[BlackFly]

"Corporations are people, my friend!"

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.

[agent008t]

But when corporations spend wealth to their benefit it comes out of their profit. So they end up paying less tax. I.e. corporate tax is an incentive for corporations to spend more, not less?

Profits are owned by shareholders. So why not just tax them normally when they receive these profits?

[larrydag]

I might be in the minority but I think there should be a 0% corporate tax rate. For the amount of revenue received by corporations doesn't match how much affect they can have on the tax code. They lobby quite a bit to affect their tax status and situation because they have the means. Yet its the individuals that contribute the most taxes but have the least amount of lobbying power. The tax code should be decided by policy of the democratically elected. Reduce the corporate rate to 0% and lobbying will decline I believe.

[notahacker]

Why would a corporation with lots of regulations they'd like changing suddenly stop lobbying for them just because they didn't pay any tax? And if lobbying for lower taxes is undesirable, surely actually giving the lowest possible tax to the lobbyists to make them go away is worse still?

[taftster]

That's a really interesting perspective, and yes I think you are most definitely in the minority. Your point is well taken, though

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.

[Quenty]

Or we could try to legally limit how much corporations can lobby.

[Xylakant]

> Maybe, like people, it makes more sense to tax them on revenue then on profit so they cannot invert to a cheaper jurisdiction?

Taxing on revenue as opposed to profits harms corporations that have a low margin, high turnover business (for example retailers)

[lazulicurio]

Sure.

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

[IanCal]

It also benefits large players as a chain of companies producing a product would have a larger combined revenue than a single company with teams doing the same work.

[zaroth]

Isn’t this just another way of saying “higher gross margin”?

[IanCal]

If I'm understanding what you mean right, no I don't think so.

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

[_ea1k]

Yeah, it might be interesting to put together a list of most impacted products. Depending upon the rate, the impact of a revenue based system on car manufacturing could be huge.

And, in practice, I'm not sure that the result would actually be better than a simpler consumption tax.

[afthonos]

And it hurts people who have high expenses. We have found ways around that.

(I have no strong opinion on this subject.)

[Xylakant]

You can deduct expenses from income, every freelancer does. So we don’t actually tax people on revenue either. We tax them on profits. (General cost of living is not an expense). Most tax systems also have progressive income tax rates, taxing lower incomes substantially less or even not at all. Certainly, a tax system that does the same for corporations would be possible. That would then benefit smaller companies.

[nybble41]

> (General cost of living is not an expense).

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.

[TomMarius]

VAT solves that

[rwmj]

At the cost of complexity and acting as a honey pot for criminals. I have to deal with VAT for a business I help to run and it's very complex. The bigger problem in the EU are the large amounts of carousel/VAT fraud.

[ed_balls]

> I help to run and it's very complex.

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

[Wildgoose]

If Corporations are truly "people" then they are slaves to their owners. The assets they own are actually collectively owned by their share-holders and the actions they take are carried out by their principal officers.[0]

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.

[hannasanarion]

You are thinking about personhood the wrong way. In the law, personhood means being able to own things, sue and be sued, pay taxes, enter contracts, and a number of other things.

Do you think that immigrants don't pay taxes?

[baselined]

>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.

[Wildgoose]

I don't know where "immigrants" came into this. I made NO mention of immigration, just foreign (overseas) ownership of shares in Corporations. What has that got to do with immigration?

[baselined]

It came from the post above.

[Wildgoose]

Are you really suggesting that Corporate Officers aren't able to enter contracts, sue people, etc.? And what the Hell have immigrants got to do with any of this?

[hannasanarion]

Corporate officers are able to enter contracts, sue people, etc, as themselves. Not as the company, which is a separate person from themselves. When you buy a product from Apple and they refuse to respect their warranty, you don't sue Tim Cook, you sue Apple. You can only do that because Apple is incorporated.

>you have the argument about taxing the citizens of other countries

[Wildgoose]

If a company poisons baby-milk, who do you arrest? The company? It's a "person" after all.

(I presume you know this, but this was an actual case in China).

[hannasanarion]

You arrest the employees if what they did was criminal (which would be the case whether a company is involved or not) and fine the company, or in extreme cases, revoke the company's charter (aka corporate death penalty).

Being able to be imprisoned is not a defining feature of a legal person, this line of argument will get you nowhere.

[Wildgoose]

You brought up immigrants, not me. What are you talking about?