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Comment by Spivak | Hacker News Reader

Yep, we need to start taxing cash flow (at a lower rate than profit) to finally close the loophole of companies "making zero profit" and therefore owing no taxes.

Profit is just a proxy for business activity, it's not handed down from the gods as the correct way to assess tax. Doing billions of dollars of business a year is a pretty good sign you're doing business and can not only afford but ought to be paying tax.

All the HN bros who started businesses selling dollars for 90c clearly hate this take. Businesses right now pay CC companies 1-3% on every transaction to Visa, a small tax on revenue clearly hasn't killed all businesses. I know in your mind "taxes" means "Uncle Sam takes 30%" but when you're taxing a much much bigger number the percent can be lower, and flat.

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So you want to kill all low margin businesses?

The idea is to encourage reinvestment. I think we should tax revenue for any company doing share buybacks or dumping it into executive comp.

If they’re reinvesting in the business and front line employees, that should be exempt.

If people want to buy into the whole “a corporations job is to maximize profit” then governments job is to encourage them to be good corporate citizens.

do you want to kill every company that is an intermediary? do you want to kill every single super market?

cause that's how you kill 50% of the businesses.

I don't think he's thought it through. It would kill more than 50% of businesses.

Besides, the state typically does take a cut of every transaction, in VAT or sales tax. This holds true even in the UK, and it's 20% which is close to the corporate tax rate on profits at 25%.

> Besides, the state typically does take a cut of every transaction, in VAT or sales tax.

What are sales taxes? Because VAT is only applied to the final transaction. VAT fraud is probably the most common tax fraud because of its availability for anyone without morality who own a business (or is close to a business owner), as it's easy to write off VAT.

It takes a cut of every consumer transaction. Businesses don't pay VAT on their materials for the products they sell.

"BREAKING: Visa raises interchange fees by 1%, every business closes."

You get how crazy that sounds, right?

1% when there's 100b of goods and you only make 101b would still kill the business with that argument, transactional fees can be written off so you don't have to pay tax on them.

How is taxing revenue different to VAT?

VAT is a "Value Added Tax". It does not tax revenue but the additional value added to something.

VAT is a tax on only the value added by an entity, not the total flow of cash through an entity.

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