I feel like there is too much outrage fueled by a complete misunderstanding of how our tax system works right now.
If corporations are taxed then there is effectively double taxation. Corporations can only spend the money on business expenses, such as paying people. However when people are paid they are being taxed already.
So our current tax system taxes a corporation if they have excess money they sit on. If they spend the money on productive uses it doesn’t get taxed, but then the people who receive the money get taxed.
So the headline is extremely disingenuous because if Nike had $0 taxable income it’s only because they shifted the taxable income to the CEO’s pay.
If corporations are taxed then there is effectively double taxation.
Not really. Corporate profits are taxed, not revenue. Taxes aren't figured until salaries are already paid.
... if Nike had $0 taxable income it’s only because they shifted the taxable income to the CEO’s pay.
I'm sure it's a lot more complicated than that. Companies aren't avoiding tax by giving all excess revenue to their CEO as compensation. That wouldn't really make sense at all.
Not really. Corporate profits are taxed, not revenue. Taxes aren't figured until salaries are already paid.
We're saying the same thing here. My point is that double taxation is avoided by figuring the taxes after salaries are paid out, which ideally would be brought to $0 because nobody wants to be double taxed.
I'm sure it's a lot more complicated than that. Companies aren't avoiding tax by giving all excess revenue to their CEO as compensation. That wouldn't really make sense at all.
The CEO is just another employee. Obviously they don't just give the CEO all the extra taxable profit... Why do you think end-of-year bonuses are given out at end-of-year? Because there's taxable income on the balance sheet and if it doesn't get bonus'd to employees then it would be sent to the Trump/Biden/whomeever is president's administration as taxes. Nobody's going to give you bonus points for paying extra taxes, but if your employees get a nice bonus they might stick around or work harder at least.
I pay income tax, then I take some of the money leftover to buy food and pay sales tax. Was I double taxed? Where is the "complete misunderstanding"?
It often feels like HN threads on big company taxes revolve around the same patterns, the people that repeat ad nauseam "but if it's legal it's legal!" and the ones that bring up double taxation as if that is some sort of tax cheat code.
Getting rid of double taxation from corporations would essentially mean getting rid of business deductions. Which means that companies would have no extra incentives to spend their money on business expenses such hiring because they'd get taxed either ways. The corporate taxes are working fine and most companies aren't avoiding taxes so much as being incentivized to spend their profits on hiring or giving out pay raises. Think of it is coerced minimum wage increases in lieu of corporate income taxation.
Double taxation on income and then on your food is just extra tax revenue, and nobody's going to stop eating because of it, though you might eat less expensive. Some places do indeed do not have taxes on basic food.
I feel like there is too much outrage fueled by a complete misunderstanding of how our tax system works right now.
Honestly, there is no benefit in fixing that because everyone is a useful idiot perpetuating the status quo and not even realizing it.
The best populist uprising starts off with this observation and ends with salaried workers getting a slightly higher tax and never touching the rich who obtain goods and services very differently.
The framing always starts about "the rich" and gets deflected towards the top 5% of wage earners who will become masqueraded as "the rich". Everyone involved will agree for two reasons: 1) it's the best they'll get from Congress and they feel like they're "doing the thing" and participating, 2) because they are wage earners and that's the only form of taxation they can relate to or even really somewhat know about.
For example, in a thread like this, someone will quote some flawed study about diminishing returns of an undefined form of "happiness" after making $75,000 a year, and then someone will talk about cost of living disparities as if that's an insightful addition to the conversation (wow, complex topic there, Champ), and all of this is being used for wage earners to fight amongst themselves about why they shouldn't have any feelings for the person that got a six-figure salary, when that new target wasn't even the person that their angst was originally directed towards.
Yeah, and in my opinion the level of happiness doesn't start diminishing until after $150k. I would straight lose my shit if I had to live on $75 k again.
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I feel like there is too much outrage fueled by a complete misunderstanding of how our tax system works right now.
If corporations are taxed then there is effectively double taxation. Corporations can only spend the money on business expenses, such as paying people. However when people are paid they are being taxed already.
So our current tax system taxes a corporation if they have excess money they sit on. If they spend the money on productive uses it doesn’t get taxed, but then the people who receive the money get taxed.
So the headline is extremely disingenuous because if Nike had $0 taxable income it’s only because they shifted the taxable income to the CEO’s pay.
Not really. Corporate profits are taxed, not revenue. Taxes aren't figured until salaries are already paid.
I'm sure it's a lot more complicated than that. Companies aren't avoiding tax by giving all excess revenue to their CEO as compensation. That wouldn't really make sense at all.
We're saying the same thing here. My point is that double taxation is avoided by figuring the taxes after salaries are paid out, which ideally would be brought to $0 because nobody wants to be double taxed.
The CEO is just another employee. Obviously they don't just give the CEO all the extra taxable profit... Why do you think end-of-year bonuses are given out at end-of-year? Because there's taxable income on the balance sheet and if it doesn't get bonus'd to employees then it would be sent to the Trump/Biden/whomeever is president's administration as taxes. Nobody's going to give you bonus points for paying extra taxes, but if your employees get a nice bonus they might stick around or work harder at least.
I pay income tax, then I take some of the money leftover to buy food and pay sales tax. Was I double taxed? Where is the "complete misunderstanding"?
It often feels like HN threads on big company taxes revolve around the same patterns, the people that repeat ad nauseam "but if it's legal it's legal!" and the ones that bring up double taxation as if that is some sort of tax cheat code.
Getting rid of double taxation from corporations would essentially mean getting rid of business deductions. Which means that companies would have no extra incentives to spend their money on business expenses such hiring because they'd get taxed either ways. The corporate taxes are working fine and most companies aren't avoiding taxes so much as being incentivized to spend their profits on hiring or giving out pay raises. Think of it is coerced minimum wage increases in lieu of corporate income taxation.
Double taxation on income and then on your food is just extra tax revenue, and nobody's going to stop eating because of it, though you might eat less expensive. Some places do indeed do not have taxes on basic food.
Honestly, there is no benefit in fixing that because everyone is a useful idiot perpetuating the status quo and not even realizing it.
The best populist uprising starts off with this observation and ends with salaried workers getting a slightly higher tax and never touching the rich who obtain goods and services very differently.
The framing always starts about "the rich" and gets deflected towards the top 5% of wage earners who will become masqueraded as "the rich". Everyone involved will agree for two reasons: 1) it's the best they'll get from Congress and they feel like they're "doing the thing" and participating, 2) because they are wage earners and that's the only form of taxation they can relate to or even really somewhat know about.
For example, in a thread like this, someone will quote some flawed study about diminishing returns of an undefined form of "happiness" after making $75,000 a year, and then someone will talk about cost of living disparities as if that's an insightful addition to the conversation (wow, complex topic there, Champ), and all of this is being used for wage earners to fight amongst themselves about why they shouldn't have any feelings for the person that got a six-figure salary, when that new target wasn't even the person that their angst was originally directed towards.
Yeah, and in my opinion the level of happiness doesn't start diminishing until after $150k. I would straight lose my shit if I had to live on $75 k again.
(and that particular study was about a family of four lol. so divide the discretionary income of $75k by a lot.)