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The point about the start-up phase is a great argument against my question. I mentioned in another post, but for this idea to not impact startups very negativel
by daenz 5y ago
The point about the start-up phase is a great argument against my question. I mentioned in another post, but for this idea to not impact startups very negatively, I suppose there would have to be an exemption for new businesses.
>There is already plenty of incentive without any government intervention.
That's true, but there is also an incentive to hide profits to avoid taxes. I'm not very knowledgeable in this, but my understanding is that there are a number of accounting tricks that many different industries can use to disguise profits as losses, which feeds directly into corruption.
- hcta 5y ago> I'm not very knowledgeable in this, but my understanding is that there are a number of accounting tricks that many different industries can use to disguise profits as losses, which feeds directly into corruption. I'm not knowledgeable about this either but I think you're confused. It sounds like you're saying you believe it's easy with "accounting tricks" to flip the sign on net income so that a profit of $X looks like a loss of $X, more so than to make a profit of $X look like a profit of $0 (which is what your proposal incentivizes). I find this very doubtful. There's always incentive to hide profits, because they have to be shared. Then you could imagine an "incentive structure" that pays companies a bonus based on profits. Obviously, that would incentivize exaggerating profits, and people would look for accounting tricks to do that.
- daenz 5y agoI'm thinking specifically of Hollywood accounting[0] 0. https://en.wikipedia.org/wiki/Hollywood_accounting https://en.wikipedia.org/wiki/Hollywood_accounting