41–50 of 183 posts
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What is a loophole? Legally avoiding taxes isn't cheating. What you're describing is tax fraud, and that's different from corporations using legal strategies to mitigate their tax burdens.
So is using cheat codes in a game also not cheating? It's part of the game after all.
But if I’m playing a multi-player game, there can be rules of that game that ban the use of cheat codes. Breaking those rules would be cheating.
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Fair means the same playing field, the same rules, the same consistent outcomes from all the corporations subject to these laws and regulations, and not just one of them who does the right thing. Exercizing loopholes is the opposite of fair. It puts those with the best cheating strategies ahead of those who play by the rules. Because you can catch the ref with his back turned doesn't make you a fair player.
What is a loophole? Legally avoiding taxes isn't cheating. What you're describing is tax fraud, and that's different from corporations using legal strategies to mitigate their tax burdens.
"A way of avoiding or escaping a cost or legal burden that would otherwise apply by means of an omission or ambiguity in the wording of a contract or law." - The American Heritage® Dictionary of the English Language, 5th Edition.
What they're describing is corporations using legal strategies to mitigate their tax burdens that you or I cannot do. Lobbying is legal, but you or I cannot lobby to any useful degree. Big-box store companies build their stores to be short-lived buildings, then will only sell them with a contract that says the next occupant cannot be a big-box store, then argue that since value is determined by what someone else will pay and nobody will pay much for the end of life of a short-lived store intended to be a shop but which now cannot be a shop, so their stores are low value and comparable to empty stores, therefore they shouldn't pay much tax on them. "In Wisconsin, new Gov. Tony Evers says his budget proposal will close the dark stores loophole in the state"[1].
> "Legally avoiding taxes isn't cheating."
Try arguing that you would only sell your houses with a stipulation that nobody can live in it, therefore you should pay the same taxes and rates that an empty lot would pay, and see if you still think that "legal is the same as right and fair".
[1] https://slate.com/business/2019/02/dark-store-theory-big-box...
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It means they're not exercising loopholes and legal sleight of hand to pay less.
What counts as a loophole though? IRA, almost by design is a way to shelter your investments from taxes. Is it a loophole to put your investments in an IRA to avoid taxes? What about when Peter Thiel puts his paypal stock in an IRA, and paid no taxes on his paypal exit?
https://www.currentfederaltaxdevelopments.com/blog/2018/7/12...
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Imagine if a household was only taxed on the money they managed to put away in savings and could count housing expenses, food expenses, education costs, healthcare, entertainment, vacations, vehicle purchases, etc. 100% against their income.
>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…
> 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.
This is the point the parent poster is making. We say that it's ok for corporations to deduct everything, but not the people? Why are we ok with that?
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https://itep.org/55-profitable-corporations-zero-corporate-t... Some examples: > Food conglomerate Archer Daniels Midland enjoyed $438 million of U.S. pretax income last year and received a federal tax rebate of $164 million. > The delivery giant FedEx zeroed out its federal income tax on $1.2 billion of U.S. pretax income in 2020 and received a rebate of $230 million. > The shoe manufacturer Nike didn’t pay a dime o…
How is it a loophole when it was literally legally allowed, not even as a slight of hand.
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Imagine if a household was only taxed on the money they managed to put away in savings and could count housing expenses, food expenses, education costs, healthcare, entertainment, vacations, vehicle purchases, etc. 100% against their income.
are you agitating to tax companies that lose money?
The other reason is to tax the rich, but you can do that by simply taxing the rich directly. If we fear powerful companies, we can put some sort of scaling size tax on the largest ones.
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Imagine if a household was only taxed on the money they managed to put away in savings and could count housing expenses, food expenses, education costs, healthcare, entertainment, vacations, vehicle purchases, etc. 100% against their income.
>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…
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 much untenable with existing revenue structures and would be disencentivizing things we want to incentivize. Just pointing out how corporate taxes just seem pretty absurd from what households pay in comparison.
Let's imagine two groups of people. One group gets a bonus and takes that money to go on a cruise. Easily 30%+ of that money gets taken by income taxes (including FICA). The other group gets their company to just pay for them to go on that cruise as a team building exercise/corporate summit/planning meeting/whatever you want to call it. That's negative taxes in the end, the cost of the business operating, it's a cost that offsets revenues. Good luck getting that audited and declared taxable.
Totally seems fair.
If you include the income tax of employees it is a lot higher. Perhaps we need window dressing to make people happy. Stop doing "income" tax and convert it to "payroll" tax. Gov gets the same amount, people can stop complaining about companies not paying tax. But at the end of the day, it's all window dressing.
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.
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.
This number is actually a shame in the sense that it shows how little taxes are paid by other big companies.