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Comment by roenxi | Hacker News Reader

In theory, correct me if I'm wrong, but corporate tax rates should be regressive. Duke Energy & Nike aren't selling to the 1%, their selling to the masses. Raising corporate taxes pushes towards either less product being produced or higher prices if investors demand the same returns.

The details are complex, but there is a great argument for Income Tax, Capital Gains Tax, Land Tax and then call it done. The 1% can't get the money out of these businesses without taking it as income or capital gains. Otherwise the money is simply being invested in getting goods/services to people cheaply. That seems like a good thing to be putting money towards, what is the government going to do with it that is better?

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Company A makes Company B (Shell) In a low tax country. Company B now holds patents, services, Ect and bills company A. Company B has tax free money to payout to company heads and others tax free.

The bigger the company the more they should be tax. If they raise prices competition can come in and compete for market shares.

I’m a firm believer we should tax companies more if they don’t pay or give certain benefits to workers. The tax will be higher then if they had given those benefits. All win in this scenario. Tax bad behavior reward good behavior.

If my stock portfolio already funds my lifestyle, marginal dollars earned by the companies I own don't affect how much stock I need to sell. Because I don't sell, they're not subject to capital gains. They just accumulate in my portfolio tax-free.

The more unequal the society, the greater the share of economic activity that is like this. In ours, probably a lot. Corporate taxes are the only opportunity to get anything from this kind of wealth creation.

Take a few steps back and think through that again from a whole system perspective. Corporations are the supports of the entire way of life that people enjoy. They are the only mechanism we've figured out that can sustain complex, interconnected and rather privileged modern lifestyles.

That money being untaxed isn't some sort of loss - these businesses are substantially better than the government at getting people food, clothing, shelter, entertainment and comfort. That is genearlly stuff we all want to encourage. If you take money out of them, there will be less of all those things. You aren't getting anything out of that invested money, you're just trying to set the economy up for a future where more people get more stuff.

I'll accept that theory isn't the best way to run a tax system, but "oh no we aren't taxing the engines of prosperity" isn't, in itself, a decent argument. Corporations are a long way down the list of things that are good tax targets.

That money being untaxed means the government has to be funded on the backs of workers instead. We have a progressive tax on labor, we squeeze the crap out of specialists and management, and then we leave owners alone. This is crazy.

Corporations aren't a real thing, they're an abstraction. You'll noted that the money isn't being spent by the very wealthy (otherwise they'd be paying CGT or Income tax). In the financial world, the money will be coming from them. In the real world, the money is coming out of systems that support the lifestyle of workers.

Look at it this way - you can't point to something that the business owners had to give up (because they didn't access the money, if they had they'd be paying CGT or Income tax). But the government is diverting real resources somewhere. In practice, those resources are going to be coming from the workers!

Which is why taxing corporations is not the best idea, once you follow the real flows of goods and services. It is a stealth tax on income, a bit like payroll tax. Better to make these taxes direct so people understand what they are paying.

> Corporations aren't a real thing, they're an abstraction.

Margaret Thatcher is that you

> Corporations aren't a real thing, they're an abstraction.

Sorry, but this is a ridiculous statement. If corporations are an abstraction, how come they are allowed to have and use millions and often billions of real U.S. dollars (or relevant equivalents in other currencies) in/from their cash reserves?

The virtue of voters knowing what they’re paying is that this awareness can inform policy. And indeed it has. They want to “tax the rich.” That’s how we arrive at this question. I agree that it’s not without side effects - the rich are capital, taxing away capital means less good cheap stuff to buy. But we can also quite reasonably decide that there is more than enough good cheap stuff to buy, and not nearly enough healthcare. Or education, or housing, or whatever else. And that we need to tap the wealth associated with providing iPhones and cheeseburgers and handbags, in order to afford those things.

> And that we need to tap the wealth associated with providing iPhones and cheeseburgers and handbags..

Well, we could do that by adjusting the income tax rate and capital gains tax rate.

That is going to my central point here, the outcome looks a lot like an income tax, except instead of targeting rich people we're targeting the systems that support people who eat cheeseburgers and think iPhones & handbags are signs of being classy.

You're describing a world here where resources are directed towards healthcare and I'm pretty sure the rich aren't actually going to give anything up from their lifestyles. Where are these resources coming from? It is better to stick to CGT and income tax. And a land tax if you want to soak the rich.

Maybe the low hanging fruit of stopping the printing of money and giving it the the rich too, most everyone agrees on that point in practice.

Income tax soaks the cohort of "rich people" who make hundreds of thousands as Apple engineers, but not the people who make hundreds of millions as Apple shareholders.

Land value tax like georgism?

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