Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

barchart.com

Post reply on HN
Print view View original

121–130 of 183 posts

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

#121

Post by MichaelZuo »

TZubiri wrote: post #49
MichaelZuo wrote: post #8

The corporate tax system is so complex it seems impossible to actually figure out what that 5% means though. e.g. They could be highly concentrated in industries where tax accounting tricks are too hard to do effectively.

Corp income tax means the tax (30%) on profit(income-expenses) retained (not withdrawn to shareholders) year over year. Berkshire hathaway is famous for not paying dividends and keeping profits and never selling shares, so this makes sense. Most companies withdraw or reinvest as much profit as possible to reduce this tax.

How does this relate to my comment?

The 5% is a relative measure against all other corporations in the USA.

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

#122

Post by tacticalturtle »

dh2022 wrote: post #68
peterbecich wrote: post #52

Why is a corporate tax necessary? It would be simpler to increase the income tax. EU has low corporate taxes and higher income taxes i.i.r.c.

By income taxes do you mean personal income tax? In any case, corporations benefit from airports / roads / ports / law enforcement / defense / education / etc... which are funded by local / federal governments. So corporations have a moral duty for to contribute to these expenses by paying taxes. (But it is only a moral duty, and not a legal obligation. So corporations end up paying nothing, or next to nothing.)

But why not just tax the owners of the corporation more to accomplish those same goals?

Why doesn’t the moral obligation rest with the owners of the company, rather than this legal construct that was created on paper?

Corporations aren’t rich people - they are machines that allocate capital and eventually return the money with profit to the owners. They can be owned by rich people, and we can tax them.

When we add taxes on corporations, we introduce compliance issues, accounting and forecasting requirements - all complications that take away money from the actual good things we can get from corporations - jobs in the community, better product development, etc.

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

#123

Post by antisthenes »

monero-xmr wrote: post #112
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…

Why would I want taxes to paid every single time it moves from entity A to entity B? All you do is decrease economic activity, in the aggregate, in a negative compounding loop

Because if you don't pay taxes for infrastructure and public services, economic activity doesn't just decrease, it grinds to a halt.

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

#124

Post by PaulDavisThe1st »

csoups14 wrote: post #107
PaulDavisThe1st wrote: post #87

Earlier quoted context omitted.

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…

Yes, and in fact the entire purpose of a progressive marginal tax system is that "everyone feels the pain of taxation" equally. It recognizes that a fixed percentage, even with a threshold, feels very different if you earn poverty-level wages than if you earn 10000 times that.

And that's what our tax system is designed around.

Corporations, and specifically their status (or otherwise) as "persons" complicates the picture quite a bit.

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

#125

Post by gamblor956 »

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 definitely is double taxation. (1st level: corporation, 2nd level: shareholders).

But the point is that the owners accept double taxation in exchange for the protections of the corporate form, like a legal liability shield, treatment of ownership interests as capital assets subject to lower tax rates on sale, deferral of taxation of shareholders' allocable shares of the business' income (as represented by dividends), etc.

A corporate tax rate is good policy. The answer to how high that tax rate should be has split families and friends for decades. Higher corporate tax rates drive substantially increased R&D spending and capital investments (and it's not even close; its easily 4x-5x the amount invested when corporate tax rates are low). This apparent paradox is quite easy to explain: when corporate tax rates are high, corporations will increase their spending on deductible categories to reduce their taxable income, and thus the tax they pay. When tax rates are low, there's little to no incentive to due that.

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

#126

Post by monero-xmr »

antisthenes wrote: post #123
monero-xmr wrote: post #112

Earlier quoted context omitted.

Why would I want taxes to paid every single time it moves from entity A to entity B? All you do is decrease economic activity, in the aggregate, in a negative compounding loop

Because if you don't pay taxes for infrastructure and public services, economic activity doesn't just decrease, it grinds to a halt.

Why would shifting the taxation burden to people rather than corporations eliminate infrastructure and public services?

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

#127

Post by PaulDavisThe1st »

2Gkashmiri wrote: post #115
immibis wrote: post #113

Earlier quoted context omitted.

Actually it's a quadruple tax system since when you give your income to a plumber the plumber pays tax and when the plumber gives the income to his landlord the landlord pays tax.

Yes because there are multiple people. You. Plumbler. Landlord. Each person is a different person and pays income tax on "their income"

If shareholders are the same legal person as the corporation, what is the purpose of the corporation?

If the corporation shields the shareholds from many forms of liability, why should the shareholders be able to claim the same personhood when it comes to income and taxation?

If corporations are said to be able to have moral and religious beliefs (thanks, SCOTUS), and yet their shareholders are free to have other, different beliefs, how can they considered the same person?

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

#128

Post by mulmen »

vel0city wrote: post #56
mulmen wrote: post #33

Earlier quoted context omitted.

Is this a joke? That’s mostly how it works already.

Most of my health expenses, sure. Not necessarily all of them, unless I play games and live within allowed limits of tax advantaged savings accounts which might just eat my money at the end of the year. My vacations, car payments, food expenses, and housing expenses are absolutely not able to be written off. One part of my housing expenses may be able to be written off, but not anywhere near all of them. Some educati…

HSAs carry over from year to year. The only limit is contribution amount.

https://www.fidelity.com/learning-center/smart-money/hsa-con...

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

#129

Post by 2Gkashmiri »

immibis wrote: post #118
2Gkashmiri wrote: post #115

Earlier quoted context omitted.

Yes because there are multiple people. You. Plumbler. Landlord. Each person is a different person and pays income tax on "their income"

Are corporations people?

legal persons, yes edit: because they can sue and be sued in a court of law. you cannot sue "god" or "gravity" or "Pythagoras theorum"

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

#130

Post by 2Gkashmiri »

PaulDavisThe1st wrote: post #127
2Gkashmiri wrote: post #115

Earlier quoted context omitted.

Yes because there are multiple people. You. Plumbler. Landlord. Each person is a different person and pays income tax on "their income"

If shareholders are the same legal person as the corporation, what is the purpose of the corporation? If the corporation shields the shareholds from many forms of liability, why should the shareholders be able to claim the same personhood when it comes to income and taxation? If corporations are said to be able to have moral and religious beliefs (thanks, SCOTUS), and yet their shareholders are free to have other, di…

no. shareholders are not usually the same legal person.

a corporation is a distinct "legal person" because it goes through "incorporation" which breathes a legal life into a concept.

a person does, a corporation has legally perpetual existence because the shareholders can endlessly transfer their shares to other persons and on death the shares are given as inheritance.

Post reply on HN