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You could make the same theoretical argument against most taxes though. If it were possible to unwind corporate taxes through raw political connections it'd hav

by roenxi 2y ago

You could make the same theoretical argument against most taxes though. If it were possible to unwind corporate taxes through raw political connections it'd have happened by now for example. Or capital gains tax in its entirety. That is actually a great theoretical argument against taxes generally by the way - there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support.

AnthonyMouse 2y ago
> If it were possible to unwind corporate taxes through raw political connections it'd have happened by now for example. Or capital gains tax in its entirety. But this has more or less been done for the most powerful, e.g. corporate income tax exists but Apple doesn't pay it, capital gains tax exists but is deferred until you sell the shares and then rich people don't do that. So then Rockefellers don't pay the tax, but you do as an ordinary peon who has a good run messing around on Robinhood, or when you start making withdrawals from your IRA. Meanwhile we can't get rid of the tax which now only applies to the middle class because people claim that you're trying to give a tax cut to the billionaires who aren't actually paying it. > there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support. It's really an argument for tax simplification. As far as I can tell the way tax policy works is that rich people hire lawyers and PR firms to cast the forms of taxation they would actually have to pay as regressive (e.g. consumption taxes, because you can't register the Rolls Royce without paying the tax and you can't sell into the jurisdiction without collecting VAT) and the forms they can avoid through shell games and accounting tricks as The One True Way To Tax The Rich (e.g. "profit" taxes, because profit is fuzzy around the edges and has high inter-region liquidity), which the rich then weasel out of and leave only the middle class paying the tax.
- andrepd 2y ago
  Excellent comment
- roenxi 2y ago
  I looked for some reliable numbers on Apple's tax payment and didn't find any, so I won't comment on that, but I do want to say some things about... > capital gains tax exists but is deferred until you sell the shares and then rich people don't do that This gets pretty quickly into the philosophical what-are-we-doing-here-exactly of taxes, but: 1) Shares don't do very much on their own, so there isn't really a problem with that. I mean, dude owns a billion in shares - if they earn income dude will pay tax, if they don't the only true to get to the value is to sell them. I imagine there are some gaping loopholes involving charities and debt, but that isn't anything to do with the deferment of the tax. 2) Because of inflation - and asset inflation is markedly higher than CPI - CGT is effectively a wealth tax because fairly quickly most of the value of an asset is the inflationary component. I've got gold bars where I allegedly am making a 100-and-something% return and that just flies in the face of the inert reality of the metal itself. The tax is markedly unfair, anyone trying to be a responsible saver ends up paying much more of their income in tax than someone who just spends it on the day and it effectively becomes a wealth tax that stops anyone in the middle class moving up over time. Moving wealth between assets is catastrophic to your financial health once CGT is a factor. There are a bunch of quirky distortions in the tax system. CGT might even be one of the contributing factors to why people don't tend to have savings (although the biggest factor is probably psychology). Rationally speaking saving is quite an inefficient use of money if you end up paying CGT.
  - cipheredStones 2y ago
    > 1) Shares don't do very much on their own, so there isn't really a problem with that. I mean, dude owns a billion in shares - if they earn income dude will pay tax, if they don't the only true to get to the value is to sell them. Are you aware of the "buy, borrow, die" strategy? In short, you can borrow against the value of appreciated assets to get income during your lifetime, then pass the assets (and the debt) on in inheritance, and your heirs don't have to pay any capital gains tax because of cost-basis step up when they sell the assets to pay the debt. You effectively avoid any taxation on the appreciation.
    - robertlagrant 2y ago
forgetfreeman 2y ago
Meh, the only cogent argument against taxation is "I like the Mad Max franchise so much I'd vacation there". Everything else is just trying to find someone else's pocket to pick to pay for the services one enjoys. Anyway, we're currently pretty damn close to having unwound corporate taxes. Check this out: https://taxfoundation.org/data/all/federal/historical-corporate-tax-rates-brackets/ https://taxfoundation.org/data/all/federal/historical-corpor...
- robertlagrant 2y ago
  > Everything else is just trying to find someone else's pocket to pick to pay for the services one enjoys That's an argument for taxation, not against it.
  - forgetfreeman 2y ago
    Tell me you don't know where roads come from without telling me you don't know where roads come from...
    - roenxi 2y ago
      Roads are approximately 0% of GDP. In fact a quick check suggests that the US annual deficit is larger than road construction spending [0] so funnily enough it is probably feasible to get rid of all taxes in the US and reduce the deficit and still have roads. People love bringing up roads in this sort of topic for some reason but they really aren't a big enough spending target to be worth it. [0] https://fred.stlouisfed.org/series/TLHWYCONS#0 https://fred.stlouisfed.org/series/TLHWYCONS#0
      - forgetfreeman 2y ago
        Roads are just one example. Either you get the concept or you dont.
        roenxi 2y ago
johnnyanmac 2y ago
>there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support. people who say this need to remember what makes the most money vs. what are the actual most necessary goods for basic civilization. Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on. There's definitely tons of corruption, but we do need someone with a wider scope to budget for the "boring" stuff.
- robertlagrant 2y ago
  > Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on. But people are funding it. They're not the ones borrowing from Macquarie, but they are the ones paying them back. Is there a more direct way to do this, is the question.
- _heimdall 2y ago
  > Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on. People fund it with their electric bill every month. If the business isn't viable and can only stay open through massive government subsidies that's a much more fundamental problem. Why does the government get to decide what is best for people to spend their money on? If consumers really would prefer to spend money in TV and sport merchandise, well it's their damn money to spend and none of the government's concern.
mytailorisrich 2y ago
The argument/discussion about taxes has to start by discussing what functions and services we want to be handled by the state. There are taxes that are there to nudge people and encourage certain things, but all in all the point is to finance the state. In most developed countries the state, in one form or another, has taken on many functions and services and that implies that taxation has to be significant. So before discussing cutting tax we need to think about what the state should offload (if anything) first.
- robertlagrant 2y ago
  I would love to have that discussion, as I agree instinctively, having worked with local and national government bodes in the UK - it does seem as though the current way is very expensive. But what could we chop off without making it much worse?
jayd16 2y ago
I think its a bit different. In other scenarios like income, capital gains or even sales tax, its tied to the taxee gaining something. Its the price of doing business and an evaluation can be made by the taxee. Incentives are pitted against each other and chalked up to the price of doing business. An LVT feels like pure downside to the taxee. There are no beneficial _direct_ effects. Its psychologically very different, especially for residential land.

by roenxi 2y ago

AnthonyMouse 2y ago

> If it were possible to unwind corporate taxes through raw political connections it'd have happened by now for example. Or capital gains tax in its entirety. But this has more or less been done for the most powerful, e.g. corporate income tax exists but Apple doesn't pay it, capital gains tax exists but is deferred until you sell the shares and then rich people don't do that. So then Rockefellers don't pay the tax, but you do as an ordinary peon who has a good run messing around on Robinhood, or when you start making withdrawals from your IRA. Meanwhile we can't get rid of the tax which now only applies to the middle class because people claim that you're trying to give a tax cut to the billionaires who aren't actually paying it. > there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support. It's really an argument for tax simplification. As far as I can tell the way tax policy works is that rich people hire lawyers and PR firms to cast the forms of taxation they would actually have to pay as regressive (e.g. consumption taxes, because you can't register the Rolls Royce without paying the tax and you can't sell into the jurisdiction without collecting VAT) and the forms they can avoid through shell games and accounting tricks as The One True Way To Tax The Rich (e.g. "profit" taxes, because profit is fuzzy around the edges and has high inter-region liquidity), which the rich then weasel out of and leave only the middle class paying the tax.

andrepd 2y ago
Excellent comment
roenxi 2y ago
I looked for some reliable numbers on Apple's tax payment and didn't find any, so I won't comment on that, but I do want to say some things about... > capital gains tax exists but is deferred until you sell the shares and then rich people don't do that This gets pretty quickly into the philosophical what-are-we-doing-here-exactly of taxes, but: 1) Shares don't do very much on their own, so there isn't really a problem with that. I mean, dude owns a billion in shares - if they earn income dude will pay tax, if they don't the only true to get to the value is to sell them. I imagine there are some gaping loopholes involving charities and debt, but that isn't anything to do with the deferment of the tax. 2) Because of inflation - and asset inflation is markedly higher than CPI - CGT is effectively a wealth tax because fairly quickly most of the value of an asset is the inflationary component. I've got gold bars where I allegedly am making a 100-and-something% return and that just flies in the face of the inert reality of the metal itself. The tax is markedly unfair, anyone trying to be a responsible saver ends up paying much more of their income in tax than someone who just spends it on the day and it effectively becomes a wealth tax that stops anyone in the middle class moving up over time. Moving wealth between assets is catastrophic to your financial health once CGT is a factor. There are a bunch of quirky distortions in the tax system. CGT might even be one of the contributing factors to why people don't tend to have savings (although the biggest factor is probably psychology). Rationally speaking saving is quite an inefficient use of money if you end up paying CGT.
- cipheredStones 2y ago
  > 1) Shares don't do very much on their own, so there isn't really a problem with that. I mean, dude owns a billion in shares - if they earn income dude will pay tax, if they don't the only true to get to the value is to sell them. Are you aware of the "buy, borrow, die" strategy? In short, you can borrow against the value of appreciated assets to get income during your lifetime, then pass the assets (and the debt) on in inheritance, and your heirs don't have to pay any capital gains tax because of cost-basis step up when they sell the assets to pay the debt. You effectively avoid any taxation on the appreciation.
  - robertlagrant 2y ago

forgetfreeman 2y ago

Meh, the only cogent argument against taxation is "I like the Mad Max franchise so much I'd vacation there". Everything else is just trying to find someone else's pocket to pick to pay for the services one enjoys. Anyway, we're currently pretty damn close to having unwound corporate taxes. Check this out: https://taxfoundation.org/data/all/federal/historical-corporate-tax-rates-brackets/ https://taxfoundation.org/data/all/federal/historical-corpor...

robertlagrant 2y ago
> Everything else is just trying to find someone else's pocket to pick to pay for the services one enjoys That's an argument for taxation, not against it.
- forgetfreeman 2y ago
  Tell me you don't know where roads come from without telling me you don't know where roads come from...
  - roenxi 2y ago
    Roads are approximately 0% of GDP. In fact a quick check suggests that the US annual deficit is larger than road construction spending [0] so funnily enough it is probably feasible to get rid of all taxes in the US and reduce the deficit and still have roads. People love bringing up roads in this sort of topic for some reason but they really aren't a big enough spending target to be worth it. [0] https://fred.stlouisfed.org/series/TLHWYCONS#0 https://fred.stlouisfed.org/series/TLHWYCONS#0
    - forgetfreeman 2y ago
      Roads are just one example. Either you get the concept or you dont.
      - roenxi 2y ago

johnnyanmac 2y ago

>there'd be a lot more money in people's pockets if they didn't have to get bureaucrats to agree on what they should be working to support. people who say this need to remember what makes the most money vs. what are the actual most necessary goods for basic civilization. Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on. There's definitely tons of corruption, but we do need someone with a wider scope to budget for the "boring" stuff.

robertlagrant 2y ago
> Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on. But people are funding it. They're not the ones borrowing from Macquarie, but they are the ones paying them back. Is there a more direct way to do this, is the question.
_heimdall 2y ago
> Sadly, most people would not fund the electric company to keep their lights on as they throw thousands at sport merchandise, including a new TV that they cannot power on. People fund it with their electric bill every month. If the business isn't viable and can only stay open through massive government subsidies that's a much more fundamental problem. Why does the government get to decide what is best for people to spend their money on? If consumers really would prefer to spend money in TV and sport merchandise, well it's their damn money to spend and none of the government's concern.

mytailorisrich 2y ago

The argument/discussion about taxes has to start by discussing what functions and services we want to be handled by the state. There are taxes that are there to nudge people and encourage certain things, but all in all the point is to finance the state. In most developed countries the state, in one form or another, has taken on many functions and services and that implies that taxation has to be significant. So before discussing cutting tax we need to think about what the state should offload (if anything) first.

robertlagrant 2y ago
I would love to have that discussion, as I agree instinctively, having worked with local and national government bodes in the UK - it does seem as though the current way is very expensive. But what could we chop off without making it much worse?

jayd16 2y ago

I think its a bit different. In other scenarios like income, capital gains or even sales tax, its tied to the taxee gaining something. Its the price of doing business and an evaluation can be made by the taxee. Incentives are pitted against each other and chalked up to the price of doing business. An LVT feels like pure downside to the taxee. There are no beneficial _direct_ effects. Its psychologically very different, especially for residential land.