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The public has a right to know how companies that pay no taxes pull it off

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Re: The public has a right to know how companies that pay no taxes pull it off

#201

Post by graeme »

throwaway2245 wrote: post #196
jlokier wrote: post #161

Earlier quoted context omitted.

> They are stealing from their fellow citizens. Yeah, but stealing how much? Almost everyone I know or read about who runs a small business or is self-employed talks with their accountant about how run things in a "tax efficient" way, to pay the minimum tax within the rules while keeping reasonable about it. It would be foolish not to. You have to keep competitive. And the rules are, for the most part, based on fair…

>It would be foolish not to. Hard disagree. At typical self-employed scale, fiddling around with avoiding taxes is a waste of time (and money) which is a net loser against putting that energy into finding income. Are self-employed people really busy setting up as a business in Estonia or lobbying their national representatives? If you're taxed on your profits, it's always better to double your profits than to avoid t…

You’re arguing against a straw man. OP wasn’t saying the self employed incorporate in Estonia. They said they are efficient with taxes. They even gave a specific example: business expenses.

For example, I run a business in Canada, and know that food and drinks are only 50% deductible. Therefore, at a 50% marginal tax rate those items effectively cost business 50% more than, say, buying office supplies. And that informs decision making.

It’s also vital to know how different capital cost classes and depreciation schedules affect things, or to properly set up a home office deduction , and to deduct everything deductible.

Most of these things are set it and forget it. It’s absolutely worth doing correctly even at a self employed scale.

Re: The public has a right to know how companies that pay no taxes pull it off

#202

Post by robertlagrant »

tpxl wrote: post #191
jlokier wrote: post #170

Earlier quoted context omitted.

> Or do like Europe is finally starting: just tax revenue. That rapidly turns into a disaster of consolidations and monopolies. You don't want that. Think about the difference between big company $BIG selling you the consumer a million Widgets for 10^9 currency units, versus 26 small companies $a..$z each selling to the next in a long supply chain which results in a million Widgets. In revenue taxation, big company $…

VAT is literally tax on revenue and it works fine. You tax the added value, so each company pays tax only on (sell_price - purchase_price).

VAT is not tax on revenue. Only the end customer pays VAT.

Re: The public has a right to know how companies that pay no taxes pull it off

#203

Post by robertlagrant »

LudwigNagasena wrote: post #169
dwighttk wrote: post #152

Earlier quoted context omitted.

It is more efficient to let people keep money than it is to take it from them and give it back. Even if the laws that allow the former would (/might) be simpler.

It is not a problem. Just give subsidies as a tax credit.

That's still a problem, if you think companies minimising their tax is a problem. The game shifts to creating the correct structure to qualify for tax credits.

Re: The public has a right to know how companies that pay no taxes pull it off

#204

Post by IG_Semmelweiss »

pibechorro wrote: post #167
ALittleLight wrote: post #26

I read about tax avoidance schemes like corporate inversions or sending all your patents to a company in some tax free haven and licensing your patents from your company for all your profits, and so on, and it makes me really mad. Companies making many billions of dollars paying no taxes. My intuition is that if I personally came up with a cute "gotcha" like this where I wound up paying zero in taxes because of some…

The laws have always and will always favor those with capital. Its naive to think otherwise. There will always be loopholes, resources to fight it, go lobby a d bribe. The "corruption" is a feature, not a bug. If you truly want go get rid of the assymetry, then the answer is not more regulations and extractions, but less across the board. Fund the services without relying on taxes to income, not only will it be fair…

Only if power is concentrated as it is today.

Concentration of power in congress is a feature, not a bug.

You can remove concentration of power and simply aee corruption/bribe/lobbying dissappear overnight

See my post above for how to do this with 3 simple laws

Re: The public has a right to know how companies that pay no taxes pull it off

#207

Post by throwaway0a5e »

chewz wrote: post #154
mschuster91 wrote: post #134

Earlier quoted context omitted.

The problem with (too much) simplification is that it removes political steering capability. For example, governments may want to promote having children (by reducing the tax load for people having children), or incentivize small businesses like shops, or domestic R&D spending...

> The problem with (too much) simplification is that it removes political steering capability. This is not a problem, this is a benefit. If you separate tax collection from tax policy you are still able making economic and social policy via other tools.

Simple tax policy is a very tough political sell.

Basically tax policy is a low bar to entry way to get the laws you want but in a lossy capacity. Instead of making something legal/illegal outright you can just make it "illegal unless you jump through hoops and/or pay money" or you can provide a tax incentive for something you like (easier to sell than a subsidy). This lets you get dumb policy that would otherwise never pass. Big business benefits from this by getting carve-outs that make them more money or by getting policy that lets them use scale to their advantage. The authoritarian upper middle class benefits from this by using tax policy to create a carrot/stick system to kinda sorta make the poors act the way they want. And of course the government and politicians benefits from the current system because it gives them influence and power.

So right now we've got big business, the top ~30% or so of society and politicians/the government benefiting from the status quo. In order to remove politics from taxes big business is going to have to pay more (or everyone else will have to pay less, an equally large pill for a lot of people to swallow), the upper middle class will have to lose a set of carrots/sticks to kick the poors around and the government will have to accept a net decrease in power. The only way to get these groups to accept this is to spend a century boiling the frog. I don't think we'll ever get simple tax policy overnight.

Re: The public has a right to know how companies that pay no taxes pull it off

#208

Post by cwhiz »

DebtDeflation wrote: post #182
whiddershins wrote: post #116

I don’t fully understand why corporations are taxed in the first place. All the money the corporation takes in ultimately gets spent on operating expenses, or is profit that is then distributed to shareholders who then owe taxes on that income. If it’s annoying and counter intuitive that corporations are in some legal senses considered people, it is even more confusing that they pay taxes. This sets up a crazy situat…

>I don’t fully understand why corporations are taxed in the first place. Because as economically inefficient as a corporate income tax is, without it you would create an enormous incentive for individuals to incorporate, filter all their income through the corporation, have the corporation pay all their expenses as business expenses, purchase their assets for them as business assets, and compensate them in the form o…

You can do all that today no problem.

Re: The public has a right to know how companies that pay no taxes pull it off

#209

Post by srtjstjsj »

marcosdumay wrote: post #200
dmurray wrote: post #197

Earlier quoted context omitted.

That's literally tax on profit.

Hum... I suggest you take a look on how taxes on profit work. That's literally a tax on value added.

The definition of "value added" is price minus costs, aka profit.

https://www.investopedia.com/terms/v/valueadded.asp

Re: The public has a right to know how companies that pay no taxes pull it off

#210

Post by a3camero »

croon wrote: post #189
jlokier wrote: post #170

Earlier quoted context omitted.

> Or do like Europe is finally starting: just tax revenue. That rapidly turns into a disaster of consolidations and monopolies. You don't want that. Think about the difference between big company $BIG selling you the consumer a million Widgets for 10^9 currency units, versus 26 small companies $a..$z each selling to the next in a long supply chain which results in a million Widgets. In revenue taxation, big company $…

Or you just tax the end result (per country). Ie, you buy through 1000 transactions, and you sell through 1500 transactions for a net total of +€5k within the country. Tax that €5k, not the individual transactions. Unless I'm missing something.

“Transfer pricing” is why this doesn’t work out.
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