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Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

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Re: Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

#101

Post by FredPret »

jshier wrote: post #74
FredPret wrote: post #65

Here's some interesting thinking about different kinds of tax: https://economicsobservatory.com/which-taxes-are-best-and-wo... > "Raising the income tax rate has by far the least negative effect on GDP. In the long run, the simulation shows that the economy pretty much returns to baseline levels, with a slight increase in potential output. The opposite is true for corporation taxes. A rise in the corporation tax rate…

I really need a good explanation for the assertion about corporate taxes, as it makes no real sense. Frankly, it sounds like corporate propaganda.

I think the idea is that corporations are the most efficient entities in the economy in terms of allocating capital. They have to be, or they go under. And when they have extra cash, investors tend to demand that it be deployed or paid back to them as dividends. So the natural incentive is for companies to run with the leanest possible capitalization and generate the biggest possible profits.

So when you take cash away from companies and allocate it to the government, you're reducing the overall capital efficiency of the economy a lot.

If you set corporate taxes to 0%, you can still keep the same size government budget if you then tax dividends and executive salaries, except you'll take the money away from less efficient entities (individuals). By the way, this also removes the incentive to deduct all sorts of personal expenses from your business tax, because there isn't any.

And if the government wants to reign in this or that monopoly or incentivize certain activities, it can do so via regulation rather than tax breaks / increases.

Same level of government budget & control, higher economic growth.

Re: Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

#102

Post by ethansimmons »

crazygringo wrote: post #54
atbpaca wrote: post #18

This number is actually a shame in the sense that it shows how little taxes are paid by other big companies.

No it's not. It shows how much more profitable Berkshire Hathaway has been than other big companies. Which is what it's known for. You'd never want other companies paying as much tax if they didn't have the profit to back it up. It would bankrupt them.

I also think the industries that Berkshire is generally in can't take advantage of some tax advantages that other companies are able to. Right?

Re: Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

#103

Post by ummmzokbro »

PaulDavisThe1st wrote: post #79
monero-xmr wrote: post #72

Earlier quoted context omitted.

The correct corporate tax rate is zero, or the correct income tax rate is zero. Double taxation on employees of corporations is ludicrous and warping. IMO corporate tax should be zero, and we tax individual people instead.

For the hundredth time, it is not double taxation. Money is taxed (generally) whenever it moves between parties. You paid tax on your income; you give (some of) it to someone else for goods or services - they pay taxes on it again. That's not double taxation, that's how tax works. Money flows to the corporation. They pay some to employees, who pay tax on their income. They (might) pay some to shareholders, who (might…

It very much is double taxation and to state otherwise seems disingenuous.

Taxing corporate profits is layering an additional (hefty) tax on its beneficiaries - people.

Search 'double taxation' and you will see this term is generally accepted by financial professionals in many jurisdictions to describe the above scenario where a corporation makes a profit, is taxed at the corporate level and then additional taxes must also be paid by the receiver of the already taxed funds (ex. shareholder, bondholder).

Re: Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

#104

Post by derefr »

vel0city wrote: post #47
gruez wrote: post #32

Earlier quoted context omitted.

>could count housing expenses, food expenses, education costs, healthcare, entertainment, vacations, vehicle purchases That's what the standard/itemized deduction is supposed to represent. The problem is that we obviously can't let you deduct everything, because if you can deduct everything there would be nothing to tax, aside from savings. And you really don't want to tax savings because savings (also known as "inve…

> That's what the standard/itemized deduction is supposed to represent. If they wanted you to deduct housing costs they'd just let you deduct housing costs. Instead they play games about mortgage interest deductions because they want to incentivize certain kinds of living arrangements over others and give handouts to some voters but not others. I agree the idea of only having households pay taxes on savings is pretty…

> Instead they play games about mortgage interest deductions because they want to incentivize certain kinds of living arrangements over others and give handouts to some voters but not others.

Your "they" is doing a lot of work here.

In reality, this system isn't top-down; it's bottom-up. Influential groups of voters (corporations, sure, but also just various stripes of "rich people" — and even upper-middle-class people at the municipal level) go out and lobby their local and regional representatives to get exceptions carved out for them (and, mostly coincidentally, people like them.)

The voters who don't get handouts are the ones who have no political influence.

(Fun fact: our current situation with capital-gains taxes, was an attempt to "rationalize" a system that was previously similarly cronyist in shape. It used to be that there were particular exceptions carved out for investment classes A and B and C that rich-and-influential people invested in, and none carved out for your regular Joe. People got mad, and the government's solution — rather than removing the carve-outs — was to just make them equally accessible to everyone.)

Re: Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

#105

Post by PaulDavisThe1st »

ummmzokbro wrote: post #103
PaulDavisThe1st wrote: post #79

Earlier quoted context omitted.

For the hundredth time, it is not double taxation. Money is taxed (generally) whenever it moves between parties. You paid tax on your income; you give (some of) it to someone else for goods or services - they pay taxes on it again. That's not double taxation, that's how tax works. Money flows to the corporation. They pay some to employees, who pay tax on their income. They (might) pay some to shareholders, who (might…

It very much is double taxation and to state otherwise seems disingenuous. Taxing corporate profits is layering an additional (hefty) tax on its beneficiaries - people. Search 'double taxation' and you will see this term is generally accepted by financial professionals in many jurisdictions to describe the above scenario where a corporation makes a profit, is taxed at the corporate level and then additional taxes mus…

It is generally accepted by financial professionals with a particular political and ideological outlook on the tax system.

You do some work, you earn income, which presumably (or hopefully) exceeds your perception of the cost of doing the work to you. You pay taxes on that. You then give the money to some third party, as a gift, for goods & services, to repay a debt, or whatever reason. Subject to the stipulations of the tax code, the recipient pays taxes on whatever they receive (e.g. for gifts there is a threshold, for debts they will pay tax only on the interest received etc. etc.). Nobody calls this double taxation.

A corporation does what it does, earns income, which hopefully exceeds the cost of doing whatever it is that it does. They pay taxes on that. They then give the money to some third party, as a dividend or bond repayment or whatever other reason. Subject to the stipulations of the tax code, the recipient pays taxes on whatever they receive. Some people try to call this double taxation.

Trying to dress this up with concepts like "the shareholders receive the profit, but taxes have already been paid on that" is just missing the point entirely: our tax system taxes money when it moves, not based on how it is labelled (at least when it works as intended).

Re: Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

#106

Post by jinnert »

paxys wrote: post #58
crazygringo wrote: post #54

Earlier quoted context omitted.

No it's not. It shows how much more profitable Berkshire Hathaway has been than other big companies. Which is what it's known for. You'd never want other companies paying as much tax if they didn't have the profit to back it up. It would bankrupt them.

Now apply that same logic to people.

[flagged]

Re: Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

#107

Post by csoups14 »

PaulDavisThe1st wrote: post #87
bobxmax wrote: post #4

Earlier quoted context omitted.

I always find "fair share" to be an odd argument. Who decides what's a fair share?

Pareto optimality would be ideal, but across an entire economy, that's almost impossible to measure. In reality, there is no objective definition of "a fair share", there is only the intent expressed in the tax code (and people of course argue over what the intent "really is"). If people and/or corps. are paying taxes following that intent, then for all practical purposes, they are paying their "fair share".

A realistic fair share is probably some colloquial measure of people and corporations being equally angry about their taxes and equally angry about others not paying their fair share. It's my personal opinion that corporations have it way too good in the current system, specifically because they've spent millions to find ways to save billions, which people cannot reasonably do, and because they've also spent millions buying our political processes off to ensure tax laws don't meaningfully change.

Re: Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

#108

Post by kristopolous »

gruez wrote: post #94
PaulDavisThe1st wrote: post #89

Earlier quoted context omitted.

The purpose of IRAs is clear from the name - Individual Retirement Account. It was intended to allow individuals to save more effectively for their own retirement, and the justification for it centered around providing incentives for people who might not otherwise save enough. At least, that was the publicly delivered account. For a billionare who can already retire in comfort few will ever know to be using any kind…

>For a billionare who can already retire in comfort few will ever know to be using any kind of IRA for any purpose is outside of the publicly given justification for their existence. So if you're sufficiently rich (by some arbitrary amount), you're now a "tax evader" and "not paying your fair share"? Can we say the same about other deductions, like the standard deduction? I doubt you'll be able to find a politician t…

The authors of the Roth IRA, which initially had a $2,000 annual contribution cap were not intending it to be used by someone with $21,800,000,000 to avoid taxes on $5,000,000,000.

I really don't know how this is difficult unless you're trying to be a troll or somehow miraculously don't comprehend how numbers work.

Re: Berkshire Hathaway Now Pays 5% of All Corporate Income Taxes in America

#110

Post by hnburnsy »

monero-xmr wrote: post #72
atbpaca wrote: post #18

This number is actually a shame in the sense that it shows how little taxes are paid by other big companies.

The correct corporate tax rate is zero, or the correct income tax rate is zero. Double taxation on employees of corporations is ludicrous and warping. IMO corporate tax should be zero, and we tax individual people instead.

Yup, only three parties pay corporate taxes; employees with lower salaries, consumers with higher prices, or shareholder via dividends, and all three of those parties are you and me.
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