Waiting for Fitzgerald

[sgtclub]

Originally posted by Mmmm, Burger (C.J.)
If you live in Delaware, perhaps. Not so much for me.

But what are these fees, how are they set, and why should they go only to the citizens of Delaware, as opposed to every state in which they do business?

They do. Each entity has to pay a foreign qualification fee to do business in any state other than it's state of organization. It pays an organization/incorporation fee it's home state. These are yearly fees.

[Captain]

Originally posted by sgtclub
To be fair, there are a whole hosts of policy reasons why entities are a good thing. Frankly, I think those severely outweigh the concerns of the federalists. The other thing to note is that, while it's true that a corporation has limited liability, it is not unlimited limited liability. See e.g., the piercing the corporate veil doctrine.

Though I note that what is probably the most trusted business in the world, Lloyds of London, has chosen not to avail itself of the protections of a corporation for reasons straight out of the federalist playbook. Now those are principaled conservatives!

Also, whatever the policy reasons for there being entities (and I'm sure we could spend days cataloguing them), the question is are there good policy reasons for treating these things called corporations as entities some of the time but not all of the time.

[sgtclub]

Originally posted by Captain
Though I note that what is probably the most trusted business in the world, Lloyds of London, has chosen not to avail itself of the protections of a corporation for reasons straight out of the federalist playbook. Now those are principaled conservatives!

Also, whatever the policy reasons for there being entities (and I'm sure we could spend days cataloguing them), the question is are there good policy reasons for treating these things called corporations as entities some of the time but not all of the time.

I'm not familiar with how Lloyds is structured. What's the scoop?

[sgtclub]

Originally posted by Captain
Also, whatever the policy reasons for there being entities (and I'm sure we could spend days cataloguing them), the question is are there good policy reasons for treating these things called corporations as entities some of the time but not all of the time.

We do so for partnerships and llc's. What's the distinction?

[Captain]

Originally posted by sgtclub
I'm not familiar with how Lloyds is structured. What's the scoop?

Whenever you get a Lloyds of London policy, the policy is backed by a syndicate of "names", who are wealthy individuals who put their entire net worth at risk to support the insurance. There are then, in any large policy, syndicates to support the syndicates. It is rare to have a Lloyds of London policy that is not backed by the net worth of private individuals that is a significant multiple of the policies insured. I understand Lloyds now has policies other than names-backed policies, but I have met a couple of names who still live every day knowing that they have taken a gamble with their entire net worth. Because of the liability, the underwriting standards are very high.

[Captain]

Originally posted by sgtclub
We do so for partnerships and llc's. What's the distinction?

For limited partnerships and llcs - general partnerships remain unlimited liability entities.

In LPs, the limitaiton on liability was invented by lawyers who used a corporation as the general partner. The form originally had at least one GP with real unlimited liability.

LLCs represent a policy decision to accept the lawyer's scam as a new hybrid form of organization.

[SlaveNoMore]

Captain
For limited partnerships and llcs - general partnerships remain unlimited liability entities.

I had no idea your last name was "Obvious"

Originally posted by SlaveNoMore
I had no idea your last name was "Obvious"

It's probably wise to refrain from making too many assumptions about the audience around here.

[sgtclub]

Originally posted by Captain

In LPs, the limitaiton on liability was invented by lawyers who used a corporation as the general partner. The form originally had at least one GP with real unlimited liability.

LLCs represent a policy decision to accept the lawyer's scam as a new hybrid form of organization.

This is not really correct. A GP of an LP does not have unlimited liability. It's liability is akin to the liability a director has in a corporation.

The point I was making is that we allow LPs and LLCs to shield themselves from unlimited liability, but we retain only 1 level of taxation (i.e., at the ownership level). So if we are willing to do this for these entities, I don't see a rational purposes for not extending that to corporate entities.

[Spanky]

Originally posted by Penske_Account

If really rich people, like Clinton (and Bill Gates and his dad, and Buffett, and Soros and Corzine et al) feel so opposed to the concept of tax cuts to the really really rich, can't they just give the money to the government as a non-deductible patriotic donation? Why is this so problematic. Pay what you think is equitable and SFTU! Commies!

The way I look at tax policy is that the rich enjoy proportionally more from government than do the poor. A rich person has much more to lose if there is lawlessness. When the law breaks down (as in NO) it is not the poor people's homes and the stores that get looted. A poor person did not own the WTC center when it got hit. The rich have more to lose when their is mass destruction. The rich also get more benefit out of our legal system. Rich peoples divorces, murder trials (look at OJ) use up the resources of our legal system. Poor people do not go to trial. They go to small claims court.

In addition, a dollar is worth much more to a poor person (it has more utilitiy or utils) than to a rich person. So you destroy less utils when you tax the rich.

So I am all for the rich paying a disproportionate share of the taxes. However, the problem is the rich help drive the economy. They invest their money more so when you tax them too much the economy suffers and the poor guy gets hurt. You want the rich to invest their money.

So the key is to tax the rich in such a way that you do not damage the economy. That is why I like excise taxes on luxury items etc.

Although the flat tax may be good for the economy I don't like it because the super rich benefit so much. There has got to be a way to soak the rich (as GHWB said it) but not hurt the ecconomy.

[Penske_Account]

Originally posted by Spanky


Although the flat tax may be good for the economy I don't like it because the super rich benefit so much. There has got to be a way to soak the rich (as GHWB said it) but not hurt the ecconomy.

But what is rich? Asset rich or income rich? there is a huge difference.

[Spanky]

Originally posted by Penske_Account
But what is rich? Asset rich or income rich? there is a huge difference.

There is a difference, but either way I don't care. They both are the biggest beneficiaries of government services. However, I would prefer to somehow tax the asset rich instead of the income rich because the income rich are actually helping the economy grow and are creating jobs etc.

I think the best way to tax the rich without hurting the poor is to have a graduated residential property tax. You can have a big estate but you will have to pay for it. A big mansion is going to cost you. Investing money in Real Estate does not help the economy. You want the rich to put their money into investments. So if they want to show off and have a big house that is where you can get them.

[sgtclub]

I don't even know where to start with this one.

Originally posted by Spanky
The way I look at tax policy is that the rich enjoy proportionally more from government than do the poor.

Cite please? The rich do not send their kids to public schools, they do not take public transportation, and they are not on welfare. They don't need food stamps, perscription drug benefits, or social security. Yes, they have more assets to protect than the poor, but I think it's at least an even use of resources.

A rich person has much more to lose if there is lawlessness. When the law breaks down (as in NO) it is not the poor people's homes and the stores that get looted. A poor person did not own the WTC center when it got hit. The rich have more to lose when their is mass destruction.

Hence, the need for a liberal interpretation of the 2nd amendment (Hi Penske!)

The rich also get more benefit out of our legal system. Rich peoples divorces, murder trials (look at OJ) use up the resources of our legal system. Poor people do not go to trial. They go to small claims court.

I would bet by any empiracle study, the overwhelming majority of legal resources are used by the poor in this country. The rich, for example, don't need (or want) a PD.

In addition, a dollar is worth much more to a poor person (it has more utilitiy or utils) than to a rich person. So you destroy less utils when you tax the rich.

This is true only if that 1 util remains stagnant. In the real world, a rich person turns 1 util into 1 million utils.

So I am all for the rich paying a disproportionate share of the taxes. However, the problem is the rich help drive the economy. They invest their money more so when you tax them too much the economy suffers and the poor guy gets hurt. You want the rich to invest their money.

So the key is to tax the rich in such a way that you do not damage the economy. That is why I like excise taxes on luxury items etc.

Although the flat tax may be good for the economy I don't like it because the super rich benefit so much. There has got to be a way to soak the rich (as GHWB said it) but not hurt the ecconomy.

Good luck trying to balance that equation.

[taxwonk]

Originally posted by sgtclub
The question is not whether the government has the power to tax this income, but rather, whether it should. The only way this cannot be viewed as double taxation is if you really view the corporation separate and apart from its owners. The corporation (or other entity) pays a tax on its income. But really, the individual owners of the corporation are each paying a portion of that tax based on their percentage ownership. When the owners also pay a tax on the amounts that are dividended up, it is a second tax on the same income.

Wonk, I know you are in favor of the dividend tax, but are you really taking the position it is not double taxation?

This started out as a discussion of a flat tax, with no deductions, no credits, no brackets, etc.

In that context, a tax on dividends is no more a double tax than a tax on wages. In either case, the corporation takes in revenue on which it is taxed, it then pays a portion of that revenue out, either as wages or as dividends. If the corporation gets no deduction for paying wages, then why should the tax payer receive a tax break for dividends?

If we are to look at things in the context of the curent tax regime, then I agree that dividends are a form of double taxation.
I would favor a more integrated approach, eliminating the tax on corporate earnings at both the entity and the shareholder level. However, I would personally lean more toward a system that promotes horizontal parity.

Grant the corporation a dividends-paid deduction. In that regard, cash the corporation pays out as compensation to its stakeholders is deductible, and the cash transferred to the stakeholders, whether in the form of dividends or as wages, is taxable on an equal basis.

[taxwonk]

Originally posted by Penske_Account
"I think it's very important that Americans understand... tax cuts are always popular, but about half of these tax cuts since 2001 have gone to people in my income group, the top 1 percent. I've gotten four tax cuts.

If really rich people, like Clinton (and Bill Gates and his dad, and Buffett, and Soros and Corzine et al) feel so opposed to the concept of tax cuts to the really really rich, can't they just give the money to the government as a non-deductible patriotic donation? Why is this so problematic. Pay what you think is equitable and SFTU! Commies!

They could, but they have no incentive to do so. That's why the government imposes taxes. On the other hand, if you feel so strongly that government provides too much, why don't you offer to take on some of the burden yourself? Pay for the paving and maintenance of your street and relieve the city of Seattle of the burden, allowing them to reduce their overall need to soak the taxpayers?