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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 w
by 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 agoLower 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.