Re:Tax Evasion at the Top of the Income Distribution: Theory...
by varispeed on Wednesday May 19, 2021 @04:23PM
(#27214013)
Why so many corporations get abnormally rich?
Because other people pay taxes for them. Classic example - company builds a factory and pays minimum wage to the workers. Workers are unable to live off of it so they apply for benefits.
The company meanwhile transfers all the profits using IP licensing and other tricks out of the country.
Higher earners working for different companies pay progressive tax to cover for benefits of low paid workers.
Politicians claim if they clamp down on tax avoidance and evasion then companies will leave the country and at least the workers pay income tax.
The problem is that people on higher income de-facto are subsidising those big corporations. They cannot save money to start their own businesses and even if they somehow manage to do it, they cannot compete with big companies that don't pay taxes.
If companies like Uber were banned from my country, there would be no economic cost - quite the opposite. We will have many local equivalents competing for customers (not shareholders) and paying the right tax.
Because other people pay taxes for them. Classic example - company builds a factory and pays minimum wage to the workers. Workers are unable to live off of it so they apply for benefits. The company meanwhile transfers all the profits using IP licensing and other tricks out of the country. Higher earners working for different companies pay progressive tax to cover for benefits of low paid workers.
Politicians claim if they clamp down on tax avoidance and evasion then companies will leave the country and at least the workers pay income tax.
The problem is that people on higher income de-facto are subsidising those big corporations. They cannot save money to start their own businesses and even if they somehow manage to do it, they cannot compete with big companies that don't pay taxes.
If companies like Uber were banned from my country, there would be no economic cost - quite the opposite. We will have many local equivalents competing for customers (not shareholders) and paying the right tax.