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Taxing Families Like Companies

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Re: Taxing Families Like Companies

#51

Post by mikepurvis »

TeMPOraL wrote: post #42
mikepurvis wrote: post #35

Earlier quoted context omitted.

> Maybe it's time to tax automation? 1000% yes; I work in industrial mobile robots and it's obvious that governments need to find a way to capture some of the value which is being created there, particular when it's a more-or-less direct trade of a wage-earning employee for a one-off capital investment. Are there are any major proposals yet for how this might work, or has already worked? The "existing" section on thi…

> Are there are any major proposals yet for how this might work, or has already worked? I don't know of any direct proposals, but I know of one thought: if you look at it, tax on fuels is partially a tax on automation already - machines use energy (be it electricity, heat or pressure), so there's a tax here that is proportional to use of machines. Of course it seems very low if treated as "tax on automation", and it'…

Interesting idea, but I don't think that's a realistic proxy, particularly when you look at the automation-per-dollar "efficiency" of computers relative to other industrial processes— like, how much compute do you get for the power that it takes to boil water or weld together a car or something? Or what about a case like a self-serve till at the grocery store? The power those consume is probably actually comparable to the power consumed by a till with a person operating it.

There are good reasons to tax energy and carbon, but critics are right that it ultimately is a tax on everything. An automation tax needs to find a way to specifically tax the gains made by putting humans out of a job, similar to what organized labour achieved for a generation of longshoreman when containerization killed their industry in the 60s and 70s (as documented in Marc Levinson's excellent book The Box).

Re: Taxing Families Like Companies

#52

Post by snidane »

Much better taxing solution: Single monopoly tax. Make companies/individuals pay proportionally for monopolistic privileges they get from rest of the society.

Examples:

- network industries (railroads, pipes, energy) will always be naturally monopolistic. There can't ever be efficient competition. So embrace the monopoly and make the receivers pay. Nice example is AT&T monopoly and a "monopoly research" tax imposed on it, resulting in Bell labs and great innovations of 2nd half of 20th century

- Exclusive access to electromagnetic spectrum. It has to be regulated to monopolistic access, otherwise congestion. Companies with access pay for privilege in an auction repeating after several years

- Exclusive access to natural resources. Why should a mining company have indefinite access to some portion of land, just because it was there first? Let them participate in a recurring auction, which would maintain proper pricing for the exclusive mining rights when there are many other such companies competing for it

- Land ownership. Similarly, why should someone have the privilege to exclusively own a parcel in prime area without paying, just because he was there first. Inefficient allocation. Actually - unfair at that. Infrastructure buildout in the area paid by income taxes of people increases value of his exclusive ownership rights. The result is redistribution of income of people who are prevented from accessing that parcel to the one receiving the privilege of exclusive parcel use. Shouldn't it be the exact opposite?

This is not new by any means. This idea was supported by one of the most influential economic movement of 19th century - single taxers. Every time it has been implemented it brought the promised results, because it hits the heart of the wealth inequality problem. It always ceased to function long term due to politics of people who got more well off because of it and didn't want to share the wealth with others - namely with future generations.

Singapore, Hong Kong and sudden growth of other asian tigers in 20th century can be considered the movement's largest documented success. China missed its chance of lifetime with Mao's cultural revolution. Sun Yat-sen was a huge fan.

The monopoly-busting progressive movement of early 20th century can also be considered its influence. It perhaps is not a coincidence that the original progressivists were fans of the pivotal book Progress and Poverty by Henry George. Shame that "progressive" drifted with its meaning somewhere else, similar to words "liberal" or "agile".

Re: Taxing Families Like Companies

#53

Post by rhn_mk1 »

jandrewrogers wrote: post #6

This isn't a new idea, the major complication is that the definition of "family" is much more fluid and fuzzy, both in practice and legally, than a corporation. When you create a corporation, there are bright lines as to what is inside the box and what is outside, plus a large number of rules as to how corporate structures can be composed and decomposed in virtually all cases. That said, the tax code for people makes…

Could you point out those assumptions?

Re: Taxing Families Like Companies

#54

Post by fma »

LocalH wrote: post #28
prepend wrote: post #2

> As a result, families pay a disproportionate share of federal tax receipts This is simply because companies pay money to individuals who then pay taxes. This is a feature not a bug as taxing companies is less efficient from just having employee pay as a deduction that gets taxed downstream. Trying to tax this money before it gets to employees would result in double taxation as the company would pay and the individu…

>This is a feature not a bug as taxing companies is less efficient from just having employee pay as a deduction that gets taxed downstream. Trying to tax this money before it gets to employees would result in double taxation as the company would pay and the individual would then pay again. So the corporation gets to enjoy low tax obligation, and push that obligation onto their employees. And that's a feature? The sys…

Yep....the claim is companies create jobs thus should have tax benefits. But I'm pretty sure the only reason that company can create job is because I purchased items from them.

If a company creates jobs because good/services were purchased, then why not empower the purchaser with more purchasing power? In a supply/demand economy, the supply side is reaping the benefits...if you give benefits to the demand side then that's labeled as making people lazy LOL.

70% of the GPD is driven by personal consumption but we're often told that we are meaningless to the economy and should give tax benefits to companies to "create" jobs.

(https://www.thebalance.com/personal-consumption-expenditures...)

Re: Taxing Families Like Companies

#55

Post by marcus_holmes »

mikepurvis wrote: post #35
fbelzile wrote: post #26

Earlier quoted context omitted.

I think a big problem is that the number of employees required to run many types of businesses has been steadily decreasing over time as technology improves. McDonald's for example went from 440,000 employees to 205,000 from 2012 to 2019 [1]. Multiply that out to include manufacturing companies and it's pretty easy to find the reason governments are strapped for cash. Maybe it's time to tax automation? [1] https://ww…

> Maybe it's time to tax automation? 1000% yes; I work in industrial mobile robots and it's obvious that governments need to find a way to capture some of the value which is being created there, particular when it's a more-or-less direct trade of a wage-earning employee for a one-off capital investment. Are there are any major proposals yet for how this might work, or has already worked? The "existing" section on thi…

UBI is the only one that makes sense to me.

There has to be a domestic market of people buying stuff for the rest of the economy to exist. If all the people are automated out of jobs, then that domestic market has to be provided by UBI. The funds for that provision have to come from corporate taxes. Probably a tax on capital spending or depreciation - if you're replacing labour with capital and the government relies on taxes on labour for its revenue, then the government has to switch to taxing capital.

If there was a way of not involving the government in this, that would probably work better. The dream, of course, being The Culture - no government at all, just people acting in their enlightened self-interest in a post-scarcity world.

Re: Taxing Families Like Companies

#56

Post by xapata »

slg wrote: post #44
xapata wrote: post #40

Earlier quoted context omitted.

What if you don't earn income, would you say that the nanny's wage is lower?

Money doesn't magically appear. The money was earned at some point and likely went through some type of income or estate tax.

Fair. However, because marginal rate differs by year, now we need to know what year's money that nanny's wage is being paid out of to make that 50 vs 70 calculation.

Re: Taxing Families Like Companies

#57

Post by sokoloff »

bpodgursky wrote: post #16
sokoloff wrote: post #4

Of all the potential problems facing our species, running out of new people does not seem to be a concern at all. I’m not surprised that during a worldwide pandemic, our birthrate fell in a society marked by ready access to effective contraception. I don’t think it’s reasonable to draw a straight line through that and worry about declining population, but I suspect this was written to be read about as reasonably as “…

You only feel this way because you aren't paying attention to the demographics of eastern europe and east asia. If it was simply a matter of "running out of new people" it might be OK -- a gradual decrease in population of 50% over a few generation could be sustainable. That's not the issue The core problem is long lifespans creating a massively inverted age pyramid. At the extreme, the emerging pattern in urban Chin…

It would be exceedingly rare for 1 child to be economically supporting 14 ancestors.

Presumably the typical period of economic support is around 25 years, meaning the 2 30 year-old parents and 4 55 year-old grandparents of the perhaps 5 year-old child would be supporting the 8 80 year-old great-grandparents (or the subset of them that are still alive).

6 adults supporting <= 8 seems much less dire than 1 supporting 14.

Re: Taxing Families Like Companies

#58

Post by ianai »

fbelzile wrote: post #26
prepend wrote: post #2

> As a result, families pay a disproportionate share of federal tax receipts This is simply because companies pay money to individuals who then pay taxes. This is a feature not a bug as taxing companies is less efficient from just having employee pay as a deduction that gets taxed downstream. Trying to tax this money before it gets to employees would result in double taxation as the company would pay and the individu…

I think a big problem is that the number of employees required to run many types of businesses has been steadily decreasing over time as technology improves. McDonald's for example went from 440,000 employees to 205,000 from 2012 to 2019 [1]. Multiply that out to include manufacturing companies and it's pretty easy to find the reason governments are strapped for cash. Maybe it's time to tax automation? [1] https://ww…

There could easily be a tax for eliminating someone's position entirely. i.e. Incentivize having way more people than needed to watch the machine do its thing.

Ok radical idea - I'm starting to think of these ever larger/automated companies as having "won" the capitalism game or discovered a fundamental solution to some problem. But the economy doesn't have a great endgame scenario for such entities. One option might be regulating them as public utilities instead of corporate entities. i.e. The point of making a huge corporation changes from eternally extracting rent to becoming so ubiquitous that society adopts it as a fundamental exercise like Fire Departments or roadways.

Re: Taxing Families Like Companies

#59

Post by akiselev »

irrational wrote: post #27
erostrate wrote: post #22

Earlier quoted context omitted.

> This is simply because companies pay money to individuals who then pay taxes. This is a feature not a bug as taxing companies is less efficient from just having employee pay as a deduction that gets taxed downstream. So if a company has a large revenue that it mostly reinvests and pays low salaries, very little tax would be paid on this revenue, and that seems okay to you? > People who complain about “companies not…

13B in revenue or profit? That is, after paying their employees, the cost of buildings and equipment, capital costs, etc. how much was left over? What percentage of that did they pay in taxes?

Are you suggesting that Amazon's revenue from customers in the United States was $13 billion in all of 2019? That's a fraction of AWS revenue, let alone their retail business.

Re: Taxing Families Like Companies

#60

Post by klipt »

encoderer wrote: post #15
prepend wrote: post #2

> As a result, families pay a disproportionate share of federal tax receipts This is simply because companies pay money to individuals who then pay taxes. This is a feature not a bug as taxing companies is less efficient from just having employee pay as a deduction that gets taxed downstream. Trying to tax this money before it gets to employees would result in double taxation as the company would pay and the individu…

You’re talking about why we can’t treat corporations like families with higher tax rates. To me the more interesting question is more about treating families like corporations. We had a nanny for a year. She made about $50k, but I had to pay her with after-tax income so the actual cost of the nanny was closer to $70k of my pretax income. This is the precise double taxation you’re talking about. Yes, higher income peo…

> She made about $50k, but I had to pay her with after-tax income so the actual cost of the nanny was closer to $70k of my pretax income. This is the precise double taxation you’re talking about.

That's just payroll taxes, which fund things like your nanny's social security and Medicare, and corporations have to pay them too.

If the nanny was on a corporation's payroll it would cost them 70k too, so if you paid the corporation for her services, you'd still have to pay more than 70k for that corporation to make a profit.

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