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I know I'm likely alone in this opinion, but corporate income tax seems like a poorly designed tax to me. Why should companies pay taxes in a year with high pro

I know I'm likely alone in this opinion, but corporate income tax seems like a poorly designed tax to me. Why should companies pay taxes in a year with high profits, even if they face losses for the next ten years? Why should I pay corporate income tax when dividends and income are taxed anyway? Corporate income tax also seems to heavily influence business strategies as a consequence, which wasn't its intended purpose.

deleted 2y ago
[deleted]
jaimsam 2y ago
A lot of words to say: taxation is theft.
- dennis_jeeves2 2y ago
  Correct. There is no 'right' way to tax.
tnolet 2y ago
The world of tax is complex. Business exist in many shapes and sizes. So... - because companies heavily use government resources like roads and stuff. - because losses can be offset against profits. These tend to be middled out over multiple years. You can port losses to other years. - a lot of companies (holdings etc.) don't pay out income tax and are basically just letterbox companies. These companies need to pay tax on dividends otherwise they would literally pay zero tax.
- I_am_tiberius 2y ago
  > - because losses can be offset against profits. These tend to be middled out over multiple years. You can port losses to other years. These losses expire (different from country to country)!! Plus, inflation is not taken into account. > a lot of companies (holdings etc.) don't pay out income tax and are basically just letterbox companies. These companies need to pay tax on dividends otherwise they would literally pay zero tax. Tax on dividends is not corporate income tax. Dividend tax is classified as capital gains tax, which is entirely separate. My point is that anyone taking out money must pay taxes through personal income tax or dividend tax. So corporate income tax is just money that would be taxed anyway - or invested/used by the company. So no real purpose other than producing another cash inflow for the government.
closeparen 2y ago
Whether you earn and save a given dollar as a W2 worker or through a business you own seems pretty incidental, right? Your net worth is going up just the same; society has the same interest in containing inequality.
sensanaty 2y ago
Why shouldn't companies pay taxes? Especially since income is taxed already and your average Joe gets screwed way more than the poor downtrodden billion dollar companies.
- I_am_tiberius 2y ago
  Because a company just invests the money. You can't take out money from a company as an owner without taxing it anyway (because you anyway have to pay capital gains tax / personal income tax). My point was that I don't see a point in having corporate income tax (that's just an additional tax that prevents companies from investing in the business and employees).
  - immibis 2y ago
    "Invests the money" means it sits in their bank account until they've convinced enough politicians that the money should be taxed as it comes into the company, not when it goes out, and then they issue a massive dividend.
binary_slinger 2y ago
Because governments need money to fund services. They would put a tax on making HN comments if they could get away with it.
- betaby 2y ago
  Link tax is a thing in some countries. HN is just to small to be taxed.
aithrowawaycomm 2y ago
Any corporation uses roads, mail, police, courts, and other public services, and this usage is not offset by individual income taxes on that corporation's employees, since the employees also use these things. In fact I suspect more resources are spent on serving corporations than serving individual taxpayers - with the important caveat that I am specifically excluding government social insurance programs. But those are often a totally separate tax system. It is baffling to think that for-profit corporations should be allowed to use public services without paying for them: before a company makes further internal investments with new revenue, it should chip in to society for building the infrastructure that made the revenue possible. A corporate income tax is perfectly natural.

deleted 2y ago

[deleted]

jaimsam 2y ago

A lot of words to say: taxation is theft.

dennis_jeeves2 2y ago
Correct. There is no 'right' way to tax.

tnolet 2y ago

The world of tax is complex. Business exist in many shapes and sizes. So... - because companies heavily use government resources like roads and stuff. - because losses can be offset against profits. These tend to be middled out over multiple years. You can port losses to other years. - a lot of companies (holdings etc.) don't pay out income tax and are basically just letterbox companies. These companies need to pay tax on dividends otherwise they would literally pay zero tax.

I_am_tiberius 2y ago
> - because losses can be offset against profits. These tend to be middled out over multiple years. You can port losses to other years. These losses expire (different from country to country)!! Plus, inflation is not taken into account. > a lot of companies (holdings etc.) don't pay out income tax and are basically just letterbox companies. These companies need to pay tax on dividends otherwise they would literally pay zero tax. Tax on dividends is not corporate income tax. Dividend tax is classified as capital gains tax, which is entirely separate. My point is that anyone taking out money must pay taxes through personal income tax or dividend tax. So corporate income tax is just money that would be taxed anyway - or invested/used by the company. So no real purpose other than producing another cash inflow for the government.

closeparen 2y ago

Whether you earn and save a given dollar as a W2 worker or through a business you own seems pretty incidental, right? Your net worth is going up just the same; society has the same interest in containing inequality.

sensanaty 2y ago

Why shouldn't companies pay taxes? Especially since income is taxed already and your average Joe gets screwed way more than the poor downtrodden billion dollar companies.

I_am_tiberius 2y ago
Because a company just invests the money. You can't take out money from a company as an owner without taxing it anyway (because you anyway have to pay capital gains tax / personal income tax). My point was that I don't see a point in having corporate income tax (that's just an additional tax that prevents companies from investing in the business and employees).
- immibis 2y ago
  "Invests the money" means it sits in their bank account until they've convinced enough politicians that the money should be taxed as it comes into the company, not when it goes out, and then they issue a massive dividend.

binary_slinger 2y ago

Because governments need money to fund services. They would put a tax on making HN comments if they could get away with it.

betaby 2y ago
Link tax is a thing in some countries. HN is just to small to be taxed.

aithrowawaycomm 2y ago

Any corporation uses roads, mail, police, courts, and other public services, and this usage is not offset by individual income taxes on that corporation's employees, since the employees also use these things. In fact I suspect more resources are spent on serving corporations than serving individual taxpayers - with the important caveat that I am specifically excluding government social insurance programs. But those are often a totally separate tax system. It is baffling to think that for-profit corporations should be allowed to use public services without paying for them: before a company makes further internal investments with new revenue, it should chip in to society for building the infrastructure that made the revenue possible. A corporate income tax is perfectly natural.