Taxing mega corporations is essential. I would add that you need to tax them to oblivion after shareholder’s expectations are reasonably satisfied. If you don’t, you essentially create rogue institutions with deep pockets that will attempt to take political control of the nation for their selfish interests. Adam Smith had interesting things to say about that.

> will attempt to take political control of the nation for their selfish interests

Kind of like the current lobbying going on all over the world?

Well, yes and no. In my opinion, lobbying in itself is not evil if it remains within reasonable limits.

One of the limiting factor is to avoid giving the said lobbies unlimited funding. That is one of the reason for taxing corporations.

Why is a corporation with political power worse than a government? You will probably say that I have more control over government because of democracy. But in practice I have a stronger control mechanism over corporations, who I can choose to pay for services. When there is a problem with my Amazon package, I get quick responsive customer service. If you have a problem with government, good luck!

You have control over corporations insofar as there is actually a competitive marketplace (which is enforced by anti-trust, which is the purview of the government).

If corporations capture the market/government and become monopolies/oligopolies and you have no choices (i.e. Comcast in some regions), you will have no more recourse.

>Taxing mega corporations is essential.

It's not in this case because the corporation didn't pay any tax.

I am sure the topic is complex, but from the article:

> The company, Microsoft Round Island One, posted profits last year equal to nearly three-quarters of Ireland’s entire gross domestic product (GDP) – despite having zero employees.

That, to me, sounds like maybe the plan to collect personal income tax on salaries might not be so straight forward.

I think the argument is that it would be collected on the sales and expenses of the companies that "feed into" this employeeless entity. Those other companies probably aren't located in Ireland or Bermuda, but around the world, resulting (in theory) in a more even distribution of tax receipts.

The best tax is one that is imposed on an individual but paid at source by the corporation paying them.

Individuals shouldn't see tax. That way the voters don't complain when you need to put it up.

Sales tax is similarly a pain - particularly when you have differing rates. At which point we get into the famous is it a cake or a biscuit type cases to decide where the dividing line is.

>Individuals shouldn't see tax. That way the voters don't complain when you need to put it up.

If taxation is such an inherent good then why does it need to be hidden from people?

If the rate is justifiable the government shouldn't need to hide it. When you consider a democratic society where the government at least indirectly serves the will of the people the idea of the government needing to pull a fast one on the people or obfuscate its actions lest the people tell them to stop becomes even more absurd.

> If taxation is such an inherent good then why does it need to be hidden from people?

Because the externalities are not always visible, and people do not have enough free bandwidth to spend the time understanding them.

Call me old fashioned, but I believe it is the role of the person being paid to justify the expense. If you get hand wavy and tell me its too complicated I'm just going to presume you are stealing from me.

The Government is not "being paid" tax dollars[^0], it is (in principle, at least) spending and redistributing wealth in ways which benefit all citizens. UKGov releases these reports, for example https://www.gov.uk/government/collections/national-statistic... - good luck condensing these down to the point where they can fit in any taxpayer's head, and this is just the surface level outgoings.

> If you get hand wavy and tell me its too complicated [...]

Unfortunately, it really is too complicated. A doctorate in economics might get you a decent way towards understanding the good that taxation provides, but given that economists still have differences of opinion, maybe not a complete understanding.

[^0]: Well it is, but only a tiny proportion.

What exactly is your background where you assume your answer is correct when you know even the experts have substantial disagreements on taxation. Maybe there are a lot of legitimate disagreements on how much and which taxes because taxes aren’t a universal good but rather a necessary evil.

What claims do you think I have made? All I have said above is that taxation (a) is complicated and (b) has hidden externalities, both of which are obviously correct and appropriate responses to the things being asked.

" A doctorate in economics might get you a decent way towards understanding the good that taxation provides"

Unlikely. Economics doesn't even understand how the monetary system works, let alone taxation.

Taxation works more like memory garbage collection than anything else. It's a cleaning up process.

"If taxation is such an inherent good then why does it need to be hidden from people?"

It isn't an inherent good. It's just required to reduce demand and release people so the public sector can purchase them with its money.

Without it you would have inflation - or none of the public services we voted for.

The reason you pay tax is that your income is higher than it otherwise would have been without the government spending.

What people who don't like tax forget is that should you eliminate it, the increased income will be eliminated too. But not in a smooth way. Jobs will be decimated, and one of those might be yours.

To invert that: if people understood how much the services being provided to them cost they would not consume them.

The goal of government shouldn't be to obscure the cost of government services. The cost should be justified.

> To invert that: if people understood how much the services being provided to them cost they would not consume them.

I don't think that's true. I think what is true, and what we've seen time and time again, is that people don't like the cost of services that others take advantage of that they don't need to.

That puts the cart before the horse. People voted for them, so they are provided - and the people required to run them removed from the private sector.

To invert that, what exactly are you planning on doing with the people currently in the public service, which the people voted for, that is so much more important than providing the services the people voted for?

It is for the private sector to justify its use of resources, not the public sector. The public sector has a democratic mandate.

I strongly disagree with that idea. Voters must know exactly how much they are paying for something for them to care about efficiency of government spendings. What you are proposing is how things currently work in Russia and trust me you don't want that

People not knowing their tax burden: feature or bug?

I think paying your state and federal taxes in the United States should be seamless. Your employer should take the taxes out of your paycheck. At the end of the month/year, you should get a statement showing all the taxes you paid.

I recently had to update my W4 form at work for tax withholding, and what a pain in the ass to read and decipher. Add to that, and I had to do the same thing for my state taxes.

I want to point out that Congress has shot down the idea of making it easier to pay your taxes many times. I'm not sure if it is Intuit or some other entity, but paying your taxes should be easy. If you don't like the level of taxation, then work to reduce them, but paying them should be easy.

Do most Americans have to do their own taxes?

It boggles my mind that this is the case.

They do.

The UK PAYE (Pay as You Earn) system has a 1% tax gap[1] compared to 12.9% on income tax and 7% on corporation tax.

It's extraordinarily more efficient to tax at source.

[1]The percentage tax gap is the tax gap pound value as a proportion of theoretical liability, where theoretical liability is defined as the tax gap plus the amount of tax actually received.

The original purpose wasn’t to hide taxation but to effectively get more money via interest by the government getting paid sooner.

As I understand it in the US, the average taxpayer’s experience is that of annual taxes but the reality is that taxes are paid quarterly and settled on an annual basis. The self employed see this more clearly. Those in employer-employee relationships don’t see it since the employer sends the quarterly check to the various income taxing jurisdictions. Any interest made from the temporary storage of cash is probably more favorable to the employer than the government since the government spends cash faster than it arrives. The government does not escrow tax remittances in an interest generating account and then withdraw it all at year’s end.

Historically individual taxes were annual while some business taxes were quarterly. In Canada, corporate income tax is annual but sales tax remittances are quarterly. The interest is favourable to government since it reduces the amount of debt it needs to carry for a time. Admittedly it’s small now but in the 80’s it was a very big deal. I admittedly have never ran payroll taxes for a business in the US so I don’t know how that in particular works. I do however know Milton Friedman came up with the idea of withholding while working for the government early in his career and he always claimed that it was motivated by interest.

Well this creates the incentive that corporations try to minimise their employees, or try to shift employment to low tax/low cost countries. Now that very well be desirable for corporations and people who derive income primarily from capital, but it is not desirable for society. The whole idea behind corporate tax is that they should be taxes on the profits they make, where they make them.

>>Well this creates the incentive that corporations try to minimise their employees, or try to shift employment to low tax/low cost countries. Now that very well be desirable for corporations and people who derive income primarily from capital, but it is not desirable for society

You mean not desirable for society in high tax/high cost countries I presume? What about society in low tax/low cost countries? It seems to be working out pretty well for Ireland[1]. That's why they resist immense pressure form the EU and maintain a low corporate tax rate.

[1] which is a high cost/low corporate tax country

Well except that Ireland receives significant subsidies from the EU. So essentially this is a case of having the high tax/cost countries pay for your infrastructure so you can be a low cost country.

Even the Land Value Tax as a single tax is gaining some momentum. An idea well over a hundred years old: https://en.wikipedia.org/wiki/Georgism

That punishes working people just for working!

How are you meant to afford a house and stuff with taxes like that?

We need wealth tax - go after the shareholders and landowners, who don't directly create value and dodge a lot of tax.

You buy $10K of DOGE at $0.0001 in 12-1-2020 and it goes to $0.10 on 12-31. You now have $10MM in wealth, and will, owe $500K to the government. DOGE goes back down to $0.0001 on 1-1. Now you owe $500K of taxes and have $10K of assets. "But you should just sell 5% on 12-31 and you will have enough to pay taxes" you say. Yeah, you and everyone else who needs to pay wealth tax. Know what it looks like when everybody sells at the same time? 2008 or 1929. Wealth tax is dumb.

That isn't what a wealth tax is, or how they are implemented.

Mainly land value tax, inheritance tax and property tax would be a good start. And we already have capital gains tax to cover the sale of appreciating assets as you describe (note it is only at sale).

The first is a more limited type of property tax, which we already have. We also have inheritance tax. The vast majority of wealth is held in capital assets like stocks and bonds (or DOGE), so if you don't tax that, then you aren't really taxing wealth, and taxing these assets is a nightmare.

Capital gains taxes are accrued on disposal. Until you sell you owe nothing

Yes, and that makes sense because it is income. A wealth tax doesn't do that or else it wouldn't really be a wealth tax.

The revenue is only the same because we dont actually collect corporation tax because we let people avoid it.

To act like there's no additional benefit on taxing literally billions in revenue is absolutely nonsensical.

$100 -> corp. $90 -> expenses, $10 -> profit. $4 -> corp tax, $6 -> shareholders dist.

$100 -> corp. $90 -> expenses, $10 -> profit -> shareholders dist. $4 -> personal income tax.

In principal it's the same. Path 1 is easier to dodge, because what constitutes "expenses" is hard to define, but distributions are obvious. And the numbers don't have to add to 100. So reality looks more like:

$100 -> corp. $95 -> "expenses", $5 -> "profit". $2 -> corp tax, $8 -> shareholders dist.

vs

$100 -> corp. $95 -> "expenses", $5 -> "profit". $10 shareholders dist. $4 -> personal income tax.

And this is why you want to tax at the distribution level.

Say you redirect $100 million away from Microsoft's research into artificial intelligence and redirect it to a government project promoting artificial intelligence research + junkets for government employees.

It is certainly plausible that a tax will provide no additional benefit. Microsoft is one of the great value creators of the late 20th/early 21st century. it is not immediately obvious why redirecting money away from the company is a good idea.

It's interesting that you said redirect $100 million away from Microsoft's research (cost) rather than Microsoft's shareholders pockets.

Were you deliberately or accidentally confusing the two?

A reasonable point. But then the money is being taxed, because money is taxed when it is returned to shareholders.

It certainly isn't obvious that raising taxes is a net win. Experience to date is that a 100% tax rate is very bad, so logically there is a fair limit somewhere between 0% and 100% - ie, a specific fair rate that is not the word "more".

Certainly Ireland would like a slice of those billions of dollars - but if they try to take a big slice, Microsoft won't route the billions through Ireland. So it is a somewhat moot point in that specific case.

If you just want to redirect money from shareholders reduce corporate tax rates to 0% and tax dividends and capital gains more. Since they aren’t doing that they are admitting they want to tax money that corporations would re-invest.

> you redirect $100 million away from Microsoft's research into artificial intelligence

This confuses the issue - corporation tax has the opposite effect to this, because it only applies to profits. When profits are heavily taxed, there's a strong incentive to invest more money in R&D and longer-term internal investment (thereby avoiding corporation tax on that spending entirely) rather than reporting it as profit that's immediately distributed it to shareholders today.

There's interesting arguments about how this affects shareholders and whether it discourages external investment, but it's certainly not a drain on R&D.

Populism is a hell of a drug.

I can assure you that on the personal income tax front and much more so at the indirect tax of cost of living the Irish govt is doing just fine thank you.

> taxing corporations is pointless

the argument for taxing profits:

- incentivise investments

- companies are less likely to hide expenses like salaries

- It's more fair for high cost business (car company vs google)

Personally, I'd tax all corporation 3% of their revenue. You could lover it by to 2% by what is your operating profit ratio to revenue. You can lower it to 1% by a list of 20-30 deductibles e.g. you install solar panels. BUT the minimum you have to pay is 1%.

If your company cannot pay 1% of the revenue you don't have a viable business. Average corporation spends more on accounting and consulting.

FYI, this setup would be extremely beneficial to gigantic companies and likely would lead to immense consolidation, since effectively you would tax 1% on every supplier transaction down the chain, whereas the vertically integrated gigacompany would only pay 1% once.

nope this tax scheme would only apply to certain corporations

e.g.

Revenue 0-20mln EUR, you keep the existing tax scheme

Revenue 20-100mln - you can choose the tax scheme

Revenue 100mln+ - you have to tax revenue

Thresholds are up for debate.

Also, companies already pay around 0-5% of their revenue in income tax. Gigantic companies pay close to 0.

This doesn't change the fundamental fact that a tax on every transaction disincentives B2B transactions and therefore directly incentivizes large, vertically integrated companies.

You can try to work against it by arbitrary progressive taxation thresholds, but this doesn't change the underlying mathematics.

Also, there's a reason why progressive taxation isn't widely implemented for corporations, because it's very easy to circumvent by splitting up and increasing the number of legal entities. A sensible way around that is taxing the _ultimate beneficiary_ rather than the company itself (i.e. the owners as natural persons), which is what GP suggests with "sales tax and personal income tax on salaries and distributions".

> This doesn't change the fundamental fact that a tax on every transaction disincentives B2B transactions

You can make the same argument about VAT. There is a cost on every transaction (split payment, money is frozen until you get a return). The incentive would be negligible comparing to other incentives for vertically integrated companies.

> progressive taxation isn't widely implemented for corporations, because it's very easy to circumvent by splitting up and increasing the number of legal entities

It's getting more popular and it's easy to draft a law that splitting companies, does not reduce the taxes (see GDPR) https://taxsummaries.pwc.com/poland/corporate/taxes-on-corpo...

> sensible way around that is taxing the _ultimate beneficiary_ rather than the company itself (i.e. the owners as natural persons), which is what GP suggests with "sales tax and personal income tax on salaries and distributions".

It doesn't work in practice, because of tax heavens. Also, I can have a travel blog and a youtube channel when I review cars and clothes. Would I pay close to 0 in taxes.

---- All taxes are bad, but given current global world, revenue tax seems to be better, hence the digital tax in EU.

> Revenue 100mln+ - you have to tax revenue

So banks and oil companies, which are naturally lots of revenue with a tiny amount of profit, would disappear, or become very small?

You'd tax global profit based on the local revenue fraction. So if the corporation has global profits of 1M and the revenue is 90% in country A and 10% in country B, then country A taxes 0.9M of profit and country B taxes 0.1M of profit and neither has to care where the corporation is located 'for tax purposes'.

> If your company cannot pay 1% of the revenue you don't have a viable business. Average corporation spends more on accounting and consulting.

Accounting costs banks and oil companies around 0.8%, so the will be fine.

I don't remember the exact number.

Revenue is simply what you earn regardless of your costs. If some kind of business generates lots of revenues but has costs that are similar, then...they are screwed. You are basically proposing taxing money that moves through any company, regardless of the amount of money that has to pass out of it. Many companies just couldn't afford to exist anymore, we'd go back to hunting and gathering because even farming would no longer be economically viable.

Oil companies have huge capital costs to find and extract resources, if you look at what their profits are compared to their costs of doing business, then obviously taxing revenue isn't going to work.

Sales tax disproportionally affects the poorer. That's undesirable, to say the least.

Restructuring taxes will take a lot more work, and then end up with hundreds, if not thousands of extra taxes, each of which will be "avoidable" if you have enough lawyers, simply because the system won't be able to keep up.

Try saying this on leftist websites like reddit. They believe taxing corporations is the solution to all world problems.

I guess this is related to the age of the Reddit's users.

> Why can't governments learn that taxing corporations is pointless?

Pure ideological point of view with no grounding in reality. It's totally possible to tax corporations. In fact, some state like Japan and South Korean get more money from enterprises than individuals, the reverse of Europe and US (until recently consumption tax was 5% in Japan, now is 8%, still far less than EU's typical 20%).

The solution you propose doesn't even work well, since it's one more incentive for (mega-)corps to not raise salaries, as keeping salary low means also low taxes.

A political challenge to taxing larger entities is that those entities have increased incentive to avoid tax. This has distortionary effects elsewhere in that it is logical for such an entity to pay fractional X toward a politician’s personal interest instead of the full X to the government.

Most economists support a 0% corporate tax rate and higher taxes on dividends and capital gains. This closes most loopholes and doesn’t tax money that corporations reinvest in growing the economy.