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If corporations are people, why did they get their own Special tax scheme?
You’re right. Super wealthy should also get their own tax scheme. /s
I hate that you’re so spot on with how they’d implement it.
Because they are people and we see peons. Common mistake.
Nah bro nah bro you don’t get it, just one more tax cut bro then you’ll get higher wages I promise. Just one more.
It’ll trickle down bro, the trickle is almost there bro, just a little more.
They create jobs. Some workers have two or three jobs! Why do you hate workers!
You know, if you raise the corporate tax rate, there’s actually an incentive to pay people more because that is effectively a cost of doing business… Food for thought.
If the corpo is taxed more on income, it lowers the profit margin, which probably would make them not especially keen on reducing it even further by paying more to their emloyees.
Noone is going to decrease their profits to pay less taxes. You only pay a fraction anyway, how would that even work?
It becomes a balance of "were losing it anyway, might as well use it to attach/keep good employees.
Instead of giving it away to Uncle Sam
This was literally the case when smart phones first came out.
Companies would buy their workers a phone and pay for the plan and write it off.
The second the irs tightened the rules, companies yanked benefit.
They would rather set it on fire than pay people more. They want to keep everyone just barely below water. Almost no corporations are looking to hire good employees, they’re looking to hire desperate people.
Why would they set it on fire? “They” are not sadists, they act out of self interest and this would not be beneficial to them in any way.
It is beneficial to them to keep workers poor, desperate, and with few options.
Because something might benefit the bourgeoisie as a class(God, forgive me for using Marxist concept of class), does not mean it makes sense to do individually, which is what we were talking about.
But I would say this is exactly backwards: individually, it always makes sense to pay less if you can, but not in terms of the whole economy.
Even if you think in terms of macroeconomics, no, poverty is not beneficial. Any economy needs a strong market to sell goods to. Unless the country is exporting somewhere else, high amounts of disposable income is needed in the population for a thriving economy. Paying workers less does not necessarily result in worse outcomes for businesses, especially in the long run, since the economy might suffer.
So you could say that the statement “the bourgeoisie as a class benefits from poverty” is incorrect.
They are very much sadists, they can spend money on anything except increasing wages
No
But they are not losing it anyway, since only a percentage of profits is taxed. They will still make more money if they pay less, just not as much as they would with lower taxes.
Only if they can get in a lower tax braket, but even then, there are other, better ways to do it.
If they need to be more competitive in terms of attracting labour, they will be more able to do this with lower taxes, because they would have a larger profit margin.
Low taxes always once tivizes taking profits. Higher taxes Incentivizes reinvestment. This is not a new understanding. Stop pushing the often debunked reaganonmic bullshit. It was never true, it never made any fucking sense. Just stop
God, I can respect your socialist views, but you don’t have to agree with everything that supports the things you like.
Thinking that if your company start making less money you will pay more to your workers is just delusional, there is no way around it. This is not Reagonomics, this is just reason.
If you claim it is debunked, provide a source for your claim.
I am not even saying we should lower taxes, just refuting your obviously false point that wages will be higher. It is baffling how uncritical you are of what you are saying.
Companies will always try to pay as little as they reasonably can. But sure, live in your fairy tale world where you can just make up reasons why your political views are great.
How many companies do you run?
I’m guessing zero because you have no idea how companies work their financials.
Even a small business should be structured to minimize taxes in ever possible way.
Companies are structured to minimize liabilities of which taxes is one of many.
It’s the very reason companies hate unions, the contract is a series of liabilities.
It’s the very reason companies dumped penions, liabilities.
As soon the tax liability became a non-concern, they went after the now higher liabilities. Thoses things were payroll and benefits. Outsourcing and off shoring.
“Income” is what’s left after they pay their expenses, including labor costs. Worker’s pay doesn’t come out of their profits.
They will increase their deductible expenses. Ideally, they’d increase worker wages, but they’ll probably do something corrupt. It’s fairly easy to say that the company needs a car to get to and from meetings, so they use their business revenue to buy a $200,000 car that they use “for business”. On the books, that’s $200,000 less profit, but they get a $200,000 asset. But, even the corrupt act of buying a car (or a yacht, a private jet, a submarine) pays the wages of workers who built the vehicle.
They don’t really want a depreciable asset like a car. They’d rather buy a thousand shares of AAPL, or 8000 shares of GME, which wouldn’t go toward paying a worker. Except that it’s a lot harder to argue that these shares are necessary for their business. They can’t really justify financial instruments; they’re limited to tangible goods and services that could be used in commerce, which means they are paying the workers who produce those goods and services.
So they stick with claiming luxury goods as necessary for their business, and we let them think they are getting away with something.
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That’s a fallacy similar to people who don’t understand tax brackets and marginal rates vs effective rates and thinking that sometimes a raise can mean you lose more to taxes than if you didn’t get the raise.
IMO if we want legislation to increase average pay, the way to do it is to tie it to other pays, like capping top pay or dividends/profit based on employee pay in some way.
I certainly won’t say I’m an expert on the topic.
I also think legislation is a long road that could leave different loop holes. I’d be interested in others thoughts on a variety of approaches here, maybe some form of credit based on percentage of employee compensation related to performance. Obviously there would need to be an incentive to pay employees more and attach it to executive incentives.
Cap CEO compensation to a percentage of the median employee salary. (obviously a bit of legalese is needed to define this exactly so there is no loophole)
Never work. There are too many ways around “compensation”.
For example, the company purchases a piece of art from the CEO’s wife, to display in their lobby. That wouldn’t be considered compensation for his “services” as CEO.
No, the tax structure is a better option. Close the ability for them to invest their excess income in financial assets. Allow them to reduce their taxable income through deductible expenses for tangible goods and services. Crawl up their asses when they try to justify objects with intangible value like artwork, but look the other way when the purchase is of a product or service produced by workers.
I’d impose a securities tax as well: tax a percentage of all registered securities, payable in shares of the security. Transfer the shares to an IRS liquidator, who sells them off slowly over time. Limit the liquidator to a maximum of 1% of total traded volume to minimize the effect on the market price. Exempt the first $10 million held by natural persons from the tax. Suddenly, nobody wants to hold more than $10 million in shares.
“Number one: In 1945 corporations paid 50 percent of federal taxes. Now they pay about 5 percent.”
“Number Two: In 1900, 90% of Americans were self employed; now it’s about 2%… It’s called consolidation; strengthen governments and corporations, weaken individuals. With taxes, this can be done imperceptibly over time.”
Make American Great Again and raise corporate taxes to 1950 levels
Any corporate tax paid is a rounding error.
They funnel it all back into “growth” even when no more is really possible.
It feels like there’s one person left in this game of Monopoly and they’re still fucking rolling the dice.
That’s how is used to work, and it was a good thing. Now they funnel it into stock buybacks.
But what if i become rich one day? I am pre-emptively voting against my own interest! The leopards will not eat my face!
Are/were there tax brackets for corporations as well?
Not sure about the US but generally no, you pay the same rate from the first dollar.
It doesn’t make sense to have brackets for corporations because they can move their income forward and backward through time to a greater extent than individuals can.
It would incentivise a lot of BS to minimise tax which ultimately isn’t “productive”.
Oh gotchya, that makes sense I guess.
You can raise it to 1000%. Most large corporations don’t pay taxes. We would be way better off if ALL of them paid…well anything really.
Every time I suggested on Reddit even a 0.1% tax on corporate revenue I get a bunch of people telling me it’s a terrible idea, but never with anything resembling a coherent argument as to why.
And it’s pronounced Reich!!!
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I have vast respect for Robert Reich’s knowledge and intelligence, so this statement really surprises me. Corporate taxes are like tariffs - if you raise them, companies raise their prices to recover that cost, passing the burden to their customers. In spite of how everybody cheers for business taxes, they have always been essentially sales taxes, paid by the public. A simplified Accounting 101 explanation tells you corporate tax is paid on profits, but on a deeper level companies know what their profit margin is, and if their tax rate changes they can recalculate prices to compensate so they can maintain the same profit level. Reich must surely understand this. I would love to hear his reasoning.
Raising the corporate tax rate is about as effective as tariffs. The money they have to spend will just get added into the price and they’ll call it “inflation” again. The problem is there is nothing to protect the consumer from rampant capitalism. The middle class has been eroded away, and the lower class loses members to the poverty line every minute. A corporate tax won’t fix that. Consumer rights will. Corporate oversight will. We need someone with a backbone in a leadership position, and we keep voting for the bent-spine cocksuckers that only care about the bottom line. It’s time to start lining politicians against the wall. It’s been a death by inches for decades, and the idea that if we make the corporations pay their fair share we’ll somehow fix the problem is the worst kind of delusion. The roots are too deep now to get away with simple pruning.
Corporate tax is much less dangerous than tariffs, assuming you tax profits.
A tariff kills small businesses with low margins. It directly increases the cost of goods sold. I know because I got bit bad by tariffs this year and might have to close the company.
A tax on profits only reduces what you earn AFTER the cost of goods sold. So if you’re in a high margin tech business, great, pay a lot of taxes. If you’re in a low margin side hustle, great, you owe very little.
Profits are often made up numbers. They can be increased to show growth to potential investors and then lowered just as quickly to avoid taxes. Creative bookkeeping happens all of the time. Trump still does it. Taxing corporations makes everyone feel all warm and fuzzy, but at the end of the day we can’t get corps to pay the taxes the owe now, what makes anyone think a 300% increase is going to get paid?
Edit: You all are mistaking the idea of taxing the rich with the reality. The idea is all cotton candy and unicorns and every kid gets free school lunch. The reality is exactly what we are living in right now. It’s not like the rich have been paying their taxes this whole time and it just isn’t enough. They aren’t paying the taxes they already owe. You can increase the numbers all you want, but it will only lead to a higher cost of consumer goods and more creative bookkeeping. You have to start differently. You don’t start wit the tax. You start with the regulations. You have to have oversight, and you have to have strong leadership. We have neither of those. If you tell your cat not to eat the open can of tuna on the counter and then walk away, the cat is going to eat the tuna. You can’t just leave them to their own devices and hope the rules you put in place are followed. When you walk back in and see that the tuna can is empty, its easy to blame the cat, but it doesn’t matter because the tuna is already gone. When the taxes aren’t getting paid, and there is no one watching the corporations, you can blame the rich all you like, but it doesn’t matter because that money isn’t getting paid if no one is watching them. Oversight. Regulations. That is how you bring the rich back down to earth. You don’t start at the end and hope the rest just fills itself in. But, please, keep downvoting.
The only way we fail is by not trying. The rich want you to believe it is impossible to tax them, it is not.
what makes anyone think a 300% increase is going to get paid?
The objectice isn’t to get them to pay the taxes.
The objective is to get them to lower their taxable income, either by decreasing revenue, or by increasing expenses.
The objective is to reduce the amount of profit they rake out of the business and turn into financial securities.
The goal is achieved when they try to figure out how to claim a yacht as a business expense (thus paying a shipbuilder their wages) rather than buying stock in a shipbuilding company (taking productivity from that shipbuilder).
The goal is achieved when they are forced to avoid the punitively-high tax, because those avoidance strategies are going to keep them from hoarding wealth-producing assets.
They are already avoiding their taxes. Increasing them won’t change that. Decreasing them won’t change it either. I feel like I’m taking crazy pills here and trying to explain the three card monte to a kindergarten class. The money just moves around. No matter what card you flip, it’s the wrong one, because they’ve put the queen in an offshore account. We have to regulate and oversee. We have to put leadership in place to ensure that the laws are followed, otherwise it won’t matter if the yacht was paid for or expensed out, because it will be in international waters where all we can do is watch them wave from it.
I feel like I’m taking crazy pills here
That’s feeling is either because everyone around you is wrong… or you are wrong.
otherwise it won’t matter if the yacht was paid for or expensed out
You are absolutely correct: it doesn’t matter if they yacht is purchased or expensed. The yacht builder makes the same either way, and he’s the one who actually matters here. The situation you need to consider is whether the yacht gets bought at all. When he buys a million shares of YCHT instead of an actual yacht, the yacht builder doesn’t get paid.
The ostensible tax rate on a $1 million earner is about 35%. They should be “taking home” $650,000, which they can spend how they like.
They are effectively paying 25%, by declaring $100,000 of their spending to be a “business expense”. That $100,000 ultimately has to be some sort of tangible good or service, not a financial asset.
This person is collecting $750,000, saying they are collecting $650,000, and is able to buy $650,000 of securities.
With the 91% top-tier tax rate, this person’s ostensible tax rate is, say, 80%. They are avoiding enough taxes to bring their effective rate down to 25%, same as in the first case. That means they have $200,000 to spend on wealth-generating assets, and they are spending $550,000 in “business expenses”.
In the first case, they expensed $100,000 in goods and services, paying the salaries of two median workers. They also purchased $650,000 in stocks.
In the second case, they expensed $550,000 in goods and services, paying the salaries of 11 median workers. They also purchased $200,000 in stocks.
I don’t give a flying fuck how much tax revenue a 91% top-tier tax rate will generate. I have zero reason to think that it will affect tax revenue in the slightest; it may even reduce revenue. But I have every reason to believe that attempting to avoid a 91% top-tier rate will greatly benefit the economy.
What you are describing is trickle down economics. Word for word. The rich spend more, so the people below them earn more. Its not new, and its the whole reason we are in this goddamned mess to begin with. We stripped regulations and let the rich run roughshod all over the economy with the hopes that their money will trickle down to the rest of us. So…
That’s feeling is either because everyone around you is wrong… or you are wrong.
I guess I know which one…
You have inaccurately described trickle down economics.
Trickle down economics is the idea that reducing income taxes makes more money available for employers to pay workers. Trickle down economics is the idea that richer employers pay more workers higher salaries than regular employers, so we should establish a tax policy that enriches employers.
They sine qua non of trickle down economics is “lower tax rates”. If you are not talking about reducing taxes, you are not talking about trickle down economics.
Trickle down economics are bullshit, because taxes are paid on the money that is leftover after paying workers; after business spending. When an employer stops spending and tries to take money out of the business, the tax man takes his bite.
Avoiding the tax man is easy: pay out all your revenue to workers, contractors, venders. Pay out all of your revenue, and you owe nothing.
A punitively high marginal tax rate allows employers to take a reasonable amount of business profits at an acceptable tax rate, then threatens to confiscate pretty much everything after. Nobody pays 91% on any part of their income; everyone gets rid of their excess revenue by buying stuff from workers, contractors, vendors, so that there is no unreasonable excess left for the tax man to take.
You need the remeber your audience - lemmy isn’t exactly filled with people that understand economics, they just think “higher taxes are better!”
So true. Higher corporate tax rates are almost never correlated with either higher tax revenue nor decreased corporate greed.
Higher taxes incentivizes tax dodging and avoidance, the way to increase wealth is to unionize and force employers to pay living wages, alternatively to move past capitalism
Increasing corporate taxes certainly incentivises corporations to move off-shore.
It depends on how the tax rate is raised. If we bump every corporate tax bracket up 5%, you’re correct.
If, instead, we establish a punitively-high top-tier rate, what we will be instead are small and medium businesses operating as usual, while large companies tailor their business models to stay just under the line. It is that “tailoring” that benefits the economy: reducing revenue, and/or increasing expenses to reduce net taxable income.
Giant companies will divest themselves into smaller business units, where they are forced to compete with eachother (under penalty of antitrust laws). This makes it harder for them to devalue labor.
At which point people won’t afford their products and they’ll have to concede. Or, better option, push everyone into FOSS operating systems and renew interest enough in Ubuntu Touch, Postmarket OS, or any of the mobile Linux distros to see widespread divestation from Google, Apple, Amazon Web Services and Microsoft. Nothing but good comes from taxing the rich.
At which point people won’t afford their products and they’ll have to concede.
We’ve got a century’s worth of data that proves you wrong.
Or, better option, push everyone into FOSS operating systems and renew interest enough in Ubuntu Touch, Postmarket OS, or any of the mobile Linux distros to see widespread divestation from Google, Apple, Amazon Web Services and Microsoft.
Bwahahahahaha. ahem. I’m sorry. I don’t know what came over me.
Nothing but good comes from taxing the rich.
Nothing but good comes from taxing the rich, and making it stick. You have to enforce the law. Without regulations and oversight, the situation won’t change in any positive direction.
Nothing but good comes from taxing the rich, and making it stick.
It doesn’t even have to “stick”, so long as the strategies available for them to avoid the taxes are beneficial.
When they are forced to turn around and spend their excessive revenue on good and services, they are putting people to work, creating paychecks, instead of padding their portfolios.
Nothing but good comes from taxing the rich, and making it stick.
Which is why we need a message unity at a scale of global import. You deeply underestimate peoples’ capacity for understanding. People don’t miss that which is stolen from them, until they realise it’s gone. The same, is true of privacy. Once the implications are broadly understood, we will rally. We are not cattle, we are the poets, we are the artists. We are the dreamers of dreams.
I don’t underestimate people’s capacity for understanding, I accurately estimate their energy to get out and do something about it. Everyone knows they’re fucked. No one has the strength to stand.
Well, I guess you’re just a practical loser them.
So this post is dishonest, as one might expect from a blatant anti-capitalist. It suggests that the corporate tax rate has just moved towards the low end in a linear fashion, whereas the truth is that it has fluctuated during the years. It also suggests that taxes were in general higher in 1950, which also is not exactly true.
https://taxfoundation.org/data/all/federal/historical-corporate-tax-rates-brackets/
https://taxfoundation.org/data/all/federal/taxes-on-the-rich-1950s-not-high/
People just became much better at dodging taxes is the real answer, but even your own source shows that tax collections in the 50s And 60s were over 3% of gdp while it’s 1% now
as one might expect from a blatant anti-capitalist
Did you forget where you are? Most of us here are blatant anti-capitalists. Using that as an insult might work other places but you’re not on Reddit anymore, friend.
I mean I think being blatantly anti-capitalist is not a good thing, but tt wasn’t meant as an insult. I do realize some people especially here think that such a position is a good one.
Fair enough!
Actually, why is everyone here an anti-capitalist? I thought only some servers were communist. And why am I here?
Most reasonable people are anti-capitalist because capitalism is inherently a system design on exploitation. The literal point of it is to abuse and exploit the workers for the gain of the few.
I think you might be somewhat insulated from a great deal of reasonable people that don’t share your views.
Why do you have to lie about taxation then, if reason is on your side?
I don’t believe I did but thanks for showing me how reasonable you are.
As one of the few non-radical leftists here, I appreciate your comment. Certainly pleasant to see after a lot of opinions mostly informed by anticapitalist sentiments, not practical concerns or facts.
I’m with you. There are either a lot of bad actors in this thread, or a lot of uneducated people. Don’t really have a preference on which it is, they are both pretty bad.
