Solidus

No, it's a thought experiment demonstrating shiznit770's and your inabilility to grasp basic economic principles.

What does this mean exactly? What is the 'base' you refer to? What system do you imagine determines how the rate is adjusted?

You're doing it again. Income tax is paid against income (as donsutherland1 points out). To compute taxes paid against total revenue is a perversion of statistics.
And this is why I put forth the thought experiment. It should be clear that by taxing revenue (case A) instead of income (case B) produces a barrier to production, or at the very least a barrier to low cost production. Perhaps you'd care to demonstrate how such a policy would perform differently?

Do you think a tax rate of over 40% creates or reduces the incentive to "camouflage" income? Do you have any actual evidence of ExxonMobil "camouflaging" income?

Correct, "what he's paid" is known as income.

Correct, "anything he's doing elsewhere" (in the simple case) is not a "cost" to producing his income.

That is exactly what happens when corporations are taxed on their income. Taxing their total revenue (case A) creates large negative distortions in the market (barrier to production, or increased cost to consumer).

J

Kernel Sanders

Well, now that both Bush and McCain are openly supporting socialism it gives Obama leeway to drift left on economics. The impact of this had he said it before the bailout would be much larger I'm sure

donsutherland1

Tax simplification and tax base (income vs. revenue) are entirely different matters. Taxing revenue would be bad policy.

Two hypothetical simplified examples for a sole proprietorship follow.

Case 1: Net income is taxable:

Sales: $100,000
Less: Cost of Goods Sold: $65,000
Gross Profit: $35,000
Less: Salary: $30,000
Income before taxes:$5,000
Less: Taxes (20% rate): $1,000
Net Income: $4,000

Case 2: Revenue is taxable:

Sales: $100,000
Less: Tax on revenue (20% rate): $20,000
Net Sales after Taxes: $80,000
Less: Cost of Goods Sold: $65,000
Gross Profit: $15,000
Less: Salary: $15,000 *maximum to allow the firm to breakeven*
Net Income: $0

Taxing revenue would be hazardous to economic activity.

SFLRN

So European Economic policy has been able to identify specific sectors that are inefficient, and then is able to make them efficient by government control? If this were the case wouldn't the majority of Europe have some kind of growth related indicator that was better than that of the U.S. (again, over the long-term)?

Ethereal

After such epic bloviation one might think I'd actually mentioned something about the French healthcare system, but alas I did nothing of the sort which makes your post decidedly irrelevant and perplexing.

bobnelsonfr

Yes, and there are in fact lots of them. The problem here is defining the yardstick. What does "better growth" mean?

For example, the French worker is among the highest in the world in per-hour productivity... but also among the lowest in time worked. (Gotta love those long vacations and those three-day weekends ) There have been any number of polls showing that the French PREFER liesure time to higher income. The conservatives are constantly trying to reduce it, and the socialists are constantly trying to increase it. Liesure time is a defining issue in French politics.

There are so many possible criteria for "better growth": health, education, infrastructures, .....

Then there is a purely materialist measure of "better growth". In the fifties every American family had a car. In the seventies, every family had two cars. In the nineties.... Bigger TV screens. Bigger houses with monster (fake) columns on the front porch. Whatever..... Conspicuous consumption is one way of appreciating "better growth". IMHO it is not really "better". .

__________________
Bob Nelson
Religion is what keeps the poor man from murdering the rich - Napoléon

SFLRN

I'm not trying to nit-pick, but I would like to see that statistic.
Not to mention the infinite amount of leisure time the unemployed in France get to enjoy. The non-white minorities especially get to "enjoy" such leisure time. That leisure time, and the other strict regulations of the labor market hasn't helped France on the whole. It's disenfranchised many non-white French people, and removed the kind of labor market flexibility needed for a healthy economy. Over the long term, as GDP increases faster in the U.S. than in France (as has been the general trend) more Americans will have the choice to have that same leisure time. When does the average French person retire?
In education France likely beats the U.S. in secondary education (although who specifically is measured in international measures is somewhat different). At the university level the French cannot compare to the U.S. (Even if you simply evaluated the quality of all French institutions vs. those in Massachusetts , or New York).
As the economist stated, "European universities are as bad as American secondary schools." France is great if you're European or an American, but if you don't fall into that category there's a significantly higher chance you'll be unemployed, and unable to move up (not to mention more likely to be discriminated against in general).

bobnelsonfr

First, the productivity numbers are easy to find. I'm sorry if this sounds rude, but I KNOW they're true. I have no need to go look them up for the umpteenth time. If you don't want to accept my word, you'll have no trouble with a quick Google. .

Second, liesure is not a function of GDP. Otherwise, Americans would already have more than the French. It is a question what a society considers important. If you wait for tomorrow, it will never come... .

Before you get carried away on North-African-origin problem in France... take a stroll through a black downtown in any big Ameican city. If you dare... .

Finally, higher education is an area where I think France has a LOT of work to do. There are many EU countries that do much better. .

__________________
Bob Nelson
Religion is what keeps the poor man from murdering the rich - Napoléon

SFLRN

Yes it is. Leisure time carries an opportunity cost, just like work does. How many 3rd World farmers call it a day after eight hours? Many individuals in 3rd world countries have to spend a great portion of their day working (compared to the West). If they don't work the hours they do, they won't have enough money for basic necessities. In a similar sense, if you can earn 50,000 dollars doing a 40 hour job vs. an 80 hour job at the same rate you'll likely choose the 40 hour job. As the economy grows (aided mostly by productivity growth) individuals have to work less to get the same general income (over a longer time frame). That frees up more time for leisure.

I live in a city with a predominately "black downtown," (and I go downtown often) (Not as segregated as Detroit, but relatively segregated), and where I live is statistically "blacker" than most of the surrounding areas. It's really not that dangerous (granted we have had armed robberies, but that has to do with the income level of the place and not with it's racial composition.) I'm not trying to be an uptight asshole or anything, but I do think it's important to note that a good share of France's people (and immigrants) have much less economic mobility than their American counterparts.
The fact remains that Europe is more xenophobic and racist than the U.S. Not to mention North-Africans suffer far worse economic conditions than African Americans in this country. (That doesn't mean the French people are inherently bad either, but it is something that has limited the mobility of these groups, more-so than in the U.S.).

SFLRN

I apologize if I cannot provide more comprehensive evidence apparently, "The poll, carried out for a group of black associations, is the first of its kind in France, where it is illegal to compile data based on ethnic criteria." BBC NEWS | Europe | First French racism poll released
Is this still the case?