Pareto optimality would be ideal, but across an entire economy, that's almost impossible to measure.
In reality, there is no objective definition of "a fair share", there is only the intent expressed in the tax code (and people of course argue over what the intent "really is"). If people and/or corps. are paying taxes following that intent, then for all practical purposes, they are paying their "fair share".
A realistic fair share is probably some colloquial measure of people and corporations being equally angry about their taxes and equally angry about others not paying their fair share. It's my personal opinion that corporations have it way too good in the current system, specifically because they've spent millions to find ways to save billions, which people cannot reasonably do, and because they've also spent millions buying our political processes off to ensure tax laws don't meaningfully change.
Yes, and in fact the entire purpose of a progressive marginal tax system is that "everyone feels the pain of taxation" equally. It recognizes that a fixed percentage, even with a threshold, feels very different if you earn poverty-level wages than if you earn 10000 times that.
And that's what our tax system is designed around.
Corporations, and specifically their status (or otherwise) as "persons" complicates the picture quite a bit.
What counts as a loophole though? IRA, almost by design is a way to shelter your investments from taxes. Is it a loophole to put your investments in an IRA to avoid taxes? What about when Peter Thiel puts his paypal stock in an IRA, and paid no taxes on his paypal exit?
Can you say why employees of large and well funded businesses get to save $23k+ per year in 401k, but employees of small and less well funded businesses can only save $7k per year in an IRA?
You don't have to be large and well funded. You do have to have your own SEP-IRA, rather than a regular IRA, and almost any self-employed person could do that. I am self-employed, my business is essentially a sole proprietorship, and I get the higher limits because of the type of IRA.
So the question is really: why do some people only get to save $7k a year in an IRA and others get to save much, much more?
>employees of small and less well funded businesses
For example, a startup without the funds or time to do all the HR to allow for 401ks is disadvantaged because their employees cannot contribute as much to a retirement account as someone who works for a business that offers a 401k (or for themselves).
A person has the following choices:
1) work for a business offering a 401k (usually larger, well funded, etc)
2) work for themselves
3) work for a small, upstart business (usually smaller, not as well funded, etc)
Why does working for #3 disallow you from saving as much for retirement? Why are tax advantaged retirement savings a function of your employer at all?
Same for paying for health insurance with pre-tax income.
Well I can pull up exactly what proponents of The Taxpayer Relief Act of 1997, which introduced the Roth IRA, stated their intentions were since this is very easy to find and widely documented but I strongly suspect you don't actually give a fuck about reality.
"intended use-case" is just more fuzzy language. They probably thought everyone would buy mutual funds, rather than 3X leveraged Nvidia ETFs. Does that mean buying such ETFs (and making bank) mean you're not paying "your fair share"? Or for something more down to earth, what about meme stocks and bitcoin treasury companies, both of which are technically companies, but are definitely not what the authors of the bill had in mind.
The purpose of IRAs is clear from the name - Individual Retirement Account. It was intended to allow individuals to save more effectively for their own retirement, and the justification for it centered around providing incentives for people who might not otherwise save enough.
At least, that was the publicly delivered account.
For a billionare who can already retire in comfort few will ever know to be using any kind of IRA for any purpose is outside of the publicly given justification for their existence.
>For a billionare who can already retire in comfort few will ever know to be using any kind of IRA for any purpose is outside of the publicly given justification for their existence.
So if you're sufficiently rich (by some arbitrary amount), you're now a "tax evader" and "not paying your fair share"? Can we say the same about other deductions, like the standard deduction? I doubt you'll be able to find a politician that answer "yes" to "do you think bill gates' first $14.6k in income should be tax-free?", does that mean that's "tax evasion" too?
The authors of the Roth IRA, which initially had a $2,000 annual contribution cap were not intending it to be used by someone with $21,800,000,000 to avoid taxes on $5,000,000,000.
I really don't know how this is difficult unless you're trying to be a troll or somehow miraculously don't comprehend how numbers work.
> Food conglomerate Archer Daniels Midland enjoyed $438 million of U.S. pretax income last year and received a federal tax rebate of $164 million.
> The delivery giant FedEx zeroed out its federal income tax on $1.2 billion of U.S. pretax income in 2020 and received a rebate of $230 million.
> The shoe manufacturer Nike didn’t pay a dime of federal income tax on almost $2.9 billion of U.S. pretax income last year, instead enjoying a $109 million tax rebate.
If you think this is the same as someone putting $7k into a 401k then you are acting in bad faith and we have nothing productive to discuss.
Some loopholes are an accident. Some are intentionally put in place by parties interested in traveling through the loophole, benefiting from doing that, and then claiming they would be stupid not to do so.
Those cases are different, even though the legal status of them may be the same.
Fair means the same playing field, the same rules, the same consistent outcomes from all the corporations subject to these laws and regulations, and not just one of them who does the right thing. Exercizing loopholes is the opposite of fair. It puts those with the best cheating strategies ahead of those who play by the rules. Because you can catch the ref with his back turned doesn't make you a fair player.
"A way of avoiding or escaping a cost or legal burden that would otherwise apply by means of an omission or ambiguity in the wording of a contract or law." - The American Heritage® Dictionary of the English Language, 5th Edition.
What they're describing is corporations using legal strategies to mitigate their tax burdens that you or I cannot do. Lobbying is legal, but you or I cannot lobby to any useful degree. Big-box store companies build their stores to be short-lived buildings, then will only sell them with a contract that says the next occupant cannot be a big-box store, then argue that since value is determined by what someone else will pay and nobody will pay much for the end of life of a short-lived store intended to be a shop but which now cannot be a shop, so their stores are low value and comparable to empty stores, therefore they shouldn't pay much tax on them. "In Wisconsin, new Gov. Tony Evers says his budget proposal will close the dark stores loophole in the state"[1].
> "Legally avoiding taxes isn't cheating."
Try arguing that you would only sell your houses with a stipulation that nobody can live in it, therefore you should pay the same taxes and rates that an empty lot would pay, and see if you still think that "legal is the same as right and fair".
Loopholes are the definition of playing by the rules.
Laws are not enacted in spirit, they are drafted, voted on, and enacted in text. What the law says is what matters, not what people assume it wants to achieve.
To claim that complying with the law exactly as it is written is unfair is, quite frankly, undemocratic and an outright rejection of the rule of law.
No, criticising the laws for being written in such a way that allow loophole behavior is not undemocratic. In any reasonable democracy you're allowed to criticise laws however much you please
It’s very easy. If I think I pay a lot then I’m paying more than my fair share. If I think you’re not paying enough then you’re not paying your fair share.
