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Jeff Bezos comes out in support of increased corporate taxes (cnn.com)
230 points by CharlesW 7 days ago | hide | past | favorite | 386 comments

Jeff Bezos honestly makes my blood boil. The guy has been blatantly advocating for policy that hurts SMBs for years while lobbying the government to do their bidding and getting away with selling it as caring for the poor and SMBS.

Here's a pattern I see play out every few years:

> Media rightly call out super rich for continuing to grow richer while people are struggling and SMBs fail

> Politicians rightly call out super rich and say they're going to do something about it

> Super rich come out in support of raising taxes, additional regulation, etc because who cares about laws and taxes if you're rich. Proceeds to lobby politicians for policies that help them.

> Media praise super rich for supporting policies and politicians that will help the super rich while either not understanding motivation or out right lying about who the beneficiary of these policies will be.

> Politicians implement policies that benefit the super rich while selling it to the public as something that's good for small business / those less fortunate.

> Media praises politicians implementing policies that were push for by the super rich while claiming it will help small business / middle class.

You'd love this story from a law lecture I went to where the CTO of a $Big_pharma_corp came to speak. It was about privacy in biotech.

The CTO said they lobby for high regulation in privacy specifically to stifle startups so they can get them cheaper.

Generally politions work with the biggest industry players to craft regulation and it ends up like you described.

Agreed. Makes more sense when you remember who owns the majority of media companies.

Retirement funds and endowments? ABC/NBC/CBS/CNN are all part of publicly owned companies are they not?


What’s really amazing is how WPP and Rupert Murdoch played the “oh look at what Pewdiepie is saying on YouTube. Does {brand} want its ads placed on it? Meanwhile, they’re trying to bully YouTube into giving them all the data about YouTube visitors.

PewDiePie is a Swedish YouTube comedian apparently, in case anyone else found that reference obscure.

He is also the most subscribed youtuber at 109M subscribers IIRC.

There’s also an Indian channel, T-Series, at 178M.

He said most subscribed youtuber (as in an individual creator) rather than most subscribed channel.

Pewdiepies videos aren't made by one man, though he is the face.

And a new york times bestseller, if mainstream appeal metrics are desired.

Thank you. Still trying to figure out what Server Message Blocks have to do with all this :)

Small, medium sized businesses?

This behaviour is normalized for a while, the wall street journal wasn't an outlier back then, but now it seems to be also expected when working for big media outlets, just look at the recent Georgia debacle. Activists disguised as journalists pressure companies to act in their favour or they will throw a fit.

I'm about half-way through Chomsky and Herman's propaganda model laid out in "Manufacturing Consent". Corporate ownership of media houses is said to be the first censorship filter that determines which angles of a policy debate get highlighted and which ones don't. Along with reading Matt Taibbi's "Hate, Inc.", where Chomsky's model is extended to post-internet US media, I can't begin to describe how much of the US media coverage of these issues has begun to make sense to me.

As Chomsky points out, propaganda is still useful information, since the angles being portrayed in a debate tells us what a societal elite wants us to see (and conversely, not see)

European here, not sure if I follow you.

Is this about the Georgia law forbidding giving water to people waiting in line to vote?

What if he really thinks this?

I remember Ron Paul saying we could do away with personal income tax - and providing facts to back up his argument - and people thought he might be crazy.

He also wanted to get rid of the Department of Education (which most people don't understand)

If you tell people that the Department of Education went into existence only in 1980, and that children before that somehow learned to read without it, the idea of getting rid of it doesn't sound quite as crazy.

This is true but not true. From wikipedia:

> The United States Department of Education (ED or DoEd), also referred to as the ED for (the) Education Department, is a Cabinet-level department of the United States government. It began operating on May 4, 1980, having been created after the Department of Health, Education, and Welfare was split into the Department of Education and the Department of Health and Human Services by the Department of Education Organization Act, which President Jimmy Carter signed into law on October 17, 1979.

> The Department of Health, Education, and Welfare (HEW) was created on April 11, 1953, when Reorganization Plan No. 1 of 1953 became effective.

From Eisenhower's speech creating HEW:

> The purpose of this plan is to improve the administration of the vital health, education, and social-security functions now being carried on in the Federal Security Agency by giving them departmental rank.

Back to wikipedia:

> The Federal Security Agency (FSA) was an independent agency of the United States government established in 1939 pursuant to the Reorganization Act of 1939. ... The new agency originally consisted of the following major components: (1) Office of the Administrator, (2) Public Health Service (PHS), (3) Office of Education, (4) Civilian Conservation Corps, and (5) Social Security Board.

> Even though the first steps toward public education were taken in 1647 by the Massachusetts Bay Colony and land was set aside for public schools by the Congress of the Confederation in 1785, the idea of universal, free public schools did not become firmly established until the Civil War era. Even then, only half of the States had an efficient public school system.

> In 1867, Congress established the Department of Education to promote the cause of education and collect and disseminate facts and statistics about education. Until it was transferred to the FSA, the Office of Education and its predecessor organization had been part of the Department of the Interior.

So while the DoEd in name wasn't created till 1980, its forebears existed at the Federal level as long as we've had public education in the United States.

Taken from various wikipedia pages, but an overall summary is here:


There are lots of examples of this restructuring in the government. For example, it would be foolish to say we should abolish the Dept. of Veterans Affairs because we were somehow able to take care of veterans prior to it's creation in 1989.

Nice summary. What I'd also want to know is how this Department of Education has grown in its various incarnations. If it used to be a small fraction of its current state not too long ago, then even if getting rid of it entirely is unwarranted, it might still make sense to roll back its growth, so that it can focus on things where it can really add a lot of value.

I'm curious if you even understand what the Dept. of Ed does. Is it the money, because that is mostly due to Pell and other grant distributions. Is it Title IX and other enforcements? Is it enforcement of the ADA within the education system?

Like what specific functions do you think the Dept. shouldn't be doing or could be scaled back? Because, like the Dept. of Energy (which is really the Dept. of Nuclear Material Management), I think a lot of people don't understand the purpose of the Dept.

>I remember Ron Paul saying we could do away with personal income tax - and providing facts to back up his argument - and people thought he might be crazy.

Income tax is a word that disguises the more accurate but insidious term: protection money.

If the govt wanted to to collect money 'legitimately' then should charge for their services. (so for example a big truck can pay more tax than say a car for use of the road).

Of course we know that since governments will generally do a worse job than private entities, so they will stick to income tax.

every word in your comment is wrong, somehow. your views seem rooted very strongly in the idea that "private enterprise can do anything well" and that is an opinion which does not agree with any of the experiences of my entire life.

businesses know how to give profit to shareholders and owners, and they do not know how to do simple things like keeping different departments each from doing work which invalidates the work of the other department.

I mean have you ever worked for a business? they are all giant messes masquerading as organized entities.

it is laughable to think that a business could be better at most things that the government now does.

"It is laughable to think that a business could be better at most things that the government now does."

I can't imagine what experience you've had to believe this. I've been in the work force for 20 years and for the most part, the shittiest businesses I've seen have been magnitudes more competent than what I've seen of government.

>I mean have you ever worked for a business? they are all giant messes masquerading as organized entities.

Lol, have you ever worked for the government? Nothing will ever clean up their mess. With businesses ( which are not aided by the govt in someway) latest one day they will perish if they are not profitable.

(Yep, I have worked for 3 decades with businesses, and probably know about 10 people who work for the government)

I've worked for both. stop watching conservative media exclusively, and stop having conservative friends exclusively.

there is a very large swath of reality that you are choosing to ignore.

Perhaps it's time we think of a tax tier for large companies that generate over $1B in revenues. This tax would apply on gross revenues, not on profit, to close potential loop holes, and it should reflect the social and environmental impact that company ($1B+) has on society.

Large companies ($1B+) that have a negative impact on the environment and society, should pay more taxes to disincentivize the harmful behaviour. On the other hand companies that have a positive impact on the environment and the society should pay less.

Also, any billionaire person who labels themselves as a philanthropist should pay double digit % taxes. After all, through taxes we contribute to public good, infrastructure, social support and public institutions. Privately controlled investment funds labeled as charities don't count. Everyone knows.

That would heavily penalize high-revenue low-profit-margin industries, such as retail. What's the point? Amazon would split off its profitable parts (AWS/services), which would make the barely profitable parts of Amazon worse for everyone.

As far paying taxes: All these billionaires aren't really making that much money, they're mostly owning stuff that may or may not appreciate. The fact that it does appreciate is now mostly a function of monetary policy. If you want to tax that, you really need a wealth tax, which is essentially confiscatory. Good luck keeping that capital ashore.

Lastly, even if you did somehow manage to keep billionaires around and tax them, it's not really that much revenue. You might as well not bother with it. It sounds unfair, and it is, but "worse is better" in this case.

> Amazon would split off its profitable parts (AWS/services), which would make the barely profitable parts of Amazon worse for everyone.

Okay but how is that actually bad?

The barely profitable parts of Amazon, ie the retail operation, are already pretty comprehensively lousy. Making it unprofitable to more or less monopolize retail, the way Amazon does now, seems like it would open competition back up among ecommerce business on a smaller scale. As I've discovered since quitting Amazon myself, with platforms like Stripe and Shopify, human-scale ecommerce no longer needs to be - or is! - the patchwork headache we all remember unfondly from 2005. The experience at point of sale is consistent, reliable, quick, and pleasant. The money goes to support small businesses, rather than being shoveled directly into the flaming mouth of Mammon. And while it does take a little longer for shipments to arrive, that's actually also a net good because almost nothing actually needs the kind of unsustainable next-day Prime treatment that Amazon's retail operation insists on by default. Without Amazon's perverse incentives toward counterfeit garbage, the rate at which I've had what I get match what I order has so far been 100%. And without Amazon Logistics involved, I can be fairly confident besides that whoever did the work of delivering that order probably was not denied the basic human dignity of access to toilet facilities because of rampant Taylorism or for any other reason.

You've really made a remarkably strong case for the thing you're arguing against! I doubt that's what you wanted, but I appreciate it all the same.

Fun fact: Amazon is <10% of retail in the US, and lower globally.

I don't really have much to disagree with you about, but maybe you want to check the "monopoly" claim.

But their retail presence is often at the expense of SMEs

Look how the small ecommerce companies have all become FBA companies

>Look how the small ecommerce companies have all become FBA companies

While I suspect you're right in that many have, I don't believe it's anywhere near a majority.

FBA: fulfillment by Amazon.


Or in the alternative, Fellow of the British Academy.


I used "monopolize" loosely, sure. Maybe they don't entirely, but they clearly want to.

(And don't they? How much of b2c ecommerce are they? - how has the pandemic affected their share? You seem to have readier access to that data than I do!)

I've just come across the statistic before. Here's a quick search hit, saying e-commerce as of a year and a bit ago that indicates 35% of e-commerce.


Maybe they do want to monopolize, but I'm pretty sure that they couldn't, what with Walmart, Target, eBay, Ali Express, and other major global players in the space. Amazon's want is largely irrelevant to a conversation like this.

On the other hand, it's harder to make a sentence flow around "oligopolistic".

I feel like seeing that Amazon owned a third of US ecommerce, before the pandemic stomped brick-and-mortar flat, goes more to my point than to yours.

Your point has changed at least twice in this thread.

My point was simply that "monopoly" is not an accurate term here.

You can't say "oligopoly may be more accurate, so I've been correct."

Sure I can! You're quibbling over my choice of a single, admittedly inexact but contextually plain, word, rather than engage at all with the actual point I made. I'm just trying to meet you where you are.

> a single, admittedly inexact but contextually plain, word

Within the context of a policy discussion, a monopoly versus oligopoly is a pretty material difference. Every growing business at some level “wants” to monopolise their niche.

You are still not addressing the point despite wording clarifications that addressed your original quibbles.

You're responding to someone else now.

I'll quote myself:

> I don't really have much to disagree with you about, but maybe you want to check the "monopoly" claim.

If you want to have a debate, we can. Name something you want to disagree on.

You make some good points, however every company should find a way to be sustainable and pay their fair share of taxes to society. If that's really not possible, then perhaps that business should go bankrupt. Breaking monopolies and monopoly-like structures will create many opportunities for SMEs / SMBs to flourish.

> All these billionaires aren't really making that much money

I'm sorry, I can't tell if what you are saying is sarcastic, naive or perhaps you work as an Amazon Ambassador (throwaway account, 3 mo. old?).

What's the alternative? Don't tax corporations, allow them to form monopolies and starve SMBs? Don't tax billionaires, allow them to hoard power and give them a free pass on everything? Trust that somehow power cannot corrupt them?

> You make some good points, however every company should find a way to be sustainable and pay their fair share of taxes to society. If that's really not possible, then perhaps that business should go bankrupt.

This sounds nice in theory, but in practice there is always the option to just not do business. You can get away with high taxes if you have something to offer in return, but at some point you just damage or destroy the economy.

> Breaking monopolies and monopoly-like structures will create many opportunities for SMEs / SMBs to flourish.

Fair enough, but as a consumer, perhaps I would prefer not to shop at the SMB equivalent of Amazon? Perhaps I like the fact that AWS is cross-subsidizing my deliveries?

Amazon isn't really much of a monopoly if you consider that it really competes on price and there isn't much of a barrier of entry to their market. They have little competition because it's not profitable, not because they're so powerful. Of course Amazon knows this, which is why they attempt to build a moat with regulation and taxation.

> I'm sorry, I can't tell if what you are saying is sarcastic, naive or perhaps...

Perhaps you did not quite understand what I am saying: These people are not earning money, they own assets. Owning assets can earn you money, such as dividends or rent. Those are already taxed. However, the reason why people find themselves on top of the "richest people" lists is usually not because they earned income from assets, but because the assets they own appreciated in value.

In general, you don't tax that appreciation because the asset price could drop just as well - if the Fed didn't bail out the market every time. You tax the profits gained from selling those assets. If you never sell your assets because you are already a billionaire and don't need cash, you don't get taxed. This is not really much of a tax revenue loss, because if you taxed, say, unrealized stock gains, you would massively suppress the value of stocks. Such hypothetical tax revenue just doesn't exist, at least not in the amount that you may imagine.

> What's the alternative? Don't tax corporations...

Yes. Corporate tax does nothing but make the country less interesting from a business perspective, for what little revenue it creates.

> ...allow them to form monopolies and starve SMBs?

That is orthogonal, in fact SMBs would profit the most from reductions in corporate tax.

> > ...allow them to form monopolies and starve SMBs?

> That is orthogonal, in fact SMBs would profit the most from reductions in corporate tax.

Is it possible that this is the root of the issue? Filing corporate taxes is 10x as complicated (and expensive) as even the more complicated end of personal returns. I've got 1099 income, sole-prop and LLC, schedule C, home office deductions, business car lease, backdoor Roth, business and personal itemized deductions, etc. I pay maybe $200/yr to my CPA for all the paperwork and filing, sometimes as much as $300.

In the past I was a partner in an S corp. We paid $5k+ every year for all the paperwork.

Reductions in corporate taxes would be beneficial to smaller shops for sure, but simplification might be the best thing for everyone. Corporate income is going to get taxed twice most of the time anyway (once at the corp, and again when it passes to someone as income) so there seems to be little need to incentivize anything other than reinvestment which already happens by it not getting taxed as income. A simple progressive tax structure based on profit with little that can be deducted outside of actual reinvestment would simplify things greatly.

> Reductions in corporate taxes would be beneficial to smaller shops for sure, but simplification might be the best thing for everyone.

Indeed. Watch Amazon lobbying for a tax that you don't have to pay, but you have to pay for proving that you don't have to pay it.

Unless you have specific information, that "Amazon is doing this for evil" narrative is really forced.

If nothing else, I'd expect the tax increase to take the form of "same tax, but we take bigger numbers", so the cost of paperwork for small businesses would remain exactly the same.

>I'm sorry, I can't tell if what you are saying is sarcastic, naive or perhaps you work as an Amazon Ambassador (throwaway account, 3 mo. old?).

I'm not who you responded to but surely you can discuss without resorting to accusations of shilling or insults.

Jeff Bezos sold over $10 billion in Amazon stock last year, they absolutely are making that much money. This whole 'net worth isn't liquid' meme is incredibly damaging and overstated.

Yes, in that instance, he made money, but also paid taxes on that. He probably wouldn't have sold if he didn't think it would be wise to diversify a little after such a huge price jump. Or maybe he just wanted to buy something ridiculous, who knows.

In general, the super-rich don't need to sell, which is why they don't need to pay taxes. If you want to change that, you need a wealth tax, with all its problems. That's my point.

He did pay taxes, but probably at a lower rate than an average doctor. The preferential treatment of capital gains over wages is a huge giveaway to Bezos.

> Jeff Bezos sold over $10 billion in Amazon stock last year,

Then he also paid income taxes on that.

> which would make the barely profitable parts of Amazon worse for everyone

Would that not benefit the competition? And isn't that a good thing?

I'm much more sympathetic to arguments about what's good for people (consumers) than I am to what's good for competitors.

I think people would be made worse off if Amazon's retail operations were to be made worse (or shut down in the limit case).

For Amazons customers, yes - but competing offerings might be better off - by creating a gap in the market that might be filled by more motivated businesses.

"I think people would be made worse off if Amazon's retail operations were to be made worse (or shut down in the limit case).


Maybe short term but the in the long term I think everybody would be better off with more smaller competitors instead of a few dominant ones. Same for Apple. I don't think their size is good for the economy or technology in the long run.

Isn't that arguing in favor of unfair competition (specifically undercutting), in a roundabout way?

One person's undercutting is another person's competition.

There's nothing wrong or anti-competitive about undercutting another retailer. At some point, you can get into anti-competitive predatory pricing or "dumping", but I don't think anyone is credibly arguing that Amazon is dumping product below their cost.

Oh no we might lose our billionaires? Good riddance.

There are good answers to the tax exile argument, but this ain't one. A tax whose only purpose is to drive the people who would pay the tax away is a bad tax.

the biggest impact of such for such corporations is the removal of the foreign income tax credit as is also makes it somewhat uneconomical to attempt pet to doge taxes vis the high tech gambits of underpricing a virtual IP and selling it to another controlled corporation to hide revenue in at the lower tax rate

In fact is has been recommended by most economists

I don't see how taxing foreign income would work. A corporation would just spinoff foreign business to avoid it. If you tax those it'd just reincorporate offshore. The USA simply can't tax the foreign income of a foreign company.

If any nation on Earth can pull this off (or a wealth tax for that matter), it's the USA. The reach of the US financial system is immense: blocking off access or otherwise making life miserable for companies that attempt to offshore operations on paper is certainly something the US could do if it has the political will.

In 2010 Congress passed FATCA [1], which forced financial institutions in foreign countries to give up information on assets held by US nationals in their borders. This was extraordinarily unpopular with other countries: I'm in Canada, and the amount of negative press was astounding. In addition to privacy concerns (the law applied to dual-citizens, including "accidental Americans" who didn't know they held US citizenship), implentation proved to be very expensive for foreign banks.

However, the US played hardball: if a financial institution was non-compliant with the provisions of FATCA, the US government took 30% of any payments made to them as tax. There was tons of grumbling, but foreign financial institutions went ahead and implemented it.

To add insult to injury, the US is itself not compliant with FATCA, as the information sharing is supposed to be reciprocal if a foreign country signs a reciprocal treaty. That has not happened.

Access to the US financial system is an extraordinarly big stick when the US government chooses to wield it. It's often said that preventing offshoring or creating a wealth tax is impossible without global buy in. Really, the US could do it if it wanted to. It would not be popular, but FATCA shows there's precedent.

[1] https://en.wikipedia.org/wiki/Foreign_Account_Tax_Compliance...

> In 2010 Congress passed FATCA [1], which forced financial institutions in foreign countries to give up information on assets held by US nationals in their borders.

With the unintended side effect that it can make it incredibly hard, if not impossible, for an American citizen to open a bank account in another country. Even if she's a resident in that country.

It'll still only work if tax policy is globalized. As long as there are tax havens this cannot operate. And the appeal of being a tax haven for small nations is incredible.

In most places (e.g. Luxembourg, Basel, Lichtenstein, ...) the "pick your favorite tax scheme" game is tolerated (in Basel you can have your pick of 3 tax schemes. Anything agricultural goes for the French scheme, most of the rest, especially medical technology, for the Swiss one, Car companies like their German tax (I'm guessing to avoid import tax)). And while not quite as impactful, it's still tolerated at e.g. the French-German border.

And of course there is the "European exception". EU countries each have their tax policy set so "their" company doesn't get taxed. Even the EU proper has such a company (Airbus). But individual countries do as well: the Netherlands has Shell, France has Total, Belgium has lots of government non-government companies (e.g. Sita, Eurocontrol, BICS, who are "Belgian" but multinationals ...). The incumbent telecom is usually beneficiary of such schemes as well, as well as large medical concerns.

And I would like to point out: one thing FATCA (+the preexisting international income tax the US has) has done is make it much more difficult, much less worth it, for US citizens to work abroad. Do we really want that ?

It's one thing to talk of equality, in the context of say the US, but what of international equality?

Being a tax haven is arguably how small nations achieve this. The US has a large unfair advantage in terms of economy - has done since at least WW2.

America skews heavily in favour of freedom - for Americans in America, not so much outside that system.

We should make corporate income taxes progressive. Small businesses should pay little to no tax, megacorps should be taxed strongly enough to encourage spinning off other companies rather than the current strategy of "acquire everything to squelch competition and maximize power". This concentration of power diffuses responsibility and allows megacorps to do evil profitably: a dozen independent amazon subsidiaries would have a much harder time lobbying in lockstep and would likely compete against each other - improving prices for consumers and labor conditions. Free market maximalists should welcome this increased competition.

Let's tax the economy of scale and force companies who are not able to utilize economy of scale well to split into multiple smaller companies.

Or just introduce higher regulations, including the degree to which a corp can compete across different industries.

For example, I sometimes thing large corporations can beat out smaller competition purely because they have/can afford a large legal/patent dept, that smaller single-industry players do not.

There should also probably be more rules wrt competition - allowing private interests to control TLD/DNS, protocols, Operating systems/ecosystems, hardware specs/compliance, the EM spectrum and other common utilities/services has allowed an extreme bent towards monolithic companies - force theses large corps to spin off internal services!

> On the other hand companies that have a positive impact on the environment and the society should pay less.

Just have a carbon tax. Setup a general scheme for SMBs, and allow larger corps to setup their own if they can do it more efficiently (regulate that, of course).

I agree. Sheer size should be discouraged. These big corporations lead to a business monoculture and hinder innovation by killingn off or buying promising new ideas.

Large corporations and billionaires also have an outsize influence on politics at the expense of small business and regular people. They shape the world to their advantage.

Let’s not forget that many of the politicians are part of the rich as well.

This is often forgotten but to me is the core issue. Sociologists point this out. Many corporate executives and politicians went to the same schools, are part of the same non-profits where they sit next to each other at dinners, and their kids are friends on the playground at whichever private school. They end up on the boards of each other’s companies. If you really boil it down, in the US there are probably less than 500,000 people in this upper echelon, fewer with real power. Same neighborhoods, same restaurants, same vacations, same circles.

Reminds me of the lead paint in toy scandal during the late 2000’s.


Mattel lobbied for and helped write legislation that regulated themselves... and everyone else.

The laws ended up disproportionately hurting small toy makers while rewarding Mattel for their bad behavior.


When you realize Bezos also owns a newspaper, and journalists get paid to write articles praising this or that. Honestly, it’s enough to jade anyone at this point.


He has accumulated quite some wealth. So corporate tax doesn't hurt that.


Small to Medium Businesses


Pretty reasonable course of action in the current climate. It is cheap and makes the headlines.

We have a system in place to address societal concerns. We came to this system after 2000 years of human history. The place is called the parliament + courts in a democracy. Yet, we don't want to follow that structure and continue on media + social media trials. So now, we as a society are "hacked" on social media + media. If we don't have the discipline, we deserve to see this played. Worse - we will only seen incessant complaints and rarely any action towards change.

What he doesn't mention is that an increase in corporate taxes will mostly impact SMBs and not giant "Big Tech" companies that have all kinds of ways of avoiding them and employ hundreds of people in their finance and accounting departments who are tasked with minimizing taxes. It's your ma&pop stores that will take the brunt of it.

In the same way that the new "Stimulus package" now requires that payment processors report any transaction over $600 on a 1099-K Tax Form, it's always the little guy that is mostly affected by the changes in tax law because little guys have no lobbyists and don't have an easy access to lawyers to fight the IRS.

Yes, yes and yes. People are sometimes surprise why people who has a lot of money seem to be left-leaning and support things like higher taxation. First, it is never a concern for them. If they need, they offshore their money or pay lawyers who know tricks or start some foundation to pass money through it.

Something that people from middle class are not able to afford.

The other reason is that making difficult for members of middle class to accumulate wealth secures their own business, they are effectively killing the growth of potential competitors.

In the longer perspective this is very dangerous, it creates oligarchy, which, in turn, has all the incentives to restrict free market, free speech and democracy.

Middle class is important for the society since those are people who have time to engage themselves into public affairs, they don't have to spend all their time trying to earn money. In addition middle class is much more numerous than 1% of the wealthiest. As a result they give work to a lot of people who are down the social ladder. Both Mark Zuckerberg and some Mr. Jones, who owns a grocery shop employ a single babysitter, need a single plumber to fix their pipes, are able to eat the same amount of food, etc. So thousands of Jones are given job to much more people than single Mark Zuckerberg (obviously I am talking about Zuckerberg as a person, not his company).

That's why from the social perspective it is important to have as many Mr. Jones as possible. They give work to a lot of people, they drag them up. That's why taxing heavily middle class is a terrible idea and all the "tax the rich" regulations in the end mean "tax those who cannot escape taxation".

I find comments like this confusing. It seems that you agree with leftists that equality is important value.

But then you say:

> all the "tax the rich" regulations in the end mean "tax those who cannot escape taxation"

Why is avoiding taxes different than any other moral problem? Why cannot you say, "putting conmen in prison" in the end means "smart conmen will avoid prison". It's this moral defeatism that gets me.

Sure, there will be people who do immoral deeds and avoid being caught, but how are we better off by not trying to catch anyone?

It's even in the open, that the large corporations pay little taxes, everybody is a witness to that. You (as a society) can change that system if you want.

I can't speak for the other person, but I think I have a similar perspective. I don't like big corporations, I think many smaller businesses are better. For one, if only a couple companies exist then you don't have many choices. For another, working as, what previous generations might've called a wage slave, feels very soul crushing. I think society would be freer and people would be happier working for smaller companies that they owned and had bigger impacts in. On top of all that, a few big companies means concentrated power and that means a few rich folks can leverage their power to political ends to get more riches and more power etc.

"Tax the rich" sounds kind of like a good idea at first but then you take into account the point about how the rich have lawyers, lobbyists, and accountants. Rich people and companies already figure out how to subvert tax laws. Why wouldn't they figure out how to subvert the new laws they are clamoring for too?

Put another way, is Bezos supporting this law because he wants to be worth less?

I'd prefer we solve things more directly. Break up big business via anti-trust. Stop businesses from buying one another. Rather than raising taxes let's just simplify the tax code so it's automatic and there is minimal ambiguity or flexibility for creative tax accounting. Let's bring legal cases on all the questionable tax strategies big companies are engaging in. Raising taxes to hope we catch the big guys doesn't seem like a smart plan to me. It seems more likely they'll dodge the increase and smaller companies will get hit with it.

> I'd prefer we solve things more directly. Break up big business via anti-trust. Stop businesses from buying one another. Rather than raising taxes let's just simplify the tax code so it's automatic and there is minimal ambiguity or flexibility for creative tax accounting.

Well, I don't see how it's feasible or desirable to do things more directly. You're saying BigCos are a problem, and you want to disincentivize their formation, then picking them on one-by-one basis will actually require more expertise and more effort, compared to having laws (e.g. tax laws) that apply broadly, and then enforce these laws.

We have laws precisely so that we wouldn't have to decide every case individually, and that the rules are clear to everyone, so they can avoid possible (and arbitrary) punishment.

I also think that as long as you want to tax all corporations the same, there will always be an inherent advantage in being big. That's why many people suggest progressive taxation in various forms to disincentivize such empire-building.

> Raising taxes to hope we catch the big guys doesn't seem like a smart plan to me.

This is a straw man - nobody is arguing just for raising taxes and then not enforcing those laws, we would love to enforce these laws of course. But having them is the first step to enforcement, I don't think your approach (enforce something without support from laws) is more viable, even legally. It requires more regulatory expertise, which you argue we are lacking compared to corporations.

Also nobody is really arguing against tax code simplification, but it only can get you so far.

A couple big companies versus hundreds of small companies in a given industry is a strong feature of leftist driven governance, whether it comes from republicans or democrats. For the little guy they are definitely not.

Big governments love a couple big businesses because it’s much easier to infiltrate, influence, control and ultimately procur wealth with that small group of businesses rather than attempting to influence 100’s or even 1000’s of smaller and independent companies.

So the next time you see 3 domestic car companies, and 3 airplane makers, and 4 toilet paper makers, 3 oil companies, etc. Understand they want it that way because of control and $$$$.

Don't equate big state with left. It's really two independent things, and not how most leftists think, in my experience.

>"I'd prefer we solve things more directly. Break up big business via anti-trust."

In theory I am all for it but on the other hand what would be the allowed size? I can hardly imagine mom and pop shop producing Lithium Ion cells, starting foundry etc, etc. This measure could put country to severe disadvantage against any other that does not implement same measures.

To be more practical and keep competitive edge internationally I'd just milk big companies by way of taxes and make sure there are no loopholes and perks like foreign earning exceptions etc. And outlaw political corporate lobbying.

when people say stuff like this

> all the "tax the rich" regulations in the end mean "tax those who cannot escape taxation"

I think they are usually talking about avoidance (legal), not evasion (illegal). while some avoidance schemes do toe the line of outright evasion, I (perhaps naively) don't believe ultra-rich people routinely employ illegal tax strategies.

personally, I'm okay with the fact that some people will inevitably break the law and not get caught, as long as it's not pervasive. if nothing else, they will have to live with the anxiety that the music might stop for them at any moment.

what I'm not okay with are the "tax the rich" initiatives that look good when condensed to a set of talking points, but in reality are just a tax hike for the upper-middle that will be easily (and fully legally) avoided by the wealthiest people. convince me you have a solution for that before you come for even more of the wages I actually work for.

> Why is avoiding taxes different than any other moral problem?

Isn't a complex tax code a moral problem for the same reason? The other way to attack the problem would be to simplify tax codes more.

You've read something into the post that isn't there. It isn't taking a position on equality. Poster might or might not support it as a value.

Notice that there isn't an argument that Zuckerberg should have less money. There is an argument that Mr Jones should have more. As far as anyone on the left is concerned that would decrease equality (the obvious way to achieve it is less transfer payments from the middle class to the poor).

> the obvious way to achieve it is less transfer payments from the middle class to the poor

This is an oft-touted talking point, but not actually correct. If you add up all the numbers, most social welfare in the West proportionally goes to pensions and healthcare. Poverty relief is usually a smaller budget than corporate welfare. This article (0) shows the distribution for the US.

Additionally, part of US social welfare specifically enables companies like Walmart to get away with not paying their employees a living wage, so is de facto corporate - not social - welfare. In short: thinking of it in terms of "the poor are the problem" only helps hide the wealth transfer from the middle class to the upper class.

There is no way for the middle class to have more money while keeping the wealth for the upper class constant, because the system already trickles up middle class wealth. At some point, we should be expecting companies to pay their dues and change rules to make them: corporation tax, liveable wages, overtime compensation, emissions, pollution, workplace safety and perhaps even off time caused by burnout.

0: https://www.usgovernmentspending.com/us_welfare_spending_40....

If welfare didn't exist, corporations would be forced to pay those wages directly.

UBI solves all these issues nicely. People get to spend the money in the way that works best for them. Because they aren't 100% tied to the corporations, the worst, lowest paying jobs gain leverage when negotiating.

While not the best solution, it is far better than current welfare. Even Milton Friedman supported UBI in this context.

> Because they aren't 100% tied to the corporations, the worst, lowest paying jobs gain leverage when negotiating.

They're just shackled to a government handout making them totally dependent on the government of the day's generosity or lack thereof.

Do we not consider the people who are getting pensions and relying on the government to pay for their healthcare as the poor? They've got no money.

> That's why taxing heavily middle class is a terrible idea

This seems to relate to marginal income tax rates, not corporate taxes.

>and all the "tax the rich" regulations in the end mean "tax those who cannot escape taxation".

They don’t have to. Simply eliminate deductions and credits and exemptions.

If you eliminate deductions, you end up with a gross receipts tax rather than an income/profit tax system.

There’s nothing at all simple about switching from one to the other. (Grocery stores in particular would be extremely hard-hit and a lot of us rely on them to survive. The wheels would come off quickly if not carefully thought though.)

Grocery stores would raise prices. What is the issue?

If the issue is it affecting poorer people adversely, then that should be addressed by making them less poor, e.g. the government giving them money.

Grocery chains that were more vertically integrated would handily outcompete independent grocers who had more intermediate steps in their supply chain, each of which was taxed on their B2B revenue.

Whole Foods could conceivably become the equivalent of a discount grocery by virtue of such integration, after Amazon bought up farms and distribution channels.

This is also why a VAT is theoretically better than a sales tax, in my opinion: it removes the incentive to vertically integrate to avoid the transaction tax....

That’s a good point I had not considered.

> Simply eliminate deductions and credits and exemptions.

Simply? In a global world economy? There is nothing simple about it.

"... this is very dangerous, it creates oligarchy, which, in turn, has all the incentives to restrict free market, free speech and democracy."

One could argue that the US is already an Oligarchy or more accurately an 'Oligarchic Plutocracy' which has accomplished all of the above.

Who is disagreeing? It’s far more difficult to argue the i verse.

Anybody who refers to USA as "democracy"? There is a lot of politicians and even ordinary people who say that.

Even I would refer to USA as democratic, but there is lot of evidence that the democratic component is pretty weak.

> In addition middle class is much more numerous than 1% of the wealthiest. Both Mark Zuckerberg and some Mr. Jones, who owns a grocery shop employ a single babysitter, need a single plumber to fix their pipes, are able to eat the same amount of food, etc. That's why from the social perspective it is important to have as many Mr. Jones as possible.

This seems like a false narrative to me.

For example, the policies Biden is putting forward tax household income at those above $400,000 annually and above, which is firmly in the 1%. This isn't your plumber or single babysitter.

In addition, they are discussing a minimum corporate tax rate and closing loopholes so that corporations and individuals can't pay 0% in income taxes, which is what many are paying now.

> which is firmly in the 1%

If the numbers at https://dqydj.com/average-median-top-household-income-percen... are correct, the "top 1%" household income threshold in the US in 2020 is $53lk. $400k is closer to the "top 2%" level.

More importantly, these numbers like "400k" tend to not be inflation adjusted (e.g. the cutoffs for the net investment tax and the additional medicare tax are not, cutoffs for phaseouts of the child tax credit are not, etc). And income percentiles grow faster than inflation. Looking at that same data table, it looks like the percentile boundaries grew 6%+ year over year from 2019 to 2020. If that's not a fluke caused by the pandemic in some way, then in 10 years you expect something like 1.79x growth in the cutoff numbers, which would put $400k at about the "top 8%" level at that point.

Is it possible that your idea of what level is "firmly in the 1%" is just a few years out of date?

I shouldn't have even included the "top 1%". That's an unfortunate flash point for veering any policy discussions off the rails.

Take the raw numbers. Yearly household income of $400,000 is not gong to affect the baby sitter or local contract plumber. I stand by my assertion that the OPs comment was attempting to distort the narrative.

Yes this may need to be adjusted for inflation down the road, like anything else.

Fwiw, I think you were misunderstanding part of the comment you replied to. It was not saying that the babysitter or contract plumber make $400k but that the local grocery shop owner might, and that both that shop owner and someone truly rich add comparable amounts to the economy in terms of service consumption.

I suspect that both of those claims are dubious, by the way. Someone with more wealth is in fact likely to employ more plumbers (due to having more toilets) and babysitters-per-child (full-time nannies, tutors, etc). And given how low-margin grocery stores are, I don't know that I'd expect a grocery shop owner to end up with $400k+ taxable income....

> Yes this may need to be adjusted for inflation down the road, like anything else.

My main point about the inflation bit is that it's disingenuous to introduce a new tax with a claim that it "does not affect the middle class" when you know with near-certainty that in 10 years or less it absolutely will. In fact you are banking on that to make the numbers you depend on actually work out.

Almost all proposals to "tax the rich" that do not come with automatic inflation adjustments built in are just proposals to tax the middle class in disguise.

Your post really resonates well with me. I wondered many times in my life, how do you effectively tax actual rich people without squashing the middle class?

Many EU states seem to get this very wrong.

I think the aim should be less about making the rich poor and more about making the poor rich. Programs that encourage entrepreneurship, safety nets, lower taxes, etc. I think we should also consider reducing immigration and free trade to benefit labor in country.

> I think the aim should be less about making the rich poor and more about making the poor rich

I agree in principle, but reducing immigration and restricting free trade aren't policies that make the poor rich; they're policies that benefit those in possession of scarce resources at a cost to the rest of society.

Take steel tariffs for instance. They benefit the steelworkers, at the cost of every domestic industry that consumes steel. The entire economy pays to support an otherwise unprofitable industry.

Reducing immigration won't magically increase the supply of skilled workers. There aren't masses of unskilled poor who aren't going to college due to immigration putting downwards pressure on skilled wages. They aren't going to college because they lack the resources and opportunity.

I think it's a trade-off. Tariffs and the like will make us less efficient as a whole, but will shift money back towards labor. Right now I think we're tilted too far towards efficiency which is leading to wealth accreting in the hands of a wealthy fortunate few owning massively successful companies.

I’m pro trade and pro immigration, but the argument on the other side is if you open up both, labor in the US now has to compete on a global arena rather than being somewhat protected via isolationist policies.

> How do you effectively tax actual rich people without squashing the middle class?

Here's some ideas:

1. Tax stock buybacks similar to dividends. Or eliminate them entirely. This leads to...

2. Let unearned income tax brackets go up to the same % levels as earned income, only for different income levels. For example, if $400k in earned income is 38%, then maybe $2m in unearned income should also be 38%. Right now long term cap gains tops out at 15%, which is bullshit.

3. Since wealthy people borrow against their assets to spend, instead of selling assets and incurring taxes, place limits on interest deductions when doing this. There are already similar limits in place for mortgage interest deductions.

> how do you effectively tax actual rich people without squashing the middle class?

By using a tax ladder [1] (tax rate increases in steps).

[1] https://en.wikipedia.org/wiki/Tax_ladder

Can you name any that do?

This isn't corporate taxes.

I'm pretty sure Bezos doesn't like this idea all that much, but it's the price of getting on board with Biden's infrastructure plan.

He probably views it as an investment. Amazon has a keener interest than most in ensuring road maintenance is done properly and if that means a small increase to his tax bill he's probably ok with it.

He also desperately needs to score some progressive points. His reputation is getting trashed rn. I'm sure that factored in to his decision.

I'm skeptical of the notion that he wants this to keep competitors down.

The guy who says “your margin is my opportunity” doesn’t want to influence taxes on the margins of others to keep competitors down? Instead he cares about road maintenance funded specifically through corporate tax hikes?

Why wouldn’t he just advocate for road maintenance?

Edit: whoops, I didn’t read his actual statement. Tricked by CNN! Still, I’m a little skeptical of ascribing motivations to people like Bezos that aren’t in line with his past actions, but instead are in line with my personal politics, which is why I’m skeptical.

Did you think lobbying is just asking for goodies and offering nothing in return?

Couldn’t one make the argument “there is no use because Big Tech have so many lawyers” no matter what the new policy is?

If taxing the big companies is the aim, how does one gauge the policy suggestion?

(I am not Americans just watching this curiously from outside)

Edit: spelling

This is one of the primary reasons I promote using the simplest possible tax and incentive structures. The simpler it is, the easier it is to avoid creating loopholes.

Besides, paying tax should be a much easier process for the small fish.

The loopholes aren't accidents.

Well one policy could be "tax companies with more than x lawyers".

Such rules only act as an incentive to find new loopholes and waist money using them. A large company can spend 99% of what they save in taxes to find out how to save it and its a net gain.

The solution would be to have absolute minimalist tax rules which are so simple that there wont be loopholes. Then also make judges apply common sense and smash every attempted loophole until everyone stops wasting money to find one.

Never going to happen obviously but we can dream.

The issue with this is that tax code is often used as a proxy to fix all sorts of social problems that lead to inequality. We give tax breaks to subsets of populations who really need them. We also push policy through tax incentives, for example solar related deductions.

I think we'd be better off fixing the deduction of such problems, but just pointing out that part of the reason taxes are so complicated are to enable this. Another reason is to create corporate tax loopholes...

Subsidizing anything should never be done trough tax breaks anyway. It just hides tax spending. Also this was about corporate taxes not private taxes. If a corporation "really needs a tax cut" its probably just unsustainable and if not it should find investors to bring the money voluntary not force spend the peoples money.

Yes the loopholes are intentional but it only helps very few individuals and a whole industry of layer, while corporations aren't actually in the business of finding tax loopholes they are indirectly forced to participate anyway because their competitor does. People blame the companies for evading taxes but they are not the problem they have to play along because everything else would be hard to explain to the shareholders.

Imagine if you are a business owner and your company slowly grows to amazon size. At what point would a sane person like to pay people to evade taxes? You would never want to do that instead of building a team of tax specialist or outsource that you could expand in real business. Your local small business owner and Jeff Bezos both have no interest in that.

Voilà! Amazon Legal Services LLC (no connection to Amazon.com Inc. ;), now provides all legal services to Amazon.com Inc.

This doesn’t work at all, many companies don’t have lawyers of their own but keep big law firms on retainer. And companies could just offload more onto JD-advantage employees/ law student interns anyways since they’re not “lawyers”

They have both in-house counsels and work with external law firms. A reason for doing this is to avoid liability.

Some big companies retain multiple law firms and ask the same advice a couple of times. If an overworked attorney who barely gets any sleep ever misses a point or drafts his/her advice vaguely in a way that would enable their evil plans, they rely on that single opinion. If there are any problems they don't assume any liability, because hey they got a legal opinion from a respectable law firm. Nobody needs to know/can prove they obtained multiple opinions on the same matter because of legal privilege.

In return, big law gets paid a lot of $$$, because of the risk of providing such opinions under considerable pressure and trickstery.

Having a legal opinion supporting an aggressive tax position that is eventually overturned doesn’t get you out of liability for that position. The appearance of food faith efforts to comply with the complex tax code may reduce penalties assessed.

Sure, my comment wasn't tax code specific. There is always risk involved, but it's much less. If you need to do it anyway, better pressure a lawyer into giving you a legal opinion. The company will pay pay the fine but who can blame you for acting on it.

In a big corp, I think most employees are concerned with saving the day. If the management pressures them to cut corners most will. What better way is there to pass the blame?

They'd just outsource them to a legal firm

One proposed reform was to give corporations an obligation to explain the difference between their profits declared to the IRS (as low as they can get away with) and their profits declared to their shareholders (accurate, because they want people to buy their shares).

Both declarations are available to the IRS; if you force corporations to declare how they "bridge the gap", while it would let them practice tax evasion, it would make it easier to assess what form that evasion takes; and it would make fraud much harder.

I don't remember if it went through.

Rate reconciliations are required disclosure. See page 64 of the 2019 financial statements [1].

[1] https://s2.q4cdn.com/299287126/files/doc_financials/2020/ar/...

Yes. Throw enough smart tax lawyers at a problem and limit your tax regardless of what law is passed.

The traditional solution is to lower taxes and simplify the tax code.

Large corporations have an effective tax rate below the nominal one due to antics with exceptions — while smaller businesses get hit harder. What’s called “progressive” often ends up regressive due to the imbalance in ability to do finance trickery. Rich people will always find or create exploits in the law, so those “high taxes on mega corps and billionaires!” hit the middle class and medium sized businesses: they’re who bear the brunt of taxes, in the US.

You get out of doing that unnecessary damage by removing the game: no whatever exceptions, just a flat rate everyone pays.

What’s called “regressive” is actually progressive in that it lightens the tax burden on the middle class and medium businesses, while making the richest pay a fair share. (Also, simpler codes are harder to cheat.)

Discussing the tax burden of the poorest is a misdirection used by politicians: the poorest in the US receive more benefits than they pay, so it’s a question of how that burden is split between the middle class and the upper class.

It's not that simple. As far as I know, corporate taxes are already flat. (If they weren't, corporations could easily split into several smaller ones to keep their profits below some threshold.)

The big issue is with "just a flat rate that everyone pays". What do you pay that rate over? Big corporations manage to pay that rate over nothing. Generally those corporate taxes are paid over profits, so corporations avoid taking profits in countries that tax them. They sit on their money, pay it out as bonuses to executives, and take their profits in tax havens.

The issue isn't the tax rate, it's the loop holes. It's that the amount that's taxed is easily manipulated. Instead of easily manipulatable profits, the tax should be levied on something less easily manipulatable. Like revenue. Of course that already happens: VAT taxes, only because you pay them on all products, they are effectively paid by consumers, not corporations.

But how about allowing corporations to deduct their local external costs from their revenue? Not easily manipulatable foreign external costs, but simply the costs made in the same market as where the revenues come from? Then you're effectively still taxing profit, but tied to the local market, cutting tax havens and internal trickery out of the picture. A company on the other side of the world selling in your country but not making any costs there; no labour, manufacturing, rent, etc; would pay tax over their entire revenue, whereas a local shop that has does have all those costs, and therefore cannot help but invest in the local economy, gets to deduct those costs and pay less taxes.

I think that could do a lot to even out the imbalance and make the playing field a lot fairer.

How does international trade work under such a system? Does my iPhone get taxed as 100% profit with no allowance for cost-of-goods-sold?

If a country doesn’t make automobiles or refrigerators, are those taxed as if they were pure profit for the retailer? It’s not like a local retailer is going to manufacture even refrigerators, let alone cars or phones.

Countries could decide they have enough in common in terms of taxes and trade that they calculate this over all those countries combined, as long as they exclude tax havens and other countries that seem to take a parasitic advantage of the markets of other countries.

> If they weren't, corporations could easily split into several smaller ones to keep their profits below some threshold

I think we need to address this somehow. Perhaps by counting size by which actual people control and/or own the companies rather than the current arbitrary legal structure.

Part of the problem with corporations is definitely that they're a massive concentration of money and power, with no person being responsible for it. If every company was just a small business of one or a handful of people working together, instead of this artificial legal construct that concentrates power and assets with no liability, these things would be a lot easier. But then you also can't do the massive investments that corporations do.

> It's that the amount that's taxed is easily manipulated

Did you even read my post?

It’s entirely about this fact: you wrote a long rant concurring, but phrased as violent agreement.

You just pulled a single phrase out of a multiparagraph post, then strawmanned my argument.

That’s not up to the standards expected of HN posts.

I did read your comment. Did you read mine? There's nothing violent about my agreement. I agree with some points, disagree with others, which I explain further. There's nothing strawman about that.

The first three paragraphs straw man my argument and misrepresent my position as saying flat taxes were the solution and it’s more complicated — when that’s exactly what I said. Literally, my entire comment is about loopholes and unintended consequences to tax policy... except the very first line, which seems to be all you read.

You had one more paragraph with some random technical considerations agreeing with me.

Then you concluded.

You literally just repeated my point, but started with “it’s more complicated than that” — which is phrased as a disagreement with my point.

That’s a straw man (misrepresenting my suggestion as being a flat rate, even though my entire comment was about loopholes — like yours) and violent agreement (phrased as disagreement when repeating the same thing).

Your reply here is just wrong. (:

> ... not giant "Big Tech" companies that have all kinds of ways of avoiding them and employ hundreds of people in their accounting department...

You could make that argument against absolutely any policy. So what is your solution then? Don't do anything?

Tax individual wealth and remove income taxes for corporations. Not capital gains, but wealth as in Switzerland or The Netherlands. Income taxes for corporations all disappear when the corporation reaches a given size after which the state only captures capital gains taxes from shareholders and employment and other taxes. The only companies that end up paying income tax are the small ones. So just tax wealth of individuals and remove all the shenanigans in between.

> Income taxes for corporations all disappear when the corporation reaches a given size

Could you explain why this is the case?

> So just tax wealth of individuals

Individuals can play the same games. Jeff Bezos could move most of his wealth into funds, foundations or companies and be poor on paper while still keeping the de-facto control of all assets. Or they could shift their wealth overseas, into tax havens or into less transparent areas like crypto.

>> Income taxes for corporations all disappear when the corporation reaches a given size

> Could you explain why this is the case?

Just to comment on this real quick, this has multiple reasons. Basically, the larger your company is, the more funds you have to spend on lawyers and experts, as well as offshoring. Also, depending on the country you're in and the specific tax laws, it might be easier to fulfill incentives for nullifying the corporate tax (IIRC reinvesting and creating jobs is how Amazon nullifies a good chunk of their taxes, right?). That is not to say, we should completely axe corporate tax imo, because some of those incentives are really good. You want corporations in your country to reinvest and create jobs, because that's overall a really good thing for the job market.

The thing about Bezos' wealth is that a huge chunk (maybe even the majority) of it is already in the form of assets. That's not as easily moved overseas (though to my limited understanding it isn't impossible) without hurting his own company, and at that point it might be profitable to just pay a wealth or asset tax or something like that. Obviously that would need to be designed REALLY well, but there's a good chance that that's how we can tax exactly what we want to tax, without hurting small businesses and without hurting the lower class.

If we could close most loopholes taxing the wealth of the individuals might work.

I’m talking all loopholes, even giving money to a 501c3. Billy’s nonprofit gives back less than 1% to the country that coddled him. Plus—I feel a lot of nonprofits are just tax dodges.

Want to manufacture overseas? Fine, but move to that country, and don’t come back.

I got carried away again. I would like to basically see tax loopholes closed, or only allowed the first few years of a business life.

I guess one of the major realization to be made that this is mostly a real-estate problem and taxing wealth is not going to help. Most of the wealth held by wealthy individuals is just on paper. If you put a high tax on wealth, most of this value is going to be erased overnight.

The problem is real-estate as this is what people need. If people could buy property they would not be interested in stocks or crypto and they would not care for rich people getting richer. They would be busy in their pools or backyards.

And fixing real-estate is not done by having more taxes, penalizing vacant homes, or grabbing your inheritance. It's simple: Build more housing.

Yes. Believe it or not, not doing something is better than doing something that will definitely have a detrimental effect.

I am almost in my 40s now and one thing I've recently learned is that sometimes it is better not to do anything at all.

Increasing the tax rate isn't what matters; the structure needs reform. For example getting rid of income tax and replacing it with revenue taxes, which are more difficult to circumvent.

I'm not sure if revenue taxes are the better idea: they will impact low-margin businesses (e.g. restaurants) hard.

This is actually doable, though you need specific classifications for each business

You can set a fee of 3% for restaurants let's say, and 10% for some other business (example)

This makes sense for small business

Amazon restaurant chain starting up, it's amazing how much of Amazon's money needs to be moved into that subsidiary.

Get a free iPhone with purchase of our $999 steak dinner.

I would assume they would raise prices so margins stay similar, though I don't know if that's been experimented with.

Even if it does mean less restaurants and less eating out, there is nothing inherently more unfair about it.

That just benefits vertical integration. Amazon would pay less taxes in Amazon basics than third party goods. What you really want is a VAT. You're only taxed on the value add of your product. It's widely regarded as the most efficient tax and the US is one of the only countries that doesn't use it.

I agree there are some issues with a revenue tax, but VAT isn't good enough because you really want to capture B2B transactions.

You can also see for example the digital services tax introduced by France because VAT was not proving effective.

VAT does capture B2B transactions. That's what makes it different from a sales tax. I'm pretty sure that you already have to pay VAT when buying online ads.

Businesses can deduct all the VAT they pay. I do have a business in the EU; I'm familiar with it.

Sales tax is essentially a tax on corporate revenue.

Is it? In the US, at least, sales tax is taken on top of listed prices (it's uncommon for an establishment to list "tax included" prices), so essentially a customer is paying for the product and then paying the government on top of it.

Unless your thought is that businesses would charge more if there was no sales tax. I don't really buy that, though; businesses list pre-tax prices specifically to avoid sticker shock.

It does not capture any B2B revenue?

Intentionally so, because taxing B2B revenue is effectively a financial penalty for not being a huge vertically-integrated megacorp. It means that any goods which have more than one company involved in their production are taxed at a higher rate than ones where every step is done in-house. This is not generally a desirable tax incentive.

Always the conflict is: how can such a huge company make so much money and pay so little in taxes? Always the answer is: they didn't make profit because they reinvested or otherwise spent the money. (Correct me of I'm wrong)

How about a policy of mandatory 10% profit for companies over 1B in revenue? That would produce some nice antimonopoly effects too.

> Always the answer is: they didn't make profit because they reinvested or otherwise spent the money. (Correct me of I'm wrong)

Generally the answer is: they "spent" the money on "intellectual property" licensed to them by a subsidiary in Ireland (patents, brand name, software license) where that subsidiary pays zero takes through some accounting trickery[0] and moves that money offshore to Bermuda or Caymans. So the main company makes zero profit in markets outside Ireland because coincidentally licensing expenses exactly equal the gross profits of the company - and thus pays zero taxes anywhere ever.

[0] formerly the "double Irish" international tax loophole, nowadays there's a different "Irish patent box"

Ok so what about us legit companies that actually reinvested our profits in new hires and other expenses? We'll just pay more because some companies are avoiding taxes? If you want to close a loophole, then close a loophole... if you raise taxes... well, they can still use the loophole.

That's not generally how GAAP works.

This is essentially being proposed as part of upcoming legislation in the US. I'd say it's likely to happen, and it probably won't have a big impact

> How about a policy of mandatory 10% profit for companies over 1B in revenue?

Funny. China had a profitability requirement for any IPO until the beginning of 2020.

> Always the answer is: they didn't make profit because they reinvested or otherwise spent the money.

This is the desired outcome and we should not touch this.

-Not the OP, but my impression is s/he implied that the big corporations performed tax shenanigans to ensure their taxable profit ended up very near zero - say, buying expensive services from subsidiaries in tax havens &c.

Say I run a company out of the US called 'Paraná' (Seeing as the other big river is already taken), turning $1B/year profit.

I promptly spend the profit buying consulting services from 'Paraná Consulting and Tax Shenanigans LLC' based out of a Panama mailbox for $1.05B, for instance - then I even run my US business at a loss.

(I don't know anything about US or international tax codes, but the above basically sums up the methods described in X stories I've read about tax planning over the years.)

I feel like this be addressed by simply banning all trade with tax haven countries.

Define tax haven countries. The UK is a tax haven for a lot of Russians, Switzerland is a tax haven for anyone not American, the UAE is a tax haven that the US does 18B in trade with, and that invests roughly 25B annually in the US directly, Singapore is a tax haven that the US actually has a surplus with. So yeah, it's not simple.

Would you also ban trade with tax haven states? There are states that have no income tax, low worker protections that offer lower costs, or did not choose to pay government employees 40 years ago with unfunded retirement benefits.

> all trade with tax haven countries.

UK, Netherlands and others countries have their own tax havens like Cayman Island, Curacao Island. Are you really going to ban trade with such big financial powerhouses?

You need a big enough bloc to make the decision together. Ideally the US + the EU + UK/EEA countries. But then yes, if countries outside the bloc decide not to comply then that's on them.

I'm growing increasingly weary about the cult of "reinvestment", which is also visible in some new corporate tax complications in my country. As sibling comments point out, this "reinvestment" can be phony IP purchases in tax havens. On the other hand, even if reinvestment is genuine, there's a question whether further concentration of capital and power in that one corporation is good for society. People say: wow, Amazon got people stuff delivered during lockdown. Truth is, even in a region where e-commerce and delivery markets are far more fragmented, it somehow happened.

Pay the damn wages and dividends, I'd say. The former will go into consumption, the latter will go probably into other companies, especially if we discourage less productive uses of capital (like real estate). And also getting taxes from these is more straightforward. Maybe they don't even have to be that high percentage-wise, if there is less possibility of avoidance.

> Pay the damn wages and dividends, I'd say.

If the goal is to increase wages, then government should lower the supply of labor and increase the demand for labor. Provide minimum x weeks of vacation, parental leave, maximum 8 hours per day until overtime rates kick in, free higher education, etc.

As for forcing companies to pay dividends, I’d rather the government not be able to tell me what to do with my company’s funds. If the government wants control of the funds, they should raise the tax rates.

My comment was more about popular mindset than specific policy solutions. I was trying to say that maybe reinvestment is not always an unquestionably good/best thing.

> As for forcing companies to pay dividends, I’d rather the government not be able to tell me what to do with my company’s funds

I don't want to digress too much, but limited liability corporation and more complex structures with shareholders are creations of the government. You used to have to obtain a specific charter from the sovereign for each one of them. So unless you're an individual doing business with unlimited liability, it's debatable whether government (or the lawgiver, to be more specific) shouldn't get to make the rules for you.

The government can make rules, but I don’t see why it has to do with how a company chooses to spend money. If the government wants more funds, then increase the taxes. Government can remove deductions for business expenses, raise tax rates, etc. But there’s no reason for government to tell a company what to do with its excess cash.

The corporation is a creation of the state. The state has obligations to humans, not to corporations. If the lives of humans to whom the state is obligated would be improved by any number of onerous requirements imposed on corporations, the state certainly should impose those onerous requirements.

Of course, the idea that states are created for the benefit of humans is bullshit, but it's nice to dream of something better...

> If the lives of humans to whom the state is obligated would be improved by any number of onerous requirements imposed on corporations, the state certainly should impose those onerous requirements.

I agree with this. Which is why I wrote the state can choose to increase taxes. I have yet to be shown how requiring a company to pay dividends accomplishes the goal of improving the lives of humans.

Dividends are taxable, and they're often paid to entities that are unable to structure "profits" as carefully as the largest corporations can. So, in this discussion in which everyone (even Jeff B!) seems to agree that more taxes should be collected, dividend requirements would be a way to do that.

Of course, that's too tame. We'd be better off eliminating the most common forms of incorporation, or severely curtailing them e.g. maximum revenue limits. All the things that corporations can do, individuals, partnerships, mutual-benefit firms, etc. can also do, except often more carefully.

Hmm. Let's see how they do it in practise: funnel all money to another entity for 'licensing' their own brand. Net effect: no profit == no tax. Benefits for society: zero. Sure you don't want to change that?

How does the other entity get out of taxes? If the answer is offshore tax havens, I agree that they're a problem, but domestic tax policy isn't the greatest lever for fixing this. But in general, just moving your money around doesn't let you entirely evade taxes.

Moving your revenue to a place with low taxes, lets you escape taxes

> doesn't let you entirely evade taxes


It's not about evading taxes to 100%, but maybe 90% (not sure about the numbers).

Also, the taxes get paid in a different country, doesn't benefit the people in, say, the US.

Simply using licensing fees to shift revenue is a simple trick but countries can legislate against it if they want. Example:


In that example they found that the 'licensing fee' was a royalty meaning there is a 30% withholding depending on double tax treaties and rates between the two locations. Which for a zero tax foreign licensor would mean a 30% local tax on however much you send overseas.

Thanks, interesting example.

I wonder how much the company saved on avoiding taxes in that way, until it didn't work any more. (Didn't see any numbers, having had a look at the linked page)

I wonder if there's any table of all different methods companies use, to avoid taxes, and how much they typically save, and what could be ways to stop it

Maybe could be helpful for lawmakers

> required to pay 30% withholding tax

That's quite a lot is it? Compared to company taxes. Seems like a strong incentive to stop cheating

Company taxes are also 30% over here typically, flat rate. It is quite a lot I think, for small businesses at least. They don't have economies of scale or fancy setups and owners will pay a tax on profits then income taxes for themselves (I think dividends can work around this with franking credits), it can hurt margins, not to mention compliance overheads for GST etc.

Why? I'd rather the Gov the spend money on programs than corporations on RND.

Uh, in that case we'll have to disagree. I think corporations in general do a better job of spending money than the government, but I don't have hard evidence for that view.

> I think corporations in general do a better job of spending money than the government

Agreed. To add perspective, I don't believe corporations will give a crap about the people (extreme example, Amazon) like we believe our respective governments should. I'd rather have bad spending on keeping people alive than no spending at all.

In my experience, corporations are great at finding ways to get "innovation grants" and "R&D tax incentives" for things that involve no real research or innovation.

Instead of actually promoting innovation, they tend to become a subsidy for the tech industry.

historically, the Government is by far the worst spender of money. they have the greatest power, and the worst track record.

What's the data here? Didn't "the government" create the internet, tons of medical research, the interstate highway system, etc?

Meanwhile Joe Schmoe bought yet another iPad (which wouldn't exist without the government inventing much of computer tech) to go in a landfill in two years. But at least he funded Apple's ability to make a brand new, basically identical model, next year.

How do we measure who has a "good" track record on spending money?

Just ask anyone who has worked for the US Government, Military, or contractors.

To avoid pure anecdotes, the Government Accountability Office actually studies this every year: https://www.gao.gov/products/gao-20-440sp ...

That's not to say I don't believe in government spending. I don't know that there is a much better solution, and any conglomeration of humans is going to have roughly equal capacity for doing the right thing and doing the wrong thing, hopefully weighted more towards the "right" thing with solid leadership...

I don't think that supports your premise. That's like a company report showing where it wasn't spending its money optimally. All institutions, public and private, waste money in some way.

"Why? I'd rather corporations spend money on RND than the Gov on programs."

R&D would get us fastest nice things like space colonization, longevity, megastructures, the next step on the Kardashev scale.

As far as I know, it was Nasa that put a man on the moon, not some coorporation. Also: the internet was invented by the government. What nice things have corporations given you?

NASA was the program manager for the Apollo program. You don’t think NASA actually built the rockets or the various modules, do you?

NASA doled out public money to prime contractors for various pieces of the program (North American, Grumman, Rocketdyne, Douglas, IBM...) and the primes subcontracted various pieces as they always do.

This is not to understate the tremendous engineering effort of organizing such a huge program, but it’s not like this achievement was done by a bunch of government workers alone.

I'm not agreeing with either you or the OP but in answer to your question: Being able to watch reusable space rockets.

Yeah, and now they "reinvest" in stock buybacks to pump up the share prices. And the people at the top get... tons of shares.

Thank you, loopholes!

Let me add more nuance to this.

What you mention is less true if corporate tax is progressive on profits.

On the other hand, Amazon wouldn't care about corporate taxes on profits because it reinvests all its revenue.

Avoiding taxes for corporations most often involves pouring money into projects, which in turn creates jobs, which in turn puts money into peoples hands. Of course this is not an issue for big companies that have the capital to do this.

This is arguably a more efficient transfer capital rather than raising taxes and then dealing with bipartisan political entities in the most efficient use.

Id also point out that the new tax policy also raises wealth tax by a significant amount. Also, its probably better to deal with wealth tax on a state by state basis, since this in turn forces the development of generally low tax areas since its favorable for people to move there (like all the companies setting up shop in Austin right now, which in turn raised the wealth of anyone there who owns a house by close to 100k at this point)

I'm sorry but putting a floor on corporate taxes is a good idea as long as all parties abide by the same rules. You don't seem to understand that the USA has some of the highest in the world so it would actually help SMBs here. There should be an out for when countries don't keep up their part of the bargain. They should pay a heavy price such as punitive tariffs for X number of years.

The 1099k thing for payment processors has been required for years. It means that companies like MasterCard and PayPal and square need to report transactions, not small businesses. The payment processors fought hard against it and lost.

At the weekend I calculated that Amazon's UK division pays 77x more corporation tax than my company. Which sounds fine, until I realize my company is probably worth 1000000x less than Amazon's UK division ;-)

> What he doesn't mention is that an increase in corporate taxes will mostly impact SMBs

So, in practice, that's just lobbying to kill his competition off?

On one hand: Good for him. I hear he also does a lot of charity work.

On the other hand: Wait wasn't it Amazon who cheated on taxes like no other company (compared in size)?

After the union shenanigans, his biasedness in the elections or well deserved PR desasters such as the contest for a new headquarter (what a surprise it went where it can influence policy most), I'm a bit allergic to being nudged to see his moves as all too altruistic.

Increasing corporate taxes raises the burden across the board, for competitors and possible future ones. Meanwhile Amazon can afford to have its accounting adjusted to mitigate the impact more efficiently than any competitor could.

It cements his position.

I really wish people would stop seeing large companies paying low taxes as cheating and "loop holes". It is neither and it makes us blind to the cause of the problem.

The politicians we vote in deliberately create laws that allow large companies to pay little to no tax. It is not an accident or a sneaky corporation that outwitted a dumb politician, it is by design.

You may be misunderstanding cause and effect.

> it is by design

It certainly wasn't "designed" for geographically flexible entities such as Amazon that didn't even exist 30 years ago.

When ever a new kind of entity fits in loop holes that weren't open one technological advance earlier it has any interest to lobby politicians to keep that niche/grey-area open. That can and should be called cheating.

Cheating by what standard? Surely all forms of lobbying for self-interest should not be called cheating?

They should be. Just replace every word "lobbying" with "bribing" and you will see it yourself.

Many of us like it when the EFF, ACLU, Nature Conservancy, or <insert your favorite cause> group lobbies.

We do not consider that bribery, yet when a group we dislike does the same thing, we’re supposed to see all lobbying as bribery or just that of opposing groups?

<Edited to add brevity.>

There are certainly forms of lobbying that are not bribery. Conflating the two is a false equivalency. Lobbying, in general, is the process of informing politicians about certain topics important to an interest group or set of individuals / constituents. When lobbyists bribe (which is illegal) or more realistically: when lobbyists conditionally contribute campaign donations, those actions are the moral hazard.

The problem with lobbying in general is that it's a one-sided information stream: politicians are generally uninformed about a topic and only get the information from the wealthy side (ie. the one able to pay a lobbyist). No need to bribe in general, just overwhelm the poor politicians with "facts" and they have no choice but to walk in line.

To play the devil's advocate: without lobbying, politicians instead get that information from whoever happens to have the resources control the narrative through astroturfing and media manipulation.

Lobbying is at least transparent in its intentions.

Great, now it's "informing". So please tell me, why does this "informing" with some real action afterwards happens only when "informing" side is wealthy? The answer is - because politicians expect tangible, personal real life benefits after such action. Maybe not now, maybe years later, but every one of them does. That's basically bribery with extra steps, it always was and always will be so.

...because you changed the words, you will see it for yourself?

Just because it's hard to put into words doesn't make it not cheating. The fact is society evolves and it takes time to discover the negatives of a lot of business models. People who exploits such models already have the benefit of our non-retroactive judicial system.

Writing a letter to your representative arguing for lower taxes: cool. Making large contributions to their campaign fund, paying them tens of thousands of dollars for a 30 minute speech at your conference etc: not cool.

Lobbying is a red herring. If it were really so powerful, companies would spend more money like it when lobbying for competing interests. Amazon spends in the order of millions on lobbying and in the order of billions on marketing.

Isn't 'marketing' just 'lobbying' to the general public? It's all a bunch or propoganda and unscrupulous behavior made possible by abusing amassed wealth. I suppose being lobbied has more perks like nice dinners and free drinks...

And who lobbies said politicians with huge power and influence? Isn't that part of the design as well?

Yes, and I think that should be illegal.

My point is that it would be more productive to focus on fixing the system than just getting angry at companies for "cheating".

The politicians are bought off by the large corporations.

Its not like the corporations haven't been using their financial influence, particularly after Citizen's United, to influence the rules.

I think its as much a case of technology, both product and ease of manipulating companies structures has moved past the traditional taxation rules per country.

We need to start approaching more taxation rules at a trading/travel block level. E.g. G12 say minimum 25% corporate tax or any product/service that involves non-complainant countries has a X% duty type thing.... or something down that concept route.

I think the real rich person law they politicians have supported and can influence is capital gains tax. Capital gains at a certain point is income. There's a reason CEO's take a $1 salary, they are clearly not living on that.

From what I've seen, tax loopholes exist mainly because of incompetence.

The Section 482-7 regs were written by the IRS to control how intellectual property is shifted offshore. The valuation methods outlined in the article were questionable. I read the regs multiple times to understand them and made an Excel valuation model to follow their rules.

Don't think the IRS realized they created terrible, ridiculous theoretical models. Don't think it was intentional either. Just a few people that didn't understand the implications and congress that signed the code into law without being able to understand it. Tax code for valuing IP is highly complex.

The US government writes terrible tax code in my opinion, mainly because they're just not very good. They're not as good as top private sector tax lawyers.

I empathize with the "You make the tax laws @SenWarren; we just follow them. If you don't like the laws you've created, by all means, change them" sentiment. Multinational corporations have to comply with tax laws from multiple countries that are arbitrary and complex.

I think a lot of it is not by design. Writing laws is hard, especially tax laws. Companies have incredible resources to find loopholes they can use. If they get patched they'll just find another one. The problem is that you'd prefer easy laws that anyone can follow, but those will always have loopholes. The more provisions you add to close loopholes, the harder it'll be for small companies and individuals to remain compliant.

I don't think any of us here could come up with a tax code that cannot be exploited. And of course large companies will exploit any loophole, all of us do when filing our taxes.

Maybe the problem is the existence of such powerful companies. Once you have them, it's very hard for politicians to stay on top of them.

To be clear, I'm not saying that there's no corruption or politicians favoring large companies. But most loopholes used by companies tend to stem from good intentions. It's like in IT security, there are backdoors but most bugs still have a benign origin.

Deliberate allowances are created but big companies can hire legions of lawyers to reduce their tax burden, to find all sorts of minutia & excuses & readings of words to take advantage of every subclause they can. The aggregate effect feels enormously poisonous, totally toxic. Mega corporations can adapt far faster than anyone or anything else, including those charged with governing & regulating.

Good governance is hard. And megacorps are an advanced persistent threat that goes to great lengths to claim exceptions for itself.

It only takes one clever accountant to find a loophole. The right fix is to simplify the tax code.

Guess why most billionaires favor political parties that agitate against simplifying the tax code...

"find all sorts of minutia & excuses"

Usually those are in there to be found and used. Your energy would be better spent being upset with the politicians for putting it in there than the lawyers for finding it.

there's a lot of sense to this, but I still continue to believe a lot of very good incentives & governance exist, that help small & medium folk, that intend well. I'm not in favor of giving up & u regulating; when systems benefits are dominated by the big, it's time to re-regulate, try to alter the ellegible beneficiaries.

Absolutely, the solution is better laws and regulations.

> Mega corporations can adapt far faster than anyone or anything else

i really don't think this is true, many big companies are hopelessly bureaucratic

I hugely agree with your sentiment. But I think this case still stands. As opposed to the human "resources" that do the work, which management feels it must direct & organize & lead & regulate, the financial department often speaks the same business school language, is already aligned to the board-level/business-school goals of raking in barrels & barrels of money.

It's also largely a question of what change is required? I've seen a parent company move itself to become a subsidiary of a holding company which is now landed in another nation. It had almost no effect on the day to day. It was paper work.

Megacorps are filled with paperwork. But that doesn't necessarily mean they are bad at it, slow at it.

Compared the government? How long did it take to fix the tax law for the Dutch Sandwich or whatever it’s called. A decade?

> On the other hand: Wait wasn't it Amazon who cheated on taxes like no other company (compared in size)?

It's because Amazon has low profit margins compared to other companies its size - AWS is profitable but the retail business isn't very much, and investors don't want them to make more money because they like free shipping too much. The remainder is lost to R&D credits.

If people want Amazon to pay more taxes, then Washington state should have an income tax. Pretty straightforward.

This is just the first PR article in what will become a decades long attempt to restore his image, just like Bill G.

He was ruthless and inhuman to his workers and we should never forget that.

I don't see the parallel to Gates. Bill Gates wasn't always popular because many people hated Microsoft at the time. I don't think there was ever concern that he treated workers wrongly or abused the tax system to get rich. I don't buy that Gates set up the foundation just to improve his image. He is really invested in these topics.

For Bezos that could very well be true. Interestingly enough Amazon used to have a really positive public image until about 1-2 years ago. If he had quit any earlier, maybe his image would be much better now.

Clearly Beso's should hire Gate's publicist.

> ruthless and inhuman to his workers

Unfortunately not only that, but ruthlessness is a main characteristic of most of his business practice. This peace is obviously yet another attempt at further increasing the size of his moat around his corporations. On top of that never forget he also has a substantial stake in mass news media itself.

> Wait wasn't it Amazon who cheated on taxes like no other company

The problem is they aren't cheating. They are hiring a lot of lawyers to find every single LEGAL mechanism in the book to allow them to pay no taxes.

I'm not saying I agree with it. But the problem here isn't with Amazon it's with the US tax code, which has been molded over decades of politicians and lobbyists to allow for this.

To fix the system you need to fix the tax code.

After which Amazon moves to Panama, Luxembourg, Dublin or Amsterdam. Or a combination thereof.

Even if you fix taxes on national level, you aren't going to catch multinationals. They keep moving just behind that inevitable race to the bottom.

I was going to ask this question: why aren't big corporations paying more taxes NOW?

Because in my country basically the governments hire law firms to write out legislation, and then those same law firms sell these types of services to circumvent the laws they draft.

So the feeling I get it's not much a taxes problem, but the public institutions are managed by lawyers, and are optimized by lawyers that leave enough margin so they can thrive.

> why aren't big corporations paying more taxes NOW?

And why should they ?? To quote Steve Eisman "incentives trump ethics every single time".

Here's a tax strategy that will greatly simplify all government efforts: any corporation with a market cap of 100bn+ is obliged to sign a privately negotiated deal with the gov to agree on a annual tax rate for the next X years. The minimum is set at 20% with no exceptions and can go up to 50% depending on the estimated negative social impact of the corporation. There are no write offs, no loopholes. Every year the tax bottomline is checked and enforced.

There is also a tax distribution enforced so that only a few can get the 20% one at any time. The goal of this to force a "bidding war" between them to get the lowest tax and the only way to do that is to reduce their negative impact to a bear minimum or stop existing altogether. Incentives.

Once that is set in place work on reducing the tax code complexity for everyone and everything below 100bn. Currently most if not all tax regimes try to shoehorn all entities under the sun under similar rules and then provide various kinds of tax write offs that create incentives to dodge tax and provides the biggest players with a massive advantage as they can hire specialists to focus on every single possible loophole to avoid paying anything.

> I hear he also does a lot of charity work.

I know I shouldn’t mix the individual with the public company he founded and I don’t want to be that person that says he only does it because the tax incentives. He is a person after all and I’m sure he deals with more social pressure as a result of his status and like all people has issues that strike a cord internally. Still there is something deeply troubling about people acquiring so much wealth that put them in that situation in the first place when he wouldn’t be there without his workers and yet significant numbers of them are on food stamps paid for by taxpayers...when his company paid $0 taxes.

I’ve heard the Charity excuse a few times, and hope people look deeper.

Be it Billy Gates, Bezos, or one of the many Midwestern Financial Gurus—-their use of 901c3‘s are basically tax dodges.

Gates foundation gives back less than 1% of the wife’s fund to the nation that birthed him, and provided a comfy launching pad for that privileged life. (I get you need to help developing nations, but America is dying. I have never seen so many homeless.)

I don’t know Bezos charities, but if it’s related to his companies commercials in media, those are carefully selected to brainwash the masses. How much money did they spend so we knew their employees had soap to wash their hands this past year? And I guess Amazon warehouse workers chuckle fund was receiving hand sanitizer that looked like vodka bottles.

I see how Amazon is now worried about climate change now with his promise of electric vehicles, so he must be worried about something? Maybe he’s running short of tax write offs, and heavily federally subsided electric vehicles make sense fiscally? Not even taking into account the millions he will save on a depreciating asset? In a way, we are buying his gift to carbon neutrality? (I would bet in five years—he will take the Uber approach to deliveries more than he does now, even requiring workers to furnish their own electric vans). I could see the boys laughing over this at the catered hootenanny. It feels good to be a gangster bllly—huh?

I only know of a few charities that truly give back. Most of the big ones we all know through media are overfunded. I once heard there is a very popular children’s hospital who could operate for the next twenty years without another cent, even when taking into account inflation/tech costs.

I used to look up nonprofits on WayStar. They have now made looking at the free 1040’s complicated.

(Does anyone know of a truly selfless charity? I’ve always given Salvation Army a long rope. They have been feeding America’s hungry forever, and I know people who eat there.)

> Be it Billy Gates, Bezos, or one of the many Midwestern Financial Gurus—-their use of 901c3‘s are basically tax dodges.

Do you mean 501c3? How are these a tax dodge? How does someone end up financially better off than just keeping and investing their wealth if they choose to donate it or deploy it in a donor advised fund?

> Gates foundation gives back less than 1% of the wife’s fund to the nation that birthed him, and provided a comfy launching pad for that privileged life. (I get you need to help developing nations, but America is dying. I have never seen so many homeless.)

If you think America is dying, boy do I have news for you about the state of most of the world. I also deploy most of my personal donations outside America, through GiveWell and Watsi (and more targeted donations independently).

America has a lot of problems. I live in NYC and can empathize with the dissonance of seeing the homeless sleeping in the cold on Madison Ave. I don't want to diminutize that, and this is something I also care about.

But the blunt fact of the matter is that America is far better off than the countries Gates focuses on. It's not even a fair comparison in terms of poverty and healthcare. Gates deploys his wealth primarily in regions that have never or only rarely "birthed" billionaires like Gates, in your words.

It is uniquely selfish to criticize billionaires for hoarding their wealth while also insisting they focus their charity on one of the richest countries in the world by median.

I do agree that charity is often overplayed and many billionaires give away so little that they barely notice. But Bill Gates definitely is an exception. Of course they don't spend all their money in a few years, that wouldn't allow them to continue their work afterwards.

But the whole life of Bill and Melinda is about their work in the foundation. It's not a side gig for good press, they don't do anything else. I can understand criticism where billionaires have a charity next to their business. But there's no other business left for Bill.

But to be fair, Bill Gates is probably the only prominent example of a billionaire who quit the industry completely and dedicated his whole life towards charity.

> But to be fair, Bill Gates is probably the only prominent example of a billionaire who quit the industry completely and dedicated his whole life towards charity.

James Simons has more or less done this for the past 15 years.

> Gates foundation gives back less than 1% of the wife’s fund to the nation that birthed him, and provided a comfy launching pad for that privileged life. (I get you need to help developing nations, but America is dying. I have never seen so many homeless.)

Alternatively, why should Gates spend charity money on America if that money would go have a greater impact on helping people and improving lives elsewhere?

> but America is dying. I have never seen so many homeless

My mom grew up in a village where some had to resort to cannibalism to survive. My grandfather was eaten after being beheaded by communists. I am blessed to be an American.

He’s actually more known for how little charity he does, relative to his wealth and his peers. As soon as he got divorced his ex-wife gave away billions which hints that he was blocking a lot of that.

Bezos has taken a page straight out of Big Tobacco's regulatory capture handbook.

In 1997, as part of the Tobacco Master Settlement Agreement, the 4 major tobacco companies agreed to sweeping restrictions on cigarette advertising. This ensured that it was almost impossible for a new player to enter the market, because they had no way to create brand awareness.

Ah yes, Altria masterminded their share price growing from 40 to 50 over only 24 years...

That same Altria Group has a >6% dividend yield.

Corporations and executives don't have strong opinions on anything. Its all easier when a) you understand that and b) you don't have strong opinions on anything either.

Because as an executive it's not your place to have a strong opinion. You're hired by the owners (i.e. shareholders in case of public companies) to make money, not to voice your opinions. There's a strong case that ethical behavior is not only the right thing but leads to long term success so of course you should act ethically. But the success of the company outweighs personal opinions. Even if you as a CEO think high taxes are fair, if low taxes benefit the company this is what you'll have to advocate. That's just the reality of working for others.

I was informing to make them as relatable as they are to me. I also don’t have strong opinions on anything and am content with this reality. As in, I don’t find this controversial and I know why corporations act how they do and didn’t need it explained ( others may have needed that though). The data changes and so too does the reaction, more people should be less worried about irony or perceived hypocrisy.

they pay little tax because they re-invest into their growth.

This is a desired behavior which we want - it fosters innovation and job creation.

Couldn't the same also be said at the human scale? Workers have to eat, sleep, often put back some money and gain some assets to grow and be more productive for their families and loved ones. Workers may use some of their money for rest and recreation but so do all companies have some degree of frivolity. This meme that gets passed around of corporations "fostering innovation and job creation" is a corporate apologist cop-out.

I think in theory corporate taxes don't add any burden, because they only apply to profits and not to overall income like personal taxes do. You could theoretically have a 99% corporate tax and corporations that don't make a profit like Uber would continue completely unaffected. (Although the only reason they have the money they need to operate is because their investors expect to be paid by future profits, and if you taxed all profit away investors would not be willing to buy equity, so really they would be affected.)

It seems to me that money can be used for two things: productive uses and unproductive uses. Unproductive uses can be taxed as much as we want - as a society we don't really care that much if people can't do unproductive things with their money like pay for foot massages and things like that. (Well, people who want to pay for unproductive things like foot massages and videogames care, but I think it's okay to take away some potential foot massages via taxation to pay for important public goods.) But we should take care when taxing productive things, because we're taking away opportunities from our future. If a masseuse wants to invest in some kind of robo-massager that will let them give twice as good foot massages for half the price, that's just a better use of everyone's time and money than continuing to do it the old way and not something we probably want to discourage.

Seen through that lens, a wealth tax (or better, a consumption tax like a VAT) makes more sense than a corporate tax to me. Imagine a chash-rich opportunity-poor corporation that has only one thing to do with its excess cash: invest it building new widget factories for 3% return on investment. And let's say there's a cash-strapped opportunity-rich second company that can build new factories for a 10% return on investment. What we would want to happen is for the owners of the first company to withdraw the excess cash, so they can invest it in the second company which has much better things to do with it.

With a corporate tax, that process is interrupted, because the first company can invest in itself tax-free but must pay taxes to return money to investors so they can put it to better use.

My thinking is that a wealth tax taxes nearly the same thing as a corporate tax, without this flaw. You can't really tax a "corporation", fundamentally everything is owned by someone so if you tax a corporation you really tax the owners of the corporation. Here's how that plays out: The price of a share of a company is usually modelled as the expected future earnings from posession of that share, discounted for time. So if you expect a company to pay dividends of $0.1/share/year forever and have a discount rate of 5%, you should be willing to pay $2.00/share. If a corporate tax of 50% reduces that to $0.05/share/year (since half the profits have been taxed so the dividends are half as large), the price will drop to $1/share. A wealth tax taxes the value of the shares directly, instead of messily taxing the profits and affecting the share price indirectly. But a wealth tax doesn't have the weird switching-over issue I mentioned earlier, so money would no longer be trapped in unproductive areas (or worse, trapped overseas waiting for a change in US corporate tax policy).

A VAT would be even better because it would incentivize people to keep their money in productive uses by taxing only unproductive uses (VAT doesn't apply to stocks or business expeneses or things of that nature). But that's kind of tangential.

Maybe a professional economist can correct me on this but that's my thinking.

> "With a corporate tax, that process is interrupted..."

there is no process interruption here. a tax on profit doesn't prevent corporations from investing in the highest npv projects available to it because capital expenditures and r&d investments occur before that taxation, and moreover the interest expense is deducted as well.

despite all the hand-wringing over corporate taxation, this maxim holds true in most cases. taxation has little effect on the investments a company chooses (or alternatively, the variance of choices gets lost in the error bars). they will still tend to choose the highest npv projects, even if that's negative.

I think you misunderstood the parent. They're discussing the case where a corporation has no high NPV projects available to it, and the best thing to do would be for it to return money to investors. They can then spend it on other companies which do have those opportunities.

In that case, it has to take that money as profits instead of reinvesting, and so is taxed.

that's more theoretical than practical. in many cases companies can work around that limitation to make such investments without (all of) those tax implications. money is typically returned to investors because the board and the executives want it to diversify themselves away, not because there are no npv positive projects to invest in. and there are plenty of ways to spend on protecting existing income streams, which is what we see companies doing regularly. there are lots of principle-agent problems and moral hazards in this realm that cloud the practical from the theoretical.

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