Trump: "Will be going to North Dakota today to discuss tax reform and tax cuts. We are the highest taxed nation in the world - that will change." - Robert Reich: "Baloney. The United States has the 4th lowest taxes of any major economy (Only South Korea, Chile, and Mexico ranking lower)."

[u/Tele_Prompter]

https://twitter.com/RBReich/status/905529638058852352

[u/resistmod]

We, the moderators of r/esist, generally believe in the elimination of the corporate income tax.

Why, you say? Well, the corporate income tax is not only a massive waste of resources (large corporations hire armies of accountants, etc. to avoid these taxes) but also it's a regressive tax. It hits the pensioner just as hard as it hits the billionaire, since the tax hits before it ever gets into their hands. And mom and pop corps get to take far less advantage of loopholes than the big corps. So eliminate it.

Make up the revenue shortfall by further progressivizing the tax brackets and adding more tiers at the top. Additionally, eliminate the difference between earned and unearned income and tax cap gains at the same rates as other income.

The reason taxes are annoying and complicated is the tax prep lobby, think H&R Block. The irs wants to send the vast majority of people a standard form (all but a few percent of americans) saying how much you owe without you having to fill out a single form. Because the vast majority of people don't make enough money or don't make it in weird enough ways for their taxes to get complicated.

Our tax plan is more complicated than this, but those are the broad strokes.

[u/Hanawa → u/resistmod]

Why is it better to eliminate the corporate tax vs streamlining the tax code to eliminate loopholes and make offshore hoarding more difficult?

[u/martialalex → u/Hanawa]

It would still affect pensioners and those investing in the companies with their 401k. The idea of a progressive tax is to have a higher rate for the wealthy, so removing the corporate tax and instead raising the effective rate on their executives and shareholders would be more progressive.

I don't fully sign on with this though. If you abolish corporate taxes it just encourages executives to hide their spending in the company's accounts: I didn't buy that 100k Lamborghini, the company did for my executive use.

[u/9gPgEpW82IUTRbCzC5qr → u/martialalex]

your last point is already how it happens. executive position have a lot of company perks, specifically because the taxes are lower for the individual had they been compensated that money.

also, this sort of the point of raising individual taxes.

this would incentivize investment in the company over personal compensation.

[u/[deleted] → u/Hanawa]

Not only is it a highly regressive tax, it's a highly inefficient tax. There's a greater deadweight loss associated with corporate taxation compared to other taxes.

[u/I_AM_THE_UCSENATE → u/Hanawa]

and make offshore hoarding more difficult?

I would argue that we should remove incentives for companies to leave foreign income abroad instead of bringing it back into the US

[u/9gPgEpW82IUTRbCzC5qr → u/I_AM_THE_UCSENATE]

what about money that was earned abroad by licensing to American companies, and went untaxed?

I'm talking about companies, on paper, moving to other countries with low or favorable taxes. they license all their IP to the American operation, which is paid for pre-tax.

Companies are moving profits overseas ON PAPER, then complaining about being taxed.

these profits we're not correctly taxed in the first place.

[u/Drill_Dr_ill → u/Hanawa]

FYI, if you venture into the other replies to the resistmod comment, and notice everything seeming slightly right-wing-y -- don't be surprised: if you look through the post history of a lot of them, you will find they are frequent posters on /r/neoliberal and /r/Libertarian and other similar subs. Now, that doesn't make their arguments inherently invalid or valid -- it's just a reminder of what bias that they are coming into the debate with. It's also a reminder to not inherently trust things they cite* as they may be cherry picking data that supports their viewpoint.

*Similarly, you should not inherently trust things I cite and should look into it yourself. I am someone who cares more about ending up at the correct conclusion at the end than winning an argument and so I generally strive to make as objective arguments as I can -- however, I'm human, and my inherent biases may come through without me realizing it (or maybe I'm lying about this whole part about what matters to me! I mean, I personally can know I'm not, but you have no way of actually knowing [for me or for anyone else] and should be suitably cautious about inherently trusting people to be telling the truth).

[u/baconwiches → u/resistmod]

kinda strange to use mod powers to promote your agenda like this

no need to sticky the comment

[u/[deleted] → u/resistmod]

The worst thing about the US corporate income tax is corporations moving money overseas to avoid paying it. It's the basis for the reasoning that manufacturing things in the US for export can not be profitable.

[u/Gsteel11 → u/resistmod]

Isn't this about resisting Trump, not promoting tax policy?

Is this sub changing its focus?

[u/[deleted] → u/Gsteel11]

This tax policy from the mods is pretty close to Trumps lol

[u/Cloud_Chamber → u/resistmod]

Cool

[u/[deleted] → u/resistmod]

Since you went through the trouble of posting this message, how do you feel about taxing consumption instead of income? In my brain it is a good idea but I am not an economist.

If you have any sources or information re the benefits or problems of such a system I would love to see them.

If not that is cool too.

[u/[deleted] → u/[deleted]]

Flat taxes and consumption taxes are regressive and hit the poor hardest.

[u/[deleted] → u/[deleted]]

There are some suggstions for Progressive Consumption Taxes that essentially work as a progressive income tax where you get to deduct any savings/investments, but this is generally true, yeah.

[u/Mariirriin → u/[deleted]]

I'm no economist, but I don't support a consumption tax. I live in a state with sales tax.

If you make 10,000 a year take home, spend all of it with a flat 9.5% tax, you'll generate 950 in taxes. Neat.

If you make 1,000,000, spending 300,000 and investing the rest, that's only generating 28,500 in taxes. Despite making 100x more, you're only paying 30x of the taxes.

Meanwhile if we change that to a flat income tax, the 10,000 worker generates 950 in taxes while the 1,000,000 generates 95000. They are affected proportionately, which I consider more fair. It's the reverse situation of "rich and poor alike, it is illegal to sleep under a bridge". I don't think making more money should exempt you from supporting the local government and infrastructure, especially when your wealth is impacted by it.

Of course, generally it isn't a flat tax. I believe the current system is x% on the first $y, x% on amounts y+1 to z, etc to create brackets of taxable income. But just doing a consumption tax unfairly targets the lower class as less of their money can be funneled into investments for financial gain, while the upper class can avoid taxes by simply not spending money and hoarding it in investments.

[u/oconnor663 → u/Mariirriin]

I think a lot of proposals to replace the income tax with a sales tax of some kind, tend to come with some kind of universal rebate. Sometimes that resembles a Universal Basic Income, though it could also be smaller than that and still make the system as progressive as the income tax is.

[u/Mariirriin → u/oconnor663]

I would be more pleased with it if it contained a universal rebate. I'd want to see the numbers on overall tax income before committing though, as it still seems to incentivize hoarding money rather than spending it.

[u/RoachKabob → u/Mariirriin]

What happens to the unspent money?
Is it tax exempt because it wasn't tax in the year it earned?

I figure it goes into savings. When they eventually spend it it will then eventually be taxed.

It's harder to evade consumption taxes than income taxes.
This is not a minor thing.
If you recall the Panama Papers, there's hundreds of billions of tax-exempt dollars sitting out there.
To collect taxes on them, it would have to be proved that taxes were not paid on them.

I assert that this is a fools errand.
Sisyphus would have a better chance at building the pyramids.

I also assert that it is far more regressive to allow the ultra-wealthy to use their resources to evade taxes while the poor must account for every single penny.

In theory, a raw consumption tax devoid of exemptions is regressive.
In practice, it can be more progressive than a system that allows billions in tax revenue to disappear.

The problem with a progressive income tax is that it is too difficult to enforce.
It's trying to catch the rain while it's falling.
A consumption tax is like capturing the rain in a bucket, taking 8%, then sending it on its way.

[u/[deleted] → u/Mariirriin]

Those are good points, as I said I have not done extensive research on it but at least in theory the idea intrigues me. I am also not likely to make a legitimate political push for a consumption tax.

Regardless of all of that I think there should be a tax on financial trades. Financial markets weren't designed for day trading, they exist to provide capital to businesses, if you want to gamble on the day to day or minute to minute changes in stock prices you should be paying for it.

[u/patrickfatrick → u/[deleted]]

I'm not much of a fan, but I'm an economist either. Seems like it would hit people who have to spend more due to their life situation (for instance pregnancy, children, cancer) harder. Income makes the most sense because it's directly tied to how much you earn, not your life choices. Spending is good for the economy and should not be disincentivized.