U.S. business contributes smallest share of federal taxes in a generation
bloomberg.com
bloomberg.com
I would even go as far as saying that payroll taxes are the same. Taxes hidden from the general public with weird incentives that break stuff in unexpected ways. We would be better served with more income, property or sales/vat taxes.
If you believe that corporations should also pass through legal liabilities, then sure it makes no sense to pay corporate taxes. But that's not the world we live in.
Sales / VAT tax is not progressive and is unfair to poor people.
Inflation is basically an unvoted regressive tax on the poor that increases every year.
When all your money (and more) goes on just living, inflation is a complete irrelevance (so long as your wages keep up, of course).
https://www.stlouisfed.org/~/media/blog/2015/november/graph_...
Year 1: debt of £100k and salary of £20k and 2% interest and 4% inflation. £18k left over, £100k owed (5x wage).
Year 2: debt of £100k, salary of £20,800. £18,800 left over, £100k owed (4.8* salary)
Year 10: debt of £100k, salary of £29600, £27,600 left over, £100k owed (3.4* salary)
In Year 1 pounds, salary stays at £20k, but debt drops to £67,566, and interest payments drop to £1351 a year.
It is simply an annual cost for having assets, and an annual benefit for having debt. Since poor people necessarily have more debt on average than rich people, poor people on average benefit from higher inflation whereas to rich people it acts like a tax.
For people who want a weath tax, I say, why not just target a slightly higher inflation rate?
With regards to "no one has their savings wiped out by inflation", tell that to, say, Russians in the early 90s. Very real and very significant savings in Sberbank turned to virtually nothing, i.e. wiped out, by inflation.
I would still argue that a higher unexpected inflation rate would hurt the poor the most, but may benefit middle class holding mortgages (although the more likely effect is that the negative effect on the overall economy would end up hurting everyone, with the poor being hurt the most).
And also inflation is not uniform and depending on its composition can hurt poor people much worse than rich ones.
Historically I haven't found any clue that a higher inflation would help against inequalities. Actually the only literature I have found on the topic seems to indicate a positive correlation between inequalities and inflation but the relation between both seem very complex and not really understood/modeled correctly right now.
all the more reason to keep moving away from defined benefit plans.
Not all assets, just cash or claims denominated in cash (like loans). Most investments don't lose purchasing power just because you devalue the dollar. The poor are most likely to have the majority of their savings in the form of cash, for various reasons; minimum investment limits, for one, and also investing in general is more efficient when you have more money to invest. Below a certain point, the brokerage fees alone would outweigh any likely annual return. Moreover, in an inflationary economy consumer prices tend to rise faster than wages, so the purchasing power of labor declines. Deflation is just the opposite: Sure, wages are falling as the dollar becomes more valuable, but prices tend to fall even faster, so purchasing power increases.
If you're looking to tax wealth then inflation is not the answer.
Yes, but dismissing this caveats is waving away the entire point. High inflation of course includes wage growth (and when it doesn't, you've got a wage growth problem,not an inflation problem). But it does so _on average_: every worker doesn't get an automatic raise every time a price goes up. The poor are the least able to sustain situations that are good on average, because they have the smallest savings buffers to weather the downswings of an average trend.
If a poor person falls prey to the various life catastrophes that might make you miss some income, not get a raise, etc, a high inflation provides a much less forgiving environment, since the real value of whatever modest amount was in your bank account is rapidly eroded (and as pointed out above, this type of buffer is rarely if ever kept in inflation-correlated assets)
Getting knocked off of an unstable cycle is practically the central challenge of the working poor, and high inflation gives you a lot less wiggle room to avoid this.
- Want a higher population? Give a deduction for children. - Want citizens to switch to alternative energies? Give a deduction for solar panel roofs and electric cars. - Want to reduce dependency on foreign oil? Give a deduction for new drilling operations. - Want to create more jobs? Give a deduction for each employee. - Want to create more housing? Give a deduction for real estate depreciation. - Want to encourage new technologies? Give a deduction for R&D expenses.
We should be taxing pollution, consumption of raw materials, plastics, use of undeveloped land, etc.
Aren't many (most?) uses of undeveloped land productive? About 100 years ago, someone built the house I'm sitting in. That was a productive activity to transform the use of that land for housing, IMO.
I agree that the baroque structures, and the crazy accountancy games companies play, need to be addressed somehow.
Are you sure about that? Businesses are highly visible, tracked entities that have to file accounts.
It's also not unusual for the very rich to route all their activities through a business, especially political donations.
> In a highly interesting manoeuvre, Sir Philip [Green] manages his various businesses through a holding company - Taveta Investments. This is registered in the name of his wife Christina, a South African who resides in Monaco. The family and company thus manage to avoid tens of millions in tax.
Corporations are certainly not pass through entities. They own assets, they exert influence on society. They benefit from government institutions. They amass wealth so that they can spend it to their benefit.
Maybe, like people, it makes more sense to tax them on revenue then on profit so they cannot invert to a cheaper jurisdiction?
Or am I a pass through entity? Arguably, most actual people are more pass through entities with respect to money then corporations. Corporations are far more likely than most individuals to amass wealth.
Most of the complexity comes from a backward compatibility and the fact that politicians creates exceptions for certain products to gain votes. If the tax was the same for everything it would be much simpler.
Fraud is a solved problem, especially if you can start from a blank slate like in US. Governments are trying to reduce the fraud, but they are super slow. https://en.wikipedia.org/wiki/SAF-T
The real difficulty is probably with foregn ownership because then you have the argument about taxing the citizens of other countries.
Taxing where business takes place is also a possibility, but turns into yet another source of obfuscation.
[0]Yes, I know about the idea of corporate "personhood". I just object to it on principle.
Do you think that immigrants don't pay taxes?
This is what puzzles me about the immigration debate. Most move here to work and better themselves and effectively pay a higher tax rate than corporations.
>you have the argument about taxing the citizens of other countries
(I presume you know this, but this was an actual case in China).
Being able to be imprisoned is not a defining feature of a legal person, this line of argument will get you nowhere.
Taxing on revenue as opposed to profits harms corporations that have a low margin, high turnover business (for example retailers)
(I have no strong opinion on this subject.)
General cost-of-living is an expense—just see how long you can keep earning that "profit" without paying it. This is partly accounted for by the standard deduction, which is approximately equal to the official federal poverty level.
To put them on even terms with corporations, individual employees and freelancers should be able to deduct any personal expenses which are reasonably related to allowing them to perform their jobs, including but not limited to food, shelter, child care, and basic utilities. Depending on the demands of the job and local conditions this may well exceed the official poverty level.
If we have two companies, one makes a widget and the other buys it and adds a clock to then sell:
Cost of making the widget $5, sale price $10
Cost of adding a clock $10, sale price $40
As two companies, the first has a gross margin of $5 and the second $20. If the companies were to combine, they'd have costs of $15 and a sale price of $40 = gross margin of $25.
I might not understand the term properly though, I based it on this https://www.investopedia.com/terms/g/grossmargin.asp
But, IMO, among the income-based taxes, gross is still the most fair. Net/value-added is too easy to manipulate and too difficult to prove manipulation of. c.f. Hollywood Accounting[1]
I also think that a progressive gross-based scheme would help prevent runaway growth in the case that r > g. At some point, the incremental cost of storing income becomes greater than the cost of passing the money through.
[1] Not a tax, but dealing with a similar problem https://en.wikipedia.org/wiki/Hollywood_accounting
And, in practice, I'm not sure that the result would actually be better than a simpler consumption tax.
Profits are owned by shareholders. So why not just tax them normally when they receive these profits?
I wonder, however, if corporations stop lobbying over taxes, will they just move that budget over to other things? Like lobbying against EPA regulations, etc.? Corporations are going to spend what corporations spend on lobbying, regardless the issue at hand.
I do really like your point that John Q. Public pays more in overall tax but gets significantly less in representation. This needs to be fixed.
this is only because we allow corporations deductions for intellectual property, remove ip deductions and remaining corp income deductions will revolve around paying wages and investing capital (e.g. building a factory), things that cannot be "inverted" or made to pass through ireland.
the corp income tax is actually less harmful than personal income or sales taxes precisely because it only falls on corp profits and the aforementioned deductions (with exception of ip) are good ones - you want companies doing those things. arguably double taxation on dividends is a somewhat questionable feature of the corp income tax though (and if anything the last type of company you would want to exempt from this double taxation is REIT like ones)
Property taxes are tough because many assets are hard to value/assess and often don’t pay enough cash flow to cover their taxes, which could lead to forcing a sale (at fire sale prices for illiquid assets).
Sales taxes tend to hit lower income people the hardest since they’re spending most of their income while the wealthy are not. You could adjust for this, but then it becomes complicated and administratively burdensome.
Tariffs distort trade and slow economic growth (though there are many people that find that trade-off worth it for other reasons).
I think a lot our system in the US is designed for ease for collection, rather than what is most efficient.
The good thing about corporate taxes is that corporations tend to be more meticulous about tracking their income and expenses, and probably also about paying their legal taxes on time than individuals. Tax revenue collected would probably plummet if we did away with the W-4 withholding system on individual income taxes and people had to file them once a quarter/year like corporations do.
Minimum income is fairly simple. As are earned income tax credits.
It's no more complicated than free need-based bus passes to offset flat bus fares.
the US tax system seems to be designed more towards political expedience than any other goal. sales tax, which voters feel every day, is relatively low compared to VAT implementations in Europe. the income tax hits high earners pretty hard, but there are innumerable loopholes and exceptions for very wealthy holders of capital to avoid paying significant capital gains.
it seems like the whole system is setup to look like it's fleecing rich people while it subtly sabotages itself in thousands of pages of tax law.
edit: also you are probably right that we would have trouble collecting tax if we eliminated withholding, but what does that have to do with corporate income tax?
So back to the point, at some point, you are going to want to convert your wealth into actual cash to spend. When this happens taxes are levied. Yes at different rates.
Loans backed by your assets do come at lower interest rates, because of less risk, but the interest as profit on the bank is taxed as income -- for the bank.
Also, on the title "U.S. businesses contribute the smallest share of federal taxes" while may fair, looks interesting next to "U.S. businesses pay us nearly all of their paycheck".
I think it would be more simple of businesses had 100% the tax burden, but I don't think it would translate into any of us taking home more cash. All that would happen is wages would lower and businesses would pay the tax.
That's half the problem with income taxes. They provide an incentive for the rich to never sell their investments because if they sell they have to pay tax, meanwhile they give the working class less incentive to invest rather than consume because they do have to pay the tax on their earned income immediately even if they invest it rather than spending it.
So you get bigger corporations (the rich can't sell to invest in a startup without paying tax), more incentive for international tax avoidance/arbitrage to the detriment of smaller businesses who can't do that, and more wealth inequality.
> They can defer these taxes indefinitely - if they need cash, they can simply use the stock as collateral for a loan in lieu of realizing capital gains taxes.
Because we're not using consumption taxes. You can't avoid VAT by taking out a loan.
> And when they die, the cost basis gets reset, wiping out whatever taxes have been deferred (and replacing them with estate taxes, if those haven't also been optimized away).
Again solved by consumption taxes, because there is nothing to reset if the money is taxed when spent rather than earned.
If we moved to a 0% Corporate tax and relied entirely on income tax then we'd start to see all manner of schemes for Executives to avoid taxes. They'd do things like taking little salary but instead being issued Corporate spending accounts with limits comparable to what they'd otherwise earn in salary.
Market forces would compensate to an extent, but not for jobs with a low demand/supply ratio, I think.
The remarkable thing about the political debate in the US is that folks on the left talk about all the public benefits the government offers in Europe, but are dead silent about how Europe pays for those benefits: consumption taxes. US consumption taxes account for 15% of revenues. That’s just half the OECD average.
The right has been floating flat and simplified tax schemes for decades, including consumption taxes. For example, Hermain Cain made a 9-9-9 Plan a central policy of his campaign.
One thing that I wish more people (including me) realize is - these big problems (taxation, immigration, protectionism etc) have multiple angles and many nuances to them, and it is just dumb to reduce them to a simple yes/no type binary question. All this to say, many people including those shouting at each other on television, probably don't know enough to argue one way or the other
Which is sad, because consumption taxes are also fairly regressive.
If we want to move more of the tax burden to corporate profits, rather than revenue (which is what consumption taxes basically are: corporate revenue taxes), you need either international agreements to increase those taxes, or tie profit taxes to local markets.
And now that I think of it, I think that might actually be possible: profit is revenue minus cost, right? With consumption taxes being the same thing as revenue taxes (which I think they are; it's a tax on the revenue corporations get from selling to consumers. Dutch VAT (BTW) is also called "omzetbelasting" (revenue tax).
So allow companies to deduct local costs from local revenue, and you've turned revenue tax into profit tax.
This seems way too simple, so I'm probably missing something here.
Take New York State for example. It has some of the highest taxes in the country. What do the citizens get back? Roads? Well, New York roads are known to be some of the worst in the country. And you still have to pay tolls to use them. Schools? Just average. State University? Again, quite average.
What the heck am I paying for?
Many countries invest in their people, provide education, houses, jobs, services, etc, and as a result, they have a wealthy, educated population that is an attractive market to sell to. But if that country has high corporate taxes, and the company can sell to that market from another country, then they end up paying less taxes and not contributing to the country that invested in that market.
That's what I mean with a race to the bottom. Of course there are other reasons why a company might choose a certain place. New York, despite its bad roads and high property prices, is popular because it's close to Wall Street, for example. But companies that have no geographical ties to New York specifically, will probably put their main office somewhere else. Wasn't Delaware a popular state to register your company?
Though, I think Delaware is past it. Even if they had higher corp taxes than ny, they would still win because of the "service" the judges provide by siding heavily with companies (over workers, consumers and even gov).
https://www.democratandchronicle.com/story/news/politics/alb...
It can be argued that they fall equally on the rich and poor. For example, if the corporation had two shareholders, one in the top tax bracket and one in the bottom, their returns would be equally hit despite difference in their underlying incomes.
On the other hand, if the burden does fall mainly on shareholders then it can be argued that from a macro perspective corporation taxes are progressive since they are ultimately paid by wealthy households (which make up majority of large investors).
The real calculation is very complex and requires deep anaylsis, but let me try to give some concepts on what could happen.
A flat tax corporate tax to every company will have more effects on the consumers than anyone else: investors will invest less than they would have without the tax, as profits go down (and will consume more of their capital), and it will happen until the profits go back to the previous point of equilibrium. They have a 1 time loss, and then never lose profitability again.
If investors dont lose out in the long term, but the state gains through tax, you need to put that on workers or consumers. workers have one trick up their sleeve: they can go independent and avoid corporate tax: either as a small businesses, or being a contractor of some sort. So some workers will win and some will relatively lose.
But the one without much help is the consumer: he cant really buy things that don't go through a private business, which means everything they buy has the tax in it.
And thats a flat tax: its never flat. A local RE developer cannot avoid corporate taxes, but Google that opens offices somewhere else can. Or businesses that have huge potential (again tech) can avoid paying the tax by reinvesting in themselves for decades, which mom&pop shop cant, thus some companies pay more than others. In consequence, more investors go to the lower tax companies, workers will go to those companies and consumers will find their products cheaper.
Still, the idea of ending the race to the bottom by replacing local revenue (sales/consumption) taxes by local profit (sales - local costs) taxes, appeals to me. It would make labour and other local costs cheaper, and discourage outsourcing every aspect of business to the cheapest possible country for it.
The key is to do progressive on the other side. Collect revenue with a flat consumption tax, then pay a uniform benefit, ideally a UBI.
If everybody pays a flat 30% tax rate and then everybody receives $10,000 in cash money, the effective tax rate for someone at $20,000/year is -20%. At $40,000 it's 5%. At $80,000 it's 17.5% and goes up from there.
So it's progressive but there is no arbitrage opportunity, no declaring profits in some other place, no weird cliffs or crazy high marginal rates on the poor due to benefits phase outs, the tax rate is uniform and applies the same to everyone without exception.
Most of this is just characterization. For example, what's the difference between corporate income tax and VAT? Almost nothing. Primarily what happens when goods cross a border -- then VAT requires tax to be paid based on where the customer is rather than which jurisdiction the corporation declares its profits in.
But VAT is a regressive "consumption tax" and corporate income tax is a progressive "income tax"? Which international corporation came up with that particular piece of corporate propaganda?
> So allow companies to deduct local costs from local revenue, and you've turned revenue tax into profit tax.
That's basically what VAT is. You are describing VAT.
If you subtract all costs within that market, including labour, it suddenly becomes more attractive to hire labour in the same market where you're selling. Companies based in tax havens do not get to subtract their costs in the tax haven, which effectively means they have to pay tax on their profit in the market where they're selling rather than the country they move their profits to.
But you do have a good point that it's not really progressive in any way. It just serves our sense of justice to have companies pay their taxes in the same market they're profiting from. I guess the most elegant way to get progressive taxation, like someone else here pointed out, is UBI.
Income tax is really the same thing. A retailer sells a widget for $100 which it bought for $90, so it pays tax on the $10 in profit. The wholesaler bought the widget for $80 and sold it for $90, so it pays tax on another $10. If you go all the way back to the mine that produced the raw materials that were manufactured into the goods, the entire $100 is profit to somebody. It's the same as VAT. Calling it "profit" rather than "value added" is a distinction without a difference.
An exception as you point out is the treatment for domestic labor, but even that's just an accounting anomaly rather than a real exception -- the worker doesn't collect VAT on their "profits" (wages) but then, no deposit no return, the employer can't deduct them. The real scam is when wages aren't deductible from VAT and yet are still subject to personal income tax, which means they're being double taxed. That is one of the few things the US corporate income tax gets right.
> If you subtract all costs within that market, including labour, it suddenly becomes more attractive to hire labour in the same market where you're selling.
If you like VAT you may enjoy DBCFT.
At the end point, VAT is a revenue tax, not a profit tax. And revenue is certainly not the same thing as profit.
Maybe I'm misunderstanding you, but that's kind of how taxes work now. You report your revenue and expenses and pay taxes on the difference.
The challenge is that there are so many loopholes that some companies can reduce their profit to 0 (or less) or allocate their profits to lower tax regions (Delaware).
A revenue tax would be far simpler and eliminate a lot of these accounting loopholes.
For maximum ease, have the banks automatically deduct 5% of each deposit and don't worry about even having to file taxes unless you received cash.
The problem with profit taxes is exactly as you say, but VAT is paid in the country where the consumers live (at least in the EU). This means VAT simple adds to the purchase price, which the company doesn't really feel and ends up basically being the consumer's problem, while the costs and profits are manipulated and moved around so that the company has to pay as little tax on them as possible.
If profit taxes were treated the way VAT is, so the company would have to pay them in the country where they made that profit, which means the revenue in that country minus the costs in that country, that would stop companies from moving their profits around, because they'd have to pay them in the country where they sold their products. And it would make it attractive to make their costs in that country too, rather than outsourcing them to tax havens and low-wage countries.
Despite support among economists, it ended up being politically harder since some companies were against it, so they ended up going with a big deficit-funded tax cut instead.
That's not the problem. Thats the solution. How else would countries compete with each other to not nationalize any company at the whim of a politician.
> you need either international agreements to increase those taxes
You really don't. The US could ban any company with server outside the US and then will not have a problem of jurisdiction. An international agreement means monopolization of government, and thankfully, you only need a few countries to not sign it to keep everything.
Competition is a beautiful thing indeed!
“Single payer healthcare is the only solution!”
“What about Switzerland?”
“What about it?”
While there are individual differences, European countries' welfare/tax systems tend to have a lot more in common between themselves than with the US.
The Nordic countries do quite well, but it's on the back of a largely homogeneous population and a significant amount of national wealth from natural resource extraction, and just using the same policies somewhere that isn't the case wouldn't necessarily work. France has generous benefits but such a high youth unemployment rate that people are literally rioting in the streets. Italy is overrun with corruption and people don't pay tax there regardless of what the law says they're supposed to do, so looking at what laws they have doesn't paint an accurate picture of what actually happens.
They're as different as they are the same.
Actually, as a whole, Americans are much less likely to cheat on taxes than Europeans, by a significant margin. This means a lower tax rate in America, when combined with the likelihood of Americans to actually cough up cash, may be on par with a higher tax rate in Europe, considering that Europeans are more likely to be cheaters.
It would be interesting to see an analysis of how this empirical truth affects the percent tax actually paid.
https://www.theatlantic.com/magazine/archive/2019/04/why-ame...
In Germany, France, Italy, and Spain, corporate taxes amount to 2-2.4% of GDP. The U.K. is at 2.8%, while the U.S. is at 1.9%.[1] Although the U.S. raises more of its taxes from corporations than Germany, France, Italy, or Spain, it has a much lower tax burden overall. However, the absolute tax burden on corporations is not that far off. Germany was at 1.7% in 2012, while the U.S. was at 2.3% in 2104.
Same thing for income taxes: https://data.oecd.org/tax/tax-on-personal-income.htm#indicat.... Income taxes ranged from 7.5% to 10.9% of GDP Germany, France, Italy, Spain, and the UK in 2017. The U.S. was at 10.5%, near the top of the range.
Almost all of our overall much lower tax burden is explained by the fact that our "middle class taxes" are far lower than in Europe. Socials security taxes are 6.3% of GDP, versus 11.5-16.8% in France, Germany, Italy, and Spain. (The U.K. is at 6.4%.) https://data.oecd.org/tax/social-security-contributions.htm#....
Consumption taxes in the U.S. are just 4.3% of GDP, versus 9.7-12% in the U.K., Spain, France, Germany, and Italy: https://data.oecd.org/tax/tax-on-goods-and-services.htm#indi....
What is the policy takeaway? Those on the left point to Europe and say "we should be more like that; those countries have already figured out how to have a fairer, more humane society." What would our taxes look like if we raised the U.S. tax burden to European levels, but also adopted a similar distribution of taxes? Corporate taxes would go up slightly. Income taxes would not go up at all. Middle class taxes would double or triple.
Put it another way. What if we raised income taxes to Swedish levels? We would add about $500 billion in revenue, assuming that did not reduce GDP. Nice, but not even enough to balance the budget. What if we raised consumption taxes to Swedish levels? We'd raise $1.55 trillion, enough to balance the budget, pay for free college, and make a serious dent in universal healthcare.
What if we tried to raise that same money through income taxes? Our income tax burden would shoot to 18.5% of GDP, higher than all but Denmark (which is a huge outlier in the OECD). And what if we tried to raise that money from just the top 1%, like the left wants to do, instead of from everybody, as in Sweden (where the top tax bracket kicks in at $70,000)? You'd have to raise taxes on that group to 100% of income.
[1] I use these countries as reference points because they are the largest in the EU28--accounting for over 70% of the population.
Edit: Just back of the envelope: if median income is 50k and US health costs are 10k/year vs 5k/year in the average EU nation, then healthcare alone could account for a 10% higher "tax" load from the US side. Warren Buffet often laments that for all our obsession about tax rates, the healthcare inefficiency costs in the US are GDP percentage wise, much higher.
The political question is: how do we go from taxes being 27% of GDP to taxes being 37.5% of GDP. (That's the level in Germany, and there is no way we do a welfare state more efficiently than Germany.) That's like $2 trillion. If we raise that money through higher income and corporate taxes, we'd be departing substantially from the norms established by the big EU countries. If we raise that money instead through higher middle class taxes, we'd be keeping within those norms. Not only that, the actual tax increase would be offset to a large degree by the savings to the middle class from not having to pay health insurance premiums and tuition fees.
The calculation is also irrelevant to the question of what taxes should pay for the 9-10% of GDP you want to transition from the private sector to the public sector. Right now, healthcare premiums are effectively a social insurance tax capped at a certain income level. Paying for universal healthcare with an explicit social insurance tax, like in Germany, would keep things within the norms established by Europe. Paying for it with income taxes or corporate taxes, like the left wants to do, would obliterate those norms, catapulting the US to the top of the charts in terms of income or corporate tax burden.
I feel like you’re arguing against a point I’m not raising. I think we should have universal healthcare. I think your calculation shows why the effective tax increase wouldn’t be as big as you might think if you account for the cost of healthcare premiums. My point here is completely different. It’s that we should follow European norms in choosing what taxes we use to fund that transition. Doubling the SS payroll tax would raise about a trillion in revenue, about 5% of GDP. A 10% federal VAT would raise another 5% of GDP in revenue. That tax increase would fall on the middle class, but would largely be offset by savings from not having to pay for health insurance. And the overall ratios of different types of taxes would stay within OECD norms.
That sounds low but it's not far out of line of the rest of the OECD. The mean is around 9%. Sweden is about 6%. The two members above 20% (or anywhere near it) are Chile and Mexico.
Corporate income tax is kind of a mess to implement and enforce.
[0]: https://en.wikipedia.org/wiki/Share_repurchase#Tax-efficient...
Ok, it's not a good reason... but face it, taxes are determined by politics, not policy.
It's an empirical measurment rather than a theoretical point.
I don't know if he's right. But, I do think that it's dicey taking conclusions like "corporate tax is a tax on pensions" as fact. Economics is not science. Economic theories that yield these conclusions are not testable. The reason macroeconomics exists as a field is that core theories which seem to work well at the micro level don't seem to make the right predictions at the macro-level.
If you have $10M of non-dividend paying stock, you could conceivably spend $200k per year while having a taxable income of zero and remaining eligible for income-based health insurance subsidies.
I understand that if you have tons of valuable assets, you can get a loan against them for a very favorable rate. but then you have to pay back the loan or at least pay the interest on it. how do you do that without having at least some income or realizing some capital gains?
Eg, suppose you have $10M in assets and borrow $200k against it. Next year it's worth something like $10.7M on average, you get charged something like $8k in interest, and you borrow another $200k to spend. So long as you leave enough of a buffer against volatility and the rate of growth of your assets is high enough, you can just borrow money indefinitely against appreciating assets.
People did this in the run-up to the 2008 housing crisis with homes, too. Take out a loan, cash-out refinance later when it's worth more, end up with a house you've taken more cash out of than put in.
also sorry, didn't realize both of my questions went to the same person.
I see my "Defense" counterparts are significantly worse programmers and claim to work less/never, but get paid 20k more per year than me.
These people don't create value, they destroy value.
They don't contribute to our roads/schools/local services that are actually useful.
As much as everyone is afraid of Google and Amazon, I don't see them getting bigger. They have hit a beaurcratic celling that will cause them to act too slow or too expensive.
The only reason government keeps growing is because they are not affected by profit.
Just raise taxes.
This is most definitely not true. Doctors that take medicare know fully well the medicare reimbursement rates will not cover the patient's bills, and raise privately insured rates to cover the gap.
These changes over decades have moved the same tax from being called corporate tax to personal tax. There is nothing nefarious about it.
This last year, more such changes made to simplify taxes for small buisness moved more of the income in this manner.
I have been a small business owner for a long time, and do precisely this, because it simplifies my paperwork. The tax is still paid.
In aggregate this accounts for a lot more than most people realize.
Here's what happened this last year to move the needle
https://www.nerdwallet.com/blog/taxes/pass-through-income-ta...
That's why I don't think records of earlier tax rates are really giving the full picture.
(also, it was the Democratic electorate that rejected Bernie, the general electorate would have gone for him over Trump according to polls)
Taxation is robbery.
If you want companies and individuals to pay taxes, you're defending a state that is unethical (as taxation forces people to give away their private property through coercion), and authoritarian ("democracy" is no justification for the use of force).
If you have any supposed justification for a centralized state that enforces taxation through the use of force on its citizens, you're only denying the fact you agree with crime.
Please stop talking about companies and individuals paying more taxes. We should all be paying no taxes through coercion.