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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: combjelly who wrote (800171)	8/7/2014 1:32:54 PM
From: bentway	Read Replies (1) \| Respond to of 1583681

However, I am fine with putting the corporate income tax rate at zero. But only if unearned income is taxed at earned income rates. I find that an excellent idea.

To: combjelly who wrote (800171)	8/7/2014 1:53:44 PM
From: i-node	Respond to of 1583681

>> Almost none of it was invested in things like employees, R&D or infrastructure. You don't "invest" in employees because you get a few extra bucks. Or infrastructure. You have to be able to show shareholders how that investment will generate a stream of future returns, or investors will demand you give them THEIR money. Just like happened with Apple. They're sitting there with a ton of money and investors told them, "If you're not going to use it productively, I will. Give me my money." Which they did. Corporations are not going to spend money on infrastructure based on a one-time windfall. This is contrary to the basic precepts of corporate finance. You finance asset acquisition with money from appropriate sources. So, you don't delay paying accounts payable to get funding to build a building. You do that with a mortgage. You don't draw down a line of credit to purchase equipment; you finance that with funds intended for that purpose. You don't hire employees unless you can reasonably expect to maintain a reasonable revenue per employee ratio. >> I am fine with putting the corporate income tax rate at zero. But only if unearned income is taxed at earned income rates. While there are a lot of differences between the tax treatment of earned and unearned income, by far the greatest difference is the tax imposed to support SS & Medicare. And here, you get into the same sort of problem -- when these programs were started, it was with the understanding that earned income ONLY would be taxed to pay for them, and even then, on a very limited basis. So, when you start taxing unearned income to pay for these programs, you are radically altering the social contract and that is something that has to be carefully considered --- not only in terms of the righteousness of it, but in terms of the economic consequences. It is a tough argument to make, that unearned income should be taxed to fund programs where the commitment was that that would not be done. A far more sensible approach, imo, would be to eliminate the corporate income tax in exchange for means testing SS & Medicare, that is, "We're not going to allow you these benefits, but we're not going to make you pay for them, either."