What is too complex about a national sales tax to replace employee contribution to payroll taxes, Medicare and health insurance?
Ah, I thought you wrote 'tax on all revenues', which meant (to me) corporate revenues, which perhaps implies also VAT tax. Looking back, you wrote "sales tax on all revenues", by which I guess you mean a sales tax on all sales.
National sales tax replaces various employee taxes.
Hmmm, I tend to agree with the idea that many incomes should not be taxed (why should selling something for a $1,000 profit be taxable, while holding onto it, with the same $1,000 unrealized capital gain, not taxable? Why discourage realization of profit?).
I guess I don't really know what's so great about a sales tax though. All of us hate sales taxes. Why is taxing consumption preferable to taxing work? Neither sounds very appealing.
Dilution of equity via a modest market cap tax is much easier to tolerate. We wouldn't even notice. Companies already dilute their equity with stock grants, investors hardly care.
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Now companies have an incentive to lower their market cap by paying it out as dividends, over paying CEOs and the hell with public pension funds that will bankrupt most blue cities if the market doesn't go up 8% a year to keep their Ponzi pension scheme floating... Heck, PE firms will buy public companies, gut them and sell the pieces as private businesses that would not have a public market so no way to value it for the "Elroy Tax."
As I wrote, you'd have to have some provisions in the tax code that makes being a private company less attractive from a tax perspective relative to the market cap tax. That should be fairly easy. And if companies don't dramatically change their behavior while giving away 1%-2% of their stock annually in employee stock option grants, I doubt a market cap tax (which might replace the corporate income tax for public companies) would cause such dramatic changes. One percent remains only one percent, and with the market caps of the public markets being pretty high the tax might be less than one percent per year.
Keep in mind the government would now WANT higher market caps, so they're likely to tweak the various laws to incent companies to want to increase their share prices. Stuff which reduces share prices might be, well, taxed!
And why should a private company be exempt from paying their share of taxes to cover SS, Medicare and regular health care?
No one said they would. |
