Thread

1. bpodgursky · 1790865467 · focus · HN ↗

   The actual solution here is to eliminate the corporate income tax and capture the money via higher capital gains and dividend income taxes.

   All of this boils down to politicians knowing (even if they can't say it publicly) that the corporate taxes are badly structured and tax incentives are often revenue-positive (since in reality, every economist knows you should not be taxing business inputs, and in fact European VATs are structured around this idea), but being unable politically to do the sane thing and capture the income at a point it can't easily be gamed.

   1. danny_codes · 1790867794 · focus · HN ↗

      It doesn’t work. Read Piketty’s book. Capital taxes would work, but income taxes are easy to avoid for the rich.

      1. bpodgursky · 1790868688 · focus · HN ↗

         That's not that true in the US. In fact, most US rich "avoid" taxes because their income is capital gains, NOT by avoiding taxes on cash income (this is why CEOs don't have high cash compensation).

         He's French and used to the rich avoiding taxation by changing jurisdictions in Europe. Well, the US has global income taxation, for better or for worse, you are on the hook everywhere. It's a different world.

         1. danny_codes · 1790880663 · focus · HN ↗

            By "avoid" I mean avoid the intention of having a progressive tax system, not like legal tax avoidance. I know we wrote in plenty of legal loopholes to classify income such that rich people can pay less.

            But it's not even the case that rich people pay capital gains necessarily. It's very easy to live off debt and never realize gains. When you die, your basis resets and you never pay any taxes ever.

            This is how people like Bezos and Trump have years where they don't pay any taxes at all.

      2. chasd00 · 1790874180 · focus · HN ↗

         > income taxes are easy to avoid for the rich.

         ironically, it's especially easy for non-rich blue collar workers to avoid income taxes. Anyone who has ever hired a contractror/mechanic etc and then found they only accept zelle, cashapp, or something similar knows this. Another way to spot this is when someone whips out a roll of 100s to pay at the grocery store. If you only deal in cash and don't have a w2 the IRS has no way to know how much income you have and therefore no way to know how much tax you owe.

         This is also how kids get basically free rides to college when their household income is actually high enough to deny any need based financial aid. None of it is reported to the IRS.

         edit: i guess another way to think about it is imagine asking your local weed dealer how much revenue is set aside to pay for their income tax at the end of the year.

   2. mindslight · 1790874697 · focus · HN ↗

      Let's flip it around - eliminate the personal income tax and only tax corpos. If the asset holding class wants to take on personal liability to save on taxes, let them.

      (And yes I say this knowing full well how disregarded entities and whatnot currently work. So please no "well ackshuallies" that merely bake in assumptions from current tax law)

      1. bpodgursky · 1790875817 · focus · HN ↗

         It doesn't work. US corporate profits were $4T in 2025, income tax receipts were $5.23T.

         Even if you taxed corporate profits at 100% (which of course, takes the stock market to zero and effectively ends the economy, but ignoring that) you have a huge gap.

         1. mindslight · 1790876295 · focus · HN ↗

            Current income tax receipts come from somewhere, right? So this argument only works if you're also arguing that a significant chunk comes from people who are employed by other individuals (non-corpos). Otherwise, for taxes that individuals currently pay on income from corpo employers (the vast majority of personal earned income, I'd venture), that money can instead go directly from the corpos to the government.

            The one big thing I know my model is missing here is appreciation of real estate held by individuals, but it seems relatively straightforward to leave capital gains (and other unearned income) intact to start while removing the tax on earned income.

            1. bpodgursky · 1790877289 · focus · HN ↗

               No... payroll comes from revenue, not profits.

               1. mindslight · 1790879763 · focus · HN ↗

                  Yes exactly, which means to draw a bound there is a much larger number in addition to your $4T profit figure.

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