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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

#81

Post by gruez »

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…

>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.

How is that negative taxes? At best it's tax free, but calling it negative tax (because it's lower than the alternative?) is double-counting. Moreover AFAIK this sort of tax evasion mostly happens at the small business level (eg. a plumber buying a pickup truck and then using it to go to the grocery store and pick up his kids from soccer practice), but it doesn't really happen at the corporate level because 1) such spending will almost be in contravention of corporate governance policies and be flagged by auditors and 2) you need so many people in on the conspiracy that it's impossible to keep a lid on it. Plenty of companies get flak for their subsidiaries in tax havens, but I'm not aware of any serious allegations of corporate tax evasion by the way of fringe benefits.

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

#82

Post by PaulDavisThe1st »

gruez wrote: post #7
strangattractor wrote: post #3

Wow and they still make money despite paying their fair share. Who would have ever thought.

But corporate taxes are on profit, not revenue, so almost by definition any company that "paying their fair share" is "still makes money".

> But corporate taxes are on profit, not revenue

They are taxes on revenue, but with a set of allowed deductions (e.g. labor costs, R&D, capital expenditure, etc. etc.)

Whether you call that a tax on profit or a tax on revenue with business related deductions is really just a matter of perspective.

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

#83

Post by lesuorac »

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 don't think the studies account for a 0% tax rate and $0 government subsidy. If you're running a large deficit then adding in a tax rate is like having a fire that you're pouring lighter fluid on. Of course when you take away the lighter fluid the fire gets smaller. However, how are you getting that lighter fluid in the first place?

It also doesn't mean that 0% is the correct tax rate. This gives pretty strong evidence that during boom (bull) years you should increase the corporate tax rate to prevent the formation of bubbles and then during bane (bear) years you should decrease it to stimulate growth.

I think the easy way to think about this is that individuals tend not to spend all of their income especially at the higher income brackets. While companies are not as severe in that effect. So if you increase taxes on a business in order for the government to pay back debt to an individual who then saves the money instead of consumes it, you're going to decrease overall consumption.

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

#84

Post by colechristensen »

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.

[flagged]

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

#85

Post by Enginerrrd »

Sparkle-san wrote: post #80
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.

I think this can make sense theoretically and what about cases where companies just horde wealth like Apple or spend it on stock buybacks (like Apple)? I'd want to see some sort of impetus for them to either reinvest or pass it along to their employees.

It seems strange to me that someone would want to punish a corporation for maintaining a larger reserve with which to handle economic downturns and the like, allowing them to continue to pay and employ those same employees instead of just letting them go.

"Hording cash" sounds like NOT spending on expenses and offsetting profits, and therefore likely involves that corporation being taxed. In addition it sounds a lot more sustainable than wall streets typical obsession with short term gains Uber alles.

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

#86

Post by colechristensen »

paxys wrote: post #62
cadamsdotcom wrote: post #5

What a PR powerhouse. Publicly saying "we paid lots of tax" would be career suicide for a tech CEO.

I'm trying to imagine what would happen to the random Berkshire board member who floats the idea of replacing Buffett.

Buffet still has 30% of the voting rights which makes him pretty hard to replace in the theoretical situation where someone would have wanted to. He's retiring at the end of the year and remaining chairman of the board.

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

#87

Post by PaulDavisThe1st »

bobxmax wrote: post #4
strangattractor wrote: post #3

Wow and they still make money despite paying their fair share. Who would have ever thought.

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".

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

#88

Post by Enginerrrd »

colechristensen wrote: post #84
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.

[flagged]

Those benefits are taxed ad income under existing rules. It's not even close to being that easy to abuse.

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

#89

Post by PaulDavisThe1st »

gruez wrote: post #29
kristopolous wrote: post #17

Earlier quoted context omitted.

Can you honestly say when the people were drafting how IRAs would work they were thinking this as an intended use-case?

"intended use-case" is just more fuzzy language. They probably thought everyone would buy mutual funds, rather than 3X leveraged Nvidia ETFs. Does that mean buying such ETFs (and making bank) mean you're not paying "your fair share"? Or for something more down to earth, what about meme stocks and bitcoin treasury companies, both of which are technically companies, but are definitely not what the authors of the bill h…

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 of IRA for any purpose is outside of the publicly given justification for their existence.

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

#90

Post by prewett »

paxys wrote: post #62
cadamsdotcom wrote: post #5

What a PR powerhouse. Publicly saying "we paid lots of tax" would be career suicide for a tech CEO.

I'm trying to imagine what would happen to the random Berkshire board member who floats the idea of replacing Buffett.

He's something like 96, and has been working on replacing himself for at least 10 years, maybe longer. He announced his retirement a few months ago. It would be irresponsible to not plan for his succession; training your replacement is arguably the first responsibility of a leader, especially when your timeline is long-term.
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