The Perfect Number: Federal corporate income tax rate | Hacker News Reader

The Perfect Number: Federal corporate income tax rate

theperfectnumber.pedal.tech

16 pointsmohiblues10 comments

Not only it is a bit annoying way to present the data, it tries to hide bs interpretations in it.

For instance, when Trump said that when he is going to reduce the taxes, jobs would come roaring back in. To prove how this wouldn't happen, pedal.tech tries to study the amount of growth, companies who currently pay less than 20% tax, showed. But that's a ridiculous way to see the merit of that argument.

Imagine if a teacher said, "I am going to reduce the amount of time people currently spend in doing homework from 3 hours to 2 hours. This will result in more well-round development of students as they will have more time to do other things.

Now of course not all students spend 3 hours doing homework, some spend more than 3 hrs, some 2 hrs, some no time at all. So according to pedal.tech, we need to look at any student who is spending only 2 hours and see what rounded development they are having, but that does not tell you what the students who spend 3 hours would do in their extra time, or what the students who only spend 2 hours would do (since now they are able to finish their homework).

This is kind of an annoying way of presenting an argument. I'd rather be able to read and look at the animations at my own pace.

That aside, to the main point, I don't think it is really an argument against lowing nominal rates, but rather an argument against lowing effective rates. Classically tax reform is involves broadening the base (eliminating exemptions, deductions, credits, etc) while lowering the nominal rate. That may not be what the Republicans are planning on doing, but won't really know until the details are hammered out.

I gave up bothering to try to follow it.

Maybe that was their goal? To present the data in such a way to make people go somewhere else?

That and the Cheeto quotes.

I like the part that shows how similar companies end up with different tax rates.

Otherwise, I am not sure that federal corporate income tax isn't high, if you consider that any dividends paid to actual persons pay income tax again. I can agree paying 35% of my profits in either way, but not twice.

I gave up on that page very early. Its horrible.

That being said, I have a tax theory. Forgetting about the political power required to do such a thing. Would it be possible to do away with all the taxes and replace them with a very low sales tax that gets applied to everything. e.g. Farmer buys a cow, pay 1% sales tax Milk wholesaler buys the milk to process, pay 1% sales tax Shop buys the milk to sell, pay 1% sales tax Shop buys labour to work in the shop (staff), pay 1% sales tax I buy milk to consume, pay 1% sales tax

More examples. Trade BitCoin, pay 1% sales tax Sell a house, pay 1% sales tax Trade shares, pay 1% sales tax

I accept some of this will be hard to police without the incentive for smaller businesses to claim the tax back.

I believe the key to making this work, is having no possible way to get exemptions. Doesn't matter if you don't make a profit, you still pay, doesn't matter if you are a organisation looking to on-sell or a consumer, every transaction pays and no way to offset this.

Finding the magic % would be difficult, but is the key part. Would this be possible? Where could I go on the inter webs to ask if such a scenario would even be possible

Think through the effects a little bit if you do this you'll get big corporations buying their entire supply chain to end up at 1% tax to pay. The more complicated the supply chain the more expensive the products would become.

e.g say for a car you'd have 10 companies chained (mining company, refining company, plastic creation company, ...)

You'd end up with ~10% tax on a car but 2% for milk. Makes it very tricky to do specialized high tech produts

That would really strongly encourage vertical integration.

Consider a company that owns oil wells, pipelines, refineries, and gas stations. It never pays sales tax on its petroleum products. Only the final consumer does on the gasoline he buys.

A competitor network made up of independent parts has an oil drilling independent pay sales tax after it sells crude to a trading firm, the pipeline owner pays sales tax on the money it gets from the driller for the use of its pipeline, the trading firm pays sales tax when it sells the crude to a refiner, the refiner pays sales tax when it sells the oil to an independently owned gas station, and finally the end consumer pays the same sales tax as the integrated firm when it sells to the end user.

Countries that raise significant revenue from sales taxes generally use a VAT (value added tax) to avoid this problem.

...and it's worth noting that the VAT is very susceptible to judgement calls and therefore lobbying by special interests and weird edge cases where canned tomatoes get one tax rate and fresh ones another.

This would strongly encourage vertical integration. If a grocery store owns the dairy and the creamery, they can sell their cheese for significantly less than a grocery store that incurs tax when it buys cheese from the creamery that incurs tax when it buys milk from the dairy.

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