Hacker News Reader

Comment by anonuser123456 | Hacker News Reader

Individuals (in the US) have standard deduction, which approximates the minimum value to sustain one's person. It's a bad approximation, but it is what it is.

It's assumed that corporations spend as little as possible on operations. Individuals obviously don't. Whereas a corporation wouldn't rent employees 500 sqft / person, individuals regularly rent/purchase that density for themselves. Similarly, while a corporation might buy a Camry and run in into the ground, some individuals will buy a new BMW every 3 years.

Corporations also don't have a motive to exist beyond profits. If you tax revenue and make profits untenable, then corporations simply will not exist. Individuals on the other hand try not to die.

View on HN

With progressive taxation of corporations, we could disincentivize the existence of trillion dollar corporations, opening up the market for thousands more million to billion dollar businesses to exist. Regulatory capture would be much harder to coordinate which would lead to much less corruption. Greater marketplace competition would lead to better quality services and products for consumers.

The curve used to shape the tax rate as company size grows could be tuned to mitigate many of the potential negative side effects of this.

> With progressive taxation of corporations, we could disincentivize the existence of trillion dollar corporations

In my misspent youth, I worked on a 10% project that helped consolidate and free-up racks of servers so that they could be physically forklifted between space leased/owned by different subsidiaries of one of the world's 5 largest corporations (by market cap). I heard through the grapevine that the main reason for this arrangement was so that these subsidiaries qualified for small business discounts on electricity, and they wanted to keep physical separation in different parts of the datacenters to bolster the case that the various subsidiaries were in fact separate entities.

When you adjust taxes and rates based on company size (or things correlated with company size), you need to be careful about subsidiary loopholes.

It costs multiple billions to make a fabrication plant. Considerable amounts of research and GPUs to train a machine learning model. That electric vehicle? Good luck developing it without a big bankroll, subsised by investors because they think it could 1000x.

> we could disincentivize the existence of trillion dollar corporations

What does it help Apple that they have hundreds of billions of dollars sitting somewhere in their offshore accounts if they cannot use that money?

An easier way to do this is just to break up these companies directly. Monopolies or duoplies or x-opolies should be broken up, just like AT&T and Standard Oil.

Having these monopolies (defining loosely - whether one company or a 2 or 3 or 4) is the main deficiency of capitalism.

Unfortunately, breaking up monopolies or increases taxes is exceedingly difficult to do as large companies and their lobbying congress prevents it in most cases.

>It's assumed that corporations spend as little as possible on operations.

A ridiculous assumption. Corporations are incredibly wasteful and tend to solve problems by piling money on them until they’re fixed.

And to that point, that money piled on solving the problem goes back into the economy.

Counterpoint, there are plenty of corporations that exist with net losses carried over several years.

Reply on news.ycombinator.com