81–90 of 199 posts
This is brilliant. I recently wrote in to my senator about net neutrality. His reply was a breathtakingly convoluted justification of not regulating companies like Comcast because antitrust laws would take care of it. I've never felt so insulted.
You felt insulted because he has a different opinion to you? Or did he write something insulting in his reply?
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Think of it this way: it's not that the larger companies are breaking the laws or simply not paying taxes that they owe - they're just being more innovative in how they approach those things. In a global economy, when there's pressure to pay lower wages by outsourcing labor, pay lower taxes by organizing some or all of the company abroad, or exploit loopholes in domestic laws for greater efficiency, that's just what…
You’re not mentioning the outsize influence that corporations have on government which leads to them permitting these loopholes. It can be fixed by legislation. In 1952 corporate tax in the US was 33% of total revenue. Today it’s less than 9%.
Comparing the corporate tax rate in 1952 to today is pointless. In 1952, the U.K. was a shell burned out from WWII. Today, it's a tax haven luring American companies to reincorporate there. You cannot fight this process with legislation--you'll just shoot yourself in the foot and drive companies out to other countries that will be happy to receive them. This isn't just a U.S. thing--even accounting for deductions and tax breaks, the U.S. has higher corporate tax rates than our competitor countries: http://www.npr.org/2017/08/07/541797699/fact-check-does-the-.... The "real" amount of taxes paid in the U.S. is about 18.6%, versus 8.5% for Canada, 11.2% for France, and 4.1% for South Korea.
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You felt insulted because he has a different opinion to you? Or did he write something insulting in his reply?
You can count the number of companies that own all American media on one hand. How is it that anti-trust is "taking care of it" again?
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Corporate taxes abroad were also often higher than the US rate at the time. Now they are much lower. If you sell X in, say, the UK -- as a company you often have the option: book the profit in the UK, or in the US. There's not much laws can do to change that, that is just the way having the flexibility to structure your business in whatever way you prefer works. If you were to reduce the US corporate tax rate to 10%,…
>If you were to reduce the US corporate tax rate to 10%, a lot more profit would be booked in the US again. Until other countries lower theirs, then it's just a race to the bottom, no?
The "race to the bottom" is the reason why free markets are so prosperous. Each business independently works to reduce costs and competition forces companies to share those savings with consumers.
The best example of the "race to the bottom" stopping are monopolies (often gov't supported) like Comcast where they can sit fat and happy raking in a ton of profits and telling consumers to shove it.
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>If you were to reduce the US corporate tax rate to 10%, a lot more profit would be booked in the US again. Until other countries lower theirs, then it's just a race to the bottom, no?
then it's just a race to the bottom, no? The "race to the bottom" is the reason why free markets are so prosperous. Each business independently works to reduce costs and competition forces companies to share those savings with consumers. The best example of the "race to the bottom" stopping are monopolies (often gov't supported) like Comcast where they can sit fat and happy raking in a ton of profits and telling cons…
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Think of it this way: it's not that the larger companies are breaking the laws or simply not paying taxes that they owe - they're just being more innovative in how they approach those things. In a global economy, when there's pressure to pay lower wages by outsourcing labor, pay lower taxes by organizing some or all of the company abroad, or exploit loopholes in domestic laws for greater efficiency, that's just what…
That's essentially what is happening when people talk about inversions. You have multinationals getting around a design flaw in the US tax system, by acquiring a foreign entity and going abroad.
Of course those companies will just search out another legal alternative to avoid paying taxes. And that is well within their rights.
> We have become a rent-seeking society It just dawned on me while reading the article that this accurately describes the shift from licensed software to SaaS that has been happening in the past decade.
That's not what rent seeking means in this context. https://en.wikipedia.org/wiki/Rent-seeking
Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. Rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity. The classic example of rent-seeking, according to Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a way to make money from something that used to be free.[5]
Now maybe, the program used to be $40 and not free but switching to $20 a month is definitely rent-seeking.
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That's essentially what is happening when people talk about inversions. You have multinationals getting around a design flaw in the US tax system, by acquiring a foreign entity and going abroad.
And those design flaws are being addressed. Google can no longer do the "dutch sandwich" and "double irish" after 2020. Of course those companies will just search out another legal alternative to avoid paying taxes. And that is well within their rights.
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You’re not mentioning the outsize influence that corporations have on government which leads to them permitting these loopholes. It can be fixed by legislation. In 1952 corporate tax in the US was 33% of total revenue. Today it’s less than 9%.
So, the same people who are already heavily influenced by corporations are somehow going to wave a magic wand to limit the influence of those who are influencing them? Not sure I believe that will happen (at least, not as long as free speech is still a thing). I don't doubt that it could happen - at least in theory - but in my opinion, we're already too far down that rabbit hole.
I know it’s hard to believe, but the next 15 years will see a dramatic rise of government power and higher corporate taxes. This will happen very suddenly with one party taking complete control of all the branches of government along with having a dominant ideology at their back. Doesn’t really matter if Republicans or Democrats are in control, we can see the progressives on the left like Sherrod Brown, and populists like Steve Bannon on the right (who has spoken highly of Senator Brown), advocating shockingly similar proposals.