Warren Has a Good Beginning for Ending Corporate-Tax Avoidance • Hacker News Board

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

#81

Post by tomhoward » Tue, Apr 16, 2019, 8:10 AM UTC

qmanjamz wrote: post #36

Corporate taxes shouldn't exist in the first place. They're just a sneaky way of double-taxing people. Corporations are really just groups of people. Those people already have to pay taxes on the income they receive from the corporation. They shouldn't have to pay taxes on it again when the corporation reports it as income.

I'm sympathetic to the argument in principle, but it hinges on the system for assessing income of/collecting taxes from individuals being adequately rigorous and efficient.

The presence of loopholes, tax havens and other mechanisms (including corporations themselves) for hiding personal income means the bucket is very leaky.

Given that corporations have to maintain complete records of their cashflows and disclose them to investors and authorities anyway, using this data for intermediate tax collection seems reasonable.

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

#82

Post by tptacek » Tue, Apr 16, 2019, 12:56 PM UTC

rb808 wrote: post #38

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'm not sure if you're in America, but in the US it federal income taxes largely goes to 14 giant aircraft carriers, a huge network of nuclear weapons, corporate farmers intensely growing carbs that makes our nation fat and payoffs to various politically well-connected lobby groups. State and local taxes probably are more useful for the things you think benefit society. Social Security and Medicare are of course fund…

If you're in the US, federal dollars overwhelmingly go to Medicare and Social Security; the United States is a health insurance and HR benefits provider that happens to have an army.

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

#83

Post by kthejoker2 » Tue, Apr 16, 2019, 1:14 PM UTC

anoncake wrote: post #56

thrill wrote: post #50

Earlier quoted context omitted.

Yet another reason why the Founders' recognition that ruling via a simple majority was an eventual death knoll for a society.

I.e. democracy is bad if you disagree with the results.

Two wolves and a sheep deciding what's for dinner.

See? Platitudes are easy.

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

#84

Post by anoncake » Tue, Apr 16, 2019, 1:24 PM UTC

kthejoker2 wrote: post #83

anoncake wrote: post #56

Earlier quoted context omitted.

I.e. democracy is bad if you disagree with the results.

Two wolves and a sheep deciding what's for dinner. See? Platitudes are easy.

So you favor autocracy (and delusionally believe that dictators tend to be the sheep)?

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

#85

Post by scottlegrand2 » Tue, Apr 16, 2019, 5:21 PM UTC

malandrew wrote: post #66

scottlegrand2 wrote: post #47

Earlier quoted context omitted.

Oh but there is an incentive here: the higher the median wage, the higher the deduction everyone gets. And for those below the median wage, they can just keep making all the money they want all the way up to that median wage and pay $0 in taxes. What exactly am I missing that's giving me all these downvotes? I just want a fair tax code all the way up and down the socioeconomic ladder and I want to wipe out all those…

don't know why you're getting downvoted, but every time I hear someone say they want to be fair, my immediate reaction is to ask "what's your definition of fair?" My definition is that everyone has skin in the game and feels the same pain when it comes to raising or lowering existing taxes or creating new ones. Any thing else is a wealth transfer and theft from one to give to the other. Having everyone feel the pain…

So then what are you proposing here, a straight head tax? That seems catastrophic to me but maybe you can tell me what I'm missing.

I believe in economics but I also believe we are living in a deranged Markov process with selfish actors. and I don't see how allowing multi-generational piles of money to accumulate is good for society in the long run because you end up with an unassailable ruling class which is exactly the opposite of what this country has evolved towards until recently, no?

I'm no fan of either major political party because the right cuts taxes and increases military spending whilst the left undoes those tax cuts and increases social spending. And in both cases we go deeper and deeper into debt.

What's your solution here? I could go for a wealth tax or I could go for 100% inheritance tax here. And in doing so eliminate income tax. I'm open to anything that doesn't excessively redistribute wealth yet at the same time stops the accumulation of wealth into a very small number of uber wealthy families.

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

#86

Post by int_19h » Tue, Apr 16, 2019, 7:14 PM UTC

scottlegrand2 wrote: post #5

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…

I would extend this sort of simplification to individuals as well. I'd give them a huge upfront deduction all the way up to the median income and then flat tax the remainder.

Change that deduction into a tax credit, and you're basically describing one way to implement UBI.

I think it's not obvious to everybody that what you're suggesting is really a progressive income tax, BTW, since that flat rate is paid on different proportion of income, and with a high enough cut-off, it can easily be more progressive than our present arrangement for most middle class tax brackets and below.

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

#87

Post by int_19h » Tue, Apr 16, 2019, 7:16 PM UTC

skybrian wrote: post #61

jonknee wrote: post #12

Corporations are owned by people, start by taxing them simply. Income should be taxed the same whether it comes from a dividend, capital gain or as wages.

It's a nice idea, but tricky to do. The difference is that wages and dividends get taxed in the year they happened and capital gains can't even be calculated until you sell an asset, because you don't know the price it's sold at. And capital gains taxes can sometimes be delayed forever (by not selling). You could mark to market, but it's tricky for investments that aren't liquid. Do you want to pay capital gains tax…

Capital gains are taxed when they're realized, and I don't think OP proposed changing that - only adjusting the rate so that it's not less than tax on regular income.

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

#88

Post by int_19h » Tue, Apr 16, 2019, 7:22 PM UTC

asdfasgasdgasdg wrote: post #64

Terr_ wrote: post #43

Earlier quoted context omitted.

> The only point in taxing corporations vs. people directly is I disagree, you're skipping a huge governmental benefit that almost all the biggest corporations request/receive: "Limited Liability." If Nuclear Asbestos Infant Toys goes bankrupt, everybody else is picking up the tab for land-cleanup and tumor-removal. In other words, those owners have chosen to socialize their company's risks, so it's only natural and…

I dunno if that's very different. Personal risks are socialized too -- via a mechanism known as bankruptcy. Anyway, again, it's a question of who you're targeting. If you think limited liability specifically is something that ought to incur a tax of that amount, then, sure, tax them that amount. But then company owners ought to be able to drop the limited liability feature and receive a lesser tax burden, right? I'm…

Not OP, I'd be perfectly fine with a tax specifically on limited liability, and I think you vastly underestimate the value of that arrangement to the company owners.

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

#89

Post by nordsieck » Tue, Apr 16, 2019, 8:50 PM UTC

AdamM12 wrote: post #75

reitzensteinm wrote: post #22

Earlier quoted context omitted.

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…

I believe double taxation actually refers to paying the corporate tax rate as well as the shareholder paying their dividend tax rate. Not capital gains.

> the shareholder paying their dividend tax rate. Not capital gains.

In theory, dividends and stock buybacks perform the same function. Because stock buybacks have more favorable tax implications (capital gains instead of income), they are often favored by institutional investors (who also like the added liquidity).

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

#90

Post by coolgeek » Tue, Apr 16, 2019, 9:18 PM UTC

tptacek wrote: post #82

rb808 wrote: post #38

Earlier quoted context omitted.

I'm not sure if you're in America, but in the US it federal income taxes largely goes to 14 giant aircraft carriers, a huge network of nuclear weapons, corporate farmers intensely growing carbs that makes our nation fat and payoffs to various politically well-connected lobby groups. State and local taxes probably are more useful for the things you think benefit society. Social Security and Medicare are of course fund…

If you're in the US, federal dollars overwhelmingly go to Medicare and Social Security; the United States is a health insurance and HR benefits provider that happens to have an army.

Roughly speaking, 25% of spending goes to the military, 25% to SS/Medicare, and the other 50% to everything else.

It is important to note that the 25% for SS/MC is funded by a separate tax, targeted to those programs. Without getting sidetracked over budget unification, it is equally important to note that this separate tax has generated a surplus for decades, and has therefore been used to subsidize the rest of the budget.