Coup For Daniel

Through the entire administrations of presidents Franklin Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, and Carter, the top-tax-bracket rate was at least 70 percent, and for long periods was much more. John Kennedy’s tax-cut plan of the early 1960s took the top rate from 90 percent down to 70 percent. Reagan took it from 70% to 28%.

Between 1985 and 2018, the global average statutory corporate tax rate has fallen by about half, from 49% to 24%. One reason for this decline is international tax competition.

Close to 40% of multinational profits are shifted to tax havens globally

U.S. multinationals are the main “shifters”: about half of all the shifted profits ultimately accrue to U.S. parents.

American Company X makes $10-20 billion per year in profit. They used to harbor that all in the United States before the 90s. Between then and the 2000s due to tax changes, American Company X set up “profit centers” in Switzerland and Singapore. Now when American Company X makes that $20 billion, instead of it being taxed 38% by the United States and the US getting $8 billion in tax revenue, it gets split up into profit centers and they rationalize as much as possible overseas. So now that tax revenue becomes $1 billion to Singapore, $1 billion to Switzerland, and a few hundred million to the United States.

It’s the silly thing in how people talk about taxes in America. They act as if every company is only an American company that is only beholden to America. Every company you care about paying taxes is global. It takes little time and little effort to say “my company is headquartered in Singapore instead of Ohio.” It takes even less time to say “most of the money actually flows through Ireland then flows through the US.”

To make things better, you have to change the rules to incentivize as much money as possible from companies to go through the US in the first place. Then, you have to do the aggressive taxation and redistribution on the proceeds of that money (not the corporate money itself). Because for a billionaire to actually get out of paying taxes on the income or capital gains, they have to physically move to another country. Not easy or ideal for them.

So the idea is to lower the corporate tax rate to 5% or below (equivalent to the most aggressive other nations), require corporate leaders to have the US as their residence to be legally US headquartered, then tax potentially 70-80% out of income, dividends, capital gains, and options for people who make a certain amount. That way you actually get money flowing to the US, jobs flowing to the US, and rich people paying their fair share.

Our system would have to stay a progressive taxation system. To start, keep all steps up to $10 million in wealth acquisition close to what they are today. Then you step to higher than 50% potentially even 70-80% per traunch of wealth acquisition beyond that. Call it wealth acquisition because you need to eliminate all games that can be played. No loopholes for trusts. None for options. None for dividends or capital gains. None for real estate claw backs. A pure, systematic “how much more are you worth” on January 1, 2020 vs January 1, 2019.

If you are super rich, to get around it you can leave the country. But doing so by these hypothetical new laws would mean you have to relinquish all rights as a corporate director of the company you work for and spend over 50% of your year overseas.

Bezos could only avoid the taxes by,

1. Fucking over the company and moving it out of the US, which is now the best country for it, or
2. Losing his ability to control the company and acquire more obscene wealth directly.

However it’s the least politically easy to sell idea ever. “Reduce taxes on corporations by an obscene amount!” Liberals will love that. “Tax rich people to hell and back on all forms of wealth acquisition.” Conservatives will love that.

It’s an idea that would save the country, and it’s politically dead on arrival.

What kind of country could ever do such a thing? Singapore.

The only country in modern history to have a benevolent dictatorship run by scientists and economists.

So American Company X set up a profit center in Singapore.