That’s basically what the UAE/Dubai model does: no personal income tax, and only a 9% corporate tax above roughly the first $100k of profits.
The problem is that this works for a lean, capital-attracting state. Most Western states are too indebted and too spending-heavy to make that switch without blowing a hole in their finances.
Also, taxing companies does not magically avoid taxing individuals. In practice, the burden gets passed on to some mix of shareholders, workers, and consumers.
And there is another problem: corporate taxes are generally considered the most damaging major tax for economic growth. So shifting even more of the burden onto companies would likely hurt investment, productivity, and wages.
Finally, even if you did this, it would not solve the core issue I’m describing. In an internet-native economy, people do not need to keep their company in the country where they sell. If the founder leaves, the company often leaves with him.
Something I keep thinking about is, why don’t we just tax companies and corporate equity, rather than individuals?
That’s basically what the UAE/Dubai model does: no personal income tax, and only a 9% corporate tax above roughly the first $100k of profits.
The problem is that this works for a lean, capital-attracting state. Most Western states are too indebted and too spending-heavy to make that switch without blowing a hole in their finances.
Also, taxing companies does not magically avoid taxing individuals. In practice, the burden gets passed on to some mix of shareholders, workers, and consumers.
And there is another problem: corporate taxes are generally considered the most damaging major tax for economic growth. So shifting even more of the burden onto companies would likely hurt investment, productivity, and wages.
Finally, even if you did this, it would not solve the core issue I’m describing. In an internet-native economy, people do not need to keep their company in the country where they sell. If the founder leaves, the company often leaves with him.