4 ms·

I think OP's point is that say the company is "theirs" and earns $100M . Now the company pays, say, 25% corporate tax rate. So there is 75M to pay the owner. Ow

I think OP's point is that say the company is "theirs" and earns $100M . Now the company pays, say, 25% corporate tax rate. So there is 75M to pay the owner. Owner takes it as income and now pays 25% tax, so they're left with 56M . Effective tax is ~44% at that point from the original $100M. I argue with my friends that tax rate is less important than turn over rate. My spending is someone else's income, so with enough generations of spending/income all the money becomes 99.999% the government's. Eg: I pay $1 to my friend, he pays 20c tax and keeps 80c. Then pays back to me 80c. I pay 16c tax and keep 64c. pay it again, 12.8c tax, keep 51.2 --> in 3 generations we're already at nearly 50% tax.

lotsofpulp 5y ago
What is the point of counting like that if you are not also incorporating services or benefits received from the government?
- maerF0x0 5y ago
  i mean if the government wants businesses to pay for that they should just send an actual invoice instead of this awkward x% of profits. The percent model keeps crappy (ie low margin) businesses from paying their actual load on society.
ChrisLomont 5y ago
>with enough generations of spending/income all the money becomes 99.999% the government's This doesn't make sense. The govt spends all the money they take in (and then some) back to the private sector. It's paid in SS, payrolls, purchases, services. Your example ignores that the govt spends that 20c tax you listed on police, goods, social security, wages, etc, along with some borrowed from markets, so in practice the govt ends up with negative money, which is called the national debt.
- maerF0x0 5y ago
  yes, but the government spending from collected taxes is only a small fraction of the taxable economy and thus over time the money still accumulates in the coffers. It's only when money is stagnant (or exchanging without profit) that it becomes in accessible from taxes. Removing the long term investment incentives (Long term capital gains) and introducing a penalty for not spending it during your life time (Estate tax) is how you ensure even those avenues of protection are gone.

lotsofpulp 5y ago

What is the point of counting like that if you are not also incorporating services or benefits received from the government?

maerF0x0 5y ago
i mean if the government wants businesses to pay for that they should just send an actual invoice instead of this awkward x% of profits. The percent model keeps crappy (ie low margin) businesses from paying their actual load on society.

ChrisLomont 5y ago

>with enough generations of spending/income all the money becomes 99.999% the government's This doesn't make sense. The govt spends all the money they take in (and then some) back to the private sector. It's paid in SS, payrolls, purchases, services. Your example ignores that the govt spends that 20c tax you listed on police, goods, social security, wages, etc, along with some borrowed from markets, so in practice the govt ends up with negative money, which is called the national debt.

maerF0x0 5y ago
yes, but the government spending from collected taxes is only a small fraction of the taxable economy and thus over time the money still accumulates in the coffers. It's only when money is stagnant (or exchanging without profit) that it becomes in accessible from taxes. Removing the long term investment incentives (Long term capital gains) and introducing a penalty for not spending it during your life time (Estate tax) is how you ensure even those avenues of protection are gone.