financial interests? That's exactly my point. Corporations have all kinds of power and leverage when negotiating with politicians regarding their tax burden. That's what leads to corruption. Corporations don't even exist as anything other than a legal framework. When you tax a corporation, you are by definition taxing the investors in it. The corporate framework gives those individual investors cover to avoid paying their taxes. I'm suggesting that you bypass the problem by eliminating corporate taxes, and replacing them with taxes on investors, who individually would not have the leverage to avoid them. As an added bonus, you'd deprive politicians of a powerful tool that they are demonstrably incapable of wielding fairly and effectively.
  - 5y ago
alexanderdmitri 5y ago
Why wouldn't executives just start having their personal transactions and outsized living expenses conducted w/ untaxed corporate revenue? This sounds like fixing a loophole by making the hole so big you can't call it hole anymore ...

by kogus 5y ago

mikece 5y ago

> It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. It's also worth pointing out that a business is subject to a number of taxes: property tax, income tax, various fees for operating a business, infrastructure upgrades (to support the tonnage of Amazon trucks), and more. I would like to think that the complete re-build of a highway interchange and re-placement of a normal asphalt street to a heavy-duty concrete road meant for hauling tons of freight, the installation of water and power connections, and everything else a company would need for a large installation would be paid for by them. But we all know these are seen as infrastructure investments that will (hopefully) lure more companies to the area (companies that WON'T be given all of the breaks) now that an anchor tenant is there and justifying a long-term investment.

Loughla 5y ago

>It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. That is a very, very bold claim. Please provide bold evidence or reasoning. >The right answer is to take such tools out of politician's hands by ending the taxes in the first place. So there is a corrupt system, and the only solution is to just destroy it? I don't get it.

jdasdf 5y ago
[Eliminating or severely reducing corporate taxation is a fairly mainstream idea in economics](https://www.econlib.org/library/Enc/CorporateTaxation.html https://www.econlib.org/library/Enc/CorporateTaxation.html)
- ceejayoz 5y ago
  That's the website of a conservative think-tank.
  - hn_ta 5y ago
    Why don't you argue the point and offer an alternative opinion or rebuttal instead of profiling the messenger?
    - ceejayoz 5y ago
      The messenger is relevant, at times, and is at least worth mentioning. I'm skeptical of "everyone agrees with me!" coming from any think tank, left or right. https://taxfoundation.org/case-not-eliminating-corporate-income-tax/ https://taxfoundation.org/case-not-eliminating-corporate-inc..., for example, argues that relying on taxing shareholders instead of the corporation ignores foreign shareholders whose income isn't subject to US taxation. (For similar disclosure, they're generally considered right-leaning.)
      - hn_ta 5y ago
        > for example, argues that relying on taxing shareholders instead of the corporation ignores foreign shareholders whose income isn't subject to US taxation. And that is a good point to discuss/argue, regardless of the messenger. You could do the same with the previous resource as well; pull out points that you like/dislike and we discuss around that as opposed to shooting down any discussion because you don't like the messenger.
      - gruez 5y ago
        >argues that relying on taxing shareholders instead of the corporation ignores foreign shareholders whose income isn't subject to US taxation. They aren't? What about withholding tax?
        ceejayoz 5y ago
        That's on income, not capital gains. https://www.investopedia.com/ask/answers/06/nonusresidenttax.asp https://www.investopedia.com/ask/answers/06/nonusresidenttax... > Nonresident aliens are subject to no U.S. capital gains tax, but capital gains taxes will likely be paid in your country of origin. > Nonresident aliens are subject to a dividend tax rate of 30% on dividends paid out by U.S. companies.
calpaterson 5y ago
> That is a very, very bold claim. Please provide bold evidence or reasoning. A selection of common reasons to oppose corporation tax: - It encourages financing via debt instead of equity (debt payments come of pre-tax profit, equity dividends do not). Debt financing is far more systemically unstable than equity financing. - Corp tax applies to profits that will be reinvested as well as those that will be withdrawn via dividends, buybacks, etc. Taxing reinvestment (eg in equipment, premises, etc) is very undesirable. - Companies are highly motivated and well able to avoid it, which means, eg that corp tax falls on small companies more than bigger ones, and that it's administratively complicated to collect (litigation is often required) In short, corp tax is a tax on money that companies often invest and leads to the most phenomenal hijinks to get out of it. IMO would be better to lower it and raise other taxes instead (eg capital gains, dividend tax).
CapitalistCartr 5y ago
The general principle is that corporate taxations are merely a concealed tax on the Public, as corporations merely pass all expenses, including taxes, on to their customers. Except Silicon Valley Startups, they run on VC money indefinitely, so can afford to sell at any loss.
kogus 5y ago
User jdasdf already responded with an excellent resource on the economic arguments. I can add this link as well, which you may find interesting: https://www.europeanceo.com/finance/zero-corporation-tax-the-arguments-for-and-against/ https://www.europeanceo.com/finance/zero-corporation-tax-the... In short, corporate taxes are going to be passed on the shareholders or consumers. So just tax them instead. Why is that better? For one thing, those individuals get to vote, so they can object in a legitimate way if they feel the taxes are unjust. For another, it removes a vehicle for government mismanagement and corruption. As for your last sentence: So there is a corrupt system, and the only solution is to just destroy it? I don't get it. I'd prefer to think about systems on a spectrum of their vulnerability to corruption, and what mitigations to corruption are feasible. In the current framework of regulation and taxation, we have a situation where corporations are, on paper, liable for huge tax burdens, and politicians can choose to lighten that load at their discretion. That's a recipe for extreme favoritism and corruption, especially when you consider most of these decisions are made at a local or state level, where media scrutiny and public awareness is especially weak. In this case, in my opinion, the best answer is to take the sharp-edged toys away from the children, by which I mean eliminate the possibility of corporate taxes (and therefore favoritism) in favor of more direct and fair taxation on the individuals who end up paying them anyway.
proxyon 5y ago
> That is a very, very bold claim. Please provide bold evidence or reasoning. No it's not. This is common knowledge in the economics world. Corporations can dodge taxes in ways individuals mostly can't.
marcosdumay 5y ago
> So there is a corrupt system, and the only solution is to just destroy it? There's merit to this idea. Often enough the correct fix for a broken system is to throw it away and replace it with something more resilient, even if you lose some theoretical optimality. This is similar to the people that want to legalize all drugs to reduce crime.

jdasdf 5y ago

This is exactly right. Corporate taxation is not a good thing in general, and makes everyone poorer.

f6v 5y ago

Suppose someone in the EU rents a VM from AWS. How does the US government tax that?

kogus 5y ago
In theory, that's income to a US Corporation, which is subject to US corporate income tax. In practice, Amazon will find a way to offset that "income" with some tax-deductible claim of loss or investment and pay little or nothing on it. I'm happy to be corrected if I've misunderstood.
fallingknife 5y ago
He's probably not renting if from "AWS" but instead from "AWS Ireland" or some subsidiary like that. If the VM is located in us-west-1, AWS Ireland probably then rents the VM from AWS USA for a price designed to minimize profit in the high tax (USA) jurisdiction and maximize it in the low tax jurisdiction (Ireland). This is called transfer pricing.

dionidium 5y ago

> I think it's misleading to call those 'subsidies'. In ordinary language we all understand that giving someone money and asking for less of their money are not equivalent, but referring to both as subsidies in terms of tax policy is pretty standard. See, for example, the debate about the mortgage interest deduction: https://www.taxpolicycenter.org/taxvox/who-benefits-tax-subsidies-home-ownership https://www.taxpolicycenter.org/taxvox/who-benefits-tax-subs...

sokoloff 5y ago
I think there's a strong argument that we should permit the mortgage interest deduction in order to keep owner-occupied real estate on equal footing with commercially-owned real estate (the expenses of which are inherently deductible by profit-seeking corporations). Otherwise, we create financial hurdles for people to buy houses that don't exist for landlords, which I think is poor policy.

bregma 5y ago

I'm all in favour of eliminating taxes on corporate revenue. Income taxes should be paid by those earning income (the dividend recipients, the capitalists making gains). Progressive taxes on executive compensation is a good idea for keeping those ridiculously excessive C-level benefits lower. Property taxes, on the other hand, should be paid by the landowner and recipient of municipal services. If Amazon wants to build a warehouse on its land and expects services like water and sewer, police and fire coverage, roads, snow and rain clearance, and many other things that property taxes pay for, they need to pay property taxes. Any property tax abatement or exemption is just taxing the local residents to help pay the exorbitant salaries of the people who go from junket to junket scooping up these delicious subsidies. I do not think it is really in the best interest of regular local citizens and for that reason it should be regulated.

AnIdiotOnTheNet 5y ago

> It feels good to tax a corporation, but it's much more practical, efficient, and transparent to keep taxes at the personal and consumer level. Yes, lets continue to turn all responsibility into externalities for our corporate overlords.

tasty_freeze 5y ago

I'm not an economist, but not taxing corporations leads to increasing income inequality, and gives companies the wrong economic signals. It costs money to run the government -- the court system, the armed forces, the legislatures, the police and fire departments, etc. Companies consume these resources and that cost should be factored into the cost of their products. In fact, it seems pretty obvious to me that especially large corporations use these resources far more than individuals. When was the last time you were able to lobby congress to write laws to your liking, or create trade agreements, or author a bill to advantage your financial interests? Back in the 50s in the US, companies paid about 30-35% of total tax revenue and the gears of industry still turned fine. Now it is about 7%, and people complain that it is too much and is harming the economy and stifling progress. If companies were taxed at a higher rate, yes, it would change things. There would be winners and losers, but a new equilibrium would be established soon enough. Dividends would be lower -- yes, so what? The economy is already too geared towards rewarding unproductive stock market games and the lopsided part of that goes to the people who are already well off. Dropping taxes to zero for companies would make things worse. Rich people wouldn't consume more and would just reinvest their increased dividends, while working people would have to make up the loss of tax revenues either through increased personal tax or loss of services.

kogus 5y ago
When was the last time you were able to lobby congress to write laws to your liking, or create trade agreements, or author a bill to advantage your financial interests? That's exactly my point. Corporations have all kinds of power and leverage when negotiating with politicians regarding their tax burden. That's what leads to corruption. Corporations don't even exist as anything other than a legal framework. When you tax a corporation, you are by definition taxing the investors in it. The corporate framework gives those individual investors cover to avoid paying their taxes. I'm suggesting that you bypass the problem by eliminating corporate taxes, and replacing them with taxes on investors, who individually would not have the leverage to avoid them. As an added bonus, you'd deprive politicians of a powerful tool that they are demonstrably incapable of wielding fairly and effectively.
- 5y ago

alexanderdmitri 5y ago

Why wouldn't executives just start having their personal transactions and outsized living expenses conducted w/ untaxed corporate revenue? This sounds like fixing a loophole by making the hole so big you can't call it hole anymore ...