4 ms·

There shouldn’t be „corporate taxes“. They tend to be difficult to collect, troublesome to declare and actually can not contribute much to national budgets. Th

There shouldn’t be „corporate taxes“. They tend to be difficult to collect, troublesome to declare and actually can not contribute much to national budgets. Think about it: Employees of multinational companies pay billions of income tax. Customers buying products and services from multinational pay billions in VAT. Shareholders of multinationals receiving dividends pay billions of capital gains tax. So what exactly is left for a corporate tax to collect?

empira 5y ago
Well it all depends on your ideas about taxation, society and the role of government. It is true that huge corporations already "give back" a lot of the money they collected under various forms (income tax, VAT, etc.) But if you think that the role of government is necessary, then you agree that it should collect taxe to exercise this role. And money is taken where money is. We tax corporations because they make benefits, and a benefit is just a way of saying that even after deducting everything they can think of, they still have money they don't need. So why not take a part of it and re-invest it elsewhere where it is needed ? Ultimately there is no proper justification for any tax, except its necessity to let society fonction properly.
- G3rn0ti 5y ago
  > Ultimately there is no proper justification for any tax, except its necessity to let society fonction properly. But a tax law should adhere to the same standard of quality as other sections of the law. Under the rule of law I -- for one -- expect tax laws at least not to be arbitrary. Just the fact there is money on the table does not entitle the society to grab it.
  - empira 5y ago
    Of course. And that is not the case at the moment. Microsoft will not get fine for 'avoiding' corporate taxe if what they do is legal. But governments will sure try to change the law so that they grab as much as is needed.
chipsambos 5y ago
> So what exactly is left for a corporate tax to collect? £220bn in profit last year. It's in the headline.
- G3rn0ti 5y ago
  Well, thanks for your snarky comment. ;) The profit goes out to shareholders as dividends, to employees as salary rises and into investments of a corporate’s means of production hopefully generating more growth and, hence, growing tax returns.
- G3rn0ti 5y ago
  > £220bn As others pointed out — this number is nonsense. See for example https://news.ycombinator.com/item?id=27380998 https://news.ycombinator.com/item?id=27380998.
  - samspenc 5y ago
    Yeah that was my first thought on seeing the title. MSFT as a whole made a grand total of $143 billion (€118 billion) revenue in 2020 (across the globe), and $44.3 billion (€36.5 billion) profit during this time. I'm not sure how they got from a €36.5 billion profit for the year (which would be the maximal taxable amount) to a €220 billion number, something 6x higher.
snarf21 5y ago
Exactly right. We want strong healthy companies. I'd rather see another special tax on all buybacks. That is the perfect time to collect more money and reduce some of the perverse incentives in the system right now.
macleginn 5y ago
This question is a bit convoluted, but see some arguments here: https://www.britannica.com/topic/income-tax/Corporate-income-tax https://www.britannica.com/topic/income-tax/Corporate-income... E.g., "The separate taxation of the incomes of corporations and their shareholders follows the legal principle that corporations and shareholders are distinct entities. Some scholars argue that it also accords with economic reality, particularly for large corporations with many shareholders who do not participate actively in controlling the enterprise. They consider a corporation income tax justified as a charge for the privilege of doing business in the corporate form, as a means of covering the costs of public services that especially benefit business, and as a way of capturing part of the profits of large enterprises."
pas 5y ago
Corp income tax tries to tax the actual value of the economic activity of the corporation. (And this is a bit different from the VAT, because it's imposed on the consumers: https://economics.stackexchange.com/questions/9678/what-is-the-difference-between-vat-and-corporate-tax https://economics.stackexchange.com/questions/9678/what-is-t... .)

empira 5y ago

Well it all depends on your ideas about taxation, society and the role of government. It is true that huge corporations already "give back" a lot of the money they collected under various forms (income tax, VAT, etc.) But if you think that the role of government is necessary, then you agree that it should collect taxe to exercise this role. And money is taken where money is. We tax corporations because they make benefits, and a benefit is just a way of saying that even after deducting everything they can think of, they still have money they don't need. So why not take a part of it and re-invest it elsewhere where it is needed ? Ultimately there is no proper justification for any tax, except its necessity to let society fonction properly.

G3rn0ti 5y ago
> Ultimately there is no proper justification for any tax, except its necessity to let society fonction properly. But a tax law should adhere to the same standard of quality as other sections of the law. Under the rule of law I -- for one -- expect tax laws at least not to be arbitrary. Just the fact there is money on the table does not entitle the society to grab it.
- empira 5y ago
  Of course. And that is not the case at the moment. Microsoft will not get fine for 'avoiding' corporate taxe if what they do is legal. But governments will sure try to change the law so that they grab as much as is needed.

chipsambos 5y ago

> So what exactly is left for a corporate tax to collect? £220bn in profit last year. It's in the headline.

G3rn0ti 5y ago
Well, thanks for your snarky comment. ;) The profit goes out to shareholders as dividends, to employees as salary rises and into investments of a corporate’s means of production hopefully generating more growth and, hence, growing tax returns.
G3rn0ti 5y ago
> £220bn As others pointed out — this number is nonsense. See for example https://news.ycombinator.com/item?id=27380998 https://news.ycombinator.com/item?id=27380998.
- samspenc 5y ago
  Yeah that was my first thought on seeing the title. MSFT as a whole made a grand total of $143 billion (€118 billion) revenue in 2020 (across the globe), and $44.3 billion (€36.5 billion) profit during this time. I'm not sure how they got from a €36.5 billion profit for the year (which would be the maximal taxable amount) to a €220 billion number, something 6x higher.

snarf21 5y ago

Exactly right. We want strong healthy companies. I'd rather see another special tax on all buybacks. That is the perfect time to collect more money and reduce some of the perverse incentives in the system right now.

macleginn 5y ago

This question is a bit convoluted, but see some arguments here: https://www.britannica.com/topic/income-tax/Corporate-income-tax https://www.britannica.com/topic/income-tax/Corporate-income... E.g., "The separate taxation of the incomes of corporations and their shareholders follows the legal principle that corporations and shareholders are distinct entities. Some scholars argue that it also accords with economic reality, particularly for large corporations with many shareholders who do not participate actively in controlling the enterprise. They consider a corporation income tax justified as a charge for the privilege of doing business in the corporate form, as a means of covering the costs of public services that especially benefit business, and as a way of capturing part of the profits of large enterprises."

pas 5y ago

Corp income tax tries to tax the actual value of the economic activity of the corporation. (And this is a bit different from the VAT, because it's imposed on the consumers: https://economics.stackexchange.com/questions/9678/what-is-the-difference-between-vat-and-corporate-tax https://economics.stackexchange.com/questions/9678/what-is-t... .)