this post was submitted on 21 Apr 2024
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What if we ended all taxes on individuals, and just charged the cost of society to the corporations? (lemm.ee)
submitted 8 months ago by [email protected] to c/economics
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This idea has been kicking around in my head for a while, and I'm hoping some Lemmy geniuses can poke holes/ flesh it out with me.

Every person I've ever heard of works for and gets paid by some form of company. So instead of the company paying the workers and then those workers getting taxed, why not just tax it all to the corporations to begin with? Instead of hundreds of millions of individuals to think about, the IRS (in US) could just focus on a few million companies.

We the people democratically decide what we think is needed for a functioning society, and charge it to the corporations.

I'd say each company should be responsible for paying the same percentage of the bill as percentage of total "profits" they made. Like, if Apple makes 10% of all the combined profits of all the companies this quarter, they are responsible for paying 10% of the bill. Highest paid employee can make 10x what the lowest paid employee (including contracted and foreign workers) makes; more than that gets included in the calculation as part of the company's "profits". (So that CEO can still get paid absurd amounts of money, but the company will still pay taxes on most of it)

What if we created some sort of secure opinion/voting app where people go to cast their vote on whatever people think needs to be voted on. Should there be UBI? Should it be a token, living, or thriving wage? (Personally, I'd go with thriving and tie it to inflation) Single payer healthcare? All education paid for? Stop funding genocide? No more polluting the planet, or at least force companies to pay to clean up their own messes? When and where are companies allowed to market to us? Where should the threshold of agreement be to enact changes, 40% 50%+1 60%? Etc etc

Then we elect people who agree to simply enact what the people democratically agree on... And if the people don't agree, they'll stay away from it or leave it to the states. And hopefully someday we could build it out so that state and local governments work this way too.

I think we get bogged down on the 2 or 3 things we disagree on and allow that to mean we never get the things we DO agree on. Let's get the things we agree on first, and then continue debating the things we disagree on.

Also I think this would be a long term plan. 12 years would give us 2 full election cycles here in the US and would give zoomers time to grow up, settle, and start to really vote (hopefully with this new system).

Anyway, like I said, let's poke holes and figure out solutions. Thanks

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[–] slazer2au 12 points 8 months ago (1 children)

each company should be responsible for paying the same percentage of the bill as percentage of total "profits" they made

Revenue, not profit. After all we as individuals are taxed based on revenue.
Stops all the tax haven horse shit.

[–] [email protected] 0 points 8 months ago (1 children)

I agree... I think I use revenue and profit interchangeably, since in this system there would be no profit until AFTER society gets paid for... And individuals would no longer be taxed on revenue or profit or whatever we want to call it

[–] Windex007 5 points 8 months ago* (last edited 8 months ago)

Taxes aren't the difference between revenue and profit.

If you open a lemonade stand, and you buy 5 dollars worth of lemons, and 4 dollars worth of sugar your EXPENSES are 9 dollars.

If you sell 5 lemonades at 2 dollars each, your REVENUE is 10 dollars.

Your PROFIT is 1 dollar.

Revenue and profit aren't interchangeable no matter what taxation structure you imagine, because they're fundamentally different concepts even irrespective of taxation altogether.

[–] Xeroxchasechase 8 points 8 months ago (1 children)

In reality if you'll just eliminate all the tax loopholes and "tax planning" you'll already have a jump in tax income. Corporations are willing to pay to politicians, lobbiests and lawyers even more than the tax they quid have paid, just to prevent taxing. Also Billionaires

[–] [email protected] 2 points 8 months ago (1 children)

I guess my thought is; FIRST we pay for the society we democratically agree on, THEN they get to take their profits from what's left... How would we go about closing the loopholes?

[–] Xeroxchasechase 2 points 8 months ago

The short answer is: create a Federal task force, increase funding to the IRS and change it's focus. The long answer is that you need to create a social movement and a political movement to counter all the PACs and lobbying and "donations" and media that are invested to keep the tax system as crippled as it is. Sorry, it wont be easy. But if you're talking theoretically than yeah, I support you and even raise you: any company that are built upon public investment should belong to the public as a proportion of the investment they relay on. (Even if the investment is in the form of technology like GPS or the internet)

[–] [email protected] 4 points 8 months ago (2 children)

Wouldnt this make tax havens even more beneficial? It effectively would increase the countries tax rate

Secure voting via app is an unsolved problem, its just not that easy. But dont some US states already do votes for individual laws?

[–] acetanilide 1 points 8 months ago (1 children)

Looks like West Virginia is trying it (or was?)

Fascinating stuff

https://mobilevoting.org/how-mobile-voting-works/

[–] [email protected] 2 points 8 months ago

Awesome! Thanks

[–] [email protected] 1 points 8 months ago (2 children)

I would hope freeing up the IRS to focus on companies would help them catch this... But also don't companies want/need to post their "profits" publicly so investors know they're doing well? Hard to claim record profits if you don't post record revenues

As for the app, I'm hoping there's some smart programming types on here who feel like working towards a solution rather than just rehashing the same old complaints... Might be hard to do, but I bet it can be done in time. I didn't understand block chain, but everyone seems hyped about it, maybe there's something there? Or maybe AI could be used to catch "bad actors"? Idk

[–] [email protected] 2 points 8 months ago (1 children)

I beleive the way tax havens work is that they do post profits, but its Apple Inc in Ireland that posts the profit. Irish profits get taxed by Ireland, so Apple will do everything it can to make sure profits go via the Ireland subsiduary. As far as I know, and I am not an economist or tax lawyer, there is no real solution for this as yet.

might be hard to do, but I bet it can be done in time

With all due respect, this is very naive. You dont seem to understand the problem, which means you cannot solve the problem.

It is super easy to create a voting website. It is super hard to correctly authenticate users, and prevent double votes, stolen credentials being used. Any system created needs to have an error rate below 1 in a million, otherwise the votes cast will be immediately disputed, and the election potentially invalidated. Blockchain does not solve this problem (see the millions of cases of bitcoin wallets being stolen), and the best AIs have accuracy rates well below what is acceptable.

On top of that, whatever solution one comes up with needs to be usable by 100% of the voting population: this means the elderly, disabled, and even those without a computer or phone. If a usability issue prevents someones vote being cast, they are being disenfranchised.

This problem is a billion dollar problem, the person or company that solves it can sell their system not just to governments, but banks, tech companys and anyone else with an app that requires authentication. This isnt a laziness problem, its a genuinely difficult, and so far unsolvable problem.

[–] [email protected] 2 points 8 months ago (1 children)

What if we taxed companies that wanted to do business in the US regardless of where they put their head quarters?

I certainly can't argue that I know the solution. I don't know much about programming and tech in general.

Also the app, at least as I envision it, wouldn't replace actual voting... You'd still have to vote for the people who agree to do what the app says... We'd just want the app to accurately portray what people actually agree on... But you're right, it would still need to be pretty secure to avoid double voting and such

[–] [email protected] 2 points 8 months ago

International tax is very tricky, and I am not an expert. If a company is based in A, and sells a product to a person in B, which country should do the taxation? If both countries claim that the tax should apply to them, the company is going to get double taxed. Currently (afaik, and im not an expert), but almost all countries currently accept that A gets to tax the company. To switch it around would require every country to agree to the alternate method. And there are likely other issues, such as encouraging companies to offshore their production to 3rd world countries, which then dont even get to tax the company if the product isnt sold to their own citizens.

Your app seems like it has its purpose already partially served by opinion polling companies. They give an insight into what the general population would like to happen. Bear in mind that these polling companies can still introduce bias into their results, so arent completely to be trusted.

Its worth noting that direct democracy also has its failings. Just because a majority want something, it doesnt necessarily mean its a good idea, for either the country or the people. No one likes taxes, but a country with no tax ends up in a bad state. No one likes going to war, but sometimes it is the morally correct thing to do.

[–] [email protected] 1 points 8 months ago

Also some states vote on some laws... But I think the process for whether it goes to direct democracy or just goes through the legislature is complicated

[–] FuglyDuck 4 points 8 months ago (2 children)

Even if you could get it done.

They’d just pass the cost on to their customers.

[–] [email protected] 2 points 8 months ago

That's the way it used to be. Before WW2 we didn't have personal income tax, it was all on businesses and the costs of doing business were passed to the consumer.

[–] [email protected] 2 points 8 months ago (1 children)

That would be fine by me... Especially with a living wage UBI tied to inflation. I'd also end subsidies for profitable corporations. $760 billion to fossil fuel companies in 2022 alone... Just in the US... It might keep prices lower at the pump, but we're paying for it anyway. Why should someone who drives an electric vehicle be subsidizing gas for people who don't? (As one example). Maybe if we started seeing the real cost of things at the register, we could actually "vote with our dollars"

[–] FuglyDuck 1 points 8 months ago (1 children)

I don’t disagree, in anything in particular. I just think it’d be a very high hurtle to get done. They’re already paying rather little in taxes to start with.

Personally… subsidies should only be used for things that provide direct benefits. Simply costing less at the pump isn’t it- but things like subsidizing research grants that then go to produce new technologies for Americans (or inexpensive drugs… but not expensive drugs…. Grrrr)

[–] [email protected] 1 points 8 months ago

I'd consider research grants to be part of the cost of a functioning society. Society should own that research though, not just give it to corporations for a pittance... Right now the public funds most basic research but the corporations get all the rewards

Definitely a high hurdle and a long process... But if we start getting the next generations to sign up now then maybe in a decade it'll grow to a point it matters... Start getting people to agree that they will vote for the people saying they'll do the things we agree on and leave the things we don't agree on to continued debate

Start building until we reach a critical mass in any particular state. Then activate people to vote for candidates running on the new system... Focus on states where Senate seats are up since those will take the longest to turn over

[–] [email protected] 3 points 8 months ago (1 children)

good luck doing that without a literal revolution

[–] [email protected] 1 points 8 months ago

I guess I'd consider this a literal revolution, since, instead of the people in power now (the rich) we the people would have actual democratic power.

[–] [email protected] 0 points 8 months ago* (last edited 8 months ago) (2 children)

Aside from the profit vs revenue delineation being pointed out, wouldn't corporations likely account for taxes by offsetting wages? It would still be coming out of paychecks in effect.

Edit: to expand, I'm not sure the flow of taxes is really the issue at hand. Especially here, we would be shifting taxation to the corporation, but it's still tax on the fruits of laborers', well, labor. I'm no economist, but I think the deeper issue is with the socialization of the workplace.

[–] [email protected] 1 points 8 months ago

Well I only mentioned it as something to vote on, but personally I think a UBI set at a thriving wage (by area) would solve a lot of issues, and I'd hope enough people agreed once the boomers are gone. How much do you think a rich person would need to pay someone to clean their toilets if that person knows they have a thriving wage to fall back on? Or maybe some people absolutely love cleaning toilets and would do it cheap, idk.

Like you say, it's the fruits of our labor. We should get to decide how it's divided up, but I think leaving some level of profit incentive is what most people want, so I would still include profit for people who don't actually work, but do own the means of production. While I personally like the idea of socializing the work place, I think it might take a while to catch on... Or maybe people would immediately vote for that in the app?

As for the for of taxes: All the wealth the laborers create gets sucked up by the companies. Either because they only pay a tiny fraction of the new wealth that's created to workers, or because what they do give us we go spend right back with the companies, or because we get taxes and that money gets spent with the companies too. So all the wealth flows to the companies, and then to their shareholders. Since like 90% of all shares are owned by like 10% of the people, and those people don't pay taxes (broadly speaking), all the wealth just keeps piling up on them. I'd say we need to close the loop. As wealth flows to the top, it is taxed and sent back to the bottom.

[–] Xeroxchasechase 1 points 8 months ago

Companies already pay workers as low as they can get away with