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OFF-TOPIC Should billionaires be taxed out of existence?

LittleWolfie

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I am i believer of tax relief per job made. That way rich people are encouraged to hire more.
I quite like the idea of reducing corporate tax based on employment,though that doesn't help the individual billionaire, I guess.

He can't, it's purely academic. The French have had a bee in their bonnet since before the Revolution. If I were to go after anyone it would be to monopolies that use their dominant position to profiteer. Especially in the field of medicine.

For the most part billionaires made their money providing what the people wanted on a large scale (that includes hedge fund managers). Note I didn't say provided value because that is subjective in as what is considered value to one could be the opposite to another.
Also in some cases,F***ing over employees. That riles up the French a lot

I mostly agree with everyone on this thread, but I feel like the top 10 or 15 guys in the Bezos stratosphere (50B+) should have some sort of obligation to do more - not necessarily tax wise.

Don't sit here and talk about buying Porsche's or whatnot; these guys literally can't spend their money in 20 lifetimes even if they live every day like a degenerate college student who just won the lottery.

I wouldn't want the feds to take their money, cause that won't help with anything. but I do think that they should contribute directly more, somehow. I know they already are, but I just personally feel like at a certain point, it gets kind of ridiculous.

Here's the problem though...

Anything they do to contribute more, at least in ways that actually positively impact our lives, is only going to increase their wealth. Then people will only be more angry.
Actually they could increase their pay to employees. I doubt Bezos would even notice if all Amazon pickers and packers had their salary doubled and all their health insurance paid, and sick leave so they no longer have to work and be worried about the expense of an ambulance when they collapse form exhaustion on the floor. Billioaires ca only spend so much, the extra ages would trickle up through the consumer sector and encourage more b2c and b2bs.

So while they would be richer in absolute terms, the lower ratio and lower income equality would reduce the anger.

Let's do a small though experiment here. Let's say Pikety is 100% right, and that we should tax every billionaire out of existence. Better yet, instead of taxing them on their business income let's round up all the greedy billionaires in the United States, throw them in jail, and confiscate all their assets - their planes, their fancy cars, their cash, their gold, their real estate, their companies, everything.

If we were somehow able to liquidate everything they owned (unlikely) we would collect a whopping $2.7 trillion (see List of Americans by net worth - Wikipedia).

Not bad, right? Until you realize how much our government really spends...

Our most recent federal budget is set for $4.75 trillion this year alone, and the federal debt is over $22 trillion. And that doesn't even include all the state, county, and municipal debt we hold either!

At the current rate we're running, all the money we confiscated would last us a little shy of 7 months (2.7/4.75 * 12). After that, we'd be back to broke. Except now, all the jobs are gone, the economy has imploded, and we're such an economic crisis that the Great Depression would look like a joke.

No matter how you slice and dice the money, there simply are not enough rich people out there to fund the types of policies we're proposing. Taxing the rich is no quick fix.

Sure you can argue about moral imperatives and the like (I too would love to see Jeff Bezos give more of his money to charity) but the only way we're going to get ourselves out of the problems we've created for ourselves is by innovating. And the best way to do that is by creating new businesses and designing new products to fix the problems we have - and thereby creating wealth for everyone in the process.
Just to play the scenario out, Pikety is French, their debt is just under €2 billion so a 90% asset tax on 10 billionaires would pay that off with a nice surplus

The idea that billionaires are evil is lame zero-sum thinking. I don't think they hurt the economy at all; on the contrary, their activities are organizing more people and resources than anyone else. How many people depend on one billionaire for their livlihood? How many people's quality of life is improved by one billionaire's products?

That said. There is something to the IP arguments in this thread. Maybe look at this a different way...

Most billionaires are this rich because governments grant them monopoly rights - over a drug, a technology, a trademark, etc.

That being the case, isn't it strange to ask governments to solve the "problem," if you see it as such, through taxation?

It's like if I was starting houses on fire, and you asked me to fix the problem by pouring water on the houses after I start them on fire. One person or entity shouldn't be both the cause and solution to your perceived problem; it's illogical.

Either the granting of monopoly rights for innovation is ok, or it isn't, or it should be improved. That's where the conversation should be. The idea of "fixing" the innovation-reward system through taxation is ludicrous. It's asking the arsonist to douse fires.
It is amusing how the industrial revolution started after the steam engine patents expired.
 

Tourmaline

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@BJdeMarco A utopian one world government. What could go wrong?
 

Jon L

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Agreed in a free market economy. However I was thinking more along the lines of patents on medicines. Then using that protection to charge exorbitant prices for these products. Way above the costs of research, production and sensible returns.

It's one of the reasons our health service is on its knees having pharmaceutical companies siphon off vast sums of money to line their coffers. But then I have an issue with profiteering from health care (as opposed to incorporating in a fair margin).
I don't agree. Let's look at Pfizer, a large pharmaceutical. Last year, they brought in $53B with a gross profit of $42B. That's a lot of money. Now, lets subtract all their expenses. That leaves us with $11B net profit.

Now, let's say that we think that a 20% profit margin is 'unreasonable' and that it should be more like 5%. That means we can reduce Pfizer prescription prices by around $8B. That reduces their revenue by 15%, which means that prescription costs on Pfizer's drugs are reduced by 15%.

A 15% discount is nice, but its hardly earth shattering. Its also not worth the problems that will come with it. For example, who is it that decides that a 20% margin is unreasonable? Will they come for your business next? Do you think they will be 'reasonable' when they decide you're making too much money? What exactly is an unreasonable profit margin, and why is it unreasonable? Why does no one care that Apple, Google and Microsoft each make far more money that Pfizer does? Are their profits unreasonable?
 

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I read the article and he just doesn't understand what makes people get in the morning and work. There are several problems with what he's saying:

1. In the USA, you can't have a wealth tax. That's a 5th Amendment taking issue. Money is a form of property -- the Constitution says that the government cannot take your property without paying YOU the fair value of it. How does anyone think this would work? (Note: They can only do an income tax because of a Constitutional Amendment that gives them that power. And that power is totally limited.)

2. If you divide up the money equally between humans, you're going to have to divide again every Friday night. It's the 80/20 rule. 80% of the money is earned by 20% of the people. Some people are good at earning and caring for money. Some are terrible at earning it, managing it and stockpiling it. The money pile at the end of the week will end up the same guy's hand time after time.

3. If you tell the billionaires that you don't want them, their skills, and their money by taxing them too much, they'll vote with their feet. They'll move to somewhere that wants them and their assets.

4. The guy at the top of the heap makes it all look easy. It's the mark of an expert. Everyone thinks that they can be him. Fat chance! You don't wander into these fortunes by being a dumb cluck. You must be strategically smart. It takes nerves of steel and the relentless forward pull of a freight train.

I really think that the man who wrote that article should retire and put down his pen. His bright-green-eyed-envy have gotten in way of his common sense.
 

Tourmaline

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80/20 -> 64/4 -> 51.2/0.8

0.8% of people will own 51.2% of all wealth. It's just the laws of nature.

@SamRussell you saying "America is not a capitalist country." seems rather...odd. If it's not a capitalistic country then what is it? Surely you can't make a strong argument that it's a socialist country...
 

lludwig

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No matter how you slice and dice the money, there simply are not enough rich people out there to fund the types of policies we're proposing. Taxing the rich is no quick fix.
That's why these tax policies are really a method to punish success and not help the poor.
 

SamRussell

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80/20 -> 64/4 -> 51.2/0.8

0.8% of people will own 51.2% of all wealth. It's just the laws of nature.

@SamRussell you saying "America is not a capitalist country." seems rather...odd. If it's not a capitalistic country then what is it? Surely you can't make a strong argument that it's a socialist country...
Like every other western country, it's a mixed economy. There are elements of a free market and elements of socialism.

A capitalist economy is one where there is 0 government involvement in the economy and individual rights are upheld (by the government, that's the only legitimate purpose of a government).

A socialist economy is one where property is privately held, but government directs its use (even the definition of socialism is contradictory).

You don't need to be full on USSR to have a socialist, or elements of, socialism in the economy.

The US, and every other Western country, we can have some private property, but government takes a cut and tells us what we can and can't do with it. Examples: Cars, education, healthcare, corporations; just about everything. Want to build an extension on your house? You better make sure the local pencil pusher gave you permission on what you can do with your property.
 

GlobalWealth

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I mostly agree with everyone on this thread, but I feel like the top 10 or 15 guys in the Bezos stratosphere (50B+) should have some sort of obligation to do more - not necessarily tax wise.

Don't sit here and talk about buying Porsche's or whatnot; these guys literally can't spend their money in 20 lifetimes even if they live every day like a degenerate college student who just won the lottery.

I wouldn't want the feds to take their money, cause that won't help with anything. but I do think that they should contribute directly more, somehow. I know they already are, but I just personally feel like at a certain point, it gets kind of ridiculous.
Amazon has about 300,000 employees.

This was only possible due to Bezos starting the company and taking risks others weren't wiling to take.

Now, Amazon feeds and houses 300,000 families because of the value the company creates through its competitive advantage and hard work of their team.

That's a lot of social contribution if you ask me.

Beyond that, Bezos does donate to charity, but minimally so.

Why you may ask? Because by and large, charity is the 2nd worst allocation of capital (paying taxes is #1) you could possibly make.

Just look up the largest charitable organizations in the world. Very few actually give 20% or more to the actual cause. Most of the money ends up in the hands of administrators.

The best "charity" Bezos and others like him can provide is to continue to be economically productive hiring more employees and empowering more people to take care of themselves.
 

GlobalWealth

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80/20 -> 64/4 -> 51.2/0.8

0.8% of people will own 51.2% of all wealth. It's just the laws of nature.

@SamRussell you saying "America is not a capitalist country." seems rather...odd. If it's not a capitalistic country then what is it? Surely you can't make a strong argument that it's a socialist country...
The US has been a socialist country for decades actually. If you read the Communist Manifesto by Karl Marx you will see the US has partially for fully "ticked" all 10 boxes.


Karl Marx's "10 Planks" to seize power and destroy freedom:
  1. Abolition of Property in Land and Application of all Rents of Land to Public Purpose.​
  2. A Heavy Progressive or Graduated Income Tax.​
  3. Abolition of All Rights of Inheritance.​
  4. Confiscation of the Property of All Emigrants and Rebels.​
  5. Centralization of Credit in the Hands of the State, by Means of a National Bank with State Capital and an Exclusive Monopoly.​
  6. Centralization of the Means of Communication and Transport in the Hands of the State.​
  7. Extension of Factories and Instruments of Production Owned by the State, the Bringing Into Cultivation of Waste Lands, and the Improvement of the Soil Generally in Accordance with a Common Plan.​
  8. Equal Liability of All to Labor. Establishment of Industrial Armies, Especially for Agriculture.​
  9. Combination of Agriculture with Manufacturing Industries; Gradual Abolition of the Distinction Between Town and Country by a More Equable Distribution of the Population over the Country.​
  10. Free Education for All Children in Public Schools. Abolition of Children's Factory Labor in it's Present Form. Combination of Education with Industrial Production.​
1- there is no such thing as private property in the US. don't believe me? stop paying property tax and see who owns it.
2- no comment necessary
3- the US partially ticked this box with an inheritance tax
4- eminent domain and civil asset forfeiture
5- federal reserve
6- state owned infrastructure, radio frequency licensing, etc.
7- central planning, licensing, property tax, corporate tax, land use permitting, etc.
8- department of agriculture, farmer subsidies, growth mandates for farmers
9- central planning, zoning, permits
10- department of education dictating curriculum, property tax to pay for public schools
 

Tourmaline

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Like every other western country, it's a mixed economy. There are elements of a free market and elements of socialism.

A capitalist economy is one where there is 0 government involvement in the economy and individual rights are upheld (by the government, that's the only legitimate purpose of a government).
I appreciate your point of view. What you described here sounds like libertarian laissez-faire capitalism, radical free markets.

Rather, a capitalist economy is based on free enterprise, private property, and open markets. The USA has all of that. I can start a business for $5. I can start a corporation for $300. You cannot do this in a socialist country. The existence of government regulations does not make a capitalist economy not capitalist, and furthermore regulations are necessary for a capitalist economy to function well and fairly.

We do however have a touch of social programs which are socialistic. But the base of our Economy is Capitalist. A few of our social programs, like welfare and food stamps and disability, are socialist in spirit. They redistribute wealth from people that earned to people that did not directly earn it. However all the money that is earned to begin with is through a capitalist system of free enterprise, private property, and free markets.

A socialist economy is one where property is privately held, but government directs its use (even the definition of socialism is contradictory).

You don't need to be full on USSR to have a socialist, or elements of, socialism in the economy.

The US, and every other Western country, we can have some private property, but government takes a cut and tells us what we can and can't do with it. Examples: Cars, education, healthcare, corporations; just about everything. Want to build an extension on your house? You better make sure the local pencil pusher gave you permission on what you can do with your property.
A socialist economy will either have government owned enterprise, or it will have community owned enterprise. Outside of small pockets we have never seen community owned enterprise, it has been government owned enterprise. No private property. No open markets.

I think you're conflating regulations with socialism? Idk, but your perspective is not in line with general definitions.

For example, Venezuela has the PDVSA a state owned oil and gas company. That is what you find in a socialist country.

America has no state owned companies. It is not socialist.
 

advantagecp

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I read a relevant quote in Tim Ferris's 5-Bullet Friday:

Quote I’m pondering —
“To the economically illiterate, if some company makes a million dollars in profit, this means that their products cost a million dollars more than they would have cost without profits. It never occurs to such people that these products might cost several million dollars more to produce than if they were produced by enterprises operating without the incentives to be efficient created by the prospect of profits.”

Thomas Sowell

Another thing I would add: Yeah, F*ck those billionaires. They got all that on the back of the common man. They don't need all that money anyway. Tax them to oblivion.

Then guess who is next? Millionaires. Hmm. That starts to get a little bit less comfortable, doesn't it?
 
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Kid

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I won't protect neither capitalists nor socialists.

The thing is that if you want to tax billionaires (and possibly, millionaires)
it's basically an experiment on live organism.

The odds of dying ?

History teaches us that economy driven by government failed.
Even China growth was done only by making it mostly capitalistic.

Do we have any example that taxing millionaires and billionaires
will bring "common good"? And won't turn your country into
totalitarian place where rising an eyebrow can make you detained
and killed?

It's like, ok you will have median income, stable job, your medical problems will be covered and there won't be any "*onaires"
... but when your kid will want ask questions or move to other country,
he will suddenly disappear.
All you will have to live with is the vision of your child being killed, possibly raped, and dumped into hole in the ground.

Going back to our experiment.

We have many examples of it not working.
We have no example of it working.

I'm not saying that capitalism is good.
But i know what happened to countries that tried to live "common good" utopia.
 

Dan_Cardone

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Billionaires would simply move and take their value, innovation, and jobs with them. Im sure other countires would love to have them.
 

ZF Lee

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Amazon has about 300,000 employees.

This was only possible due to Bezos starting the company and taking risks others weren't wiling to take.

Now, Amazon feeds and houses 300,000 families because of the value the company creates through its competitive advantage and hard work of their team.

That's a lot of social contribution if you ask me.

Beyond that, Bezos does donate to charity, but minimally so.

Why you may ask? Because by and large, charity is the 2nd worst allocation of capital (paying taxes is #1) you could possibly make.

Just look up the largest charitable organizations in the world. Very few actually give 20% or more to the actual cause. Most of the money ends up in the hands of administrators.

The best "charity" Bezos and others like him can provide is to continue to be economically productive hiring more employees and empowering more people to take care of themselves.
Haha...never know how they manhandle with the retained earnings.

Speaking of accounting, it’s one of the reasons why I am in favour of the social enterprise model.

You serve a social cause, but at the same time, public oversight and market demand (for your enterprise’s products) keep you in check.

Plus, valid social enterprises usually have to show their financial statements each quarter on their website. A quick look besides a simple ratio analysis would be able to tell what’s going on.

As for charities, I have never found any who display their figures eagerly, or they only put up select doctored figures on the slides at the annual dinner.
 

Wiezel

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You can't tax the rich, they have passive income. It won't hurt them.
Easy for 'poor' people to complain about the rich, the "lucky" rich.
 

LittleWolfie

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Do we have any example that taxing millionaires and billionaires
will bring "common good"?
Yes it is called a flat tax system,everyone pays the same percent of their income

Bulgaria has 10% make 20,000 selling your time for money? Pay 2,000. Divorce your time and sell productocracy for 1,000,000,000 pay 10,000,000.

Compare that to how apple has an effective tax rate of 3.5% while the little guy has what 40%?

The australian goverment proposed it and the opposition objected on the grounds they would be taxed too little!
 
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LittleWolfie

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Now, Amazon feeds and houses 300,000 families because of the value the company creates through its competitive advantage and hard work of their team.

The best "charity" Bezos and others like him can provide is to continue to be economically productive hiring more employees and empowering more people to take care of themselves
Amazon and the goverment feeds and houses those workers because a lot of warehouse workers are paid too little to live on which is why they can claim means tested benefits.

So you need to either give credit to both or neither.

There are employers that voluntarily pay a living wage and your assertiom holds true for them(Amazon is not one)
 

Dan_Cardone

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Amazon and the goverment feeds and houses those workers because a lot of warehouse workers are paid too little to live on which is why they can claim means tested benefits.

So you need to either give credit to both or neither.

There are employers that voluntarily pay a living wage and your assertiom holds true for them(Amazon is not one)
Im not saying that amazon shouldn't pay their employees more money (nor am I saying they should) but I live in a place where Amazon warehouse employees are paid above the average for similar work from other employeers in the area. I have an distant cousin who works for them and always complains they don't pay him enough to live. Of course, him buying a bag a weed every week and new PS4 games all the time probably doesn't help.

My point? Some people really are underpaid and exploited but most "poor" people in America are poor because they have a bad mindset and even worse spending habits. Bezos could give his lowest paid employees a 20% raise and most of them would still complain because they would continue to waste their money.
 

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Compare that to how apple has an effective tax rate of 3.5% while the little guy has what 40%?
Apple overpays by 3.5%.

The little guy overpays by 40%.

Theft is theft, regardless of how much I steal from your wallet.
 

GlobalWealth

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Amazon and the goverment feeds and houses those workers because a lot of warehouse workers are paid too little to live on which is why they can claim means tested benefits.

So you need to either give credit to both or neither.

There are employers that voluntarily pay a living wage and your assertiom holds true for them(Amazon is not one)
The average Amazon warehouse employee earns $13.50 per hour.

That is their pay because that is what the market bears. They deserve nothing more, or nothing less.

Amazon has no moral obligation to feed their families.
 

Tourmaline

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Yes it is called a flat tax system,everyone pays the same percent of their income

Bulgaria has 10% make 20,000 selling your time for money? Pay 2,000. Divorce your time and sell productocracy for 1,000,000,000 pay 10,000,000.

Compare that to how apple has an effective tax rate of 3.5% while the little guy has what 40%?

The australian goverment proposed it and the opposition objected on the grounds they would be taxed too little!
I actually do like a flat tax system in general. It's fair.

However, this is America's current tax rates for single people:
27567

Pretty low taxes overall. Most people do not pay more than 22%.

However, I do not like taxing corporations. There's no need to. Why tax them at all when the people that get money from the corporation are going to get taxed?

Apple is made up of employees. They pay income tax. Why does Apple need to pay taxes as well? Having incentives to lower their tax rate is good, presuming those incentives are good too. Which they typically are. Want a low tax rate? Invest in oil or build housing for example as some good incentives for tax breaks.
 

lewj24

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I hate when people want to tax the rich. My coworker heard on the news about some new tax proposed for the rich and said, "I don't care, doesn't affect me." This is how the average person views it. They think it won't affect them but it will. The person who pays your salary is probably rich and if they have to pay more in taxes then they can't pay you more and might have to pay you less.

I also hate when people say things like, "Bezos has $100 Billion dollars, that's ridiculous how does one man have so much money? That's not right, you couldn't spend that much money if you tried!" I hate it because it's not true. Bezos doesn't have that much money. He owns stock in a company that is worth that much money. There's a big difference.

People think rich people just sit on piles of cash. How dumb. Rich people invest that cash into the market. They buy stocks, bonds, real estate, etc. which help grow the economy. Even if they kept millions in a bank account and did nothing with it they are still investing in the market. You think the bank just sits on that big pile of cash? No! The bank invests it!

Taxing the rich is bad for the economy.
 

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Have we even broached the subject of where that taxed money goes?

It's taken from the most productive class of citizens, and the "poor" that everyone believes will be the direct beneficiaries sees barely a shred of it. It's a public sector marketing gimmick to move money from private hands to millions of social workers and other human paper weights in government make-work departments.

Basically stealing from the rich to give to the department of motor vehicles.
 

LittleWolfie

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I actually do like a flat tax system in general. It's fair.
Yes and most wealthy people would pay more under that system. It also has the advantage of the simplicity reducing the cost of tax officers, accountants etc.

However, this is America's current tax rates for single people:
View attachment 27567

Pretty low taxes overall. Most people do not pay more than 22%.
That is a progressive tax system of course, and if your Warren Buffet you pay 17.4% straight from the horses mouth.

This is why the 23% fair tax proposal needs far less funds form the higher earners on the table, because Buffet et all would pay more.

However, I do not like taxing corporations. There's no need to. Why tax them at all when the people that get money from the corporation are going to get taxed?
I think the theory is the company uses resources itself (office space, fire/police//ambulance/water/road space etc) Plus how do you stop the use of a company by an individual?

I'm guessing you would quite like the Estonian system. 0% on undistributed profits(Left in the company) and 20% on distributions like Salaries/dividends/benefits in kind so no one can buy a "company yacht" and just use it themselves. Anyone with offshore income or self-employed pays 20%,nobody else has to worry.

Apple is made up of employees. They pay income tax. Why does Apple need to pay taxes as well?
Should Apple's overseas employees pay income tax too? Why should employees pay for corporate chancery courts of Delaware? Apple can exploit accountants and economies of scale to pay the same amount of tax revenue but in a more productive time than each employee alone. Or can outsource to other specialized companies for even greater scale) This is why it takes the average Estonian 5 minutes to file their tax. The productivity savings are returned in the form of greater services for the same rate or lower taxes and same services.


Having incentives to lower their tax rate is good, presuming those incentives are good too
I like the idea of offsetting employee payroll and income tax form corporate tax, that way the more people you hire the lower your bill. Which will reduce the complaints and the government gets the money either way.

. Which they typically are. Want a low tax rate? Invest in oil or build housing for example as some good incentives for tax breaks.
Maybe the US ones are , but I have yet to see many good ones here. I'd suggest oil is a bad instinctive. Why should it be prioritized over gas or sustainable wood or solar ? Should the government or the market be making that decision?

Investing in homes also encourages, speculators to rise the prices and put homes beyond the reach of the masses. Why should it be homes rather than offices or farms?

What about in new companies instead?
 

GlobalWealth

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I'm guessing you would quite like the Estonian system. 0% on undistributed profits(Left in the company) and 20% on distributions like Salaries/dividends/benefits in kind so no one can buy a "company yacht" and just use it themselves. Anyone with offshore income or self-employed pays 20%,nobody else has to worry.
Speaking as someone who owns an Estonian company, I can tell you it is not nearly as good as the marketing suggests.

The E-residency project is a well marketed joke. The only thing it allows you to do is open a company in Estonia, which is not really ideal except under a few certain niche situations.

It was targeted toward location independent entrepreneurs and freelancers, but there are dozens of better options than Estonia for company formation.

As for tax, it is much more complicated that you stated. Taxation will depend on the owners personal tax home. For example, if you are a German residency with an Estonian company, Estonia will remit tax information to Germany and you will be taxed in Germany at the German rate, not Estonian rate.

If you have no tax home, it is possible you will be taxed at the Estonian rate, however under the new CRS directive, most likely Estonia will remit tax information back to your country of citizenship thus you will be taxed in your country of citizenship, regardless of whether or not you live there.
 
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