Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

All these sorts of schemes are doomed to fail for the very simple reason that corporations are more agile than the law making process.

Here's an easy plan to end tax avoidance:

1. Any company that sells more than $X/year to people living in the US needs to be registered in the US.

2. Flat tax with no exemptions (all corporations would be taxed like C-corps).

3. No more rules.

A plan that won't work is one that adds even more rules on top of the the enormous mound of rules currently in place.

So much of the tax avoidance tactics ends up as more investment and propels our economy forward. Amazon is a prime example. The government taxes profits. Amazon instead of making a profit, reinvests the money into its business.

Even when corporations do stock buy backs, it's not like most of the money goes to the investors to spend frivolously. Instead most of it just gets reinvested in different businesses that have a better plan for the money than the company that did the stock buyback.

Any way you slice it, Warren's plans just reduces reinvestment and puts the brakes on economic growth. You can't tax your way to prosperity unless the taxes are used strictly for things that are an investment in the economic future of the country such as education and infrastructure. Taking the money from those investing it and blowing it on entitlements is a terrible idea.

At the end of the day, all this reinvestment creates jobs and allows individuals to provide for themselves instead of being dependent on sucking at the teat of the state.

Just a thought. How about abolishing corporate tax and then making every entity as pass through entity for tax purposes? At the EOD all entities are owned by someone and that income is taxed at a progressive rate. From what I've read the corporate tax is only 10% of the federal budget anyway.

Edit: This wouldn't stop a company from doing what Amazon did and reinvest all the time but at least given a profit an entity would be pressured to pay out cash in order to cover tax liability of owners. Would help avoid hoarding of cash on balance sheets.

This just creates a disincentive for those corporations and individuals that are being the most productive.

People need to remember that the United States doesn't exist in a vacuum. We are in competition with all the other countries out there. Maximizing productivity matters at a national level.

The more competitive we are, the better off Americans are on average. If we lose that lead position to other countries, we may achieve greater equality internally but we will be worse off relative to the rest of the world.

Why should I care about the corporate tax burden? Taxes come out of people's pockets, not corporations.

There's an argument to be made that we can get foreign shareholders to pay taxes they otherwise wouldn't, but that's a much different argument than "corporations aren't paying their fare share".