4 ms·

The revenue is only the same because we dont actually collect corporation tax because we let people avoid it. To act like there's no additional benefit on taxi

The revenue is only the same because we dont actually collect corporation tax because we let people avoid it. To act like there's no additional benefit on taxing literally billions in revenue is absolutely nonsensical.

roenxi 5y ago
Say you redirect $100 million away from Microsoft's research into artificial intelligence and redirect it to a government project promoting artificial intelligence research + junkets for government employees. It is certainly plausible that a tax will provide no additional benefit. Microsoft is one of the great value creators of the late 20th/early 21st century. it is not immediately obvious why redirecting money away from the company is a good idea.
- pydry 5y ago
  It's interesting that you said redirect $100 million away from Microsoft's research (cost) rather than Microsoft's shareholders pockets. Were you deliberately or accidentally confusing the two?
  - roenxi 5y ago
    A reasonable point. But then the money is being taxed, because money is taxed when it is returned to shareholders. It certainly isn't obvious that raising taxes is a net win. Experience to date is that a 100% tax rate is very bad, so logically there is a fair limit somewhere between 0% and 100% - ie, a specific fair rate that is not the word "more". Certainly Ireland would like a slice of those billions of dollars - but if they try to take a big slice, Microsoft won't route the billions through Ireland. So it is a somewhat moot point in that specific case.
  - TimPC 5y ago
    If you just want to redirect money from shareholders reduce corporate tax rates to 0% and tax dividends and capital gains more. Since they aren’t doing that they are admitting they want to tax money that corporations would re-invest.
- pimterry 5y ago
  > you redirect $100 million away from Microsoft's research into artificial intelligence This confuses the issue - corporation tax has the opposite effect to this, because it only applies to profits. When profits are heavily taxed, there's a strong incentive to invest more money in R&D and longer-term internal investment (thereby avoiding corporation tax on that spending entirely) rather than reporting it as profit that's immediately distributed it to shareholders today. There's interesting arguments about how this affects shareholders and whether it discourages external investment, but it's certainly not a drain on R&D.
fallingknife 5y ago
$100 -> corp. $90 -> expenses, $10 -> profit. $4 -> corp tax, $6 -> shareholders dist. $100 -> corp. $90 -> expenses, $10 -> profit -> shareholders dist. $4 -> personal income tax. In principal it's the same. Path 1 is easier to dodge, because what constitutes "expenses" is hard to define, but distributions are obvious. And the numbers don't have to add to 100. So reality looks more like: $100 -> corp. $95 -> "expenses", $5 -> "profit". $2 -> corp tax, $8 -> shareholders dist. vs $100 -> corp. $95 -> "expenses", $5 -> "profit". $10 shareholders dist. $4 -> personal income tax. And this is why you want to tax at the distribution level.
- deleted 5y ago
  [deleted]

roenxi 5y ago

Say you redirect $100 million away from Microsoft's research into artificial intelligence and redirect it to a government project promoting artificial intelligence research + junkets for government employees. It is certainly plausible that a tax will provide no additional benefit. Microsoft is one of the great value creators of the late 20th/early 21st century. it is not immediately obvious why redirecting money away from the company is a good idea.

pydry 5y ago
It's interesting that you said redirect $100 million away from Microsoft's research (cost) rather than Microsoft's shareholders pockets. Were you deliberately or accidentally confusing the two?
- roenxi 5y ago
  A reasonable point. But then the money is being taxed, because money is taxed when it is returned to shareholders. It certainly isn't obvious that raising taxes is a net win. Experience to date is that a 100% tax rate is very bad, so logically there is a fair limit somewhere between 0% and 100% - ie, a specific fair rate that is not the word "more". Certainly Ireland would like a slice of those billions of dollars - but if they try to take a big slice, Microsoft won't route the billions through Ireland. So it is a somewhat moot point in that specific case.
- TimPC 5y ago
  If you just want to redirect money from shareholders reduce corporate tax rates to 0% and tax dividends and capital gains more. Since they aren’t doing that they are admitting they want to tax money that corporations would re-invest.
pimterry 5y ago
> you redirect $100 million away from Microsoft's research into artificial intelligence This confuses the issue - corporation tax has the opposite effect to this, because it only applies to profits. When profits are heavily taxed, there's a strong incentive to invest more money in R&D and longer-term internal investment (thereby avoiding corporation tax on that spending entirely) rather than reporting it as profit that's immediately distributed it to shareholders today. There's interesting arguments about how this affects shareholders and whether it discourages external investment, but it's certainly not a drain on R&D.

fallingknife 5y ago

$100 -> corp. $90 -> expenses, $10 -> profit. $4 -> corp tax, $6 -> shareholders dist. $100 -> corp. $90 -> expenses, $10 -> profit -> shareholders dist. $4 -> personal income tax. In principal it's the same. Path 1 is easier to dodge, because what constitutes "expenses" is hard to define, but distributions are obvious. And the numbers don't have to add to 100. So reality looks more like: $100 -> corp. $95 -> "expenses", $5 -> "profit". $2 -> corp tax, $8 -> shareholders dist. vs $100 -> corp. $95 -> "expenses", $5 -> "profit". $10 shareholders dist. $4 -> personal income tax. And this is why you want to tax at the distribution level.

deleted 5y ago
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