> We invented corporations to help improve society

I think it's easy to say this, but I'm not sure the history of corporations bears this out. Technically, the first corporations were colonial expeditionary forces (like the Dutch VOC) that were sent to Africa and the Caribbean to control various types of precious resources and we all know what happened there.

I guess it all depends on who "society" is in your statement, because someone has always has to lose in a corporate structure.

> Technically, the first corporations were colonial expeditionary forces (like the Dutch VOC) that were sent to Africa and the Caribbean

I don’t know the definitive origin, but one of Cæsar’s reforms in the Lex Julia was to require collegia be approved by the Senate (or Emperor) to be considered a legal body. The concept of corporations traces to at least then, almost certainly earlier, since corporate personhood is a logical result of the process of creating a legal system.

The novelty of the English and Dutch trading companies wasn’t their corporate personhood, but their distributed ownership as a joint-stock company.

Minor quibble - there is no single Lex Julia. Any law passed by Gaius Julius Caesar or his heir Gaius Julius Caesar would be called XYZ Lex Julia to distinguish it from previous and later legislation that happened to share the same name.

Sources - Caesar, Life of a Colossus and Augustus, First Emperor of Rome by Adrian Goldsworthy.

That's not really any different than referring to the law vs a law.

They both work in most contexts.

The VOC was established by the government because it didn’t like that there were many competing merchant companies. It wasn’t the first company, it was sort of the first public company.

Sure, I'm not trying to argue that VOC was the very first company. Companies of various types date back to the silk road. But large-scale corporations were largely conceptualized during mercantilism and their history is inextricably tied to colonialism, which can't be overlooked when people start saying things like "corporations were created to help society." They helped some people, but they also wiped out entire populations (see the Banda Islands).

I read a lengthy account of US Corporate history in graduate school (whose exact title eludes me at the moment). My impression is that in the US, there was a desire to tie transportation to broader physical markets, and include decreasing costs by owning the warehouse and distribution infrastructure. On the marketing end, a common brand name for a family of products was also owned by the corporation. An important early US example is the National Biscuit Company NABISCO. There were no US national food companies, as each market had the combination of brands, storage and distribution for the food product. The corporation held assets large enough to tie market regions together. It was not a small feat and was very much the Big Markets Tech of the time. Sears and Roebuck from Chicago form a different model, with non-perishable goods.

For international finance, early 20th century oil played a special role, not adequately described here.

As far as the parent comment about corporations "killing people" .. this is true but naive.. since the Romans and before, brutality was the norm, not the exception. Every educated person and most others knew about extreme forms of collective abuse, it had happened again and again. The very formation of civilization, including merchant and trade functions, was generally meant to be an improvement on past forms. Rarely, but with serious circumstance, some merchant company would rape and murder their way to fortune for a while. But karma is a bitch as they say, and those things did change. The tame history I cite above, was specifically aimed at making a better economic engine, for profit by ownership, which upon consideration was the chosen path.

As OP isn't forthcoming with their corporate history text, one of which I'm familiar and can recommend is Charles Perrow, Organizing America: wealth, power, and the origins of corporate capitalism. As a sociologist specialising in organisational behaviour and structures, Perrow brings a deep expertise and excellent scholarship to the field.

https://www.worldcat.org/title/organizing-america-wealth-pow...

Archive.org don't appear to have this, though ZLibrary / LibGen do.

Archive.org have it but not for digital loan unless you are officially "print disabled", but you can preview and full text search.

https://openlibrary.org/works/OL4468926W/Organizing_America

Which links to: https://archive.org/details/organizingameric00perr/

Thanks. Search wasn't turning that up for me at all.

Where and when was your graduate schooling?

Assigned reading will frequently be listed on syllabi. Older versions can be found through the Wayback Machine, if posted online (and from the early 1990s through about a decade ago, many were, unfortunately, integrated school information systems have largely hidden these behind registration walls).

That's really interesting, I'd read the crap out of that US corporate history book if you ever recall the name.

All that would not have been possible without the arrival of "modern" stock exchanges.

Also, their reorganization after each first generation of underhanded practices became recognized, otherwise attention could not have been as well diverted from the ability to leverage greed even more so than leverage the resources of the smaller investors.

Good historical reference sections on Wikipedia:

https://en.wikipedia.org/wiki/London_Stock_Exchange

>During the 17th century, stockbrokers were not allowed in the Royal Exchange due to their rude manners. They had to operate from other establishments in the vicinity, notably Jonathan's Coffee-House.

https://en.wikipedia.org/wiki/Philadelphia_Stock_Exchange

https://en.wikipedia.org/wiki/Tontine_Coffee_House

https://en.wikipedia.org/wiki/New_York_Stock_Exchange

NYSE of course is where lots of the money ended up from the international slave trade, and not just from sales in North America.

Seems to me that's what allowed NYC to take the place of London as the world's financial center, since the UK frowned on slavery much eartier than the US.

Also early 20th century oil might have been the only thing with as good or better return than slavery had generated.

>can't be overlooked when people start saying things like "corporations were created to help society."

Uhm, who says that? Corporations were always created by people who wanted to cooperate to pursue their common interests.

That's not correct. Corporations, particularly in the limited-liability sense of the term, are created by society, not people. The laws of a jurisdiction provide a carve-out for a fictional entity that gets special rules to protect the people who act as its brain. But that's different from those people creating it.

And to this end, the only reason to create a corporation is to make society better. If they're not, we have the ability to revoke their charters, and we should use that more.

> And to this end, the only reason to create a corporation is to make society better

I'm sorry but this is patently false, the reason to create a corporation is to capture profit.

Want to make society better? There are numerous non-profit and government organizations that broadly aim for this goal which do not turn a profit. The goal of a corporation is to sell goods or services, and hopefully those goods or services do in fact better society. However, this is far too often not the case to make the argument that corporations exist to improve society. Look at how much control corporations have over our society today, they're practically invincible and indemnifiable in our current culture because they're so much more insulated legally than individuals.

Perhaps I was unclear, but you get that you're lecturing me about what I just said, right? What you are describing is the goal for a person to apply to have a corporation created for them to manage. That's not the reason that society allows corporate charters to exist. Society need not allow a corporate charter to be established that does not benefit that society, and can revoke them should they not be achieving the goals of the society that grants them.

What is the average person’s interest in creating laws aroubd i corporation? Doesn’t it stand to reason that it’s the people creating businesses that would be the ones suggesting the laws that protect themselves from liability?

The fact that corporate charters are never revoked points to the laws being in the corporations favor, not the citizens’

We allow those protections to allow people to take business risks without taking significant personal risk.

This encourages entrepreneurship. I don't think you'd see as many people trying to build widgets if they had to put their family's home on the line.

In exchange for those protections, we get widgets.

Sorry, I didn't mean to imply that LLC / incorporation has no benefit to society, it plainly does. I was responding to the conjecture that it's society at large that writes the rules. I figure the stakeholders writing the laws are the people who have the most to gain.

You're right. They absolutely are. They don't have to be.

From where I stand, corporations should be afraid of the societies that grant them their charters.

It is literally a direct quote from the post I originally responded to.

They actually wanted a way to raise money for war effort to break free from the Spanish influence.

It was a massive public money raising campaign to build war ships, guns and hire mercenaries, all under the guise of "exploring exotic commercial opportunities overseas".

>all under the guise

It's not a guise when other countries monopolize trade routes. It's simply a cost of doing business.

What I meant is their true motivation and intentions (war efforts) were different than what they made it appear with the VoC capital raising.

EDIT: in "The World's First Stock Exchange" [1], the author outlines this historical context of conflict between Netherlands and Spain, which spurred the VoC and - considered to be - the first stock market.

[1] https://www.goodreads.com/book/show/18847884-the-world-s-fir...

Yeah perhaps I should say I was thinking more about the limited liability form that got established sometime in the 1800s across a variety of western countries. The government orgs are a thing too, of course, but things that are that closely tied to government tend to have their own access to enforcement.

It's more that at one point during the industrial revolution, it became common that someone would make a private venture, incorporate it, and from there the law granted a number of modern considerations that we still live with. I'm thinking of limited liability and its effect on bankruptcy.

Also interesting that one of the examples given is using Intellectual Property to fiddle taxes. IP itself is another thing that is sold as "being done for the good of society" but if you trace the history, it was basically a way of handing out the King's total ownership of society to his friends, giving them a monopoly on salt or whatever, very similar to giving them a monopoly on trade with india.

I do think both (intellectual property and corporations) can actually be good for society if properly regulated, I just don't think that was the original intention, nor the current status quo and it won't naturally develop in that direction without concerted effort.

one of the firsts things they taught in law school was that the legal system wasn't just created to uphold "justice" but really to protect the wealthy and powerful

The first corporation depends of the definition used. If we are talking about joint-stock companies there were some form in China and in Europe before colonial expeditions to fund capital intensive enterprises like dams and mills (in the rare cases where it was not funded by the Lord/Abbey/State) Like so https://en.m.wikipedia.org/wiki/Bazacle_Milling_Company

The VOC did improve Dutch society, hell the Netherlands was able to defeat the Spanish empire thanks to the spice trade.

OP probably also thought about other societies involved, like the Indonesians, who did not really benefit, quite the opposite, and with far more people.

Or OP might have been considering the theory that "Fascism is Colonialism turned inward" and the impacts of that that the Dutch themselves later felt.

But then who gets priority here? The Netherlands or Indonesia? And it can easily be debated Indonesia as we know it would not exist without the VOC...

Would that be a bad thing?

Firsr corporations were basically groups of people killing, torturing and exploiting less advanced civilizations overseas. Over the time capitalism has developed towards more peaceful culture, not the other way around as people often imply.

I'm certainly not trying to imply that capitalism is more or less peaceful than it was in the 17th century, I guess the main point that I'm trying to make is that corporations exist to generate profit, they never really existed to improve society.

A lot of the shifts towards a more humane version of capitalism came through outside forces like organized labor (i.e. the 40 hour workweek, the establishment of child labor law, etc.). These were not things that corporations volunteered, it took lots of people threatening to stop the system in order to achieve many of the benefits we enjoy today. We'd still be working 7 days a week starting as small children if those outside forces didn't establish many of those fundamental changes for us.

> We simply hear too much about "selling IP rights" to subsidiaries and similar schemes that are clearly meant to lower tax rather than increase revenue.

Huh. Made me wonder if advocates of IP reform could claim improved tax sanity as a benefit.

Happily, not an original thought.

Here's the first hit via ddg:

Intellectual Property Law Solutions to Tax Avoidance [2015]

https://www.uclalawreview.org/pdf/62-1-1.pdf

"Multinational corporations use intellectual property (IP) to avoid taxes on a massive scale, by transferring their IP to tax havens for artificially low prices. Economists estimate that this abuse costs the U.S. Treasury as much as $90 billion each year. Yet tax policymakers and scholars have been unable to devise feasible tax-law solutions to this problem. This Article introduces an entirely new solution: change IP law rather than tax law. Multinationals’ tax-avoidance strategies rely on undervaluing their IP. This Article proposes extending existing IP law so that these low valuations make it harder for multinationals to subsequently litigate or to license their IP. For example, transferring a patent for a low price to a tax-haven subsidiary should make it harder for the multinational to demonstrate the patent’s validity, a competitor’s infringement, or entitlement to any injunctions. The low transfer price should also weigh toward lower patent damages and potentially even a finding of patent misuse. Extending IP law in such ways would thus deter multinationals from using IP to avoid taxes. Both case law and IP’s policy justifications support this approach."

Also...

> How can we have free markets when we don't even know who owns what?

Yup. Open markets require symmetrical information.

You call it "economic orthodoxy" but it's really nothing of the sort. There's not even really a technical definition of "free markets" so I don't know where you're getting your assertions.

I think you're kind of gesturing at the concept of "perfect competition", which is rigorously defined and does have technical requirements [0], one of which is perfect information. But it actually doesn't really apply to the tax situation of the owner.

In other words, for political and ethical reasons, there's a lot of reform that can and should be done, but I wouldn't dress up the argument in the form of "economic orthodoxy", unless you're talking about actual economic orthodoxies like lowering corporate income tax and preferring VAT to personal income tax.

edit: I should soften my confidence here, it's been a while since I did economics. At least, I've never heard of transparency extending beyond the good or service being a requirement for perfect competition... do you have a source for that, or can you clarify how it would affect things?

[0] https://en.m.wikipedia.org/wiki/Perfect_competition#Idealizi...

> unless you're talking about actual economic orthodoxies like lowering corporate income tax and preferring VAT to personal income tax.

Those are more political ideologies than anything.

By economic orthodoxy, I simply mean that it's a fairly common economic teaching that bad things happen when parties are uninformed. For instance Akerlof lemons is about information asymmetry.

I'm not referring to any specific model (monopolistic competition etc) but to the general observation that a fair few economic models point out that having wrong information causes problems.

> For instance Akerlof lemons is about information asymmetry.

Akerlof lemons have zero to do with knowing the salary of the CEO of the lemon company.

I don't understand - there is a job market, and like most markets here is information asymmetry. Companies have more information about compensation than workers. In this situation, having less salary information enable employers to take advantage of employees.

We're talking about this https://en.wikipedia.org/wiki/The_Market_for_Lemons right?

Are you so sure about that? Think about the CEOs themselves as the lemons... a lack of transparency can lead to the same adverse selection pressure that trends towards "lemon CEOs" flourishing, and pay transparency can help align the incentives somewhat.

"Free" and "market" are contradictions. Markets exist when individuals can amass capital irrespective of wider social needs, and this necessarily requires armed force, or the threat of armed force, to prevent people from collectively deciding about resource allocation. That's the state. Naturally the state also enforces many things besides ownership of capital, some of them better (like minimum wage and health and safety codes) and some worse. But the point is that even if you had the fantastical and anti-realistic "perfect information", markets wouldn't be "free".

At the same time, markets do "work". That is, the results of market interactions are what you might expect from market interactions: Accumulation of capital in fewer hands, economic cycles of various kinds, some motivation for innovation and lots of innovation for exploitation, war, scams and such...

You are being downvoted and its quite disturbing.

And you even didn't say anything controversial, hardly any options, but simple facts and conclusions drawn from the facts.

We can even bring out the comments by the Chicago school of economics - the birthplace of neoliberal free market ideology. Who with assistance from the government 'helped' south American countries by implementing more free markets than in USA. And as the result those countries imploded both politically and economically, and what does Chicago say? well obviously markets were not free enough.

They laugh at communist who say failed soviet counties were not communist enough, yet they do exact same thing with their experiments (actually, the difference is that they inflicted it on other countries).

> (actually, the difference is that they inflicted it on other countries) No difference there. Soviet communism was all about exportation.

As any ideology does, but soviet communism an oppose to radical free market was also self inflicted.

Which begs a question, if neoliberals believe in what they preach then why they only export it?

There is no such thing as “free” markets in the US or any other country. All markets are defined and limited by the laws, rules, and regulations in place to enable the market to exist in the first place. Unless you are talking about the “free market” of a lawless failed stare.

Also, sadly, unmatched competetiveness in the real world. Markets and states evolved because they out-murdered and out-robusted all other forms of organizing.

I think this hits the nail on the head. Wealth is protected by a vast array of national and international laws and institutions - everything from protection of intellectual property to the technicalities of making sure that you and I can't both own the same piece of property at the same time. In return for this, it's not unreasonable for national governments to require more transparency in terms of who owns what. (By the by, I think the real reason this doesn't happen is the obvious suspicion that it could lead to more progressive forms of taxation, e.g. wealth taxes.)

I agree completely.

For free markets to work, we need the following:

-Bankruptcy without bailouts to clear dead wood.

-Abolish patents as these simply limit free market competition and are a ploy to try to claim ownership on something that usually is one tiny fragment of human knowledge.

-Public tax records for everyone. Sunlight is the best disinfectant (and the best way to allocate resources)!

-Wealth tax instead of income tax.

> Abolish patents as these simply limit free market competition and are a ploy to try to claim ownership on something that usually is one tiny fragment of human knowledge.

Think this one through, what’s the incentive to invent or make a thing of there’s no protection? Because someone wants to?

A common bit of knowledge here on HN is that "Ideas are worthless, execution is everything". Most ideas do not occur to just one person at a time... typically dozens of people and groups are working on the next incremental advance in human knowledge. Patents are awarded to whoever has the most aggressive lawyers, not necessarily who actually had the idea first. Beyond that, most innovation is funded by government grants and universities and should be public domain, not some professors property. And most importantly - patents stop all new further innovation, especially when a company owns many patents in an area. Why do you think there is only 2 airplane companies - Boeing and Airbus? They own all the patents you would need to start a competitor.

Great, so then require a parent to be actioned upon. And patents don’t last forever so eventually Boeing and Airbus will have, in great detail, explained how their thing worked so others can copy it.

those sounds like good ideas but they make markets less free.

So why call it free market?

How is “bankruptcy without bailouts” making markets less free ?

Which "bailouts" are you referring to? The 2008 crisis, where the "bailouts" were actually loans, which were repaid with interest, providing profits for the taxpayer, or the current COVID bailouts, which provide the people with money, not needing repaid, that look like they're adding significantly to inflation?

They were bailouts, because, without Fed's guarantees, no financial institution would loan money to most of these badly-managed, reckless corps. And they are doing the exact same thing again, knowing they will be bailed out again.

"Profits for the taxpayer" - did you get a penny of the "profits"? The only people who profited were the executives of the bailed out companies - who deserved to lose their jobs, not double their wealth.

> reckless corps

Can you explain how they were rekless?

If i go to cassino and bet my life saving on black that's rekless. If I go to cassino and bet your life savings then 50% of times I am genius investor, or 50% of times i am really really sorry for your loss.

The problem is that those corporations are playing a game they cannot loose. Its only logical for them to push risk (therefore profits) more and more. They themselves created 'too big to fail' term.

I am not trying to make excuses for them, they are the people who captured regulatory institutions, and de-facto are self regulating - and in practice we all know where that leads. They are responsible for what happened and is happening.

Good list!

I would also..

- allow government to compete on the free market.

- allow government to force-purchase static businesses that are profitable but not innovating.

- require government to monitor such port folio and privatize where innovation is failing. Privatization of this kind should not be rushed and aim to get good value for the assets.

- print money against the new government assets minus earnings from privatization

> allow government to compete on the free market

So then we should disallow government from regulating the market? There is a conflict of interest in your conjecture.

Government has to make money some how. While it is good to extract wealth from people with deep pockets I believe profiting from transactions though taxation for the most part is discouraging economic activity.

I and many other people have a laundry list of skills that I could offer to others only if I fill out piles of paper work.

If little jimmy wants to wash 1 car he needs to register a business and get the business bank account?

If big Joe has 100 car washes and he is earning a stable income without expanding or innovating to much government could make a bid on it and offer him a job.

If say the US gov wants to force-purchase the google search engine it should pay handsomely for it. Say 1800 billion. Alphabet would do just fine bidding on the advertisement slots and selling them to their customers. (Such a large purchase should probably involve a referendum)

It is our government. If we want it to sell beer in town hall it should be up to us. If you and many others are against it it obviously shouldn't happen.

> Reporting to investors ought to mirror reporting to the taxman.

This would be a nice simple GAAR: you pay either the current corporate rate or 20% of the GAAP profits you report in your stockmarket statement, whichever is the larger.

Alternatively, governments need to open up these schemes to everyone so they become accessible to every middle class person. BUT they 'll also have to compete with other governments about providing better and transparent taxation options. Right now the schemes are limited not only to the rich but to the well connected rich

As far as the taxes bit, at least here in the USA I always felt that we should just get rid of corporate taxation entirely, and instead tax ya know, the CEOs etc the difference, which in effect means taxing capital gains like regular income for instance.

That would do wonders for businesses to simplify the tax schemes and really moves the taxation portion to the individuals.

I’m sure like any tax reform this has edge cases and stuff I know I haven’t considered but wouldn’t the upside be taxation happens more uniformly as a result?

If we get rid of corporate income tax (and we should), we should absolutely bill corporations for ALL use of publicly-funded infrastructure.

- use of public highways (reimburse in proportion to wear-and-tear, etc).

- use of public regulatory agencies like the FCC and FAA (to permit broadcast spectrum and airspace to be useful resources without everyone grabbing all of it all at once).

- very expensive use of US military to enforce international law, or to protect assets in foreign countries.

- use of publicly funded education to train their workforce.

I could probably go on for pages and pages but these are probably the big ones we spend the most money on.

I think a few months of this system and most corporations would be BEGGING to go back to simple income tax where they can game the system and scam their way out of paying what they owe.

That's great and all, but the tax revenue in absolute terms from corporations is probably several orders higher than what you can tax a rich CEO.

Just something to keep in mind.

Maybe part of solution is higher sales taxes , and less (or zero) other taxes. Ie tax mainly (only?) at the purchase of a good or service. I don’t recall seeing massive sales tax fraud scandals, atlease at any meaning scale.

Sales taxes are logistically simple but also highly regressive, so the wealthy wouldn't even have to use loopholes to enjoy an ultra-regressive tax system :).

Why is the point to tax the wealthy more? Why do we want to kill the incentive for starting companies and becoming wealthy?

My opinion, the left will only be happy with a 100% income tax and socialism.

> Why is the point to tax the wealthy more? Why do we want to kill the incentive for starting companies and becoming wealthy?

There isn't any evidence that tax rates much higher than those we currently have have been any obstacle to growth. Perhaps in theory, but many countries around the world and across history (including the United States!) have had much more progressive taxation regimes and it hasn't "kill[ed] the incentive for starting companies and becoming wealthy."

> Perhaps in theory, but many countries around the world and across history (including the United States!) have had much more progressive taxation regimes and it hasn't "kill[ed] the incentive for starting companies and becoming wealthy."

Which countries? And what happens when another country becomes more competitive than the US from a tax perspective? Will it destroy the country? certainly not. Will the US continue to be the world reserve currency and lead the world? Again, no.

The United States had very high income taxes from 1950 until 1980 (and also grew very fast during that period - much faster than in the period 1980-present). It is also worth noting that the United States was actually the leading advocate of very progressive income taxes during that period - convincing many other countries to adopt extremely high top tax rates on the wealthy. Today, most developed countries have higher top tax rates (and more progressive tax regimes) than the United States does - Germany, France, Sweden, Japan, etc. etc.

> And what happens when another country becomes more competitive than the US from a tax perspective?

This is a really important point and I'm glad you brought it up. The progressive taxation regime has been undermined over the past 30-40 years by the "Washington consensus" - the idea that free flows of goods and capital are paramount and that it should be US policy (as well as the policy of the IMF, World Bank, etc.) to pursue such ends via trade agreements and in exchange for loans. The issue is that free flows of capital leads to the exact problem you describe: a global race to the bottom on tax rates and a general nihilism about the possibility of an equitable tax regime. The long term challenge, then, is about building transnational agreements that are about more than just free flows of goods and capital: they must address issues of taxation as well.

The argument (with sales taxes) isn’t usually that they don’t let you soak the rich but that they’re too hard on the poor.

Almost by definition, somebody living paycheck-to-paycheck is spending all their income. So their sales tax bill is going to be basically whatever the sales tax rate is applied to their income (e.g., a 7% sales tax rate applied to all of their income). Somebody who saves some of their income isn’t spending that portion, so in a year their sales tax bill will be smaller than the sales tax rate (e.g., if they save 10% of their income, then they’re only paying sales tax on the 90% that they spent). You could say this isn’t hard enough of the rich, or it’s too hard on the poor. Usually “too hard on the poor” is an easier argument to make.

There are solutions, such as exempting food or other necessities (the poor probably spend a bigger portion of their income on food, so exempting food helps them more), or adding a luxury tax on things that the poor don’t buy, etc. Of course, then there’s an effort to define what should count as a necessity or what should count as a luxury. When I was a teenager, California sales tax did not apply to packaged food, but did apply to food bought at a restaurant. But there were exceptions to both of those cases: there was a snack tax that applied to some packaged foods (the list changed each year) so that some packaged foods were still taxed; and packaged food sold at a restaurant was exempt (I worked at Cinnabon, hot cinnamon rolls were taxed, after thirty minutes on the hot plate we let them cool down, refrosted and packaged them and they were no longer taxed; if somebody asked for packaged rolls when we were out, they got hot rolls in the box without paying sales tax).

It’s also true that “income” isn’t always the interesting number. Somebody with a million dollars in the bank and no income doesn’t pay income tax, but they do pay sales tax. Of course, if the money came from wages in a previous year, they paid income tax then. If the money was an inheritance, it might have been taxed but the US keeps changing the details of the estate tax.

> Why do we want to kill the incentive for starting companies and becoming wealthy?

Because raising taxes isn't going to keep someone who would already be considering starting a business from starting a business.

Do most people who start a business actually become wealthy?

> Because raising taxes isn't going to keep someone who would already be considering starting a business from starting a business.

How can you say that? Have you polled everyone starting businesses? This very thing happened to me with a distribution business in which taxes, and the potential for them being raised, made the business unprofitable compared to the same business running in China.

> Do most people who start a business actually become wealthy?

Subjective and impossible to calculate but by all means because not everybody can find a way we should kill it for everyone right? Because not everyone is smart enough to become a medical Dr, we should ban the profession or implement pay caps right?

What about VAT then? Value added tax as levied in the EU is not a sales tax. It's also a very popular fraud mechanism...

> How can we have free markets when we don't even know who owns what?

Why would we need to know who owns what in order to have a free market?

Most of the profit is based on information asymmetry or on being a monopoly (high barrier to entry).

Interestingly, creating difficult to understand or implement tax codes also raise the barrier to entry.

> How can we have free markets when we don't even know who owns what?

Good point, but take a number. We can't have free markets because most "regulation" is set up to favor some side or the other. There isn't even and fair competition. What we have is government sanctioned winners (and losers).

Before we get to who owns what, let's talk about how Uncle Sam can shamelessly put his thumb on the scale (read: bias and corruption) and too rarely be called out for doing so.

> How can we have free markets when we don't even know who owns what?

Great. Let's add more paperwork to the incorporation/reporting process.

> As for taxation, there needs to be an overhaul.

Taxation has a hard time changing the current laws because these are revenue for government. It can't do an overhaul but it can make new rules/regulations. Great, more paperwork.

> Moving profits to other countries shouldn't be possible, or rather, it should be more fixed by the nature of the business than by the desires of the CFO.

More paperwork, regulations, rules and advisors. That should simplify your tax diagram.

> Perhaps the way to see it is, if you say "we make money by selling coffees in the UK"

Many economic players are way more complex than a company selling coffee in the UK. These also happen to be the most influential and important nodes in your economy.

tldr: Tax is a really complex issue. ICIJ is, surprisingly, not that transparent in its funding and the people doing the funding/leaking these documents; I'm really doubtful they are doing it because they have "good hearts" or on any goodwill to help "society".

> Great. Let's add more paperwork to the incorporation/reporting process.

Many of the systems required to create a more complete accounting of assets already exist. For example, in the United States financial institutions already generate 1040s for profits/losses/dividends on financial assets; it wouldn't be particularly difficult for those forms to also include the actual assets themselves and their values. Local governments already collect property taxes (which, at various points throughout history have included a lot more than just property - such as cars/boats/etc.; equipment, etc. - so the infrastructure already exists to tabulate these other categories too) - it wouldn't be hard to transmit that data. I'm not arguing that it wouldn't take any work to have a transparent accounting of who owns what, but it's certainly not impossible - after all, we do it for income and no one seems to bat an eyelid. Not to mention that we live in an age of fast and easy electronic communications. Transparent wealth accounts have existed before in much more difficult circumstances (e.g. wealth taxes imposed on war profiteering by various governments after WWII) and it didn't prove to be an insurmountable burden.

> Taxation has a hard time changing the current laws because these are revenue for government. It can't do an overhaul but it can make new rules/regulations. Great, more paperwork.

Taxation is law - in fact, the tax code and how it is structured is probably the most important part.

> More paperwork, regulations, rules and advisors. That should simplify your tax diagram.

There is already an incredible amount of paperwork, regulations, rules and advisors involved in the gaming of the global tax system that already occurs. More transparency around asset ownership would help lead to a simpler global tax regime, not a more complicated one.

> but it's certainly not impossible - after all, we do it for income and no one seems to bat an eyelid.

Certainly, given we’ve been to the moon, will be on mars soon, and are standing on the brink of cures for some of the worse diseases we could figure it out. But then you’ve removed a measure of privacy. Why does everybody need to know what everybody else owns? Then comes the difficulty in tabulating this data. The rich will pay someone to do it. The rest of us will spend even more time each year figuring out everything we own vs got rid of that year.

Progressive taxes are a failure. Millions of words are in the current tax code and it still failed. Why add more words? Flat tax, no deductions, pull it at the income source. QED.

OR, we can keep futzing around trying to implement a “fair” tax code, only to find out in the end it’s impossible

> But then you’ve removed a measure of privacy.

I don't think such a system of accounts would need to be publically accessible. It could work similarly to income taxes - where the public is able to look at robust aggregate data, the IRS is able to collect taxes as necessary, and central banks are able to make good monetary policy based on real data.

> The rest of us will spend even more time each year figuring out everything we own vs got rid of that year.

For the vast majority of wealth that the vast majority of people own (property and financial assets), nothing would be required because (as I mentioned above) there already exist reporting mechanisms for those types of assets.

> Progressive taxes are a failure. Millions of words are in the current tax code and it still failed.

Why do you think progressive taxes are a failure? Taxes used to be much more progressive during a period of much higher growth (1950-1980). Over the last 40 years we've gradually made the tax system more regressive by lowering rates and inserting more and more loopholes (which primarily benefit the wealthy)

> I don't think such a system of accounts would need to be publically accessible. It could work similarly to income taxes - where the public is able to look at robust aggregate data, the IRS is able to collect taxes as necessary, and central banks are able to make good monetary policy based on real data.

OK, what will this do? Nothing.

> For the vast majority of wealth that the vast majority of people own (property and financial assets), nothing would be required because (as I mentioned above) there already exist reporting mechanisms for those types of assets.

Again, it sounds like you’ve changed nothing.

> Why do you think progressive taxes are a failure? Taxes used to be much more progressive during a period of much higher growth (1950-1980). Over the last 40 years we've gradually made the tax system more regressive by lowering rates and inserting more and more loopholes (which primarily benefit the wealthy)

For a few reasons, including the left constantly saying they’ve failed and they don’t have enough money. Another reason is income tax was originally meant for the wealthy, then inflation caught up. With an inflationary currency taxes implemented for the rich only will eventually apply to all, as income tax does today but didn’t before. Not to mention the massive overhead to process all of this data, we literally picked the most complicated way to do this.

> OK, what will this do? Nothing.

It will do several things. First of all, having robust publicly available aggregate data will spur better debate about the equitable distribution of wealth. Second, it will allow the IRS to easily collect wealth taxes should congress authorize those. Third, it will enable Central Banks to make better decisions - right now we're flying mostly blind, so to speak.

> For a few reasons, including the left constantly saying they’ve failed and they don’t have enough money.

I don't think "the left" is saying that income taxes have failed. I think "the left" is saying that income taxes are no longer as progressive as they once were for a number of reasons: (1) top tax rates are much lower than they once were; (2) income and capital gains are taxed differently; the low (and flat) rate of capital gains taxes mean that the wealthy pay effectively lower tax rates; (3) the huge number of loopholes introduced into the tax code predominantly help the wealthy and make the overall income tax regime more regressive than it would otherwise be.

I think the left also argues that income isn't the most accurate measure of an individual's capacity to pay taxes.

> Another reason is income tax was originally meant for the wealthy.

This is simply not true. Income taxes were introduced by most developed countries in the first half of the 20th century as (1) a check on inequality; (2) a reasonable way to expand the tax receipts of the federal government from something like 10% of national income to the 40+% of national income that countries require in order to invest in anything but purely regalian state functions. It has little to do with inflation, and tax brackets are constantly adjusted for inflation in every country that has implemented one. On the other hand, income taxes are progressive so by design they hit the wealthy harder (and always have done).

> Not to mention the massive overhead to process all of this data, we literally picked the most complicated way to do this.

The IRS budget is very small.

That point aside, progressive taxes are meant to tax people according to their ability to pay. A flat tax can never accomplish that. Most progressive taxes fall under three categories: wealth taxes, inheritance taxes, and income taxes. You need to collect a certain amount of data for all of them.

> First of all, having robust publicly available aggregate data

> I don't think such a system of accounts would need to be publically accessible.

Which one is it? Public or not?

> I don't think "the left" is saying that income taxes have failed. I think "the left" is saying that income taxes are no longer as progressive as they once were for a number of reasons

Yes, which I alluded to. Now tell me, when will this end? As I said, we have an inflationary currency, so of course todays taxes will not be enough in the future. Which is why this system is a joke to me. Why are you surprised the taxes are not enough anymore?

> This is simply not true. Income taxes were introduced by most developed countries in the first half of the 20th century as (1) a check on inequality; (2) a reasonable way to expand the tax receipts of the federal government from something like 10% of national income to the 40+% of national income that countries require in order to invest in anything but purely regalian state functions. It has little to do with inflation, and tax brackets are constantly adjusted for inflation in every country that has implemented one. On the other hand, income taxes are progressive so by design they hit the wealthy harder (and always have done).

https://en.wikipedia.org/wiki/Legal_history_of_income_tax_in...

The first income tax applied to those making more than $600/yr, which means the poor didn't pay. Today, the poor still pays, as that limit was never updated to the new "wealthy" level. Also because the left wanted a larger taxable base, for more $$$$.

Please avoid "other countries" as we're talking about the US and I have no clue or care about other countries tax codes or history.

> That point aside, progressive taxes are meant to tax people according to their ability to pay. A flat tax can never accomplish that.

How so? If you tax everybody at the same low rate, say 15%, then every can pay? Whatever the minimum bracket is in the current system, use that. This will result in less tax revenue, which is why the left hates this system.

Another way to put all of this, if you want Obamacare, lets open up those medical records to the public so we can decide if:

a) we can afford you being on it

b) if your conditions are correctable

> Which one is it? Public or not?

The aggregate data would be public and the underlying data points would not be. Just in the same way it's possible to have a robust discussion of income equality but I can't look up how much money my neighbor earns.

> Yes, which I alluded to. Now tell me, when will this end? As I said, we have an inflationary currency, so of course todays taxes will not be enough in the future. Which is why this system is a joke to me. Why are you surprised the taxes are not enough anymore?

No, this is not true. Income tax brackets are updated every year, and always have been, to account for inflation.

> The first income tax applied to those making more than $600/yr, which means the poor didn't pay. Today, the poor still pays, as that limit was never updated to the new "wealthy" level. Also because the left wanted a larger taxable base, for more $$$$.

The 19th-century income tax only lasted a few years, was not particularly progressive, raised very little revenue, and generally bears little to no resemblance to our current income tax. The income tax we have today dates to the early 20th century.

> Please avoid "other countries" as we're talking about the US and I have no clue or care about other countries tax codes or history.

But we should care about other countries because their experiences can inform ours.

> How so? If you tax everybody at the same low rate, say 15%, then every can pay? Whatever the minimum bracket is in the current system, use that. This will result in less tax revenue, which is why the left hates this system.

If you want to construct a modern state, you need progressive taxation to raise the 40-70% of national income a year in tax revenue (all "developed" modern states do this. Places like India and South Africa don't, which explains a lot...). If you believe we should go back to a 19th-century state which collects low taxes and does little redistribution, (1) inequality would balloon; and (2) I've got bad news for you, because most people in the United States support significantly more progressive taxation. (Not to mention that the United States would quickly fall behind the rest of the world due to lack of investment in education, which is one of the primary drivers of productivity growth.)

> The aggregate data would be public and the underlying data points would not be.

So now leaves the question, what does this report look like?

> Just in the same way it's possible to have a robust discussion of income equality but I can't look up how much money my neighbor earns.

Who's having these discussions? Certainly not the entirety of the political landscape is involved. This is a leftist idea, so perhaps the people on the left are having a robust discussion about wages, but the people on the right and some of the moderates (like myself) are tired of people saying they don't make enough (being self made from a poor family myself). Your idea here is yet another extension of this. You want to know what people make and own so you can determine how much tax they should pay, and if they're paying enough. I can short circuit this for you. We all know the left wants more taxes, the right wants less, and the majority of the moderates are siding with the right right now. We can safely avoid this massive headache and know the outcome desired by all parties involved.

> No, this is not true. Income tax brackets are updated every year, and always have been, to account for inflation.

OK you missed this one completely so I'll walk you through it a bit more. The value represented by the currency never changes. However the representation of that value does change over time and with an inflationary currency it keeps increasing. So the reason the the tax brackets and taxes are increased or updated, is because they need more money to get the same value from taxes as the previous year. With the left wanting to implement full on socialism, this will never end and we will go broke as a nation. Or put more simply, when 100% tax is implemented, and we need more, what happens then?

> The 19th-century income tax only lasted a few years, was not particularly progressive, raised very little revenue, and generally bears little to no resemblance to our current income tax. The income tax we have today dates to the early 20th century.

OK?

> But we should care about other countries because their experiences can inform ours.

No.

> If you want to construct a modern state, you need progressive taxation to raise the 40-70% of national income a year in tax revenue (all "developed" modern states do this. Places like India and South Africa don't, which explains a lot...). If you believe we should go back to a 19th-century state which collects low taxes and does little redistribution, (1) inequality would balloon; and (2) I've got bad news for you, because most people in the United States support significantly more progressive taxation. (Not to mention that the United States would quickly fall behind the rest of the world due to lack of investment in education, which is one of the primary drivers of productivity growth.)

So how did the US become the greatest nation prior to high taxation? How come high taxes was literally the trigger that started the rebellion? Some people have an idea that the only way to a prosperous nation is via socialism, and to those people I'd say they're brainwashed as the schools in the US have been doing for about 4 decades now.

My point remains, if we continue on this path, and seek to justify further taxes we will ultimately end up with 100% income tax. And that's really the point of all of this, to implement socialism.

> So now leaves the question, what does this report look like?

You can slice and dice the data how you like. Again, exactly how we currently do it with income data.

> Who's having these discussions? Certainly not the entirety of the political landscape is involved.

The entire political landscape is involved, as evidenced by your comment that you want lower taxes.

> You want to know what people make and own so you can determine how much tax they should pay, and if they're paying enough.

This is literally the goal of progressive taxation.

> We all know the left wants more taxes, the right wants less, and the majority of the moderates are siding with the right right now.

Polls show overwhelming support for increasing taxes on the wealthy.

> OK you missed this one completely so I'll walk you through it a bit more.

$1 doesn't have any inherent value by itself. The value of a dollar is determined by what you can exchange it for. $1 in 1921 was significantly more valuable than $1 in 2021 - you could buy a lot more with it. This is called inflation. As long as inflation remains relatively low and predictable, it doesn't really matter in the abstract whether something costs $1 or $10 or $100 (if inflation rises quickly, that's another story of course!) There exists a metric called the Consumer Price Index which measures this inflation, and therefore the value of a dollar across time. Income tax bracket cutoffs aren't increased over time in order to raise more revenue. They are increased in order to raise the same amount of revenue after adjusting for inflation. But again, this doesn't mean anything, because inflation theoretically increases the price of everything - wages, prices, etc.

> Or put more simply, when 100% tax is implemented, and we need more, what happens then?

The United States had a top marginal income tax rate of 80-90% for most of the period 1950-1980. The United States economy grew much faster during this period than the period 1980-present, when top marginal tax rates were much lower. The point isn't to implement a 100% income tax. It's to make the tax system more progressive, which enables further investments in education, research, and health care, which fuels growth.

> So how did the US become the greatest nation prior to high taxation?

By most economic measures, the United States wasn't the strongest country in the world until the first half of the twentieth century. Some of the reasons for that include lower levels of inequality with respect to education in the late 19th century compared to most European nations; the earlier implementation of progressive income taxes compared to those nations; greater investments in education compared to France and Germany (and especially the UK) that led to higher per capita productivity; not suffering as much economic damage from the two World Wars; etc.

> How come high taxes was literally the trigger that started the rebellion?

The revolution had nothing to do with high taxes (taxes were very low, in fact - see https://taxfoundation.org/taxation-representation-american-r...). It had to do with unfair taxation. And that's exactly what this whole argument is about: the wealthy pay unfairly low taxes because of tax havens and an inability to properly tax wealth.

// How can we have free markets when we don't even know who owns what?

Free markets exist regardless of how you choose to assign property to people. Be it violence or consensus. Ownership is to be decided by the parties involved in the exchange. 3rd partys are an easy solution.

> Ownership is to be decided by the parties involved in the exchange.

No, ownership is to be decided by governments who use force to protect property rights. They may take advice from the parties involved in the exchange, they may decide that neither party involved in an exchange was the owner.

No- ownership determines disposition of property, not government.

For instance, in most jurisdictions, a dispute between two (claimed) property owners can only be decided by them, in full agreement, with the courts stepping in only when a stalemate is reached.

But the judge can only decide the dispute, and can't, for instance, arbitrarily issue an order giving the property to a 3rd party, or decide a dispute where one of the parties haven't first come to the court seeking that resolution.

Similarly, a property owner can summon police to help enforce their property rights in the case of a trespasser, but police can't arbitrarily enforce the rights of 3rd parties without request.