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United States43603 Posts
I agree with xDaunt but it would require a complete overhaul of the tax system to make it work and selling any change to people is a hard job. You'd simultaneously be saying "abolish corporate tax" and "massively increase personal tax" which would get you no votes from either side.
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On July 17 2014 02:25 xDaunt wrote:Show nested quote +On July 17 2014 02:08 Nyxisto wrote:
Well keeping money in corporations is generally not bad, the problem I see is that (at least here in Germany) nearly half of all business are partnerships and it's not really distinguishable how much money is actually in the corporation and how much money is private income. For what xDaunt is proposing to work you would first make sure that you can clearly tell when people withdraw money from their business. That's already done. The methods for taking money out of a business are "dividends," "capital gains" (from a sale), and "wages/salary." All three are already reported.
It's also pretty easy to use business assets to, lets say, buy a private jet or golf club memberships or extravagant corporate retreats. These things can be justified as investments, when in reality they are luxury purchases for the corporate elite. That's why I support crippling luxury taxes.
There is of course a cost to luxury taxes. It cripples the luxury goods industry. I'm OK with that. As long as that money is getting funneled elsewhere into the economy, that's fine. In theory, every dollar a corporation spends on a luxury good could be a dollar used to hire employees or invest in non-luxury capital. In reality, it would just encourage the wealthy to buy their jets and watches overseas. Tax reform is not such an easy problem to tackle.
This was your "the rich will always fuck the poor" post of the day
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On July 17 2014 02:54 KwarK wrote:
I agree with xDaunt but it would require a complete overhaul of the tax system to make it work and selling any change to people is a hard job. You'd simultaneously be saying "abolish corporate tax" and "massively increase personal tax" which would get you no votes from either side.
Not really. Corporate taxation isn't really a major component of federal revenue. It'd be easier to do than you think.
But I still think that a massive overhaul of the tax code is long overdue anyway.
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On July 17 2014 02:49 xDaunt wrote:Show nested quote +On July 17 2014 02:45 Gorsameth wrote:On July 17 2014 02:33 xDaunt wrote:On July 17 2014 02:28 Gorsameth wrote:On July 17 2014 02:20 xDaunt wrote:On July 17 2014 02:05 Gorsameth wrote:On July 17 2014 01:57 xDaunt wrote:On July 17 2014 01:48 YoureFired wrote:On July 17 2014 01:40 xDaunt wrote:
Taxing corporations is dumb anyway. Get rid of or greatly reduce corporate taxes and increase it on individuals to offset the loss. wat could you explain the logic behind this (if there is any) Taxing corporations separately creates distortions in behavior, the most notable of which is relocating out of country to nations (or other states) that don't tax corporations. These problems are entirely unnecessary because corporate profits are already taxed when those profits flow to owners and employees as capital gains and income respectively. One could very easily adjust the tax rates on individuals and eliminate corporate taxes to remain revenue neutral. Given how horrifically complicated our tax code is, anything that simplifies it is a step in the right direction. Wont this simply mean that money is instead hoarded in the companies pocket instead of the individual? Why would the corporation horde the money? You have to keep in mind what a corporation is. It's a construct for doing business and making money for its owners. Every dollar that stays in the corporation is money that the owners aren't realizing in profits on their investment. Owners want and need to realize a gain at some point. For this reason, a corporation won't hang on to money if it doesn't have a legitimate, business-related, strategic reason to do so Does it? If I own company X (51% shares or whatever) and it makes a million a year yet I only spend 500k a year what reason do I have to take the other 500k out of the company if I pay taxes when I do and no taxes if I don't? Yes this wont apply to every business but it will apply to enough to be a problem. So how are you getting the $500,000 to pay for your $500,000 in expenses? You can't use your company to pay for your personal expenses. People who do that inevitably have the IRS crawl up their asses. To cover your $500,000 in expenses, you have to make a distribution to yourself one way or another -- most likely as a dividend or as part of a salary. In other words, the money can't stay in the corporation if its your sole source of income. ps.
Your American, you know corporations are not a construct for business, their people. I'm sure if you look around, you'll see me saying both that corporations are constructs and that corporations are people. Both are true depending upon how you look at it, and neither is mutually exclusive. Ofc you have the declare you take the money, but my point is any money you don't need are better left in the corporation because there you pay no taxes rather then take it out where you do pay taxes. You would get rich people making dummy corporations to store their excess money because there they don't pay taxes under your idea. So what? You may be rich on paper, but it's wealth that you can't use as long as it stays in the corporation. It's no different than owning a stock that has doubled since you invested it. You don't actually realize the wealth until you sell the stock. In other words, at some point, the owner of the corporation will always make a distribution to himself and he will pay taxes on that distribution.
Uhh bulllshit. One would just take the money that they needed to get the things that couldn't possibly be business related (pretty few things fit this) and everything else like yachts, jets, cars, fancy meals, suits, etc... would just be 'Business expenses' or 'corporate vehicles' (This is already happening with corporations that are currently 'paying taxes').
As much as conservatives get on liberals for unrealistic visions, this pie in the sky idea that corporations would not be used as tax shelters if they weren't taxed, stands in a group of it's own of ridiculous notions.
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On July 17 2014 02:49 xDaunt wrote:Show nested quote +On July 17 2014 02:45 Gorsameth wrote:On July 17 2014 02:33 xDaunt wrote:On July 17 2014 02:28 Gorsameth wrote:On July 17 2014 02:20 xDaunt wrote:On July 17 2014 02:05 Gorsameth wrote:On July 17 2014 01:57 xDaunt wrote:On July 17 2014 01:48 YoureFired wrote:On July 17 2014 01:40 xDaunt wrote:
Taxing corporations is dumb anyway. Get rid of or greatly reduce corporate taxes and increase it on individuals to offset the loss. wat could you explain the logic behind this (if there is any) Taxing corporations separately creates distortions in behavior, the most notable of which is relocating out of country to nations (or other states) that don't tax corporations. These problems are entirely unnecessary because corporate profits are already taxed when those profits flow to owners and employees as capital gains and income respectively. One could very easily adjust the tax rates on individuals and eliminate corporate taxes to remain revenue neutral. Given how horrifically complicated our tax code is, anything that simplifies it is a step in the right direction. Wont this simply mean that money is instead hoarded in the companies pocket instead of the individual? Why would the corporation horde the money? You have to keep in mind what a corporation is. It's a construct for doing business and making money for its owners. Every dollar that stays in the corporation is money that the owners aren't realizing in profits on their investment. Owners want and need to realize a gain at some point. For this reason, a corporation won't hang on to money if it doesn't have a legitimate, business-related, strategic reason to do so Does it? If I own company X (51% shares or whatever) and it makes a million a year yet I only spend 500k a year what reason do I have to take the other 500k out of the company if I pay taxes when I do and no taxes if I don't? Yes this wont apply to every business but it will apply to enough to be a problem. So how are you getting the $500,000 to pay for your $500,000 in expenses? You can't use your company to pay for your personal expenses. People who do that inevitably have the IRS crawl up their asses. To cover your $500,000 in expenses, you have to make a distribution to yourself one way or another -- most likely as a dividend or as part of a salary. In other words, the money can't stay in the corporation if its your sole source of income. ps.
Your American, you know corporations are not a construct for business, their people. I'm sure if you look around, you'll see me saying both that corporations are constructs and that corporations are people. Both are true depending upon how you look at it, and neither is mutually exclusive. Ofc you have the declare you take the money, but my point is any money you don't need are better left in the corporation because there you pay no taxes rather then take it out where you do pay taxes. You would get rich people making dummy corporations to store their excess money because there they don't pay taxes under your idea. So what? You may be rich on paper, but it's wealth that you can't use as long as it stays in the corporation. It's no different than owning a stock that has doubled since you invested it. You don't actually realize the wealth until you sell the stock. In other words, at some point, the owner of the corporation will always make a distribution to himself and he will pay taxes on that distribution.
Except if he keeps it there for 10 years he avoids 10 years of wealth tax while the company is still able to invest and grow it without paying anything beyond the bare minimum in taxes.
Yes Apple has millions lying around doing nothing but they still pay taxes over that(if they kept it on the books in the US), something they would not be doing in xDaunts system.
Edit: BTW I agree the tax code needs changing and overhauling. I just don't see how this idea would change anything.
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On July 17 2014 03:02 GreenHorizons wrote:
As much as conservatives get on liberals for unrealistic visions, this pie in the sky idea that corporations would not be used as tax shelters if they weren't taxed, stands in a group of it's own of ridiculous notions.
No, the point is that they're already paying virtually no taxes anyway. A shift from corporate taxation to high income& personal wealth taxes would actually help small&middle sized businesses, because at the moment they're the only one paying corporate taxes anyway.
On July 17 2014 03:04 Gorsameth wrote:Show nested quote +On July 17 2014 02:49 xDaunt wrote:On July 17 2014 02:45 Gorsameth wrote:On July 17 2014 02:33 xDaunt wrote:On July 17 2014 02:28 Gorsameth wrote:On July 17 2014 02:20 xDaunt wrote:On July 17 2014 02:05 Gorsameth wrote:On July 17 2014 01:57 xDaunt wrote:On July 17 2014 01:48 YoureFired wrote:On July 17 2014 01:40 xDaunt wrote:
Taxing corporations is dumb anyway. Get rid of or greatly reduce corporate taxes and increase it on individuals to offset the loss. wat could you explain the logic behind this (if there is any) Taxing corporations separately creates distortions in behavior, the most notable of which is relocating out of country to nations (or other states) that don't tax corporations. These problems are entirely unnecessary because corporate profits are already taxed when those profits flow to owners and employees as capital gains and income respectively. One could very easily adjust the tax rates on individuals and eliminate corporate taxes to remain revenue neutral. Given how horrifically complicated our tax code is, anything that simplifies it is a step in the right direction. Wont this simply mean that money is instead hoarded in the companies pocket instead of the individual? Why would the corporation horde the money? You have to keep in mind what a corporation is. It's a construct for doing business and making money for its owners. Every dollar that stays in the corporation is money that the owners aren't realizing in profits on their investment. Owners want and need to realize a gain at some point. For this reason, a corporation won't hang on to money if it doesn't have a legitimate, business-related, strategic reason to do so Does it? If I own company X (51% shares or whatever) and it makes a million a year yet I only spend 500k a year what reason do I have to take the other 500k out of the company if I pay taxes when I do and no taxes if I don't? Yes this wont apply to every business but it will apply to enough to be a problem. So how are you getting the $500,000 to pay for your $500,000 in expenses? You can't use your company to pay for your personal expenses. People who do that inevitably have the IRS crawl up their asses. To cover your $500,000 in expenses, you have to make a distribution to yourself one way or another -- most likely as a dividend or as part of a salary. In other words, the money can't stay in the corporation if its your sole source of income. ps.
Your American, you know corporations are not a construct for business, their people. I'm sure if you look around, you'll see me saying both that corporations are constructs and that corporations are people. Both are true depending upon how you look at it, and neither is mutually exclusive. Ofc you have the declare you take the money, but my point is any money you don't need are better left in the corporation because there you pay no taxes rather then take it out where you do pay taxes. You would get rich people making dummy corporations to store their excess money because there they don't pay taxes under your idea. So what? You may be rich on paper, but it's wealth that you can't use as long as it stays in the corporation. It's no different than owning a stock that has doubled since you invested it. You don't actually realize the wealth until you sell the stock. In other words, at some point, the owner of the corporation will always make a distribution to himself and he will pay taxes on that distribution. Except if he keeps it there for 10 years he avoids 10 years of wealth tax while the company is still able to invest and grow it without paying anything beyond the bare minimum in taxes. Yes Apple has millions lying around doing nothing but they still pay taxes over that(if they kept it on the books in the US), something they would not be doing in xDaunts system.
Investments are not being taxed anyway. They create jobs and grow the economy, it makes sense not to tax them. And no apple is not paying taxes for the money they have stored overseas, but also it is not generating revenue for them.
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On July 17 2014 03:04 Gorsameth wrote:Show nested quote +On July 17 2014 02:49 xDaunt wrote:On July 17 2014 02:45 Gorsameth wrote:On July 17 2014 02:33 xDaunt wrote:On July 17 2014 02:28 Gorsameth wrote:On July 17 2014 02:20 xDaunt wrote:On July 17 2014 02:05 Gorsameth wrote:On July 17 2014 01:57 xDaunt wrote:On July 17 2014 01:48 YoureFired wrote:On July 17 2014 01:40 xDaunt wrote:
Taxing corporations is dumb anyway. Get rid of or greatly reduce corporate taxes and increase it on individuals to offset the loss. wat could you explain the logic behind this (if there is any) Taxing corporations separately creates distortions in behavior, the most notable of which is relocating out of country to nations (or other states) that don't tax corporations. These problems are entirely unnecessary because corporate profits are already taxed when those profits flow to owners and employees as capital gains and income respectively. One could very easily adjust the tax rates on individuals and eliminate corporate taxes to remain revenue neutral. Given how horrifically complicated our tax code is, anything that simplifies it is a step in the right direction. Wont this simply mean that money is instead hoarded in the companies pocket instead of the individual? Why would the corporation horde the money? You have to keep in mind what a corporation is. It's a construct for doing business and making money for its owners. Every dollar that stays in the corporation is money that the owners aren't realizing in profits on their investment. Owners want and need to realize a gain at some point. For this reason, a corporation won't hang on to money if it doesn't have a legitimate, business-related, strategic reason to do so Does it? If I own company X (51% shares or whatever) and it makes a million a year yet I only spend 500k a year what reason do I have to take the other 500k out of the company if I pay taxes when I do and no taxes if I don't? Yes this wont apply to every business but it will apply to enough to be a problem. So how are you getting the $500,000 to pay for your $500,000 in expenses? You can't use your company to pay for your personal expenses. People who do that inevitably have the IRS crawl up their asses. To cover your $500,000 in expenses, you have to make a distribution to yourself one way or another -- most likely as a dividend or as part of a salary. In other words, the money can't stay in the corporation if its your sole source of income. ps.
Your American, you know corporations are not a construct for business, their people. I'm sure if you look around, you'll see me saying both that corporations are constructs and that corporations are people. Both are true depending upon how you look at it, and neither is mutually exclusive. Ofc you have the declare you take the money, but my point is any money you don't need are better left in the corporation because there you pay no taxes rather then take it out where you do pay taxes. You would get rich people making dummy corporations to store their excess money because there they don't pay taxes under your idea. So what? You may be rich on paper, but it's wealth that you can't use as long as it stays in the corporation. It's no different than owning a stock that has doubled since you invested it. You don't actually realize the wealth until you sell the stock. In other words, at some point, the owner of the corporation will always make a distribution to himself and he will pay taxes on that distribution. Except if he keeps it there for 10 years he avoids 10 years of wealth tax while the company is still able to invest and grow it without paying anything beyond the bare minimum in taxes.
Again, so what? If the money in the account is $1,000 on year 1 and $1,000,000 on year 10, he still has to pay in taxes X% of whatever amount that he takes out.
Yes Apple has millions lying around doing nothing but they still pay taxes over that(if they kept it on the books in the US), something they would not be doing in xDaunts system.
You're missing the point. Even in the absence of a corporate tax, taxes will be paid on Apple's revenues eventually when it is paid out in salaries/wages, dividends to owners, and as a capital gain when Apple is sold at an increased value. All you're doing is creating hypotheticals that are both wrong and not even remotely founded in reality.
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On July 17 2014 03:05 Nyxisto wrote:Show nested quote +On July 17 2014 03:02 GreenHorizons wrote:
As much as conservatives get on liberals for unrealistic visions, this pie in the sky idea that corporations would not be used as tax shelters if they weren't taxed, stands in a group of it's own of ridiculous notions.
No, the point is that they're already paying virtually no taxes anyway. A shift from corporate taxation to high income& personal wealth taxes would actually help small&middle sized businesses, because at the moment they're the only one paying corporate taxes anyway.
Oh I agree with the idea in principal like plenty of Utopian ideas. I just don't see how it gets written in a way that isn't exploited to high heaven by the same people exploiting the current tax code. I also don't see how anything that accomplishes what is being discussed actually passes the political hurdles it would face.
No one is really suggesting that the revenue go down or up. It seems the idea is just to change which entities are paying what. So the idea doesn't really help small business owners as they would still be paying the same share of taxes under this new system as they are under the old. Corporations (or the people that own/run them) wouldn't be paying any more taxes it would just be coming out of a different account.
Someone mentioned a wealth tax which could mean wealthier people paying more in exchange for less wealthy people paying less. If something like that was included (xDaunt seems to just want to tax income not wealth) I could see it being more likely to actually resolve some issues. Otherwise it's just changing the rules for the sake of it.
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On July 17 2014 03:09 xDaunt wrote:Show nested quote +On July 17 2014 03:04 Gorsameth wrote:On July 17 2014 02:49 xDaunt wrote:On July 17 2014 02:45 Gorsameth wrote:On July 17 2014 02:33 xDaunt wrote:On July 17 2014 02:28 Gorsameth wrote:On July 17 2014 02:20 xDaunt wrote:On July 17 2014 02:05 Gorsameth wrote:On July 17 2014 01:57 xDaunt wrote:On July 17 2014 01:48 YoureFired wrote:
[quote]
wat
could you explain the logic behind this (if there is any) Taxing corporations separately creates distortions in behavior, the most notable of which is relocating out of country to nations (or other states) that don't tax corporations. These problems are entirely unnecessary because corporate profits are already taxed when those profits flow to owners and employees as capital gains and income respectively. One could very easily adjust the tax rates on individuals and eliminate corporate taxes to remain revenue neutral. Given how horrifically complicated our tax code is, anything that simplifies it is a step in the right direction. Wont this simply mean that money is instead hoarded in the companies pocket instead of the individual? Why would the corporation horde the money? You have to keep in mind what a corporation is. It's a construct for doing business and making money for its owners. Every dollar that stays in the corporation is money that the owners aren't realizing in profits on their investment. Owners want and need to realize a gain at some point. For this reason, a corporation won't hang on to money if it doesn't have a legitimate, business-related, strategic reason to do so Does it? If I own company X (51% shares or whatever) and it makes a million a year yet I only spend 500k a year what reason do I have to take the other 500k out of the company if I pay taxes when I do and no taxes if I don't? Yes this wont apply to every business but it will apply to enough to be a problem. So how are you getting the $500,000 to pay for your $500,000 in expenses? You can't use your company to pay for your personal expenses. People who do that inevitably have the IRS crawl up their asses. To cover your $500,000 in expenses, you have to make a distribution to yourself one way or another -- most likely as a dividend or as part of a salary. In other words, the money can't stay in the corporation if its your sole source of income. ps.
Your American, you know corporations are not a construct for business, their people. I'm sure if you look around, you'll see me saying both that corporations are constructs and that corporations are people. Both are true depending upon how you look at it, and neither is mutually exclusive. Ofc you have the declare you take the money, but my point is any money you don't need are better left in the corporation because there you pay no taxes rather then take it out where you do pay taxes. You would get rich people making dummy corporations to store their excess money because there they don't pay taxes under your idea. So what? You may be rich on paper, but it's wealth that you can't use as long as it stays in the corporation. It's no different than owning a stock that has doubled since you invested it. You don't actually realize the wealth until you sell the stock. In other words, at some point, the owner of the corporation will always make a distribution to himself and he will pay taxes on that distribution. Except if he keeps it there for 10 years he avoids 10 years of wealth tax while the company is still able to invest and grow it without paying anything beyond the bare minimum in taxes. Again, so what? If the money in the account is $1,000 on year 1 and $1,000,000 on year 10, he still has to pay in taxes X% of whatever amount that he takes out. Show nested quote +Yes Apple has millions lying around doing nothing but they still pay taxes over that(if they kept it on the books in the US), something they would not be doing in xDaunts system. You're missing the point. Even in the absence of a corporate tax, taxes will be paid on Apple's revenues eventually when it is paid out in salaries/wages, dividends to owners, and as a capital gain when Apple is sold at an increased value. All you're doing is creating hypotheticals that are both wrong and not even remotely founded in reality.
Except over in reality the rich are getting richer and your plan is to tax them less for it. Your elimination wealth tax for anyone who has access to company to store it.
Plus as others have mentioned, you can spend almost everything a person ever needs as the non taxed company. Need food? bill the cafeteria. Need a car? business expense. ect ect. heck you can probably find a way to make the company cover your estate aswell.
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Abolishing the corporate tax has only taken so long because of the bizarre way we use language in politics. "Corporation" is a Republican idea, tied in everybody's mind with "rich people." Of course, this is incorrect: the corporate tax is a tax on every wage and good in the United States (except for imported ones) at a flat rate, and is therefore automatically inferior to the progressive tax rates offered by, say, income tax. (That cap gains is treated as its own thing is another problem). Like a sales tax, its effect is ultimately regressive, and if we abolished it and made sure the rules to get our 0% tax rate meant that corporate HQs were getting shifted here rather than abroad bringing high-income people along with them, there would be at least a significant offset of the cost of removing that tax.
Comprehensive overhaul is what our system needs, but doing that and correcting the capital gains tax would go a long way. The problem is selling Dems on the "Corporate" tax and Republicans on cap gains.
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On July 17 2014 03:23 Gorsameth wrote:Show nested quote +On July 17 2014 03:09 xDaunt wrote:On July 17 2014 03:04 Gorsameth wrote:On July 17 2014 02:49 xDaunt wrote:On July 17 2014 02:45 Gorsameth wrote:On July 17 2014 02:33 xDaunt wrote:On July 17 2014 02:28 Gorsameth wrote:On July 17 2014 02:20 xDaunt wrote:On July 17 2014 02:05 Gorsameth wrote:On July 17 2014 01:57 xDaunt wrote:
[quote]
Taxing corporations separately creates distortions in behavior, the most notable of which is relocating out of country to nations (or other states) that don't tax corporations. These problems are entirely unnecessary because corporate profits are already taxed when those profits flow to owners and employees as capital gains and income respectively. One could very easily adjust the tax rates on individuals and eliminate corporate taxes to remain revenue neutral. Given how horrifically complicated our tax code is, anything that simplifies it is a step in the right direction. Wont this simply mean that money is instead hoarded in the companies pocket instead of the individual? Why would the corporation horde the money? You have to keep in mind what a corporation is. It's a construct for doing business and making money for its owners. Every dollar that stays in the corporation is money that the owners aren't realizing in profits on their investment. Owners want and need to realize a gain at some point. For this reason, a corporation won't hang on to money if it doesn't have a legitimate, business-related, strategic reason to do so Does it? If I own company X (51% shares or whatever) and it makes a million a year yet I only spend 500k a year what reason do I have to take the other 500k out of the company if I pay taxes when I do and no taxes if I don't? Yes this wont apply to every business but it will apply to enough to be a problem. So how are you getting the $500,000 to pay for your $500,000 in expenses? You can't use your company to pay for your personal expenses. People who do that inevitably have the IRS crawl up their asses. To cover your $500,000 in expenses, you have to make a distribution to yourself one way or another -- most likely as a dividend or as part of a salary. In other words, the money can't stay in the corporation if its your sole source of income. ps.
Your American, you know corporations are not a construct for business, their people. I'm sure if you look around, you'll see me saying both that corporations are constructs and that corporations are people. Both are true depending upon how you look at it, and neither is mutually exclusive. Ofc you have the declare you take the money, but my point is any money you don't need are better left in the corporation because there you pay no taxes rather then take it out where you do pay taxes. You would get rich people making dummy corporations to store their excess money because there they don't pay taxes under your idea. So what? You may be rich on paper, but it's wealth that you can't use as long as it stays in the corporation. It's no different than owning a stock that has doubled since you invested it. You don't actually realize the wealth until you sell the stock. In other words, at some point, the owner of the corporation will always make a distribution to himself and he will pay taxes on that distribution. Except if he keeps it there for 10 years he avoids 10 years of wealth tax while the company is still able to invest and grow it without paying anything beyond the bare minimum in taxes. Again, so what? If the money in the account is $1,000 on year 1 and $1,000,000 on year 10, he still has to pay in taxes X% of whatever amount that he takes out. Yes Apple has millions lying around doing nothing but they still pay taxes over that(if they kept it on the books in the US), something they would not be doing in xDaunts system. You're missing the point. Even in the absence of a corporate tax, taxes will be paid on Apple's revenues eventually when it is paid out in salaries/wages, dividends to owners, and as a capital gain when Apple is sold at an increased value. All you're doing is creating hypotheticals that are both wrong and not even remotely founded in reality. Except over in reality the rich are getting richer and your plan is to tax them less for it.
This is an issue that is wholly unrelated to corporate taxation. And corporate taxation isn't a solution to it either. You have to tax the rich people directly if you want to reduce their wealth. Taxing their corporations isn't going to get you to where you want to go -- especially given all of the complications and problems that come with corporate taxation. That's my whole point.
Your elimination wealth tax for anyone who has access to company to store it.
C'mon, dude. Do you even know how corporate taxation works? It is not a wealth tax.
Plus as others have mentioned, you can spend almost everything a person ever needs as the non taxed company. Need food? bill the cafeteria. Need a car? business expense. ect ect. heck you can probably find a way to make the company cover your estate aswell.
Aside from the fact that significance of corporate write offs for things that are arguably more personal than business-related is greatly overstated around here, I'll again pose a familiar question:
So what?
Taxing corporations is unrelated to the issue. People are going to use their corporate entities to buy cars for their personal use regardless of whether corporations have to pay a corporate income tax. All I am seeing is the same old tiresome railing against "corporations" that I always see from people who don't really understand what they are and how they work.
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Oh I agree with the idea in principal like plenty of Utopian ideas. I just don't see how it gets written in a way that isn't exploited to high heaven by the same people exploiting the current tax code.
There is nothing utopian about it. Apple effectively already pays like 7-8% in taxes.(Source),while small companies pay their full share. Reforming taxes towards taxing rich people directly and eliminating corporate taxes would probably help many smaller businesses immediately. The only 'utopian' thing about it is that no one in the US seems to want to increase income taxes in any way.
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On July 17 2014 03:18 GreenHorizons wrote:Show nested quote +On July 17 2014 03:05 Nyxisto wrote:On July 17 2014 03:02 GreenHorizons wrote:
As much as conservatives get on liberals for unrealistic visions, this pie in the sky idea that corporations would not be used as tax shelters if they weren't taxed, stands in a group of it's own of ridiculous notions.
No, the point is that they're already paying virtually no taxes anyway. A shift from corporate taxation to high income& personal wealth taxes would actually help small&middle sized businesses, because at the moment they're the only one paying corporate taxes anyway. Oh I agree with the idea in principal like plenty of Utopian ideas. I just don't see how it gets written in a way that isn't exploited to high heaven by the same people exploiting the current tax code. I also don't see how anything that accomplishes what is being discussed actually passes the political hurdles it would face. No one is really suggesting that the revenue go down or up. It seems the idea is just to change which entities are paying what. So the idea doesn't really help small business owners as they would still be paying the same share of taxes under this new system as they are under the old. Corporations (or the people that own/run them) wouldn't be paying any more taxes it would just be coming out of a different account. Someone mentioned a wealth tax which could mean wealthier people paying more in exchange for less wealthy people paying less. If something like that was included (xDaunt seems to just want to tax income not wealth) I could see it being more likely to actually resolve some issues. Otherwise it's just changing the rules for the sake of it.
If the conversation is going to pivot from "what should tax reform look like?" to "what would politically feasible tax reform look like?", we need to introduce a whole shitload of new variables. I'll make it easy for you though. In the current political environment, tax reform isn't on the table. Republican doctrine is that taxes can't go up or even appear to go up. That means as long as Republicans control at least one house of congress, any tax reform that raises rates or adds new taxes (even if that means lowering rates elsewhere or eliminating old taxes) just isn't going to happen. The best you could do is target specific subsidies like, for example, homeowner subsidies. Just typing that seems absurd. It's much easier to add subsidies than to subtract them. We're stuck with what we got (and what we got is shit) for the foreseeable future, at least.
Edit: You can't eliminate the corporate tax without getting an increase in some other tax in exchange. Which isn't going to happen. Since this thread is specifically about the corporate tax, I thought I'd be specific about that.
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On July 17 2014 03:38 Nyxisto wrote:Show nested quote +Oh I agree with the idea in principal like plenty of Utopian ideas. I just don't see how it gets written in a way that isn't exploited to high heaven by the same people exploiting the current tax code. There is nothing utopian about it. Apple effectively already pays like 7-8% in taxes. (Source),while small companies pay their full share. Reforming taxes towards taxing rich people directly and eliminating corporate taxes would probably help many smaller businesses immediately. The only 'utopian' thing about it is that no one in the US seems to want to increase income taxes in any way.
Except as I have been arguing the rich don't get taxed more because your creating another giant loophole by removing corporate tax. So all you accomplished is reduce the burden for smaller businesses (which is good) and reduced the government income (which is bad)
@xDaunt I know corporate tax is not a wealth tax. your missing the point. By allowing corporations to store money for free (no taxes on it) your ensuring no rich person will ever have personal wealth that you can tax, only income tax as they withdraw small amounts as needed and spend it right away, tho even the need to withdraw and pay taxes for that is something that is questionable.
If you want to reform the tax code, which again is indeed needed, you need to do it in such a way that those who should pay taxes actually pay them, not merely move the hole from one spot to another.
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On July 17 2014 03:33 xDaunt wrote:
Aside from the fact that significance of corporate write offs for things that are arguably more personal than business-related is greatly overstated around here, I'll again pose a familiar question:
So what?
Taxing corporations is unrelated to the issue. People are going to use their corporate entities to buy cars for their personal use regardless of whether corporations have to pay a corporate income tax. All I am seeing is the same old tiresome railing against "corporations" that I always see from people who don't really understand what they are and how they work.
Still pretty fucking unfair, and I reserve my right to rail against it. My proposal was a VAT to tackle that problem, but that's far from a perfect solution.
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On July 17 2014 03:49 sc2isnotdying wrote:Show nested quote +On July 17 2014 03:33 xDaunt wrote:
Aside from the fact that significance of corporate write offs for things that are arguably more personal than business-related is greatly overstated around here, I'll again pose a familiar question:
So what?
Taxing corporations is unrelated to the issue. People are going to use their corporate entities to buy cars for their personal use regardless of whether corporations have to pay a corporate income tax. All I am seeing is the same old tiresome railing against "corporations" that I always see from people who don't really understand what they are and how they work. Still pretty fucking unfair, and I reserve my right to rail against it. My proposal was a VAT to tackle that problem, but that's far from a perfect solution.
A sales tax on the offending items is the better way to deal with it.
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On July 17 2014 03:23 Gorsameth wrote:Show nested quote +On July 17 2014 03:09 xDaunt wrote:On July 17 2014 03:04 Gorsameth wrote:On July 17 2014 02:49 xDaunt wrote:On July 17 2014 02:45 Gorsameth wrote:On July 17 2014 02:33 xDaunt wrote:On July 17 2014 02:28 Gorsameth wrote:On July 17 2014 02:20 xDaunt wrote:On July 17 2014 02:05 Gorsameth wrote:On July 17 2014 01:57 xDaunt wrote:
[quote]
Taxing corporations separately creates distortions in behavior, the most notable of which is relocating out of country to nations (or other states) that don't tax corporations. These problems are entirely unnecessary because corporate profits are already taxed when those profits flow to owners and employees as capital gains and income respectively. One could very easily adjust the tax rates on individuals and eliminate corporate taxes to remain revenue neutral. Given how horrifically complicated our tax code is, anything that simplifies it is a step in the right direction. Wont this simply mean that money is instead hoarded in the companies pocket instead of the individual? Why would the corporation horde the money? You have to keep in mind what a corporation is. It's a construct for doing business and making money for its owners. Every dollar that stays in the corporation is money that the owners aren't realizing in profits on their investment. Owners want and need to realize a gain at some point. For this reason, a corporation won't hang on to money if it doesn't have a legitimate, business-related, strategic reason to do so Does it? If I own company X (51% shares or whatever) and it makes a million a year yet I only spend 500k a year what reason do I have to take the other 500k out of the company if I pay taxes when I do and no taxes if I don't? Yes this wont apply to every business but it will apply to enough to be a problem. So how are you getting the $500,000 to pay for your $500,000 in expenses? You can't use your company to pay for your personal expenses. People who do that inevitably have the IRS crawl up their asses. To cover your $500,000 in expenses, you have to make a distribution to yourself one way or another -- most likely as a dividend or as part of a salary. In other words, the money can't stay in the corporation if its your sole source of income. ps.
Your American, you know corporations are not a construct for business, their people. I'm sure if you look around, you'll see me saying both that corporations are constructs and that corporations are people. Both are true depending upon how you look at it, and neither is mutually exclusive. Ofc you have the declare you take the money, but my point is any money you don't need are better left in the corporation because there you pay no taxes rather then take it out where you do pay taxes. You would get rich people making dummy corporations to store their excess money because there they don't pay taxes under your idea. So what? You may be rich on paper, but it's wealth that you can't use as long as it stays in the corporation. It's no different than owning a stock that has doubled since you invested it. You don't actually realize the wealth until you sell the stock. In other words, at some point, the owner of the corporation will always make a distribution to himself and he will pay taxes on that distribution. Except if he keeps it there for 10 years he avoids 10 years of wealth tax while the company is still able to invest and grow it without paying anything beyond the bare minimum in taxes. Again, so what? If the money in the account is $1,000 on year 1 and $1,000,000 on year 10, he still has to pay in taxes X% of whatever amount that he takes out. Yes Apple has millions lying around doing nothing but they still pay taxes over that(if they kept it on the books in the US), something they would not be doing in xDaunts system. You're missing the point. Even in the absence of a corporate tax, taxes will be paid on Apple's revenues eventually when it is paid out in salaries/wages, dividends to owners, and as a capital gain when Apple is sold at an increased value. All you're doing is creating hypotheticals that are both wrong and not even remotely founded in reality. Except over in reality the rich are getting richer and your plan is to tax them less for it. Your elimination wealth tax for anyone who has access to company to store it. Plus as others have mentioned, you can spend almost everything a person ever needs as the non taxed company. Need food? bill the cafeteria. Need a car? business expense. ect ect. heck you can probably find a way to make the company cover your estate aswell.
There is no such thing as a wealth tax, the wealth tax is called inflation. The government shouldn't be able to tax what's in your bank account if they taxed the money before you put it in there.
The astronomical corporate tax is a regulatory barrier that modifies behavior to irrational levels. Why would Apple repatriate it's 30 billion in it's bank account and pay 10 billion in taxes when it could borrow 30 billion and pay 2 billion in tax deductible interest. That's just the US government saying they don't want 30 billion going to work in it's economy with the asinine tax code.
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On July 17 2014 03:51 xDaunt wrote:Show nested quote +On July 17 2014 03:49 sc2isnotdying wrote:On July 17 2014 03:33 xDaunt wrote:
Aside from the fact that significance of corporate write offs for things that are arguably more personal than business-related is greatly overstated around here, I'll again pose a familiar question:
So what?
Taxing corporations is unrelated to the issue. People are going to use their corporate entities to buy cars for their personal use regardless of whether corporations have to pay a corporate income tax. All I am seeing is the same old tiresome railing against "corporations" that I always see from people who don't really understand what they are and how they work. Still pretty fucking unfair, and I reserve my right to rail against it. My proposal was a VAT to tackle that problem, but that's far from a perfect solution. A sales tax on the offending items is the better way to deal with it.
A VAT (value-added tax) is essentially a sales tax. There's some differences but the basic idea is the same: a luxury tax. I'm not an accountant, so I can't really parse the pros and cons in an intelligent way, but a VAT is trendier and thus more politically feasible, so that counts for something.
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On July 17 2014 03:59 sc2isnotdying wrote:Show nested quote +On July 17 2014 03:51 xDaunt wrote:On July 17 2014 03:49 sc2isnotdying wrote:On July 17 2014 03:33 xDaunt wrote:
Aside from the fact that significance of corporate write offs for things that are arguably more personal than business-related is greatly overstated around here, I'll again pose a familiar question:
So what?
Taxing corporations is unrelated to the issue. People are going to use their corporate entities to buy cars for their personal use regardless of whether corporations have to pay a corporate income tax. All I am seeing is the same old tiresome railing against "corporations" that I always see from people who don't really understand what they are and how they work. Still pretty fucking unfair, and I reserve my right to rail against it. My proposal was a VAT to tackle that problem, but that's far from a perfect solution. A sales tax on the offending items is the better way to deal with it. A VAT (value-added tax) is essentially a sales tax. There's some differences but the basic idea is the same: a luxury tax. I'm not an accountant, so I can't really parse the pros and cons in an intelligent way, but a VAT is trendier and thus more politically feasible, so that counts for something.
VAT's cause more distortion than a sales tax, which is why I'd rather go with the sales tax.
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On July 17 2014 02:54 KwarK wrote:
I agree with xDaunt but it would require a complete overhaul of the tax system to make it work and selling any change to people is a hard job. You'd simultaneously be saying "abolish corporate tax" and "massively increase personal tax" which would get you no votes from either side.
I don't think you'd need to increase personal taxes by much. If we're making corporations act as pass-through entities (many already are, ex. MLPs) more tax incidence occurs at the personal level rather than the corporate level, which is largely a wash in terms of overall government revenue.
The largest adjustments (that I can think of) would be for ending the double taxation of equity income and accounting for the progressiveness of personal income taxes.
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EPT
