Question:Follow

the problem is that it's flawed at both ends. No one should be not paying taxes(except in such circumstances as I mentioned before), but those with more should pay a higher percentage. But the way it is is that those at the lowest end pay nothing, those at the highest end pay less than they should. Making the problem worse is that the Democrats think that some should be exempt and the rich should pay more, and the Republicans think in two ways. First, they act like all taxes need to be lowered(they don't) and are bad(they're not), but on the other hand, they also argue that those not paying should be(and they're right), but still argue for lower taxes for the rich.

The reality is that to fix the system, you are alienating a lot of voters regardless, so nothing will ever be done unless both sides can agree to fix it in the necessary way. But that will never happen, everyone puts their respective party ahead of what's right. In the long-term, things would be better if the system was fixed, but all anyone cares about is the short-term. This is why things are getting worse. No one is thinking ahead.

Plus, if anyone honestly thinks that taxation is even substantially holding them back, go to a nation with no taxation and you'll be free at last. If the tax-****** in this country had an ounce of perspective they'd realize that they're just bent out of shape because they hate writing a check once a year (or in many cases, not getting a big enough one back), not because writing the check has any meaningful negative impact on the way they live.

The irony is they're a prime example of money not buying happiness because they already have it and they're still pissy just because they have to give a little back. They want more and more even though it won't make their lives any better and it'll make the lives of a lot of people with far less means than they have significantly worse off.

Fuck that. I'm happy to pay my taxes.

Job monopolies, etc. Rich people don't need to hire new employees, and you have to be an idiot to think that expanding is always fiscally prudent, even looking past the fact that not every financially secure person is motivated to increase revenues. Many people just stop once they get to a certain level of wealth and decide it's no longer worth it... that is, unless they have to make more money to reach that level, perhaps by some method of taking that money so they don't just sit on it and stagnate productivity. Hmm, if only there were such a way to keep rich people's money circulating...

The other problem with the idea that the widow living on a pension should pay the same amount as Warren Buffet is it would be impossible to run the government on the amount of taxes you collected that way.

Either you would have to tax the widow for more than she can afford, or you would have to have to have the tax rate so low you couldn't afford to do have any sort of healthcare, education, military, roads etc.

I assume you have data to support this claim?

Do you have data to support your claim?




Edited, Aug 10th 2011 7:34pm by Elinda

Why? Someone says that they see a pattern which I don't see and I ask them for evidence to support it? That seems like a pretty reasonable question, don't you agree?



That doesn't address the claim that was made though. He said that when big businesses profits increase, they eliminate their workforce in the US in order to make even more money. The fact that most things we buy aren't made in America doesn't tell us anything about why they are no longer made in America.


I'm not arguing that companies don't seek profits. I'm questioning the directionality of the issue. Businesses do not offshore their operations because they earn big profits. They offshore their operations because they are not earning big profits. They move their operations offshore when the domestic operations become less profitable. But the claim being made suggests the somewhat absurd idea that if the Levi Strauss was making huge amounts of money making jeans in the US, that this would cause them to decide to make them somewhere else.


That's kinda ridiculous, right? They choose to move their operations elsewhere *after* the profits from operating domestically become less profitable. The directionality of the cause/effect relationship is backwards from what was claimed. If we could make operating in the US more profitable for that company, they would presumably hire more people here than they do. We can certainly say that it wouldn't make them hire less. And I would assume that you can grasp the obvious fact that by making it less profitable for them certainly isn't going to make them hire more people.



Isn't that really the issue here? Can anyone really honestly argue that making it more expensive to hire people in the US will somehow result in more jobs being created? If you want to create jobs, the last thing you should do is threaten to raise taxes on big businesses and mandate additional costs for each person hired. Yet, that's exactly what the Democrats did. And now they stand around wondering why those big businesses aren't hiring anyone. The Dems have basically spent the last 3 years telling businesses that if they hire people, they're going to hit them over the head with a 2x4. Is it really that hard for you people to see why unemployment is still high?


Please tell me you can see this?

Yeah, every company in the USA was going belly up before they decided to exploit underpaid labour overseas...riiiight.... lol


You're hilarious. Show me the data which supports your claim. These companies were plenty profitable before they went offshore - they went offshore to make more money, not because they were losing money by manufacturing in north america.

Gbaji, are you for or against the GOP created multinational tax arbitrage laws that " prevent double taxation" and incentivize companies to outsource manufacturing by allowing MNCs to realize US sales
profits in production areas thus paying tax (often at lower rates) to non-US governments?

No, I'm not talking about the participatory taxation splitting that goes on when a MNC develops whole hog supply chains in multiple markets. I was specifically asking about the incentives that allow a US based, but operating multinationally, business to realize it's profits in other markets, even when the business done which created those profits was done in the US. This allows a MNC to shift money around so that they don't pay taxes, or pay the reduced secondary taxation rates on US profits, which technically increases their competitive advantage, but also gives a multinationally based company a disproportionately large competitive advantage against solely US based companies. What I mean by incentivizing outsourcing, is that it gives an additional incentive above and beyond the labor pricing arbitrage that traditional outsourcing operations provide.

The way in which this is actually carried out is more convoluted (Yeah, more convoluted) than the way I laid it out here, but their are some weird transfer pricing and for stated taxes, non-nexus exemptions (Which doesn't apply as much in relation to MNCs), along with various other mechanics that generate the sum total of the incentives laid out above.

Edited, Aug 12th 2011 10:12pm by Timelordwho

Just a out of curiosity when did ThiefX become Varus? This thread makes no sense now.

Warren Buffet just today



So according to someone who ACTUALLY HAS MONEY TO INVEST in large amounts... the gbaji theorem of "taxes stop job creation and investment" is wrong. What a shock.

Although I am sure I should believe gbaji and thiefx who obviously know more about what the super rich do with their money than Warren Buffet, right?

Ok. So we both agree that the way the US tax code is currently written has a harmful effect on US domestic productivity.



Previously, being when? You make it sound like you want to blame someone for it, but are unspecific about who did this and when. The reality is that it was a series of changes made over time, mostly intended to encourage foreign corporations to invest in the US (so to get Toyota to build their cars here, for example), but with the negative side effect we're talking about today.



No. I don't prefer it (although as I've pointed out, it's a bit more complex than a simple "yes/no" answer can give). And you are blaming one group, incorrectly IMO. You'd need to provide more than just your own statement that it's a "fact" to convince me of this. Surely, you aren't suggesting that US corporations actually lobbied for a tax system which penalized them? That seems kinda silly, doesn't it?



Ah... You are making exactly that silly claim. So they lobbied for tax code so they'd have to lobby to make loopholes around that tax code? That seems kinda counterproductive, doesn't it? Wouldn't they have just lobbied to not have the penalizing tax code put in place from day one? Doesn't it seem more likely that political forces opposed to big business (like say Democrats), put the tax code in place, and businesses lobbied to get loopholes put in as a defense against that code? Makes more sense that way, doesn't it?



I really think you're underestimating the fact that competing political ideologies will result in legal code which does one thing but has loopholes allowing those things to be avoided. Occam's Razor and all of that. If the corps truly had the kind of influence you suggest, they'd have just had the code written to not tax them for economic activity in the US at all. Certainly, they'd have just eliminated corporate taxes entirely so as to not have to bother with the effort and expense of creating dummy corps to shuffle money around so as to avoid the taxes. Right?



No. By harming them, I mean making them pay more taxes than their activities in the US should warrant.



I think you're missing my point. If instead of attempting to tax 100% of all corporate income earned by any US based corporation, which then forces those corporations to "hide" their income offshore in order to avoid the taxes, we instead only taxed them based on their economic activity in the US, we'd actually collect more taxes than we do right now. The US tax code creates an "all or nothing" effect for US corporations. They have to hide their income or else pay taxes even for income earned elsewhere. For corporations which operate in multiple countries, this is sufficiently expensive that they'll expend the effort to work around it.

The result is that the US often collects zero taxes from corporations. Which is less than they could have collected if we had a more reasonable corporate tax system. Are you getting this yet? You have to accept the fact that quite often, if you raise taxes too high, or make them too unreasonable, you'll actually collect less taxes than if you made them more moderate and/or reasonable. People don't spend much effort avoiding taxes that are reasonable. When they're unreasonable, they'll spend the effort, and once they spend the effort to avoid taxes, they're going to avoid paying all of them, not just the unreasonable portion.



Yes, but do you understand that because the only way for corporations to avoid paying unreasonable taxes on profits generated in other countries is to expend the effort in those complex paper shuffling operations, that once that cost/effort has been expended they can also use those same methods to avoid paying their "fair share" of taxes on profits generated in the US. One causes the other to happen.

Think of it this way: Let's imagine you have a local transit system. People can buy a bus/train/trolley ticket for whatever distance they're traveling and it's reasonably priced. Let's imagine that for many people this is less expensive and more convenient than owning a car. Now, imagine if the city arbitrarily decides to radically increase the cost to buy a ticket for any trip farther than 5 miles. So you can still buy a relatively inexpensive ticket to get to work, or the nearby shops, but it'll cost a ton to travel across town to visit your relatives, or whatever. Now, you might consider buying a car, so as to make those longer trips more cost effective, right? But once you buy a car, you might start using it to make those shorter trips too. Once you've spent the money to buy a car, you're going to tend to use it instead of taking the bus or train. As a result, total revenue from bus/train tickets will go down.

Same deal here. Once a corporation makes the decision to set up the mechanism to move profits made internationally into areas which can't be taxed by the US, why not use the same system to hide profits made domestically as well? They would not have done this in the first place if it weren't for the unreasonable and unfair taxes the US is trying to collect. But once they've taken those steps, it would be kinda foolish not to use them to avoid paying their fair share of taxes in the US as well.

That's the problem with the "all or nothing" system the US has set up for US based corps. You can't blame the players for playing according to the rules you created. We set up the rules which basically force the corps to do this. Why blame them?



Yeah. I know. That's what I'm talking about as well. I'm just going a step farther and addressing why the corporations do that in the first place. Taxing them more isn't the solution here.



Again, ask yourself why they go through those hoops. It's because of the way the US taxes US based corps. Change that system, and they'll have no reason to do this, and we'll collect our "fair share" of taxes.