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There's no other way then to establish AMT for corporations. Otherwise countries will apply deductions around this 15% global minimum anyway.

prepend 5y ago
I tried to call out the other way is to push the income to individuals so corporate profits are always near zero. So to apply energy on taxing individuals rather than corps. For corps income is so fluid, I think we get more revenue with tariffs, usage taxes, property tax, VAT, sales, etc. Profit isn’t as important to corporations as it is to individuals.
- dannyw 5y ago
  Wealthy individuals will just keep all their wealth in a company and accumulate forever. It's terrible for wealth inequality.
  - prepend 5y ago
    Corporate income taxes don’t matter with this as corporate income gets deferred even longer than individuals. So I think it’s neutral for wealth inequality, since an individual getting $1B in income or a corporation getting $1B in income to a single individual is the same. Or deferring income with trusts, credits, etc. I think for wealth inequality, the goal is to have more individuals with greater wealth, so this doesn’t seem to affect the number of people impacted.
  - djbebs 5y ago
    Punitive taxes and regulation is what heightens wealth inequality. In any case I find that any appeals to decrease wealth inequality is ultimately no more than greedy appeals to take from the responsible and give to the irresponsible, so I've long since stopped seeing that as a legitimate argument.
- ojbyrne 5y ago
  How would taxing individuals make the use of expensing 5000 square foot offices, country club dues and private jet travel less attractive for executives? They would just pile up the deductible expenses and take less taxable compensation.
  - prepend 5y ago
    Lower corporate tax rates make it more likely to distribute profit to employees (bonuses) and shareholders (dividends, stock repurchase). My reasoning is that people prefer direct compensation over perks, and shareholders can’t get perks. With a high tax rate, there’s more of a benefit to pay deductible benefits rather than bonuses. With lower tax rate, the incentive goes away so corps can just pay directly. The goal is to get max tax revenue, so whatever equilibrium results in the highest government revenue is preferred. So the comparison should be what brings in the most revenue.
- Retric 5y ago
  You’re assuming a 1:1 relationship between company country and stockholder’s country. That’s simply no longer even remotely true. So, in practice lowering US corporate taxes is a tax break on the Saudi royal family etc and a net increase in taxes for American citizens.
  - bpodgursky 5y ago
    The US could tax dividends and cap gains for foreign shareholders, if it wanted.
    - Retric 5y ago
      The backlash of foreign countries taxing both their companies and US investors would also make such a change a net loss for American citizens. By far the best option is to just raise taxes on US companies and thus lower taxes on American citizens.

prepend 5y ago

I tried to call out the other way is to push the income to individuals so corporate profits are always near zero. So to apply energy on taxing individuals rather than corps. For corps income is so fluid, I think we get more revenue with tariffs, usage taxes, property tax, VAT, sales, etc. Profit isn’t as important to corporations as it is to individuals.

dannyw 5y ago
Wealthy individuals will just keep all their wealth in a company and accumulate forever. It's terrible for wealth inequality.
- prepend 5y ago
  Corporate income taxes don’t matter with this as corporate income gets deferred even longer than individuals. So I think it’s neutral for wealth inequality, since an individual getting $1B in income or a corporation getting $1B in income to a single individual is the same. Or deferring income with trusts, credits, etc. I think for wealth inequality, the goal is to have more individuals with greater wealth, so this doesn’t seem to affect the number of people impacted.
- djbebs 5y ago
  Punitive taxes and regulation is what heightens wealth inequality. In any case I find that any appeals to decrease wealth inequality is ultimately no more than greedy appeals to take from the responsible and give to the irresponsible, so I've long since stopped seeing that as a legitimate argument.
ojbyrne 5y ago
How would taxing individuals make the use of expensing 5000 square foot offices, country club dues and private jet travel less attractive for executives? They would just pile up the deductible expenses and take less taxable compensation.
- prepend 5y ago
  Lower corporate tax rates make it more likely to distribute profit to employees (bonuses) and shareholders (dividends, stock repurchase). My reasoning is that people prefer direct compensation over perks, and shareholders can’t get perks. With a high tax rate, there’s more of a benefit to pay deductible benefits rather than bonuses. With lower tax rate, the incentive goes away so corps can just pay directly. The goal is to get max tax revenue, so whatever equilibrium results in the highest government revenue is preferred. So the comparison should be what brings in the most revenue.
Retric 5y ago
You’re assuming a 1:1 relationship between company country and stockholder’s country. That’s simply no longer even remotely true. So, in practice lowering US corporate taxes is a tax break on the Saudi royal family etc and a net increase in taxes for American citizens.
- bpodgursky 5y ago
  The US could tax dividends and cap gains for foreign shareholders, if it wanted.
  - Retric 5y ago
    The backlash of foreign countries taxing both their companies and US investors would also make such a change a net loss for American citizens. By far the best option is to just raise taxes on US companies and thus lower taxes on American citizens.