4 ms·

"Economists think this will happen via tax (from the jobs created, and from the profits of the companies), yet so many of the companies that receive such benefi

"Economists think this will happen via tax (from the jobs created, and from the profits of the companies), yet so many of the companies that receive such benefits from state funding, bring their jobs elsewhere, and of course we know they also pay very little tax." He makes it sound like the USA would be just as well off if big tech companies weren't here. The US government is basically a ~15% shareholder in all US companies due to salary and other taxes. If they can invest in technology research and build more US companies, then the US government earns a net profit. I would like to see a breakdown for a major technology company to see what percentage of their revenue goes to income tax withholding, and then see how much government funding went into helping that company come to life. Edits: 1. Number adjustment 2. By "income tax witholding" I mean the income tax that the employees pay. If 50% of revenue goes to salaries, and 20% of salaries go to income tax witholding, then 10% of a company's revenue goes to income tax.

rtpg 12y ago
remember that time GE paid basically 0% in taxes? the 30% number is only in theory (there is the salary breakdown but I don't think 30% is the number that ends up hitting)
- swatow 12y ago
  I'm not an expert in taxation, but corporate taxes are just one piece of the pie. There is no way for employees to avoid income tax, and as far as I know, no way for US based shareholders to avoid paying capital gains/dividends taxes.
  - philwelch 12y ago
    In fact, some economists argue that corporate taxes are fundamentally inefficient, because corporations are just a mechanism for producing either individual income or capital gains for their shareholders, so it would be better and fairer to tax the actual humans profiting from the business rather than the corporate straw man itself.
    - swatow 12y ago
      I'm familiar with the theory, however I've never seen a good treatment of how this works with multiple countries. The income and capital gains taxes only apply to shareholders residing in the US. Maybe some of the corporate tax could be considered a fair "rent" price for using the nations resources? But I'd have to see a real model to be sure. It's still unclear to me whether (a) nations have conflicting goals when it comes to taxation (they don't when it comes to free trade, so maybe they don't with tax either) and (b) what the optimal corporate tax rate is.
      - davidw 12y ago
        It's clearly complicated, and something that might have different equilibria. If you had a corporate tax of 0, you'd be foregoing some taxes that would otherwise not end up in the local coffers because the money would flow out of the country and be taxed elsewhere. OTOH, that kind of arrangement would be very attractive for foreign investors, who would be more likely to send their money to your country, which would likely have many positive effects.
      - AnthonyMouse 12y ago
        Multiple countries is the primary reason that corporate income tax doesn't work. International corporations just report profits in the countries with the lowest taxes. Corporate profit doesn't have any physical existence, it's just numbers in a spreadsheet, you can trivially move it to any country you like. The only way to tax an international entity is to tax them on the things that actually exist in your country: Customers, employees, property, etc. But that's not corporate income tax anymore, it's sales tax, personal income tax, property tax, etc. The closest thing you can get to corporate income tax that actually works is VAT.
      - philwelch 12y ago
        The corporate strawman itself could also be resident in another country, as in the famous Double Irish with a Dutch Sandwich setup.
    - rtpg 12y ago
      this is an argument that only works on an infinite time scale. Just like many other taxes on assets, taxing profits works to avoid hoarding (see Apple). Money is meant to be spent, not hoarded.
- arjunnarayan 12y ago
  GE paid 0% tax because the US govt decided to subsidize certain things that it wanted (mostly green energy related things), and implement that subsidy through the tax code via tax deductions and tax credits (because direct subsidies are politically unpalatable). GE promptly went and did exactly what the government wanted, which was invest in those nice expensive things, up to the point where all their taxes were wiped out. If your beef is that the US govt shouldn't subsidize things via the tax code, then that's a separate issue. If your beef is that GE should pay nonzero taxes, then you should view it as "GE paid X% taxes, and then did things it did not want to do unsubsidized in order to earn back -X% taxes as a reward." In which case, GE did pay taxes. They just then took advantage of an opportunity to earn back those taxes in exchange for investing in green energy related things.
  - deleted 12y ago
    [deleted]
- pc86 12y ago
  The 30% number is also marginal, which is often forgotten by those arguing that corporations (or certain people) aren't paying enough taxes.
adaml_623 12y ago
Two assumptions you seem to be making: 1. That profits are paid out through salaries. They aren't. They are moved via clever financial mechanisms to large shareholders and as retained funds. This is why the existence of so many tax havens is a big problem. 2. That Mariana is a male. The person in that interview is quite clearly male.

rtpg 12y ago

remember that time GE paid basically 0% in taxes? the 30% number is only in theory (there is the salary breakdown but I don't think 30% is the number that ends up hitting)

swatow 12y ago
I'm not an expert in taxation, but corporate taxes are just one piece of the pie. There is no way for employees to avoid income tax, and as far as I know, no way for US based shareholders to avoid paying capital gains/dividends taxes.
- philwelch 12y ago
  In fact, some economists argue that corporate taxes are fundamentally inefficient, because corporations are just a mechanism for producing either individual income or capital gains for their shareholders, so it would be better and fairer to tax the actual humans profiting from the business rather than the corporate straw man itself.
  - swatow 12y ago
    I'm familiar with the theory, however I've never seen a good treatment of how this works with multiple countries. The income and capital gains taxes only apply to shareholders residing in the US. Maybe some of the corporate tax could be considered a fair "rent" price for using the nations resources? But I'd have to see a real model to be sure. It's still unclear to me whether (a) nations have conflicting goals when it comes to taxation (they don't when it comes to free trade, so maybe they don't with tax either) and (b) what the optimal corporate tax rate is.
    - davidw 12y ago
      It's clearly complicated, and something that might have different equilibria. If you had a corporate tax of 0, you'd be foregoing some taxes that would otherwise not end up in the local coffers because the money would flow out of the country and be taxed elsewhere. OTOH, that kind of arrangement would be very attractive for foreign investors, who would be more likely to send their money to your country, which would likely have many positive effects.
    - AnthonyMouse 12y ago
      Multiple countries is the primary reason that corporate income tax doesn't work. International corporations just report profits in the countries with the lowest taxes. Corporate profit doesn't have any physical existence, it's just numbers in a spreadsheet, you can trivially move it to any country you like. The only way to tax an international entity is to tax them on the things that actually exist in your country: Customers, employees, property, etc. But that's not corporate income tax anymore, it's sales tax, personal income tax, property tax, etc. The closest thing you can get to corporate income tax that actually works is VAT.
    - philwelch 12y ago
      The corporate strawman itself could also be resident in another country, as in the famous Double Irish with a Dutch Sandwich setup.
  - rtpg 12y ago
    this is an argument that only works on an infinite time scale. Just like many other taxes on assets, taxing profits works to avoid hoarding (see Apple). Money is meant to be spent, not hoarded.
arjunnarayan 12y ago
GE paid 0% tax because the US govt decided to subsidize certain things that it wanted (mostly green energy related things), and implement that subsidy through the tax code via tax deductions and tax credits (because direct subsidies are politically unpalatable). GE promptly went and did exactly what the government wanted, which was invest in those nice expensive things, up to the point where all their taxes were wiped out. If your beef is that the US govt shouldn't subsidize things via the tax code, then that's a separate issue. If your beef is that GE should pay nonzero taxes, then you should view it as "GE paid X% taxes, and then did things it did not want to do unsubsidized in order to earn back -X% taxes as a reward." In which case, GE did pay taxes. They just then took advantage of an opportunity to earn back those taxes in exchange for investing in green energy related things.
- deleted 12y ago
  [deleted]
pc86 12y ago
The 30% number is also marginal, which is often forgotten by those arguing that corporations (or certain people) aren't paying enough taxes.

adaml_623 12y ago

Two assumptions you seem to be making: 1. That profits are paid out through salaries. They aren't. They are moved via clever financial mechanisms to large shareholders and as retained funds. This is why the existence of so many tax havens is a big problem. 2. That Mariana is a male. The person in that interview is quite clearly male.