[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.