| > If a limited liability contractor paves my driveway, and they damage my neighbour's roses while they are at it, my neighbour never got a choice. Limited liability doesn't mean no liability. You can still go after them and get the assets of the company or its recent profits, which will generally be more than the value of some roses. You just can't get company owner's house. But that sort of thing is always the case. There is no such thing as unlimited liability because nobody has unlimited assets. You can cause a million dollars in damage when you only have a hundred dollars to your name and there is nowhere for the money to come from. Limited liability is just choosing the line at which we say something is closely enough associated with another thing to have to pay for its mistakes. > But when your business pays creditors, via interest and return of principal, that's usually with money that's less taxed ('pre-tax money') than when they pay dividends or do share buybacks ('post-tax money'). It's worse than that. Corporate acquisitions use pre-tax money, which encourages business consolidation. The real solution is to use consumption taxes instead of income taxes, which are much fairer, harder for tax laywers to avoid and less invasive of individual privacy, and are one of the best ways to tax international corporations. Then if you want a progressive tax system you just give each individual a tax refund in a fixed amount, which creates a progressive effective rate curve. This would also have the benefit of disadvantaging debt, because you would have to borrow enough to pay the tax on whatever you buy and then pay interest on the higher amount, discouraging debt-based purchases. But there are a bunch of misguided claims that it would hurt the poor somehow (even though they would be paying less in total tax after the refund), probably because it would actually work and the people who benefit from the status quo have to put out some argument against it. |