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Comment by dx034 | Hacker News Reader

That sounds interesting but would probably be a paradise for tax lawyers. You just create a network of companies, one for each income band. That way, an employee never makes more than the average. Of course only large corperations can afford that so that smaller companies will have a harder time hiring talent.

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> That sounds interesting but would probably be a paradise for tax lawyers. You just create a network of companies, one for each income band. That way, an employee never makes more than the average. Of course only large corperations can afford that so that smaller companies will have a harder time hiring talent.

You could probably define company, for the purposes of such a law, that excluded those kinds of structural shenanigans. Basically, define it in terms of its qualities rather than in terms of legal instruments.

I'd also guess that the IRS has already authored those definitions, or it at least a good distance of the way there.

This way you are adding more complexity which in turn adds more loopholes. A good tax framework should be as simple as possible to avoid this type of shenanigans.

> This way you are adding more complexity which in turn adds more loopholes.

I don't agree. Simple but dumb rules lead to easy to exploit loopholes. Saying they shouldn't be fixed in the name of "simplicity" is like saying a particular unhanded-case bug shouldn't be fixed because the extra case adds "complexity."

> A good tax framework should be as simple as possible to avoid this type of shenanigans.

The idea we're discussing is one where the tax framework is used as an instrument of regulation. If a behavior is found to be detrimental to society, I think society should rise to the task of regulating it rather than shirk that responsibility because of a fear of "complexity."

In most jurisdictions a limit a limited company has to have a board and a CEO. You can outsource middle management- this is what McKinsey, Bain, BSG etc essentially do, but you can't legally outsource the guys at the very top.

So what? They would just be the department heads of the previously monolith company (e.g. instead of having a sales department with a VP of sales and a few top managers, you just have a Sales Company subsidiary with a CEO and a few board members).

You already have that at large companies, the CEO is also head of a lot of subsidiaries. You can then compensate at that company as it best fits and channel the main compensation through another company.

Again, I'm thinking about applying this to all individual (and human) adult citizens of a country, which will probably obviate the need to repeat the process at smaller scales like companies, where the problem is compounded by artificial constructs such as corporate personhood.

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