I do not understand how people can not understand that a percentage tax, by it's definition, does have the largest companies pay more.
They don't understand it because it isn't true on a proportional basis (and in some cases on an absolute dollar value basis, too).
Larger companies have access to tax avoidance strategies which are unavailable to smaller companies[1] which substantially changes the calculus.
I've gone through the books of plenty LargeCos. The playing field is not even.
[1] issues include inability to finance high-end tax structuring advice, writing of grants or negotiate valuations, lack of ability to amortize risk associated with an unfavourable tax ruling, lack of capital to access directorship services in tax havens etc.
Is it, though? This is a situation where Chesterton's Fence is important to consider.
No single government regulates tax worldwide, and each is iteratively attempting to balance a multitude of concerns, while remaining competitive to capital.
Additionally, many of the loopholes aren't legislative tax exemptions on the books. They're determinations regarding how and when certain things are recognized on the books. 'Fixing' those problems doesn't 'remove' loopholes. It just creates new rules which are then exploited.
Finally, with respect to tax simplification in general: Simplifying the tax code is akin to refactoring code. Sure, there are some areas where it could be engaged in without causing problems (and which would result in efficiency gains!), but much of the appeal of refactoring code lies in how we ignore the tricky edge cases when designing a new utopic system in our heads.
The legal project of re-digesting a highly complicated body of law and producing a more functional version would take, at the very least, a decade of work. So now we're hitting the complexity limits of an administration's compute ability too. Shit.
All in all: it's a bit harder than that. I wish you were right, though.
I have two taxpayers, Roy the rich ($1000 / month) and Peter the poor ($100 / month). Today we will have a 10% flat tax. Peter pays $10. Roy pays $100. The total tax take is $110 and Roy is paying 91% of it.
If we imagine a 'comfortable' lifestyle costs $200/month then there is an argument against using this flat tax system, but it is difficult to escape from the fact that Roy is doing almost all the heavy lifting from the who-is-funding-society perspective. Even if Roy has a very good team of accountants and is managing to only pay 5% of his income in tax (grossly unfair!) he would still be paying 83% of the total tax take (50 / 60). If we use percentages, the rich are going to be paying for most of what the government does, whether they pay personally or through corporate tax.
Most people overestimate how profitable companies are, the economics of business tend to squeeze margins. I've seen a lot of arguments in Australia whinging that not enough taxes are paid by companies like Quantas because they don't understand concepts like depreciation and carrying losses forward. Those concepts are quite fair once it is accepted that maybe assets take a few years life in them before they need to be replaced.
EDIT Bit slow this morning, I figured out what you meant by proportional basis.
Society as a whole benefits from Peter the poor paying proportionally less in taxes because Roy the rich simply does not consume the same proportion of his income (let's keep in mind, that in real life, Roy is 100,000 times richer than Pete, not 10x). Taxing Roy proportionately more is not only the ethical thing to do, but also the rational thing to do if you want a strong economy.
These policies aren't about what you find fair, they're in place because they are what make society prosperous.
I do not understand how people can not understand that the largest companies pay a lot of money to structure their taxes so that they pay proportionately less of their income in taxes than smaller companies do despite deriving significantly more economic benefits from the stable economic system those taxes enable.
Also, the percentage tax does not by definition mean that the largest companies pay more. It means that the most profitable companies (on an income tax basis) pay more taxes on an absolute basis than a similarly-sized company that makes less profit. However, Apple, Google, and GE are all (or at least in GE's case, was) highly-profitable companies that pay ridiculously low taxes for their profit because their "taxable" income is significantly less than their economic income.
I understand it that just fine. I just prefer to fix the problem, not the symptom.
> There are two ways of constructing a corporate tax system: One way is to make it so simple that there are obviously no loopholes, and the other way is to make it so complicated that there are no obvious loopholes.
I say this because when people make a simplistic statement about a company not paying much or any taxes on profits a lot of people are mislead into believing the company is somehow not contributing to government revenue. Which is obviously not the case at all.
If it's fair for a company to have the legal rights of a person, it's only fair they pay the same rate of taxes as a natural person.
If the share holders of the company is legally indemnify against the debts/risks of the company, then they shall also pay their fair share of taxes, and should not deduct it from the already paid portion of company tax. So this way, if you want legal protection of a limited liability corp, you have to pay double taxes. But if you accept legal responsibility if the company, then you don't get double taxed.
I don't really have an opinion on anything else you're talking about.