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Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

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Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#21

Post by programmertote »

andrewstuart wrote: post #17

Taxes are a good thing. They pay, or should pay, for education, health, military, roads and infrastructure and a wide variety of other stuff that is good for everyone. It puzzles me that people hate taxes so much.

I consider myself a fairly progressive person. But I think at least some of the people, who don't like paying so much taxes, don't like the fact that the government is allocating the tax money collected, and it could, according to their belief, cause inefficiency.

I agree with that notion to a certain degree. For example, I wish there is a way to allocate the tax that I pay yearly to the programs that I want to fund. Specifically speaking, say if I pay $100 in tax, I should have a say to paying at least $50 of that to programs that I think are important for me (e.g., dept. of transportation; dept. of education; EPA...)

Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#22

Post by reitzensteinm »

AdamM12 wrote: post #6
nordsieck wrote: post #2

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 e…

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…

We have that in Australia & NZ, called Franking. When a corporation pays tax, it receives credits which can be distributed with the dividends it pays out.

While strictly better than the alternative for business owners, I always felt the incentives were a bit weird; if you left profits in the company to expand, you'd pay tax on that up front which would slow growth. So it would bias you towards withdrawing profits (at least compared to the tax policies of other countries).

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

In my opinion, corporate taxation should be tied to liability; essentially being the compensation to society for the risk that your company will go though bankruptcy. If you are willing to be personally liable for your business, you should be able to operate it as a simple pass-through vehicle. And this should apply even to something the size of Apple - investors willing.

It's commonly argued that capital gains combined with corporate tax is double taxation, but limited liability has a huge amount of value; making the link between them explicit and optional would (I think) be the best of both worlds.

Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#23

Post by peteradio »

Eridrus wrote: post #10

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".

So you are saying tax the shit out of the extremely high earning individuals?

Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#24

Post by SamReidHughes »

aeternus wrote: post #18
malandrew wrote: post #4

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…

Sure, we should be encouraging reinvestment but how do you resolve the unfairness of companies that choose to reinvest themselves vs. pay out a dividend and allow investors to re-invest? Amazon benefits from many government-funded programs: educated workforce, road & rail infrastructure, national defense, judicial contract-enforcement, etc. Is it fair that a company that reinvests gets all that for free while a compa…

This is true for any form of taxation, such as income/payroll taxes when paying for daycare versus watching your kids yourself.

Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#25

Post by asdfasgasdgasdg »

andrewstuart wrote: post #11
Eridrus wrote: post #10

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".

>> Taxes come out of people's pockets, not corporations. That's not correct - corporations are meant to be paying significant tax.

It is correct. People own corporations. So if you're taxing a corporation, you're actually just taxing the people that own it. (And/or its customers or employees.) The only point in taxing corporations vs. people directly is if you're trying to target a set that's difficult to tax otherwise, such as rich people who own big corps but don't realize a lot of income on their own balance sheet.

Which IMO is a fair group to target. But that's the point. Corporations are just things that are owned by people. People, ultimately, pay the taxes. So the question ought to be, which people do we want to pay more taxes, and what's the best mechanism to get them to pay those taxes?

Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#26

Post by guelo »

anchpop wrote: post #20
0_gravitas wrote: post #16

Earlier quoted context omitted.

Some sibling comment to oc seems pretty straightforward: the profit taxed is the profit reported to shareholders

What would prevent a company from telling the shareholders they made no profit? Is there a separate process that prevents them from lying and is more difficult to manipulate than the current tax code?

Presumably they want the stock to go up so they would want to report a profit. And Wall Street gets pretty upset with any company trying to cheat on their GAAP reporting

Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#27

Post by aeternus »

moosey wrote: post #15
malandrew wrote: post #4

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…

There are things that Amazon needs done to continue to run it's business effectively. Roads need repaired, crime needs to be kept down to acceptable rates, trash needs to be removed, they need to be defended from foreign nations, etc. The need of the corporations of our nation means that everyone, including these companies that don't build their own roads and militaries are on "the government teat". The idea that mon…

I'd be interested to know which studies?

While I agree that Amazon should pay their fair share, I find it hard to believe that there is a general loss of efficiency when privatized.

Companies have strong incentives to reduce costs, whereas government projects often have negative incentives to reduce costs. (Cost-plus contracting and use-it-or-lose-it budgets).

NASA is a great example, that organization made some amazing breakthroughs early on, but has arguably stagnated. It is now being surpassed by private companies due to ballooning bureaucracy and cost-prohibitive mission proposals. Something that many thought impossible.

https://www.scientificamerican.com/article/space-exploration...

Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#28

Post by chii »

programmertote wrote: post #21
andrewstuart wrote: post #17

Taxes are a good thing. They pay, or should pay, for education, health, military, roads and infrastructure and a wide variety of other stuff that is good for everyone. It puzzles me that people hate taxes so much.

I consider myself a fairly progressive person. But I think at least some of the people, who don't like paying so much taxes, don't like the fact that the government is allocating the tax money collected, and it could, according to their belief, cause inefficiency. I agree with that notion to a certain degree. For example, I wish there is a way to allocate the tax that I pay yearly to the programs that I want to fund.…

> programs that I think are important for me

Which is the whole reason why individuals should not be making such choices. Small, marginalised causes or departments should still get funding.

If we followed your method of fund allocation, some aspects of Govt would not get any funding at all. You may also end up funding departments which don't need as much funding. This misallocation is worse than today's imo.

Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#29

Post by maxxxxx »

dmm wrote: post #7
nordsieck wrote: post #2

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 e…

> Flat tax with no exemptions The difficulty with taxation is not calculating tax rates, that's simple, the difficulty is determining what is taxable income/profit.

"The difficulty with taxation is not calculating tax rates, that's simple, the difficulty is determining what is taxable income/profit."

Exactly! Flat tax is just another trick to reduce top tax rates while not solving any problems.

Re: Warren Has a Good Beginning for Ending Corporate-Tax Avoidance

#30

Post by Spooky23 »

andrewstuart wrote: post #17

Taxes are a good thing. They pay, or should pay, for education, health, military, roads and infrastructure and a wide variety of other stuff that is good for everyone. It puzzles me that people hate taxes so much.

In the US, anti-tax movement came out of the Goldwater era where Western libertarian and resource extraction people joined up with segregationists to form the modern conservative movement.

The idea is that rugged individuals should have absolute property rights, and that business will take care of things.

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