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Comment by I_am_tiberius | Hacker News Reader

I know I'm likely alone in this opinion, but corporate income tax seems like a poorly designed tax to me. Why should companies pay taxes in a year with high profits, even if they face losses for the next ten years? Why should I pay corporate income tax when dividends and income are taxed anyway? Corporate income tax also seems to heavily influence business strategies as a consequence, which wasn't its intended purpose.

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The world of tax is complex. Business exist in many shapes and sizes. So...

- because companies heavily use government resources like roads and stuff.

- because losses can be offset against profits. These tend to be middled out over multiple years. You can port losses to other years.

- a lot of companies (holdings etc.) don't pay out income tax and are basically just letterbox companies. These companies need to pay tax on dividends otherwise they would literally pay zero tax.

> - because losses can be offset against profits. These tend to be middled out over multiple years. You can port losses to other years.

These losses expire (different from country to country)!! Plus, inflation is not taken into account.

> a lot of companies (holdings etc.) don't pay out income tax and are basically just letterbox companies. These companies need to pay tax on dividends otherwise they would literally pay zero tax.

Tax on dividends is not corporate income tax. Dividend tax is classified as capital gains tax, which is entirely separate. My point is that anyone taking out money must pay taxes through personal income tax or dividend tax. So corporate income tax is just money that would be taxed anyway - or invested/used by the company. So no real purpose other than producing another cash inflow for the government.

Why shouldn't companies pay taxes? Especially since income is taxed already and your average Joe gets screwed way more than the poor downtrodden billion dollar companies.

Because a company just invests the money. You can't take out money from a company as an owner without taxing it anyway (because you anyway have to pay capital gains tax / personal income tax). My point was that I don't see a point in having corporate income tax (that's just an additional tax that prevents companies from investing in the business and employees).

"Invests the money" means it sits in their bank account until they've convinced enough politicians that the money should be taxed as it comes into the company, not when it goes out, and then they issue a massive dividend.

Any corporation uses roads, mail, police, courts, and other public services, and this usage is not offset by individual income taxes on that corporation's employees, since the employees also use these things. In fact I suspect more resources are spent on serving corporations than serving individual taxpayers - with the important caveat that I am specifically excluding government social insurance programs. But those are often a totally separate tax system.

It is baffling to think that for-profit corporations should be allowed to use public services without paying for them: before a company makes further internal investments with new revenue, it should chip in to society for building the infrastructure that made the revenue possible. A corporate income tax is perfectly natural.

Whether you earn and save a given dollar as a W2 worker or through a business you own seems pretty incidental, right? Your net worth is going up just the same; society has the same interest in containing inequality.

Because governments need money to fund services. They would put a tax on making HN comments if they could get away with it.

Link tax is a thing in some countries. HN is just to small to be taxed.

A lot of words to say: taxation is theft.

Correct. There is no 'right' way to tax.

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