If you want to go to jail, try shoplifting.
Indeed they don't need roads, rails, fire departments, police departments, etc. Corporations don't exist in a vacuum.
Let's have a deal: we abolish the taxes if they don't use any these.
You might say: but citizens already pay for this! True. However, if you abolish taxes for companies then citizens will have to pay more for public services. You might say: but we will increase their wages. I say ok then, let's make it part of the deal: a decent minimal wage.
works fine until automation gets rid of most of the jobs
Only domestic companies' corporate earnings get hit to pay for this.
Two exemptions I can think of are health/dental insurance (exempted by law) and free food at Silicon Valley campuses (highly contestable benefit as far as IRS is concerned, the jury is still out on treatment of that).
How can one hide virtually their entire income while still being able to enjoy most of the benefits?
A large group of people (plumbers, electricians, landscapers, solo real estate agents) are actually incorporated and self-employed under this model, and yet are not massively wealthier in comparison to the rest of the population.
Various non-profits, university endownments, churches and pension funds, charitable trusts and charitable foundations have far higher concentrations of cash (and by your definition, power) that avoids the tax man entirely. States and municipalities also pay zero federal taxes on profits if they happen to end up with budgets in black. If you think the (somewhat easily fungible) corporate earnings are under-taxed, what's your take on non-profits and municipals?
I am quite accepting of churches, as long as they keep their beliefs to themselves and fulfill their role as keepers of cultural heritage. Better keep them running than artificially converting churches into living history museums after they died. I would consider it a great cultural loss if, say, St Peter's would be just another ruin owned by the Italian government.
University endowments, at the scale they apparently exist, are weird indeed. Do they grow because giving money to add to the pool gives (temporary) influence over the application of the pool? That would be a surprisingly nasty scheme. A donations race like that is how the Roman bishopric originally became a political force in late antiquity/early middle ages, slowly displacing secular authorities.
You don't even need much money in your personal account, just use the corporation as your personal tax free piggy bank.
I am not sure how "make investments from your company" is just an overwhelmingly better option than "make investments from your personal account". Not only the corporation doesn't get a variety of tax advantages, such as 401(k), IRAs and Roth IRAs, there's an added burden of an additional K-1 for the investment vehicle.
Have you ever actually attempted any of the "obvious" optimizations you provide here? Has anyone ever used your advice for their tax planning?
Contrary to popular disbelief, folks at the IRS weren't quite born yesterday.
It seems only reasonable that they pay for this, as it costs society every time a company breaks the law and the directors wring their hands but change nothing.
Which is it?
Really this is just like any other situation where the government due to structural weaknesses can't set/enforce policy effectively. Just like in the Prohibition or the War on Drugs, neither of which the government was equipped to make happen, the solution is to remove the problematic policies and take a more realistic approach.
If you want to see riots in the streets because people literally can't afford food and healthcare, yeah, sure, go for it.
The price of labour is now artificially cheap because the price of food is not taken into account due to subsidies and foodstamp programs, as well as the huge labor/population supply that such policies have created. There is no way the market could peacefully absorb such a massive distortion and so if we were to ever attempt it, no doubt there would be countless individuals chanting "see, we told you the market isn't the solution". These things need to be phased out over generations so as to avoid massive starvation and riots by the poor.
Which healthcare subsidy would result in riots in the streets?
Also keep in mind that the US has been without the 16th amendment longer than it has been with it, so anything based off of an income tax must not be intrinsically important enough to automatically result in street riots. Though of course an irresponsible and sudden withdrawal could certainly cause problems.
Off the top of my head, Medicare and veteran's health benefits. I don't know that ceasing flexible spending accounts (money put in an account, pre-tax, just for medical/health expenses) and the tax deduction for medical expenses above a certain amount would be riot-worthy.
One item in consumer's favor is that food items are usually exempt or treated at a lower sales tax rate.
Here's what I honestly don't understand about HN:
Climate change has near unanimous support from climatologists. Most (rightly, imho) point that as a reason why it should be accepted by the general public. And those doubting the experts are considered ridiculous.
Here, however, we have an issue to drop corporate taxes which has near unanimous support from economists (across the political spectrum). Yet we call the experts ridiculous.
Why the flip? Why should the general public accept the expert advice in one field, but then turn around & call it ridiculous in another?
But I am calling the arguments that they use in the article ridiculous, and in particular the parts that I've quoted in my post above.
Even if you put all methodological issues (and citations from Richard Feynman) aside or even whether corporate taxes work or not, lots of social science findings would seem dubious simply because they deal with human behavior, which is something which is almost impossible to not have an opinion on, specially because it attempts to describe our own behavior.
The problem is that, if I were to understand reality through my own behavior, it would be through an unwarranted generalization of my own conditions to the population as a whole. It's like that joke of "why don't they just buy themselves some money?".
That's one of the issues, at least.
If you're going to ban me, just ban me.
You've been downvoting all my comments for months now. Would you please stop doing that? Abusive downvotes are dropped by the software, but they still add noise to the data.
Edit: Ok, since you've responded by doing even more of it, I'm going to take this as a signal that you're not using HN in good faith and ban your account. If you don't want it to be banned, you're welcome to email [email protected].
Can someone explain this to me? I was under the impression that wages were expenses and non-taxable. So if they paid higher wages so they ended up with no profits they would have to pay no tax.
If a company today is returning 10% to its shareholders per annum (and is paying, say 30% tax), then reducing the tax rate to 15% frees up additional cash to reinvest in the business that wouldn't have been available / would've otherwise gone to taxes. Or that money could flow back to shareholders, who could then reinvest it in other businesses.
Now the workers are the share holders and reinvesting in other businesses is called consuming.
God I'm good at this.
- Abolish corporate taxes
- Increase minimum wage (including an automatic inflation adjustment)
- Increase estate taxes and private corporate transfer taxes (intergenerational)
- Heavily tax (90%) all corporate spending in politics, using revenues to fund educational news sources
Everybody gets something that they want.
From experience, passing substantial unconditional wealth to my children (above and beyond education) seems far more likely to turn them into assholes than decent citizens.
Whatever I achieve in this life is not my own, it is the culmination of the efforts of all the generations that put me in position to do what I do, and a legacy to leave to all the future generations of my family.
As their wealth is typically preserved via real estate and land ownership, there's a politicial motive to decrease the cost of that, so economies also suffer from high barriers to entry and need to inflate taxes on something else to pay for the government services.
Repealing estate tax would work when combined with higher property tax rates or land value tax, but is rarely politically doable, as well-connected political families and large landowners tend to be the same families.
The value lies in long term thinking, sustainability. A farmer can either maintain the soil, carefully rotating crops so that it will be able to feed future generations as good or better than his predecessors, or he can go for the agricultural equivalent of strip mining and move on to the next plot when the previous one is depleted.
But when you replace the soil with fungible assets, all that long term thinking benefit goes out the window. Sticking to the farming example, repeated slash and burn farming will only encourage more of the same, as long as there is something left to burn. Larger operators will grow faster than smaller ones, and after a few generations, when there is nothing left to burn, the descendants of those who burnt the most will employ the losers to tend the desert.
for some one who is now dead and thus very very unlikely to give a shit.
So, 'too late' basically. That world is long gone now.
Even if other corporate taxes were reduced or eliminated, payroll taxes would need to continue.
I believe you mean that the revenue currently generated by payroll taxes would need to continue.
Evade, or avoid? It's a big difference--as I'm sure has been said, tax evasion is illegal. Tax avoidance is not.
You mean, if you went abroad, produced trillions of income, left said income there and came back to your country?
Absolutely not. Corporation will choke employees and consumers alike if they are allowed to have their way. This quarter my company decided to cut the quarterly bonuses to zero because Y-oY growth targets were not met. Although profits were higher then last year. Now it looks ridiculous to me to expect an fixed pefcentshe growth forever and then punishment employees who didn't even knew that increasing Y-oY growth is part of their responsibility. If at all anybody should have been punished, it should have been the top management. But since they make the rules, there is no downside.
That would be impossible unless the law itself changes from the way it is currently interpreted:
From what I can find, Dodge v. Ford isn't considered "garbage", but it is often misrepresented.
Directors have a primary responsibility to work for the benefit of the shareholders, but they also have virtually total discretion in how to achieve that. In the absence of clear evidence of the intention to shirk the responsibility - such as, in Dodge v. Ford, telling the shareholders you're putting public interests ahead of their profits - the onus is on the shareholders to prove that the directors aren't fulfilling their fiduciary duty.
For the record: I'm Dutch. I have free healthcare, good infrastructure, fast and cheap internet, sensible employment law, no police abuse, etc. All for ~40% tax (http://www.expatax.nl/tax-rates-2016.php).
Why? Because our government actually works. Why? I don't really know. It's a compound of hundreds of little effects.
The solution isn't 'less government', it's 'a working government'. Every time I learn something new about how the U.S. government is structured I shake my head a little. First-past-the-post voting of a single president that holds way too much power. A congress with life time based assignment that interpret a 200 year old document to their wishes to structure law. Case based law with uninformed juries, where the selection of the jury is optimized for maximum disinformation. It goes on.
On top of that there are financial taboos with origins that as a 199x er I do not understand: 'socialism', 'communism', 'higher taxes'. These ideologies (just like a free market) do not work on their own. Both ideologies have good ideas, and you need to take the best of both to make it work. But the American public is brainwashed.
I'm rambling a bit. There is no easy solution from what I can see. The U.S. government is structurally flawed and only massive changes can fix that. On top of that the public is misinformed and does not have its own best interests in mind.
Regardless I've been screwed over by plenty of folks that look just like me, so what you say comes across as an excuse for the state of affairs rather than owning the issues and seeking to improve it.
For that matter, I think that Americans had a lot more trust in their government before the last couple of decades.
[1] https://en.wikipedia.org/wiki/List_of_active_separatist_move...
Moreover, I'm not convinced our current problems are purely local. Trump followed on the heels of Brexit, and right-wing nationalist/populist movements are on the rise across Europe. The world is going through some weird changes right now, an angry reaction to future shock, and recent US politics are just a symptom.
Drafting random collaborators for a rewrite could be one approach, but they would still be prone to getting influenced by the establishment. Maybe dozens of randomized committees working in parallel, with all but one draft discarded at random, to make sure that writing happens out of the spotlight, and with little incentive for self-serving elements?
If you mean for companies... I don't exactly know. But I do know that we aren't exactly clean in the global playing field for tax havens, and I wish we would change that.
The Netherlands is one of the countries significantly facilitating tax avoidance, and this is (obviously) by design. Hundreds of billions in royalty payments flow through the country every year to tax havens.
There are problems with American government, but these are really not them. The only thing here that might hold water is the President having too much authority, and that's been a relatively recent trend.
So spreading a social safety net across a large and diverse population strikes me as utterly obvious.
How do you see diversity and scale as being a negative?
Locally, welfare can be egoistically motivated. Just about everybody would be willing to pay serious taxes to raise that one beggar off his doorstep - if only to keep him out of sight. We like to think of that as altruism, but it hardly is. Now ask those same people to pay serious taxes for the benefit of poor people thousands of miles away and you get a completely different picture.
Enter mobility: If you raise "your" beggar, someone else might just hope that theirs will go to a place where they will be raised (your doorstep). Clearly, egoism won't work as a motivator anymore because you don't want to be the new charity central. Therefore, welfare has to happen on the same organizational level as freedom of movement and that's where the relative unwillingness to help those thousands of miles away comes in again. Even basic income suggestions quickly lose their pie in the sky utopia feel when it comes to the question of access/citizenship/migration.
The US was literally built on mobility as a substitute of welfare, but once the original anti-welfare "stay poor or go west" was exhausted, the inherent antagonism between mobility and welfare continued to stay obscured behind other ideological concepts, "temporarily embarrassed millionaires" and all that. The EU is learning the hard way, but it is impossible to separate valid concerns and solution-finding from all the noise of and about stupid racism.
Yes. But you see, if the state did that to you there would be no unpleasant consequences, whereas doing that to a big corporation will bring on a wold of pain.
> It may look unfair to tax consumers to compensate for a major business tax holiday -- but then such a move would give businesses a strong incentive to keep prices lower to avoid a drop in demand.
A drop in demand? People are going to eat less food because taxes are now lower? Need less healthcare? Will move to a cheaper home? Just not use internet? Drive the car less to work and sit more at home?
Supply/demand is crooked. It doesn't work for the majority of the goods the majority of the people purchase. Demand is fairly fixed and based on population, and supply is provided by the only bidder in your area.
> Besides, liberated from corporate taxes, they'd have more freedom to increase wages.
Does anyone still believe this 'trickle-down' hogwash?
I really wonder when America will have its wake up call during its third part-time job to pay the rent that maybe change is needed, and that your government has no intention of making it.