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Comment by BrandoElFollito | Hacker News Reader

I seriously do not understand why companies pay taxes on the income and not the revenue. (EDIT: I mixed them up)

I pay on the revenue. I also buy things. I also consume. And somehow I can manage with taxes on the revenue.

This would also solve the problem of companies that get 10 M€ in revenue, but somehow only 10€ is taxed because expenditure, capex etc

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I got curious while reading and I've read this[1]:

> Revenue is total money from core business activities before expenses are deducted.

> Income, or net income, is earnings remaining after all expenses are deducted from revenue.

Sorry for being pedantic. I don't understand why English has such ambiguous terms for something that shouldn't be. Or am I even more confused now?

To directly answer your comment: I agree that companies should be taxed on revenue and not income. Citizens are taxed on revenue, so why aren't companies?! They're supposed to be treated as people.

[1]: https://www.investopedia.com/ask/answers/122214/what-differe...

Sorry, I mixed them up (I am not a native speaker of English, but would have probably mixed them up in French as well :)). Thanks (I updated my post)

Producers produce up to the point marginal benefit equals marginal cost. Tax on revenue inflates marginal cost and would create shortages etc.

Revenue based taxes are a an idea to consider as they have many advantages - a big one is that they are harder to evade. One disadvantage of them is that they give advantage to big players that own the whole supply chain. Imagine you are a small player and need a supplier who needs a supplier who needs a supplier. Suddenly the tax is paid 4 times while your competitor who owns the whole supply chain pays once.

Imo when you start thinking about it the most reasonable position is that corporate income tax should be 0. Instead we should focus on consumption taxes, land taxes and taxing other resources and especially pollution.

Taxing companies on revenue would completely wipe out low-margin businesses like supermarkets, and create massive distortions in the economy where one company being vertically integrated and owning everything being practically the only option, as otherwise goods passed between businesses means tax is paid on the revenue twice.

It would kill the economy overnight.

Why? If the low revenue busyness is taxed at 1% and the mega one at 30% (just examples).

Taxing on the income also means that you can offload taxes elsewhere easily

Then let's have a similar system for citizens.

Some companies run at an extremely narrow margin. For example the margin for grocery stores is reportedly 1%. If you changed the tax system to tax gross revenues, now those stores would need to dramatically raise prices to accommodate.

It's not an easy problem.

It all depends on the tax level. If today they are texted at, say, 20%, this could be a 5% on gross revenue (or whatever), and indexed on the revenue (like for humans).

I also run on narrow margins, and nobody cares.

I am saying there are unintended consequences to such changes. If all the grocery stores all at once raised prices 5%, your margins might turn negative. And most of your neighbors.

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