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Are corporations people now? Do they have their own special set of rights and privileges like people do? Ultimately, corporations are groups of people. Why isn

Are corporations people now? Do they have their own special set of rights and privileges like people do? Ultimately, corporations are groups of people. Why isn't it sufficient to tax the money when the owners of the corporation are trying to cash out through dividends or in some other way? Why does it have to be taxed every year like income? Why is it necessary to tax money that the corporation would otherwise invest in R&D?

wolverine876 5y ago
> Are corporations people now? Do they have their own special set of rights and privileges like people do? Yes, that is why the legal structure exists: They've always been 'fictional persons'. That's what a corporation is: A separate entity where money can be pooled and personal liability (and taxes) limited, with it its own rights and privileges. It's fundamental to a corporation. > Ultimately, corporations are groups of people. Why isn't it sufficient to tax the money when the owners of the corporation are trying to cash out through dividends or in some other way? Why does it have to be taxed every year like income? Why is it necessary to tax money that the corporation would otherwise invest in R&D? That's called a partnership, and you are free to setup your business in that way. I'd talk to a lawyer first; there might be a reason that every major business is setup as a corporation - there must be something they like about it. Why must I personally pay taxes on money I'd use to invest in other things? All money in the economy is productive, yet we must tax something. Why does the corporation get off free while, requiring me to pay more?
- kukx 5y ago
  Your last argument could be reduced to "if evil happens to me, why not make it happen to others". If taxing investment is bad let's agree not to do it, instead of perpetuating the abuse. And no, definitely not all money is productive and it can be easily wasted on worthless products and services. Taxing the tools to create value is not the same as taxing for example vodka.
  - wolverine876 5y ago
    > Your last argument could be reduced to "if evil happens to me, why not make it happen to others". It's not evil. Taxes are not evil at all. I want a functioning government, including the services it provides. There's a trendy concept that all taxes are evil, but rationally that doesn't hold any water at all. > definitely not all money is productive and it can be easily wasted on worthless products and services. Taxing the tools to create value is not the same as taxing for example vodka. This undermines the free market, and basic freedom. I judge for myself, knowing my situation, the best place to spend my money. Sometimes vodka has the highest ROI, and don't forget that the money goes to the store which then spends it again. Macroeconomically, even if I gave the liquor store owner money for nothing, I haven't burnt the money. It's in new hands ready to be spent again (and the rate of transactions has a major impact on the economy). But yes, we still can make some judgments about what to tax, and investment in fact often gets a tax break.
    - kukx 5y ago
      I did not say that taxes are evil per se, but bad taxes are bad. "This undermines the free market (...)" - yes taxes obviously affect the free market. They are often meant to skew (regulate) it, like tax that targets unhealthy products eg cigarrets. Also, the way we spend money is not neutral to the economy. By buying one product over another we send an important signal about what is valuable. If we, as a sociaty choose junk, we will get more junk, if we choose good products, we will get even better products in the future. I recommend you read about "the broken window fallacy", since it is related.
dragonwriter 5y ago
> Are corporations people now? Always have been, legally. That’s the defining feature of the corporate form, as opposed to classic partnerships. > Why isn’t it sufficient to tax the money when the owners of the corporation are trying to cash out through dividends or in some other way? Why does it have to be taxed every year like income? Its the insurance premium for the liability shield that comes with the corporate form.
- DangitBobby 5y ago
  That's weird, I've never seen a corporation sent to jail for egregious crimes.
  - wolverine876 5y ago
    They can be charged criminally, as can their officers and board, but it rarely happens.
- BurningFrog 5y ago
  This myth will never die. Corporations are treated the same as people in some legal contexts. This is more practical than having two parallel sets of laws to keep in sync. It does not mean corporations are people.
deleted 5y ago
[deleted]
ethbr0 5y ago
> Why isn't it sufficient to tax the money when the owners of the corporation are trying to cash out through dividends or in some other way? Because failing to tax capital formation in situ leads to all sorts of abuses. Exhibit A: The entire security-based lending industry [0], which allows you to realize the benefit of appreciated stock price while retaining stock ownership and without triggering a taxable event [0] https://www.investopedia.com/terms/s/securitiesbased-lending.asp https://www.investopedia.com/terms/s/securitiesbased-lending...
- Aerroon 5y ago
  But those same abuses will happen anyway because we tax the corporations themselves and when the money is paid out from the corporation. Ie we will still have to deal with that exact same problem. It's just slightly smaller in scale.
  - ethbr0 5y ago
    Taxing something vs not taxing it (while shareholders still receive a benefit) is a pretty large difference.

wolverine876 5y ago

> Are corporations people now? Do they have their own special set of rights and privileges like people do? Yes, that is why the legal structure exists: They've always been 'fictional persons'. That's what a corporation is: A separate entity where money can be pooled and personal liability (and taxes) limited, with it its own rights and privileges. It's fundamental to a corporation. > Ultimately, corporations are groups of people. Why isn't it sufficient to tax the money when the owners of the corporation are trying to cash out through dividends or in some other way? Why does it have to be taxed every year like income? Why is it necessary to tax money that the corporation would otherwise invest in R&D? That's called a partnership, and you are free to setup your business in that way. I'd talk to a lawyer first; there might be a reason that every major business is setup as a corporation - there must be something they like about it. Why must I personally pay taxes on money I'd use to invest in other things? All money in the economy is productive, yet we must tax something. Why does the corporation get off free while, requiring me to pay more?

kukx 5y ago
Your last argument could be reduced to "if evil happens to me, why not make it happen to others". If taxing investment is bad let's agree not to do it, instead of perpetuating the abuse. And no, definitely not all money is productive and it can be easily wasted on worthless products and services. Taxing the tools to create value is not the same as taxing for example vodka.
- wolverine876 5y ago
  > Your last argument could be reduced to "if evil happens to me, why not make it happen to others". It's not evil. Taxes are not evil at all. I want a functioning government, including the services it provides. There's a trendy concept that all taxes are evil, but rationally that doesn't hold any water at all. > definitely not all money is productive and it can be easily wasted on worthless products and services. Taxing the tools to create value is not the same as taxing for example vodka. This undermines the free market, and basic freedom. I judge for myself, knowing my situation, the best place to spend my money. Sometimes vodka has the highest ROI, and don't forget that the money goes to the store which then spends it again. Macroeconomically, even if I gave the liquor store owner money for nothing, I haven't burnt the money. It's in new hands ready to be spent again (and the rate of transactions has a major impact on the economy). But yes, we still can make some judgments about what to tax, and investment in fact often gets a tax break.
  - kukx 5y ago
    I did not say that taxes are evil per se, but bad taxes are bad. "This undermines the free market (...)" - yes taxes obviously affect the free market. They are often meant to skew (regulate) it, like tax that targets unhealthy products eg cigarrets. Also, the way we spend money is not neutral to the economy. By buying one product over another we send an important signal about what is valuable. If we, as a sociaty choose junk, we will get more junk, if we choose good products, we will get even better products in the future. I recommend you read about "the broken window fallacy", since it is related.

dragonwriter 5y ago

> Are corporations people now? Always have been, legally. That’s the defining feature of the corporate form, as opposed to classic partnerships. > Why isn’t it sufficient to tax the money when the owners of the corporation are trying to cash out through dividends or in some other way? Why does it have to be taxed every year like income? Its the insurance premium for the liability shield that comes with the corporate form.

DangitBobby 5y ago
That's weird, I've never seen a corporation sent to jail for egregious crimes.
- wolverine876 5y ago
  They can be charged criminally, as can their officers and board, but it rarely happens.
BurningFrog 5y ago
This myth will never die. Corporations are treated the same as people in some legal contexts. This is more practical than having two parallel sets of laws to keep in sync. It does not mean corporations are people.

deleted 5y ago

[deleted]

ethbr0 5y ago

> Why isn't it sufficient to tax the money when the owners of the corporation are trying to cash out through dividends or in some other way? Because failing to tax capital formation in situ leads to all sorts of abuses. Exhibit A: The entire security-based lending industry [0], which allows you to realize the benefit of appreciated stock price while retaining stock ownership and without triggering a taxable event [0] https://www.investopedia.com/terms/s/securitiesbased-lending.asp https://www.investopedia.com/terms/s/securitiesbased-lending...

Aerroon 5y ago
But those same abuses will happen anyway because we tax the corporations themselves and when the money is paid out from the corporation. Ie we will still have to deal with that exact same problem. It's just slightly smaller in scale.
- ethbr0 5y ago
  Taxing something vs not taxing it (while shareholders still receive a benefit) is a pretty large difference.