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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

#171

Post by crazygringo »

const_cast wrote: post #167
crazygringo wrote: post #59

Earlier quoted context omitted.

> Unironically yes. Do you realize that won't produce more revenue, it will just bankrupt companies and produce less revenue? Companies are already incentivized not to waste by competition. That's the whole point of capitalism. You don't need taxes for that.

A lot of companies are essentially on the welfare of their investors, who may or may not be stupid. Many companies purposefully do not turn a profit, because they're aiming to cheat the market and sell at a loss to push competitors out. A lot of very successful companies operate or have operated this way, and it's incredibly dangerous for the market. It causes the erosion of small businesses and further promotes mono…

> We can try to disincentive that by saying, "hey, you don't want to turn a profit, that's fine, but you still have to pay up".

That doesn't make any sense. You're saying, instead of consumers getting lower prices, they should pay more and that money should go towards taxes. That means, essentially, that you're asking the consumers to pay taxes.

What you're describing is predatory pricing. People have mixed views on that, but if you want to address it, then address it directly. Taxing revenue is a strange, roundabout way of doing it that is going to harm a ton of non-predatory businesses without actually changing the market dynamics of predatory pricing -- because your taxes will be affecting the non-predatory companies even more! Since they, by definition, charge more money and therefore will be paying more taxes on the greater revenue.

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

#172

Post by const_cast »

crazygringo wrote: post #171
const_cast wrote: post #167

Earlier quoted context omitted.

A lot of companies are essentially on the welfare of their investors, who may or may not be stupid. Many companies purposefully do not turn a profit, because they're aiming to cheat the market and sell at a loss to push competitors out. A lot of very successful companies operate or have operated this way, and it's incredibly dangerous for the market. It causes the erosion of small businesses and further promotes mono…

> We can try to disincentive that by saying, "hey, you don't want to turn a profit, that's fine, but you still have to pay up". That doesn't make any sense. You're saying, instead of consumers getting lower prices, they should pay more and that money should go towards taxes. That means, essentially, that you're asking the consumers to pay taxes. What you're describing is predatory pricing. People have mixed views on…

The problem is that our current tax system incentivizes the kind of venture-capital fueled market manipulation we see. Companies actively try to optimize for the lowest amount of profit, similarly to how the ultra-wealthy try to optimize for the lowest income.

We have some methods to address predatory pricing but I think it's obvious they pretty much don't work on any scale that matters. When I look around the modern US, I see the least amount of successful small businesses I've ever seen in my lifetime. We're living in a corporate hellscape, and more and more business look to rent-seeking anti-consumerist behavior.

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

#173

Post by colechristensen »

crazygringo wrote: post #152
colechristensen wrote: post #77

Earlier quoted context omitted.

>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. They do have the profit in that the money they make doing things exceeds the money they spend to do the thing, but though a series of tricks of varying legality and ethics they make it so on paper they do not have "profit" and therefore successfully avoid taxes. Amazon reported losses for the fir…

You seem to be misunderstanding. Amazon paid no corporate taxes because it was reinvesting everything into growth. There's nothing illegal or unethical about that – in fact it's not a bug, it's a feature. We incentivize that because it means that Amazon winds up paying more taxes in the long run. Once it no longer has growth opportunities but is just raking in the profits, it winds up paying tons of taxes. Way more t…

I don't really think we needed to incentivize amazon to grow to dominate the market reaching 40% total retail ecommerce market share and destroying many competitors that weren't trying to race to monopoly. The companies taking profit not trying to conquer the world were doing the right thing and were put to disadvantage by the tax code. Tax revenue is not maximized by allowing rotating monopolies that only pay taxes for the relatively brief period between when they're growing and dying.

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

#174

Post by jazzyjackson »

merth wrote: post #75
jazzyjackson wrote: post #66

Earlier quoted context omitted.

I feel like this is a myth people share without ever looking into. You service the debt with income that you make and pay tax on the income you service the debt with

They do not need to service debt using taxable income, they can roll it over indefinitely or until death, at which point the tax obligation disappears due to the stepped-up basis (capital gains reset on death)

I don't know what you mean by "roll it over", take out more loans to pay the previous ones? Just not make payments?

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

#175

Post by PaulDavisThe1st »

2Gkashmiri wrote: post #130
PaulDavisThe1st wrote: post #127

Earlier quoted context omitted.

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.

In which case, when the company distributes profits to shareholders, that is a transfer between people, and is taxed like other similar transfers. There is no double taxation - the company (one legal person) is taxed on income/profit, the shareholders (different legal persons) are taxed on the money they receive from the company.

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

#176

Post by mulmen »

vel0city wrote: post #134
mulmen wrote: post #128

Earlier quoted context omitted.

HSAs carry over from year to year. The only limit is contribution amount. https://www.fidelity.com/learning-center/smart-money/hsa-con...

FSAs don't. https://www.healthcare.gov/have-job-based-coverage/flexible-...

Sure but you do have a tax advantaged way to cover medical expenses.

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

#177

Post by TZubiri »

almosthere wrote: post #131
TZubiri wrote: post #48

Earlier quoted context omitted.

But that's not paid by the corp, it's paid by the employee.

its window dressing - either way it's going to be paid. no one is going to win out either way if its moved, the gov still gets its money.

It is what it is, and it's not what it is not

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

#178

Post by 2Gkashmiri »

PaulDavisThe1st wrote: post #175
2Gkashmiri wrote: post #130

Earlier quoted context omitted.

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.

In which case, when the company distributes profits to shareholders, that is a transfer between people, and is taxed like other similar transfers. There is no double taxation - the company (one legal person) is taxed on income/profit, the shareholders (different legal persons) are taxed on the money they receive from the company.

yep

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

#179

Post by _DeadFred_ »

jazzyjackson wrote: post #66
merth wrote: post #60

Earlier quoted context omitted.

I think because they don't get any dividend to trigger income tax, instead they get a loan against their shares and spend that and roll over the debt to infinity.

I feel like this is a myth people share without ever looking into. You service the debt with income that you make and pay tax on the income you service the debt with

Bro, this is HN. Most of us here know at least one person who does this. It seemed pretty popular with the early Facebook folks. So this talking point that this is a myth isn't going to work here.

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

#180

Post by crazygringo »

const_cast wrote: post #172
crazygringo wrote: post #171

Earlier quoted context omitted.

> We can try to disincentive that by saying, "hey, you don't want to turn a profit, that's fine, but you still have to pay up". That doesn't make any sense. You're saying, instead of consumers getting lower prices, they should pay more and that money should go towards taxes. That means, essentially, that you're asking the consumers to pay taxes. What you're describing is predatory pricing. People have mixed views on…

The problem is that our current tax system incentivizes the kind of venture-capital fueled market manipulation we see. Companies actively try to optimize for the lowest amount of profit, similarly to how the ultra-wealthy try to optimize for the lowest income. We have some methods to address predatory pricing but I think it's obvious they pretty much don't work on any scale that matters. When I look around the modern…

> The problem is that our current tax system incentivizes the kind of venture-capital fueled market manipulation we see.

It really doesn't at all. It's quite neutral in that regard.

> Companies actively try to optimize for the lowest amount of profit

This is self-evidently false. Companies actively optimize for the greatest total profit, considering the net present value of future profits. This does mean delaying profits if reinvesting them is expected to yield growth. This is desirable.

> We have some methods to address predatory pricing but I think it's obvious they pretty much don't work on any scale that matters.

Honestly it hasn't been a major policy priority. They could absolutely work if implemented, but not everyone agrees it's a problem that needs solving. Many people consider it to be hostile to a free market. I'm not taking sides here.

> When I look around the modern US, I see the least amount of successful small businesses I've ever seen in my lifetime.

The major culprit here is technology and economies of scale. The tax code has some quirks, but it is essentially irrelevant here. Even if predatory pricing accelerates the demise of some small businesses, they weren't going to last much longer anyways. Which is why predatory pricing isn't actually nearly as common as many people think, and why it's not always viewed as a problem. E.g. Uber and Lyft engaged in it for years, but traditional taxis are still in business. Small businesses have been disappearing because they simply don't have economies of scale. Their products cost more so people don't go there. It's that simple. Nothing to do with the tax code.

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