[lbo-talk] Corporate Taxes, was why Prince is right

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Sat Jul 10 11:13:30 PDT 2010


Doug writes:


> Corps probably pay at least some of it, otherwise they
> wouldn't lobby so hard for tax breaks.

No company is successful as a result of tax breaks; if a tax break is the difference between profitability and failure, it's without qualification not a success. That being said, tax breaks are a side-line business for many: for a little bit of input you can get a potentially outsized return. So, hey: why not? Note that it's an asymetric situation: because tax rates are mostly linear, there's no chance that cutting production or prices to save taxes is ever a good idea.


> since a corp is really just a network of relationships organized
> towards the ultimate benefit shareholders and top management, and
> not a person in any real economic sense, corps can't really pay taxes.

I like to think of it as a gross check on outsized returns: since you can't make something from nothing (cf first law of thermodynamics), outsized profitability *must* necessarily have been a trick[*]. So redistribution of at least some of the lucre seems fair and appropriate: we all were either taken advantage of or duped, so in exchange for getting the jets, hookers, and coke ... society should get a share.

Note this is a lot more charitable than the other thread's "fuck-you-pay-me" -- if you don't make a profit, you necessarily don't owe tax.

/jordan

[*] Example: Microsoft can sell their stuff for a lot more than it takes to pay for the stuff they sell, so paying corporate income tax seems right: it's clear redistribution from mostly businesses to anyone who don't use Windows (still more people in the US than are voters!). $6B/year off the top seems about right, don't you think?



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