According to New York Times story today, Facebook is developing a tool to effectively allow China to block content on its news feed. In return, Facebook would finally get to enter the Chinese market. Although Facebook does provide blocking of certain content in other countries (e.g., content that is allegedly inconsistent with local culture and laws in places like Pakistan), the apparent willingness to cooperate with China's government to block actual news that helps it blockade information to the Chinese people is a step way beyond what Facebook has done to date. And, it further reflects that Mark Zuckerberg's consistent statements about facilitating communications for the common good is a lie; he and Facebook clearly are only interested in becoming more profitable, even if that means cooperating with the massive censorship programs of the Chinese government. And, while I'm generally in favor of companies making as much money as possible based on the quality of its services and products in the market, directly cooperating with an oppressive government and developing tools to facilitate that oppression should called what it is: collaboration in censorship and oppression. The US government should be concerned that US companies are actively supporting and encouraging the oppression of millions of people by a foreign government, especially one that is hostile to the US. Perhaps the US government should also consider passing laws that prohibit US companies (and Facebook is not the only one; also, Cisco and others) from doing business with or in such countries if their business is used to facilitate such oppression.
23 November 2016
19 November 2016
"Doing Evil All The Time" Is A More Appropriate Motto
You may recall that Google's initial motto was said to be "Do No Evil" or "Don't Be Evil". According to the Wikipedia site about this, it was proposed by one or another employee in 2000 and has generally been considered part of Google's Code of Conduct. That sounds great. And, other large technology companies that arise out of Silicon Valley tend to make public statements that they are saving the world in one way or the other by increasing global communications, etc. In some circumstances, the various technologies have, indeed, been crucial towards advancing certain good causes. For example, the Arab Spring events resulted in several stories of how Twitter essentially facilitated a revolution against dictators. And, depending on your view of the "main stream media", Donald Trump's use of Twitter was an extremely cost-effective way to get his views into the political consciousness and supported his successful election bid.
I'm sure there are many, many examples of all the good things that Google, Twitter, Snap Chat, etc. have been used for (sometimes even better than sharing funny cat videos). However, these companies have also been complicit with China in preventing important data from reaching the Chinese people. More important, what most of these companies have in common is that they capture and devour and then sell your data. That's really all they do. Google does it under the guise of providing free search information. Snap Chat and Facebook do it under the guise that they are helping people share information with each other. Twitter does it under the guise that they are helping people communicate.
They don't charge membership fees to the users. As such, the business models of all of these companies are driven by one thing and only one thing: acquiring the public's personal data and selling it to advertisers or other consumers of the data that want to sell things and services to the users. The sophisticated algorithms and other tools used to acquire, analyze, slice and dice and sell the data to third parties result in "targeted advertising" that has developed into virtual mind control over their user populations (which means nearly everyone). It results in a all sorts of companies using the massive amounts of data to push consumerism like never before. For example, I was once looking for a faucet when I was re-doing my kitchen. When I left the kitchen renovation websites, I was followed around on other sites for days by "targeted advertising" of the same faucets that I had looked at. I also once heard a Google executive state that gathering all of this information was really good for everyone by explaining that it would be great if when our sneakers were wearing down and we were walking by a sports store then the sports store would know you were close by and would send an advertisement to your phone to sell you those sneakers that you so desperately needed at that moment. From my perspective, that would effectively a form of mind control; a process by which "free will" is taken away from us but we don't know it. Even if that sneaker example sounded useful at some level, there is no way the sneaker company is going to wait to push those sneakers on you only when your sneaker is likely to be worn out. Instead, they'd be constantly trying to get you to buy then earlier than that and to buy multiple styles and colors.
This omnipresent and rapacious data collection and usage is the only real reason these companies exist. Their business models are far from living up to the naïve idea that they "Do No Evil". Instead, the manner in which they are knowing and using virtually everything bit of information about our lives is what I would call "Doing Evil All The Time".
Very recently, some of these tech companies have lost data-usage regulatory law suits in the UK and the EU. These cases must be very worrisome to the big-data tech companies that are virtually trying to know and track every bit of information about you. Personally, I think the government should very aggressively limit and regulate these companies' acquisition and usage of the our data. I would even go so far as to say that the license and usage agreements should be strictly limited by new laws that restrict the data-collection and data-usage provisions the license agreements that we click without reading all the time. Sure, there may be fewer world-saving technology companies, but at least our world will be less controlled by these companies and the amount of wasteful consumerism would decrease.
I'm sure there are many, many examples of all the good things that Google, Twitter, Snap Chat, etc. have been used for (sometimes even better than sharing funny cat videos). However, these companies have also been complicit with China in preventing important data from reaching the Chinese people. More important, what most of these companies have in common is that they capture and devour and then sell your data. That's really all they do. Google does it under the guise of providing free search information. Snap Chat and Facebook do it under the guise that they are helping people share information with each other. Twitter does it under the guise that they are helping people communicate.
They don't charge membership fees to the users. As such, the business models of all of these companies are driven by one thing and only one thing: acquiring the public's personal data and selling it to advertisers or other consumers of the data that want to sell things and services to the users. The sophisticated algorithms and other tools used to acquire, analyze, slice and dice and sell the data to third parties result in "targeted advertising" that has developed into virtual mind control over their user populations (which means nearly everyone). It results in a all sorts of companies using the massive amounts of data to push consumerism like never before. For example, I was once looking for a faucet when I was re-doing my kitchen. When I left the kitchen renovation websites, I was followed around on other sites for days by "targeted advertising" of the same faucets that I had looked at. I also once heard a Google executive state that gathering all of this information was really good for everyone by explaining that it would be great if when our sneakers were wearing down and we were walking by a sports store then the sports store would know you were close by and would send an advertisement to your phone to sell you those sneakers that you so desperately needed at that moment. From my perspective, that would effectively a form of mind control; a process by which "free will" is taken away from us but we don't know it. Even if that sneaker example sounded useful at some level, there is no way the sneaker company is going to wait to push those sneakers on you only when your sneaker is likely to be worn out. Instead, they'd be constantly trying to get you to buy then earlier than that and to buy multiple styles and colors.
This omnipresent and rapacious data collection and usage is the only real reason these companies exist. Their business models are far from living up to the naïve idea that they "Do No Evil". Instead, the manner in which they are knowing and using virtually everything bit of information about our lives is what I would call "Doing Evil All The Time".
Very recently, some of these tech companies have lost data-usage regulatory law suits in the UK and the EU. These cases must be very worrisome to the big-data tech companies that are virtually trying to know and track every bit of information about you. Personally, I think the government should very aggressively limit and regulate these companies' acquisition and usage of the our data. I would even go so far as to say that the license and usage agreements should be strictly limited by new laws that restrict the data-collection and data-usage provisions the license agreements that we click without reading all the time. Sure, there may be fewer world-saving technology companies, but at least our world will be less controlled by these companies and the amount of wasteful consumerism would decrease.
26 July 2016
Why do People Believe that the System is Rigged? Because it is!!
So, Donald and Bernie have made a lot of statements about the system being rigged. Rigged generally towards wealthy people who maintain and increase their wealth. And, rigged politically for those already in power or the wealthy (see above) to control the politicians and the political process. Just by watching the publicly known activities of the rigged-system's beneficiaries such as campaign finance and lobbying - legal, but better stated as legalized corruption - one should conclude that the system is set up only for a relatively few. However, unless you are part of the system, mere mortals don't normally get to see the inner workings of that system reflecting exactly how rigged the system really is. The recent release by WikiLeaks of the Democratic National Committee's emails clearly reflect the elites' coordinated effort to kill off Bernie's campaign for the presidency, but - and even more worrisome - it highlighted the systematic and unabashed effort to sell access to the president and others to donors. In one sense it is laughable that so many people think that by giving $10,000 or even a $100,000 they are actually being listened to by the party's policy makers; that requires millions that are given by only a few - and they really only want access for business reasons, not to have an effect on policy. A great example of such ignorance are the fake policy dinners and other events that are held by the political parties to invite such donors to "contribute" to the party's and the government's policy-making process. I can't imagine people so naive to think that their input at such events matters yet apparently smart enough have made to make the money to begin that they donated in order to be invited to such events. In any event, now that Bernie's voice is being eliminated from the public space this week through the Democratic Party's Convention and the official nomination of Hillary Clinton, only Donald Trump will be carrying forward the "rigged system" argument. And, for him, the disclosure of how both parties raise money and rig the system is a gift that will keep on giving because he will be able to use it against Hillary and the Democrats and yet be immune from blowback on him because he was never a beneficiary of such a system on the Republican side (which works in exactly the same way as it does for the Democrats). If all this resonates with his and Bernie's supporters, I suspect Trump has a very good chance to be the next president.
As a related aside, the WikiLeaks disclosures bring back what I heard Kim Dotcom state last year in an interview on Bloomberg TV about the extradition case against him in New Zealand (the U.S. has requested that New Zealand send Kim Dotcom to the U.S. to stand trial for copyright infringement and other crimes relating to his file-sharing website called MegaUpload). He said that Julian Assange (the WikiLeaks founder) was going to release so much information about Hillary that she'll likely have to withdraw from the presidential race. That statement was made before the date of the earliest emails recently released. So, that could mean that WikiLeaks has a lot more (older and more damaging) information to release about Hillary, which could mean even more damage to her campaign and an even greater chance that Trump wins the presidency.
As a related aside, the WikiLeaks disclosures bring back what I heard Kim Dotcom state last year in an interview on Bloomberg TV about the extradition case against him in New Zealand (the U.S. has requested that New Zealand send Kim Dotcom to the U.S. to stand trial for copyright infringement and other crimes relating to his file-sharing website called MegaUpload). He said that Julian Assange (the WikiLeaks founder) was going to release so much information about Hillary that she'll likely have to withdraw from the presidential race. That statement was made before the date of the earliest emails recently released. So, that could mean that WikiLeaks has a lot more (older and more damaging) information to release about Hillary, which could mean even more damage to her campaign and an even greater chance that Trump wins the presidency.
10 July 2016
Criminals with a Badge
What is one to think about what is happening in the U.S. with race relations and policing? I find it incredible that the many, many recent killings of black people by police does not raise even more outrage than it has. Sure, there have been marches and protests, in particular by the Black Lives Matter movement. And, certainly, some (maybe a large) degree of racism is involved. But, my view is that there is a much bigger problem. That is, we have way too many policeman who are just "criminals with a badge".
Only the willingly uninformed will not admit that certain policeman have a character that could have just as easily resulted in them being a street thug. They have a desire to dominate people and commit violence when someone fails to follow their instructions. On top of that, many police departments seem to have very flawed hiring practices that allow such persons to become policemen. And, to make matters worse, some police department training must, obviously, fail to curtail the authoritative and violent nature of such individuals.
It is not enough to say that the majority (even vast majority) of policemen do not fit into such a category, because there are simply way too many that do. When you look at the many recent videos of police killings, you cannot not fail to ask why a person, who is following instructions, already detained or otherwise clearly not putting an officer's life in danger, ends up dead.
Policing is not like military action. The police should not consider that they are at war with society, or certain segments of society. If a suspect slips away and is not obviously putting others or the officer in danger, the officer should not be allowed to just shoot the suspect in the back as he runs away. If the suspect is in handcuffs with multiple officers holding him down, the police should not be allowed to threaten the suspect with a gun and then shoot the suspect because he doesn't stop struggling. Yet, this type of thing happens way too often. How to explain these events other than a combination of poor hiring decisions, poor policies and poor training. Sure, there may be a racism element to these deaths, but a racist police officer doesn't automatically go about killing people. Bad police officers are who unjustly kill people. These are essentially just criminals with a badge.
Only the willingly uninformed will not admit that certain policeman have a character that could have just as easily resulted in them being a street thug. They have a desire to dominate people and commit violence when someone fails to follow their instructions. On top of that, many police departments seem to have very flawed hiring practices that allow such persons to become policemen. And, to make matters worse, some police department training must, obviously, fail to curtail the authoritative and violent nature of such individuals.
It is not enough to say that the majority (even vast majority) of policemen do not fit into such a category, because there are simply way too many that do. When you look at the many recent videos of police killings, you cannot not fail to ask why a person, who is following instructions, already detained or otherwise clearly not putting an officer's life in danger, ends up dead.
Policing is not like military action. The police should not consider that they are at war with society, or certain segments of society. If a suspect slips away and is not obviously putting others or the officer in danger, the officer should not be allowed to just shoot the suspect in the back as he runs away. If the suspect is in handcuffs with multiple officers holding him down, the police should not be allowed to threaten the suspect with a gun and then shoot the suspect because he doesn't stop struggling. Yet, this type of thing happens way too often. How to explain these events other than a combination of poor hiring decisions, poor policies and poor training. Sure, there may be a racism element to these deaths, but a racist police officer doesn't automatically go about killing people. Bad police officers are who unjustly kill people. These are essentially just criminals with a badge.
22 June 2016
What is the True Record of the Chinese Communist Party?
One of the strongest arguments for the continued control of the Chinese government by the Chinese Communist Party is that the Party has created and well-managed the Chinese economy since the time Deng Xiaoping decided around 1980 that the Chinese economy should open up and a degree of privatization and capitalism should exist in China. And, it is true that the growth of the Chinese economy since that period has been unprecedented, lifting hundreds of millions of Chinese out of poverty and placing China and its economy as a leader on the world stage. And, the Chinese Communist Party has consistently presented such economic success as being a creation of the Party and, by extension, could only have been accomplished by the Party. As such, the argument is, there is no need for political opening of any sort because the country and its economy are on some sort of scientific and inevitable march to higher and higher future success through "Socialism with Chinese Characteristics".
Most Chinese less than 40 years old have never known anything but economic progress and the great decision making of the Party I recall meeting several years ago with a very successful Chinese businessman who was very supportive of the Party and described how the government policy-making system was so perfect that it really could not make a mistake. Until possibly recently, most Chinese truly believe that the China economic success story is, in fact, the result of the current political system, in particular the manner in which the Party controls and runs the country and its economy.
However, it is worth considering a very different explanation for how the Chinese economy got to where it is today and the related risks from the generally accepted story being wrong. I suggest that we need to look at the Chinese economy not over a period of 40-50 years, but more like 500 years. China has always been a very large country. In the year 1500, China was the leading economy of the world. Given its size, resources and culture, that was not unusual. In fact, China had long been one largest and most-successful economies. Then the industrial revolution happened in the England and Europe and China missed it. For many reasons, China turned inward and made some very poor decisions that severely weakened the country and its economy. That continued well into the late 1900s when foreign powers had much control over parts of the Chinese economy and even Chinese territory (e.g., Hong Kong and Shanghai). Then, there was a short period of a republic and some self-determination to be followed by additional self-imposed weakness by way of poor decisions and then in 1947 the Communists took over and further accelerated the bad decision making by insisting that Marxism was a panacea to success. Horrific decisions were made such as the Cultural Revolution and the Great Leap Forward that effectively destroyed the Chinese economy to a degree that it could hardly get much worse. Only after sinking as low as they could possibly be did the fantasy thinking of the Party capitulate and provide the room for someone like Deng Xiaoping to achieve power and commence with reforms.
But, what really happened and who was responsible for it? One view is that what the Chinese Communist Part largely did was to stop making bad decisions. That is, the allowed Chinese people to start making some of their own decisions and the state-owned enterprises started to conduct business on rational and international terms. And, the Party started to operate in a manner that supported, or at least did not so strongly opposed, economic growth. However, that is some thing quiet different than causing the growth of the economy. It is more like stepping off a giant balloon and simply allowing it to re-inflate to its normal size. That Party has squeezed all the air out of the balloon for so long that when allowed to re-inflate it was naturally going to grow fast and for a long time. During this 30-40 year period, the Party used the economic growth to maintain control and convinced the Chinese that the Party was the instrument of the economic growth. Even non-Chinese were impressed, wondering if "State Capitalism" was a potential way forward for many economies. Chavez in Venezuela was a prime example.
Then, China's economy started to slow in 2008. And, importantly, the Party stated to implement decisions to prop up the economy, such as flooding the economy with cash that the country has accumulated over the period of its growth, That stabilized the economy enough that some people were again impressed, but in reality the issues were just being kicked down the road. Then, more recently, the stock markets collapsed and the Party intervened again and implemented horrible policies that have left many in the financial and economic community wondering whether the Party really knows what it is doing at all. In my "balloon" theory the last 7-8 years shows that the Party really doesn't know what it is doing and, more importantly, was never the cause of the growth of the Chinese economy. Instead, it was the result of the re-inflation of the balloon that naturally revived the Chinese economy to its more natural level. And, once the Chinese people start to realize this and realize that the Party is not only not really in charge of the economy but also was never really responsible for the growth of the economy, the people will then start to ask what the Party and the entire system is about. Then, social and political unrest will be natural and the entire Chinese entity and political system are at risk.
Most Chinese less than 40 years old have never known anything but economic progress and the great decision making of the Party I recall meeting several years ago with a very successful Chinese businessman who was very supportive of the Party and described how the government policy-making system was so perfect that it really could not make a mistake. Until possibly recently, most Chinese truly believe that the China economic success story is, in fact, the result of the current political system, in particular the manner in which the Party controls and runs the country and its economy.
However, it is worth considering a very different explanation for how the Chinese economy got to where it is today and the related risks from the generally accepted story being wrong. I suggest that we need to look at the Chinese economy not over a period of 40-50 years, but more like 500 years. China has always been a very large country. In the year 1500, China was the leading economy of the world. Given its size, resources and culture, that was not unusual. In fact, China had long been one largest and most-successful economies. Then the industrial revolution happened in the England and Europe and China missed it. For many reasons, China turned inward and made some very poor decisions that severely weakened the country and its economy. That continued well into the late 1900s when foreign powers had much control over parts of the Chinese economy and even Chinese territory (e.g., Hong Kong and Shanghai). Then, there was a short period of a republic and some self-determination to be followed by additional self-imposed weakness by way of poor decisions and then in 1947 the Communists took over and further accelerated the bad decision making by insisting that Marxism was a panacea to success. Horrific decisions were made such as the Cultural Revolution and the Great Leap Forward that effectively destroyed the Chinese economy to a degree that it could hardly get much worse. Only after sinking as low as they could possibly be did the fantasy thinking of the Party capitulate and provide the room for someone like Deng Xiaoping to achieve power and commence with reforms.
But, what really happened and who was responsible for it? One view is that what the Chinese Communist Part largely did was to stop making bad decisions. That is, the allowed Chinese people to start making some of their own decisions and the state-owned enterprises started to conduct business on rational and international terms. And, the Party started to operate in a manner that supported, or at least did not so strongly opposed, economic growth. However, that is some thing quiet different than causing the growth of the economy. It is more like stepping off a giant balloon and simply allowing it to re-inflate to its normal size. That Party has squeezed all the air out of the balloon for so long that when allowed to re-inflate it was naturally going to grow fast and for a long time. During this 30-40 year period, the Party used the economic growth to maintain control and convinced the Chinese that the Party was the instrument of the economic growth. Even non-Chinese were impressed, wondering if "State Capitalism" was a potential way forward for many economies. Chavez in Venezuela was a prime example.
Then, China's economy started to slow in 2008. And, importantly, the Party stated to implement decisions to prop up the economy, such as flooding the economy with cash that the country has accumulated over the period of its growth, That stabilized the economy enough that some people were again impressed, but in reality the issues were just being kicked down the road. Then, more recently, the stock markets collapsed and the Party intervened again and implemented horrible policies that have left many in the financial and economic community wondering whether the Party really knows what it is doing at all. In my "balloon" theory the last 7-8 years shows that the Party really doesn't know what it is doing and, more importantly, was never the cause of the growth of the Chinese economy. Instead, it was the result of the re-inflation of the balloon that naturally revived the Chinese economy to its more natural level. And, once the Chinese people start to realize this and realize that the Party is not only not really in charge of the economy but also was never really responsible for the growth of the economy, the people will then start to ask what the Party and the entire system is about. Then, social and political unrest will be natural and the entire Chinese entity and political system are at risk.
01 May 2016
Who Does the NRA Really Represent?
The gun control debate just rages on, especially during election season. There are increasingly interesting twists and turns in the debate.
For example, the "gun control" side has tried to re-brand their argument as "gun safety". That sounds (at least to the moderate gun ownership sector of the population) a lot less like the government trying to take away someone's guns and a lot more like some sort of reasonable plan to protect people from gun violence. This was smart and seems to have been borrowed from the "same-sex" marriage proponents who re-branded themselves as "marriage equality" proponents as well as the same-sex marriage opponents who have now moved on to branding themselves under the "religious liberty" moniker.
Also interesting is the increasingly awareness than a very large portion of gun-related deaths are the result of suicide. That is tragic, but that is information that the gun-control crowd doesn't really want to be very public because it makes gun-related homicide and mass murders to appear to be less of the problem that it is. That also allows the pro-gun crowd to more easily argue that their are sufficient laws in place regarding gun ownership and that the real issue is "mental health" (that is, the supposed underlying cause of suicide), which is mentioned regularly now.
But, in my view, there is another issue that does not get much play, but I'm convinced it is true. That is, the NRA really doesn't care directly about the Second Amendment and individual right to own guns, etc. Rather, the NRA's real interest and effort is for the gun manufacturers and sellers to be able to sell guns without significant limitations and to perpetuate the Second Amendment culture by the purchasers of those guns. There is lots of evidence of this, including that the NRA keeps pushing through legislation to preclude legal liability for gun manufacturers. Only the most tortured explanation of such legislation can support why such a law supports individual's Second Amendment rights. Instead, the NRA's main purpose is to convince gun buyers and owners that their rights are constantly under attack and that the more people who own and carry guns the safer we all will be. That is fundamentally an ignorant position, but it has been sold very effectively and the ultimate winners of such a strategy and mass delusion are the gun manufacturers and the extensive distribution and support network that sells and keeps guns in the hands of all those people that the NRA has been deluding.
08 March 2016
Corporate Taxation is a Fraud
Ever since I took Tax I in law school, I have wanted to develop and argument that corporate taxation is really a fraud on individual (i.e., human) taxpayers. Generally, one view of corporate taxation is that corporations should pay more in taxes (often stated as their "fair share") so that the tax burden on individuals is less. Another view is that high corporate taxation reduces investment incentive, job growth, etc. Both views, in my opinion, miss the point because they assume that corporations actually pay taxes. But, more realistically, it should be understood that corporations actually don't pay taxes (regardless of the level of the corporate tax rate), only individuals pay taxes.
To present a simple example, let's consider the corporate taxes that might be paid by Coca Cola and where the money for such taxes actually comes from. Let's assume that a can of Coke sells for 2 dollars and that the corporate profit on the 2 dollars is 20%. So, Coca Cola just made 40 cents on that sale. And, let's assume that the corporate tax rate is 20% on those profits. So, that means Coca Cola pays 8 cents in corporate taxes. But, that does not mean that individual taxpayers now have 8 cents more in their pockets because Coca Cola paid the tax to the government . To the contrary, what really happened is that the tax was indirectly paid by individuals. That is, the purchaser of the Coke paid 8 cents more than he otherwise would have if there had not been a corporate tax on Coca Cola. So, although Coca Cola collected the tax and transferred it over to the government, the tax was mostly paid for by the purchaser of the Coke.
Depending on what would have happen to the price of the Coke if there had been no corporate tax, it is also possible that the result of the corporate taxation was that the employees were paid less than they otherwise would have been or the shareholders earned a lower return on their investments that they otherwise would have. The consequence of the corporate tax may hit each of those groups of individuals, but it doesn't really matter for the purposes of the explanation. What really matters is that the corporation is not really a taxpayer.
So, what does that all mean? Well, for one thing, we can conclude that corporate taxation is regressive and negatively impacts poor people. Why? Because poorer people spend most of their income buying things that are taxed. Less poor people save more money. So, because a corporate tax is at least partly like a sales tax, it is a regressive tax and not a progressive form of taxation. Normally, the pro-corporate tax crowd would argue that increasingly corporate taxation is good for lower income earners, but it is actually very bad for lower income earners. So, contrary to corporate taxation helping the lower income earners, it is working against them and they don't even know it. And, more generally corporate taxation is essentially an opaque way of taxing all individuals because (unless they have read this post) they don't realize that they are the ones paying corporate taxation.
As such, corporate taxation is largely a fraud on the individual taxpayers. So, instead of paying an effective personal tax rate of 30% or so on one's income, there is a huge hidden tax that individuals pay that pushes up their effective tax rate well beyond the 30%.
The solution is simple. Eliminate the corporate tax rate. That of course, would mean that the US Treasury would need more money and that would then only come from raising the effective tax rates of individual taxpayers. But, that's OK because individual taxpayers are already paying those higher taxes, as explained above. So, the consequences of eliminating the corporate tax rate would have at least two benefits. One, it would eliminate the fraud that is currently perpetuated on the individual taxpayer and make it more transparent how much in taxes that the individual taxpayers are actually paying. Two, the regressive consequences of the existing corporate taxation would be changed so that the additional taxes would be paid through the more progressive tax structure of individual income taxation.
To present a simple example, let's consider the corporate taxes that might be paid by Coca Cola and where the money for such taxes actually comes from. Let's assume that a can of Coke sells for 2 dollars and that the corporate profit on the 2 dollars is 20%. So, Coca Cola just made 40 cents on that sale. And, let's assume that the corporate tax rate is 20% on those profits. So, that means Coca Cola pays 8 cents in corporate taxes. But, that does not mean that individual taxpayers now have 8 cents more in their pockets because Coca Cola paid the tax to the government . To the contrary, what really happened is that the tax was indirectly paid by individuals. That is, the purchaser of the Coke paid 8 cents more than he otherwise would have if there had not been a corporate tax on Coca Cola. So, although Coca Cola collected the tax and transferred it over to the government, the tax was mostly paid for by the purchaser of the Coke.
Depending on what would have happen to the price of the Coke if there had been no corporate tax, it is also possible that the result of the corporate taxation was that the employees were paid less than they otherwise would have been or the shareholders earned a lower return on their investments that they otherwise would have. The consequence of the corporate tax may hit each of those groups of individuals, but it doesn't really matter for the purposes of the explanation. What really matters is that the corporation is not really a taxpayer.
So, what does that all mean? Well, for one thing, we can conclude that corporate taxation is regressive and negatively impacts poor people. Why? Because poorer people spend most of their income buying things that are taxed. Less poor people save more money. So, because a corporate tax is at least partly like a sales tax, it is a regressive tax and not a progressive form of taxation. Normally, the pro-corporate tax crowd would argue that increasingly corporate taxation is good for lower income earners, but it is actually very bad for lower income earners. So, contrary to corporate taxation helping the lower income earners, it is working against them and they don't even know it. And, more generally corporate taxation is essentially an opaque way of taxing all individuals because (unless they have read this post) they don't realize that they are the ones paying corporate taxation.
As such, corporate taxation is largely a fraud on the individual taxpayers. So, instead of paying an effective personal tax rate of 30% or so on one's income, there is a huge hidden tax that individuals pay that pushes up their effective tax rate well beyond the 30%.
The solution is simple. Eliminate the corporate tax rate. That of course, would mean that the US Treasury would need more money and that would then only come from raising the effective tax rates of individual taxpayers. But, that's OK because individual taxpayers are already paying those higher taxes, as explained above. So, the consequences of eliminating the corporate tax rate would have at least two benefits. One, it would eliminate the fraud that is currently perpetuated on the individual taxpayer and make it more transparent how much in taxes that the individual taxpayers are actually paying. Two, the regressive consequences of the existing corporate taxation would be changed so that the additional taxes would be paid through the more progressive tax structure of individual income taxation.
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