[dalke]

Obviously providing jobs for tax payers isn't unique to companies. I can pay for a nanny, chauffeur, and private cook even if I don't have a company. Since your logic is "X provides jobs so X shouldn't be taxed" then I shouldn't have to be taxed if I have any household staff, no?

That logic makes no sense. (If it makes sense to you, please elaborate. How many employees and how many FTEs does one need before this special exemption kicks in, and why that level?)

Now, by "company" I assume you mean "corporation." Corporations form for various reasons, the biggest being liability. Without it, shareholders could be sued individually.

This protection is worth something to the shareholders. I think it's perfectly reasonable that the state, which is the authority that grants companies the right to exist, should be able to extract something from the company - taxes and fees, for example - in order that the company may continue.

Do you think that corporations should exist without paying any fees to the state? If so, why should they get liability protection for free?

If the tax rate is too high, then people could switch from the corporate form of company to a sole proprietorship. A sole proprietor can have employees, and thus "provide jobs for tax payers", even though the business itself is not taxed separately from the proprietor's income.

Now, obviously there's a large set of trade-offs, and the example I gave - a switch to sole proprietorship - is too blunt. My point is that the idea that "provide jobs" necessarily implies "should not be taxed" is so simplistic that it more indicates a lack of understanding of why there are companies in the first place.

[doctorwho]

A corporation doesn't get liability protection for free, the corporation itself remains liable for whatever it does while the shareholders (but not board members) are protected.

In a global economy, where corporations can exist anywhere they like, taxing corporate profits is almost a guarantee that we'll see the same thing that happened to manufacturing jobs happen to corporate headquarters. The corporations will move to countries with lower tax rates because they can and because it will save them billions. I'd move my HQ to keep a billion in the bank instead of giving to the clowns trying to run the country.

[dalke]

I think you're adding in a nuance which I wasn't trying to clarify. Corporations provide a legal protection that doesn't exist for sole proprietorships, partnerships, or some other forms. (For example, like Lloyd's of London over most of its history, where 'Names' backed policies with personal wealth and had unlimited liability.)

You are correct in that it's not "for free", and the corporation is liable. My point is that corporate existence only occurs through state involvement, and there's no obvious reason why the state cannot make money from that.

You follow up with a market reason. Your statement is correct. Companies (and people, and employers) can use tax differences in the world to their advantage. You are free to move your HQ should you wish.

And that leads us to the topic mentioned by the linked-to article. Quoting from the OECD's "About BEPS" page:

> In an increasingly interconnected world, national tax laws have not kept pace with global corporations, fluid capital, and the digital economy, leaving gaps that can be exploited by companies who avoid taxation in their home countries by pushing activities abroad to low or no tax jurisdictions. This undermines the fairness and integrity of tax systems. The project, quickly known as BEPS (Base Erosion and Profit Shifting) is looking at whether the current rules allow for the allocation of taxable profits to locations different from those where the actual business activity takes place and if not, what could be done to change this.

[Eye_of_Mordor]

I think you are angry with corporations 'getting away with it', but you can view them as an enabler of tax:

- taxes from their employees

- taxes from their dividends

What if there were no corporation tax - how would revenues be affected?

[dalke]

I can view them as lots of ways. For that matter, I've owned two companies myself, one where the business income was part of my income and one where they were separate.

But I'm not answering your question as you've not answered the ones I posed to you. As it stands, it appears that you don't know much about corporations nor corporate taxation. It seems rather a waste of my time to continue this exchange if I don't think you're making a reasonable effort at it, or tire of weak attacks on my character.

[Eye_of_Mordor]

OK, in response to your questions:

Q: Since your logic is "X provides jobs so X shouldn't be taxed" then I shouldn't have to be taxed if I have any household staff, no? A: Nope, that wasn't my logic.

Q: Do you think that corporations should exist without paying any fees to the state? If so, why should they get liability protection for free? A: Government is for the people, so they pay the tax. Liability protection for shareholders would be covered by dividend tax.

[dalke]

Your phrase was "Is there any point in taxing companies at all - they provide jobs for tax payers."

How is that not "X provides jobs therefore X should not be taxed?" Note too my followup: How many employees and how many FTEs does one need before this special exemption kicks in, and why that level?)

You propose an alternative, which is that liability protection is covered by dividend tax.

That's not practical. Google has never paid a dividend, and Berkshire Hathaway has only paid a dividend once since Warren Buffett took over. There are many other companies which don't, or which only rarely, pay dividends.

Why should their shareholders get liability protection when they've never (or almost never) paid said tax?

I see you omitted capital gains tax from your list of two possible tax sources. That of course only applies to companies which make a profit, so shareholders who don't make a profit from their investment (or who never realize their gains over their life) are still getting liability protection for free.

You seem to argue that only the people should pay taxes. That's a perfectly reasonable argument. But as soon as you allow for an entity which is able to control money independent of any person - ie, a corporation - then by definition "any contribution imposed by government [...] whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name" is a tax on that entity.

There's no reason for the government to allow a special entity without getting at least something in return. You don't like income tax on corporations. But you haven't explained why you don't like corporate registration fees or the Maryland law which imposes fees based on the number of issued and outstanding shares. For that matter, if a company isn't taxable because it isn't a person, then who pays property tax, payroll tax, customs duties, sales tax, etc?

That is, why is income somehow special from all of the other taxes that a corporation pays?