Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea • Hacker News Board

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#361

Post by tstrimple » Thu, Oct 22, 2020, 7:07 PM UTC

SheepSlapper wrote: post #320

tstrimple wrote: post #195

Earlier quoted context omitted.

No one "forms their own opinion" in a vacuum. Your beliefs and opinions are influenced in a multitude of ways by your environment including the media you consume. Asking how the biases you have were formed is something everyone should be asking of themselves, and certainly doesn't seem like an inappropriate question.

Of course opinions are shaped by outside factors, but the reason those kind of responses are annoying is because they're just so... uninteresting. I'm not the guy from above, but responding with "I disagree with you so are you sure your opinions are your own" is dismissive and doesn't lead to a more interesting or thoughtful discussion. Instead, asking WHY he believes gives you the opportunity to engage in the discus…

How do you get at how a person has formed their opinions without asking and it being taken as a slight? There was no dismissal or disagreement. Just an on-topic question.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#362

Post by davrosthedalek » Thu, Oct 22, 2020, 7:08 PM UTC

exabrial wrote: post #107

If the US Government were a charity, the rating would be 0-stars. Nearly all tax money is pocketed by special interests. The usual arguments "yeah what about fire and police" account for a rounding error in tax collection while the vast majority is simply pocketed by friends of your elected officials. You know what'd be nice? Consent. I'd like to be consented before my value is forceful removed from me. I'd like to p…

I think Italy has something like that for the "church tax". You can select whether you want that money to go to a church or a different non-profit, but you have to pick something and pay.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#363

Post by gamblor956 » Thu, Oct 22, 2020, 7:09 PM UTC

AnthonyMouse wrote: post #284

tonystubblebine wrote: post #6

As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high, I see that as an incentive to hide the profits by investing in the future. I know this isn't always the case with everyone. And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them. But this incentive is so blatantly obv…

> But when taxes are high, I see that as an incentive to hide the profits by investing in the future. That isn't really the societal win you're making it out to be though. If you "pocket" profits, i.e. pay them to investors, the investors just go out and invest them again in something else. Which is actually better, because it reduces concentration of wealth inside of corporations. Instead of one corporation growing…

So if you increase the domestic corporate tax rate, investment moves from domestic companies to things like real estate speculation and foreign companies, which may not be desirable.

The reverse is actually true. Historically, the lower the tax rate, the more investment you get in real estate speculation and other passive income streams because it's now more efficient to simply not invest in productive activities when you can just get effectively free money without doing any work.

The higher the tax rate, the more businesses invest in actual business activities, because they get more expenses they can use to offset income they may earn, and because passive activities generally don't generate enough of a return to be worth the investment compared to (re)investing in an actual business.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#364

Post by [deleted] » Thu, Oct 22, 2020, 7:09 PM UTC

tonystubblebine wrote: post #6

As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high, I see that as an incentive to hide the profits by investing in the future. I know this isn't always the case with everyone. And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them. But this incentive is so blatantly obv…

[deleted]

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#365

Post by davrosthedalek » Thu, Oct 22, 2020, 7:10 PM UTC

cossatot wrote: post #351

maerF0x0 wrote: post #121

Earlier quoted context omitted.

If we tax wealth, people will be incentivized to generate non-wealth things. Why buy a stock if Biden will take 1% of it annually? May as well just buy rapidly depreciating status symbols instead.

Because the stock may still appreciate at 6% annually. And, depending on what is actually done with the money that Congress has decided to appropriate, it may be redistributed to consumers who will buy more of whatever that publicly traded company produces, or pay off the national debt, or do other things that can increase the health and growth of the economy. (Or not.)

More drones, more likely than not.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#366

Post by conanbatt » Thu, Oct 22, 2020, 7:12 PM UTC

ish wrote: post #190

Open Question: Why don't taxes actually go down over time? Who is capturing the value generated by productivity gains that might make things cheaper to run?

This is a pet-peeve of mine. There's a part of taxes that has to grow with the economy size because the service is provided by people and they need to be compensated at market rate. Say the army, education, etc. But of course there is a bunch of things the government does that should be getting cheaper, like administration of services, etc.

Its the problem with income-taxes, naturally government increases expenditures without need for legislation. It's a bad rule. This is why I think government should be financed by flat-expenditures: sum of costs / people and send a bill. This framing would make government very sensitive to increase of expenditures.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#367

Post by SilasX » Thu, Oct 22, 2020, 7:12 PM UTC

gamblor956 wrote: post #318

SilasX wrote: post #260

Earlier quoted context omitted.

>The more taxes you have on corporate income, the higher the incentive for corporations to invest in the company, so they can avoid paying taxes. And the lower the incentive to make new investments. And the higher the incentive to engage in socially wasteful tax-avoidance accounting.

Actually, history bears out that higher tax rates result in corporations re-investing more of their profits in the company and less in tax-avoidance accounting. The difference being that the former is low risk and can grow the business, while the other has a good chance of triggering penalties that wipe out the savings and could even result in jail time for one or more executives. Consider that the historically highe…

>Actually, history bears out that higher tax rates result in corporations re-investing more of their profits in the company and less in tax-avoidance accounting.

I'm just imagining the 1950s cottage industry in compensating executives with a company car, personal assistant outside of work, etc before the IRS caught up?

And all the present day shenanigans with Amazon/Apple etc hiding profits in Ireland?

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#368

Post by gamblor956 » Thu, Oct 22, 2020, 7:12 PM UTC

senko wrote: post #212

vidanay wrote: post #168

Earlier quoted context omitted.

This is something that I have not seen very much research about (not saying it doesn't exist.) When taxes are high, then "wealthy" people will search for a method to reduce their tax burden. For business owners and employers, there are two large options for reducing tax burden - increasing employee salary, and increasing re-investment (R&D, infrastructure, etc). Both of which are commonly cited as deficient in modern…

For sufficiently large companies, a third option is to create a global corporate structure that minimizes the tax burden. If lawyers + accountants + other fees is considerably less than the tax (which is probably the case for most mid-sized or larger companies), becomes a no-brainer for them. See https://en.wikipedia.org/wiki/Double_Irish_arrangement for a historic example.

It used to be a no-brainer to go overseas.

But the Double Irish (and similar structuring) is no longer permitted and would be treated as an illegal tax scheme today. (It's grandfathered in for companies already using the structure.)

Generally, between BEAT, GILTI, global transfer pricing policies, and the rise of nationalist economic policies, it's now riskier and more expensive to switch to a global corporate structure than to just keep everything in the US.

I used to do a lot of outbound structuring work, and now (post TCJA) almost everything is inbound, compliance, or restructuring existing foreign operations to more tax-friendly foreign jurisdictions (i.e., moving out of China to Vietname, etc.)

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#369

Post by brewdad » Thu, Oct 22, 2020, 7:13 PM UTC

vkou wrote: post #180

czbond wrote: post #169

Earlier quoted context omitted.

I should have been more literal - 50% of federal taxpayers.

The median household income in the US is $68,000, I'm pretty sure that household pays federal taxes. Should we move the goalposts again?

At that income level, a married couple with two children and childcare expenses could easily end up with zero tax bill and maybe even paying negative income tax. Standard deductions, child tax credit and childcare expense credits get you there without any exceptional circumstances.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#370

Post by koolba » Thu, Oct 22, 2020, 7:14 PM UTC

gen220 wrote: post #307

koolba wrote: post #211

Earlier quoted context omitted.

> You pay taxes on all of your income. But businesses only pay taxes on their profit. It's a big, big difference that changes the incentives. It’d be insane to have it any other way for businesses. Whole swathes of low margin businesses would be impossible to operate. For example a super markets average margins are 3-5%. Corporate tax is (generally) on profits because you can deduct costs. It allows for the flow of m…

> The real scam is when things like health insurance premiums are deductible for a company but not for an individual. To be fair, that this "scam" is still alive today is mostly by accident. It stems from WWII times, when stateside laborers were uniquely low in supply and high in demand, and when labor had ridiculous bargaining power. Laborers couldn't really ask for higher wages, because that was politically impossi…

> Regardless of the interesting history, I agree with you, it should be universally deductible.

I’m for it being universally not deductible. Or at least not deductible for corporations.

The idea is that it forces everyone onto a common public individual market as there would be no tax or cost advantage of corporations to self-insure or provide insurance.

Longer term this gives better mobility to workers and lowers costs of the individual market by bringing in 100M+ healthy people (which lowers the average risk weight cost of insurance).