Trump Wants Tax Plan to Cut Corporate Rate to 15% • Hacker News Board

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#121

Post by mjfl » Tue, Apr 25, 2017, 3:26 AM UTC

muninn_ wrote: post #112

mjfl wrote: post #102

Earlier quoted context omitted.

To play devil's advocate, Finland was giving sort of a vague argument for their tax cuts: "dynamic effects", while in America there are very concrete potential effects of the policy. You can point directly to Apple and say, "If we cut tax rates to 15%, Apple will bring back $X to the USA", "Exxon Mobile will bring back $X to USA", and so on. You can even... talk to them and ask them what it would take to repatriate t…

Eventually that money will be either returned to share holders, or will be invested in the business. You also have to consider that the government in Finland is probably way less shitty than the US government.

The money is already returned to shareholders offshore as equity in the global company. I don't know what you are talking about.

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#122

Post by vannevar » Tue, Apr 25, 2017, 4:27 AM UTC

mjfl wrote: post #102

pavlov wrote: post #93

Finland tried this same thing with the same "dynamic effects will offset lost tax revenue!" rhetoric a few years ago, and it didn't work out anything like expected. At the start of 2014, Finland lowered its corporate tax rate to 20% (from a previous 24.5%). The lost tax revenue amounted to $800M EUR, but the government claimed that half of that would be recouped thanks to positive dynamic effects the tax cut would cr…

To play devil's advocate, Finland was giving sort of a vague argument for their tax cuts: "dynamic effects", while in America there are very concrete potential effects of the policy. You can point directly to Apple and say, "If we cut tax rates to 15%, Apple will bring back $X to the USA", "Exxon Mobile will bring back $X to USA", and so on. You can even... talk to them and ask them what it would take to repatriate t…

This is a race to the bottom. There is no public policy reason that corporations, particularly public corporations, should be allowed to amass such enormous piles of cash.

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#123

Post by JKCalhoun » Tue, Apr 25, 2017, 5:23 AM UTC

harryh wrote: post #40

JKCalhoun wrote: post #35

Earlier quoted context omitted.

But that's kind of what I mean — if you were using your business as a "deduction" hopefully the alternate computation would ignore that and you would be in for the higher (and deserved, IMO) bracket.

There is no deduction for "a business" in the way you describe. That's....not how it works.

I own real estate I rent out. I can deduct all manner of things related to that business from the rental income (insurance, property tax, etc.).

In what way are we talking about different things?

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#124

Post by tmaly » Tue, Apr 25, 2017, 11:57 AM UTC

mjfl wrote: post #102

pavlov wrote: post #93

Finland tried this same thing with the same "dynamic effects will offset lost tax revenue!" rhetoric a few years ago, and it didn't work out anything like expected. At the start of 2014, Finland lowered its corporate tax rate to 20% (from a previous 24.5%). The lost tax revenue amounted to $800M EUR, but the government claimed that half of that would be recouped thanks to positive dynamic effects the tax cut would cr…

To play devil's advocate, Finland was giving sort of a vague argument for their tax cuts: "dynamic effects", while in America there are very concrete potential effects of the policy. You can point directly to Apple and say, "If we cut tax rates to 15%, Apple will bring back $X to the USA", "Exxon Mobile will bring back $X to USA", and so on. You can even... talk to them and ask them what it would take to repatriate t…

I think the small businesses, the mom and pop shops that cannot afford a fleet of accountants, will benefit the most from a lower tax.

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#125

Post by muninn_ » Tue, Apr 25, 2017, 2:34 PM UTC

mjfl wrote: post #121

muninn_ wrote: post #112

Earlier quoted context omitted.

Eventually that money will be either returned to share holders, or will be invested in the business. You also have to consider that the government in Finland is probably way less shitty than the US government.

The money is already returned to shareholders offshore as equity in the global company. I don't know what you are talking about.

Sure but not through dividends or stock buybacks

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#126

Post by dplgk » Tue, Apr 25, 2017, 3:48 PM UTC

tmaly wrote: post #124

mjfl wrote: post #102

Earlier quoted context omitted.

To play devil's advocate, Finland was giving sort of a vague argument for their tax cuts: "dynamic effects", while in America there are very concrete potential effects of the policy. You can point directly to Apple and say, "If we cut tax rates to 15%, Apple will bring back $X to the USA", "Exxon Mobile will bring back $X to USA", and so on. You can even... talk to them and ask them what it would take to repatriate t…

I think the small businesses, the mom and pop shops that cannot afford a fleet of accountants, will benefit the most from a lower tax.

How does lower or higher tax changes the amount of accountants you need?

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#127

Post by civilian » Tue, Apr 25, 2017, 7:34 PM UTC

djtriptych wrote: post #115

civilian wrote: post #33

Earlier quoted context omitted.

That's a mischaracterization of his argument. He's saying that a lower corporate tax rate would help grow companies, and the economy as a whole. We would continue to pay income and payroll taxes (which are the main source of tax income anyway), and that the benefits of a larger economy + more income/payroll tax income would offset the lowest revenue in corporate taxes.

Are you kidding? The idea that companies hire linearly with revenue growth should be dying by now no? Is this not hacker news? We think that will continue for the foreseeable future? Corporate revenue follows a power law distribution, and the top companies are not growing by hiring as many people as they can. Apple earns about $1M/US employee in profit. Federal tax rate (~30%) on that number is say $300k. Payroll tax…

I'm not kidding, and you make a good point! I'd say that-- I really just don't have the numbers to prove this either way. Doing a quick search for "what percent of companies costs are payroll" led me to this http://smallbusiness.chron.com/percentage-business-overhead-... which suggests that 15-30% is common. But let's say a company has $100 more dollars to spend-- sure, $20 (or in Apple's case, $8.33) would go to labor. But the rest would go to other costs, which would further to grow the economy. If the company didn't feel like it needed to expand operations, then it would return its profits to it's investors/founders, who will invest it elsewhere.

The idea is that there are a lot of secondary effects of changing the tax rate, and not that payroll/income taxes would be recovered directly by one company, but that it would be recovered by the set of all companies who all are both: Receiving more money because they have a lower tax rate and receiving more money because other companies have more money to spend on them. This is also a compounding effect-- a lower tax rate might not give a benefit the first year, but as the economy benefits from compound growth, it should give a benefit in the future.

At some point the benefits of this would level out-- if it's hard to find useful ways to investment new money. Or at some point we just say "yeah, we know we could grow the economy more, but we simply need money to run the government with".

So, have we already reached the point where the benefit has leveled out? Maybe. But like, you can't deny this trend, it's just basic economics.

I also wasn't trying to argue against you, I just wanted to re-state his argument, since your previous response was just a tangent. The concept of economic growth and ideal tax rates is a different argument than how we spend our taxes, and I think that our advocacy of lower taxes as a way to increase tax income was perceived as a slight against your values.

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#128

Post by dmix » Wed, Apr 26, 2017, 5:09 PM UTC

aanm1988 wrote: post #101

dmix wrote: post #17

Earlier quoted context omitted.

Only a small percentage of companies are public and have CEOs making giant bounces off of tax cuts. This worldview that Bernie Sanders esque people hold, where every business person is a rich multi millionaire, ignores the reality of business... where the vast majority are small and medium sized businesses. The critique of George Bush's temporary tax credit was that it was used as bonuses rather than stimulating the…

Didn't sanders tax plan involve closing loopholes used by big companies and taxing the wealthy more heavily? Neither of which would hurt your precious small businesses. They would hurt the corporate overlords though.

> Didn't sanders tax plan involve closing loopholes used by big companies and taxing the wealthy more heavily?

Steve Mnuchin talked about closing these by simplifying the tax code during his senate hearing. This was Ted Cruz primary pitch for his tax plan... and in general on of the staples of tax reform people on both sides of the party.

Bernie Sanders also said he would be comfortable with a 90% top tax bracket too, which completely failed when the socialist party tried to do it in France.

Regardless, the goal should be increasing tax revenue, not tax rates. And the US government already takes in a massive amount of money.

There's probably a million ways for it to be better spent and still dramatically improve the social safety nets and offer public healthcare. Yet whenever these goals are discussed it's always in the context of adding more and more spending.

And re: closing loopholes, the usual result of these efforts such as Obama's various attempts, were to add even more complexity to the tax code. There are many ways to reach a goal. Just because you want lower taxes and a dramatically simplified tax code doesn't mean I'm against social policies.

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#129

Post by dmix » Wed, Apr 26, 2017, 7:30 PM UTC

dplgk wrote: post #126

tmaly wrote: post #124

Earlier quoted context omitted.

I think the small businesses, the mom and pop shops that cannot afford a fleet of accountants, will benefit the most from a lower tax.

How does lower or higher tax changes the amount of accountants you need?

Complex tax code = lots of loops that can be found via a team of accountants

Therefore the big firms that everyone villianizes for paying little taxes are already paying low taxes. This would lower the taxes for those who can't afford the team of accountants. Ideally they should also dramatically simplify the tax code to eliminate all of the loopholes so everyone pays the expected rates and there are no reinforcing cyclical benefits for market incumbents crippling innovation and continually enriching a small subset of the population.