Only 10% Don't Pay Federal Taxes, Stop Complaining

[NotnotgnimmiJymmiJ]

But how do you think someone takes control of a corporation? They buy a controlling share of the stock. This is not at all uncommon, especially when poor management has driven down a company's stock price or when it has something valuable to offer another company. If I control more than 50% of the stock, I have legal control over the corporation, or do you dispute this?

Which is precisely an example of 49% of the ownership of the company exercising absolutely no control over the company they are invested in.

Simply not true.

The use of a direct share-weighted voting scheme results in power disproportionate to investment. I recommend you start reading here and catch up. The long and the short of it is that shareholder influence is distributed in an even more skewed fashion than shareholder investment.

Irrelevant. One share equals one vote. If mutual funds choose not to exercise their voting rights, that is their choice. If you want more votes, you have to buy them in shareholder democracy.

Note that the peculiar financial structure of corporations, with subsidiary structures of sorts, allows the further leverage of operational power well beyond the 2:1 factor... as does widespread shareholder apathy driven by indirect holdings, fund holdings, et cetera.

They bought those shares, they own them just as much as the guy who wants to change management.

Funny that you should choose that example.

Funny, because it's true.

Yes, it's true that I have no power over our government. If I want to change something, I will need more votes.

Did I claim they were supposed to be doing something else? IMO, they'd be breaking the law if they were doing other stuff on the shareholder's dime.

Than making money? Actually, they could be trying to change the world.

If they are wasting shareholder money in order to "change the world," they are probably breaching their fiduciary duty.

Excuse me? Are you talking to me? Because I'm about 100% certain that I never claimed that a corporation was the same entity as its shareholders.

That's nice. Because you're defending the claim that shareholders pay corporate income taxes. Not my fault if you can't offer a coherent argument, because that's what I'm doing here.

They do, because they own the corporation.

It's quite simple. Not being the same entity places the shareholders at a remove from all activity by the corporation. Including paying taxes. Enough so that saying that the shareholder "does" something that the corporation is doing is absurd.

So if my corporation loses money, that doesn't decrease my wealth?

Actually the corporation would get the refund check and either reinvest it or give it back to the shareholders in the form of share buybacks or dividends.

Corporation gets the refund. Corporation decides what to do with it. Not Joe Shareholder looking at his $18.93 share of the refund and saying "OK, I'll use that to buy more shares." Joe Shareholder is not paying Apple's corporate income tax any more than Joe Shareholder is wholesaling iPads and marketing them on television.

If he owns the corporation, it is his money.

Except for fiduciary duty, and control over the company.

Both of which are as a matter of practical course ... negligible in analyzing the relationship of Joe Shareholder with the company.

Funny, my dad seems to have spent about 80% of his career representing plaintiffs in cases where management has breached its fiduciary duty. It's inexplicable!

And who appoints them?

Right. It's a chain several links long.

Uh uh.

Now, compare with voters in a political system. Voters directly sign petitions to put candidates on the ballot. Voters directly vote for or against candidates. Voters can even directly put in recall measures ("Hi guv'nor Arnie! How's tricks?"). If districts are weighted in such a manner as to strip them of actual voting effect, they can go directly to court and win. (See Banzhaf's court case for an example of a multi-district local governance system that was forced to change its ways.)

And in shareholder democracy, the shareholders directly appoint the board.

Yes, and that's another important distinction you've made between a shareholder and a creditor. Management only has the obligation to act in the shareholders interests. The corporation doesn't owe shareholders anything in the case of bankruptcy if there is nothing left after the creditors are through.

Right. Which means you're the low creditor on the totem pole. You've traded the ability to maybe influence the election of a board member for the ability to directly pressure the company and pick up the pieces if it files for bankruptcy instead of fulfilling its obligations.

Yes, that is one of the differences between being a shareholder and being a creditor.

Fundamentally? Same role.

Nope.

Investor supplies capital in exchange for income. Money now for money later.

Debt and equity are both forms of financial capital. Not a novel observation, doesn't change a thing.

[Tahar Joblis]

Simply not true.

No, that's precisely what happens with share-weighted voting.

Irrelevant. One share equals one vote.

One share equals one point weighting. And how the votes are cast and counted is non-trivial.

Note that the peculiar financial structure of corporations, with subsidiary structures of sorts, allows the further leverage of operational power well beyond the 2:1 factor... as does widespread shareholder apathy driven by indirect holdings, fund holdings, et cetera.

They bought those shares, they own them just as much as the guy who wants to change management.

You don't seem to be replying to what I'm saying here.

Yes, it's true that I have no power over our government.

No, that wouldn't be. What's true is that you have more power over it than a typical shareholder does over the company he's investing in.

If they are wasting shareholder money in order to "change the world," they are probably breaching their fiduciary duty.

Not as a court would recognize the term. Read some mission statements sometime. Some companies, in fact, pitch themselves as having a vision for the future - a vision they believe will be eventually profitable in the long term, but often one with a higher purpose. Fair trade coffee. Organic food companies. Many of these companies pass up opportunities for more profit now because it doesn't fit with their mission. Some donate to charity - and not just as a tax writeoff!

They do, because they own the corporation.

Still not a coherent argument. Repetition is no substitute for logic.

So if my corporation loses money, that doesn't decrease my wealth?

Not directly, no. Indeed, if your investment is adequately hedged, a sudden drop in stock price may not, in fact, signal a measurable depreciation of your wealth.

If the share price decreases, your current wealth alters. However, the company can be losing money while its market valuation goes up. It's a matter of the collective market "opinion" on how the company will perform in the future that matters - something loosely tied to actually making and losing money, but it's not a hard and fast lockstep.

If he owns the corporation, it is his money.

Which is why he has the last draw of it? Joe owns, in his share certificate, a voting share, a dividend share, an assets share with some assigned level of priority, or some combination thereof (some companies issue multiple types of stock). He can only be said to "own" the company in the loosest sense, in that he's sharing it with a large number of other investors (many of whom hold more stock than Joe Shareholder), is not directly responsible for the company (as he would if he owned a dog), et cetera.

He doesn't actually own the corporation's assets. What he owns is the right to receive a certain proportion of the value of said assets in the event said corporation is liquidated. His stock may not even grant him the right to vote on anything. All this depends on how the corporation is structured; it's not actually required that a company issue voting stock to the public.

However, regardless of the type of stock, we'll find that if Joe owns stock in Apple, that doesn't entitle him with access to Apple's bank accounts. Quite frankly, while the corporate entity of Apple may owe him a certain long-term financial obligation, this degree of "ownership" isn't the least bit transitive.

Funny, my dad seems to have spent about 80% of his career representing plaintiffs in cases where management has breached its fiduciary duty. It's inexplicable!

I imagine it's his specialty, then. There are also lawyers who make careers in politics, environmental cleanups, and swimming pool safety. It's a big world, and there's plenty of room to mess up even the simplest operations.

And in shareholder democracy, the shareholders directly appoint the board.

"Appoint" is the incorrect word. They hold one of a variety of types of elections. Again, the method generally used does not actually result in decision-making power being allocated to shareholders in proportion to their holdings. (Again, see Banzhaf and similar power indices for weighted voting systems); this is a smaller point than the fact that the board does not actually run the company. The board instead elects (again) people who decide to run the company.

It's a little like the US Senate back in the 19th century - elected by a state legislature. Insert smoke-filled rooms at your discretion.

Debt and equity are both forms of financial capital. Not a novel observation

And a very true one. Not to mention... highly relevant.

What's the intrinsic action of holding stock? Providing capital in exchange for income. And for most investments, that's all there is. And for most investors, in fact, their homo economicus optimal strategy is to diversify their portfolio far enough and wide enough that they wouldn't be able to pay attention to board elections. Can't blame them for doing it - even if it means that corporate governance is plagued with low "voter" turnouts as a result.

Which is precisely an example of 49% of the ownership of the company exercising absolutely no control over the company they are invested in. The use of a direct share-weighted voting scheme results in power disproportionate to investment. I recommend you start reading here and catch up. The long and the short of it is that shareholder influence is distributed in an even more skewed fashion than shareholder investment.

Actually in large corporations, one can get away with having only a plurality of the shares.

Which is precisely an example of 49% of the ownership of the company exercising absolutely no control over the company they are invested in. The use of a direct share-weighted voting scheme results in power disproportionate to investment. I recommend you start reading here and catch up. The long and the short of it is that shareholder influence is distributed in an even more skewed fashion than shareholder investment.

Actually in large corporations, one can get away with having only a plurality of the shares.

Yeah, this is true. If you have the largest single block of votes under your control, you'll usually win an uncoordinated low-turnout plurality vote.

[NotnotgnimmiJymmiJ]

Simply not true.

No, that's precisely what happens with share-weighted voting.

No, that's precisely not what happens (and you admit as much later). I need only barely crack open my Finance I textbook, Modern Financial Management by Ross, Westerfield, Jaffe, and Jordan.

Shareholdes' Rights The right to elect the directors of the corporation by vote constitutes the most important control device of shareholders. Directors are elected each year at an annual meeting by a vote of the holders of a majority of shares who are present and entitled to vote... The most important difference is whether shares must be voted cumulatively or must be voted straight.
To illustrate the two different voting procedures, imagine that a corporation has two shareholders: Smith with 20 shares and Jones with 80 shares. Both want to be a director. Jones does not want Smith, however. We assume there are a total of four directors to be elected.

Cumulative Voting The effect of cumulative voting is to permit minority participation.4 If cumulative voting is permitted, the total number of votes that each shareholder may cast is determined first. This is usually calculated as the number of shares (owned or controlled) multiplied by the number of directors to be elected. With cumulative voting, the directors are elected all at once. In our example, this means that the top four vote getters will be the new directors. A shareholder can distribute votes however he/she wishes. Will Smith get a seat on the board? If we ignore the possibility of a five-way tie, then the answer is yes. Smith will cast 20  4  80 votes, and Jones will cast 80  4  320 votes. If Smith gives all his votes to himself, he is assured of a directorship. The reason
is that Jones can’t divide 320 votes among four candidates in such a way as to give all of them more than 80 votes, so Smith will finish fourth at worst. In general, if there are N directors up for election, then 1/(N  1) percent of the stock plus one share will guarantee you a seat. In our current example, this is 1/(4  1)  20%. So the more seats that are up for election at one time, the easier (and cheaper) it is to win one.

Straight Voting With straight voting, the directors are elected one at a time. Each time, Smith can cast 20 votes and Jones can cast 80. As a consequence, Jones will elect all of the candidates... Straight voting can freeze out minority shareholders; that is the reason many states have mandatory cumulative voting.

Even then, as was pointed out, you don't need an absolute majority (or a plurality for that matter) to exercise partial or even complete control over a corporation.

And more shareholders' rights (notice, creditors don't have any of these rights).

Other Rights The value of a share of common stock in a corporation is directly related to the general rights of shareholders. In addition to the right to vote for directors, shareholders usually have the following rights:
1. The right to share proportionally in dividends paid.
2. The right to share proportionally in assets remaining after liabilities have been paid in liquidation.
3. The right to vote on matters of great importance to stockholders, such as a merger, usually decided at the annual meeting or a special meeting.
4. The right to share proportionally in any new stock sold. This is called the preemptive right.

Irrelevant. One share equals one vote.

One share equals one point weighting. And how the votes are cast and counted is non-trivial.

One share equals one vote.

Note that the peculiar financial structure of corporations, with subsidiary structures of sorts, allows the further leverage of operational power well beyond the 2:1 factor... as does widespread shareholder apathy driven by indirect holdings, fund holdings, et cetera.

They bought those shares, they own them just as much as the guy who wants to change management.

You don't seem to be replying to what I'm saying here.

I am. It is a shareholders right to be apathetic just as much as it is another shareholders right to be indignant. The only thing that matters is the number of shares they hold.

Yes, it's true that I have no power over our government.

No, that wouldn't be. What's true is that you have more power over it than a typical shareholder does over the company he's investing in.

My vote counts as 4.76*10-7 percent of the vote. In shareholder democracy, by contrast, you can gain as much power as you choose to buy.

If they are wasting shareholder money in order to "change the world," they are probably breaching their fiduciary duty.

Not as a court would recognize the term. Read some mission statements sometime. Some companies, in fact, pitch themselves as having a vision for the future - a vision they believe will be eventually profitable in the long term, but often one with a higher purpose. Fair trade coffee. Organic food companies. Many of these companies pass up opportunities for more profit now because it doesn't fit with their mission. Some donate to charity - and not just as a tax writeoff!

Doing "good" things doesn't necessarily entail a waste of shareholder money.

They do, because they own the corporation.

Still not a coherent argument. Repetition is no substitute for logic.

Not much logic is required. A share represents ownership of a corporation. Someone who owns a share, owns a fraction of the company. This is not controversial.

So if my corporation loses money, that doesn't decrease my wealth?

Not directly, no. Indeed, if your investment is adequately hedged, a sudden drop in stock price may not, in fact, signal a measurable depreciation of your wealth.

If the share price decreases, your current wealth alters. However, the company can be losing money while its market valuation goes up. It's a matter of the collective market "opinion" on how the company will perform in the future that matters - something loosely tied to actually making and losing money, but it's not a hard and fast lockstep.

P = EPS/R +NPVGO
Seems pretty straightforward to me.

If he owns the corporation, it is his money.

Which is why he has the last draw of it? Joe owns, in his share certificate, a voting share, a dividend share, an assets share with some assigned level of priority, or some combination thereof (some companies issue multiple types of stock). He can only be said to "own" the company in the loosest sense, in that he's sharing it with a large number of other investors (many of whom hold more stock than Joe Shareholder), is not directly responsible for the company (as he would if he owned a dog), et cetera.

He doesn't actually own the corporation's assets. What he owns is the right to receive a certain proportion of the value of said assets in the event said corporation is liquidated. His stock may not even grant him the right to vote on anything. All this depends on how the corporation is structured; it's not actually required that a company issue voting stock to the public.

However, regardless of the type of stock, we'll find that if Joe owns stock in Apple, that doesn't entitle him with access to Apple's bank accounts. Quite frankly, while the corporate entity of Apple may owe him a certain long-term financial obligation, this degree of "ownership" isn't the least bit transitive.

Nevertheless, he and the other shareholders own the corporation.

Funny, my dad seems to have spent about 80% of his career representing plaintiffs in cases where management has breached its fiduciary duty. It's inexplicable!

I imagine it's his specialty, then. There are also lawyers who make careers in politics, environmental cleanups, and swimming pool safety. It's a big world, and there's plenty of room to mess up even the simplest operations.

Actually lawyers don't have specialties, but no he chose those cases when he worked for the government because that's basically what he felt like doing. It also happened to help when he entered private practice that those cases were particularly easy to find and lucrative, as lawyers are payed based on a percentage of the settlement or judgment.

And in shareholder democracy, the shareholders directly appoint the board.

"Appoint" is the incorrect word. They hold one of a variety of types of elections. Again, the method generally used does not actually result in decision-making power being allocated to shareholders in proportion to their holdings. (Again, see Banzhaf and similar power indices for weighted voting systems); this is a smaller point than the fact that the board does not actually run the company. The board instead elects (again) people who decide to run the company.

It's a little like the US Senate back in the 19th century - elected by a state legislature. Insert smoke-filled rooms at your discretion.

Nevertheless, the shareholders still elect the board.

Debt and equity are both forms of financial capital. Not a novel observation

And a very true one. Not to mention... highly relevant.

What's the intrinsic action of holding stock? Providing capital in exchange for income. And for most investments, that's all there is. And for most investors, in fact, their homo economicus optimal strategy is to diversify their portfolio far enough and wide enough that they wouldn't be able to pay attention to board elections.

And that is their right as a shareholder, which they paid for. Unsurprisingly, "caring a lot" about board elections does not magically grant you increased voting power.

Can't blame them for doing it - even if it means that corporate governance is plagued with low "voter" turnouts as a result.

Which is precisely an example of 49% of the ownership of the company exercising absolutely no control over the company they are invested in. The use of a direct share-weighted voting scheme results in power disproportionate to investment. I recommend you start reading here and catch up. The long and the short of it is that shareholder influence is distributed in an even more skewed fashion than shareholder investment.

Actually in large corporations, one can get away with having only a plurality of the shares.

Which is precisely an example of 49% of the ownership of the company exercising absolutely no control over the company they are invested in. The use of a direct share-weighted voting scheme results in power disproportionate to investment. I recommend you start reading here and catch up. The long and the short of it is that shareholder influence is distributed in an even more skewed fashion than shareholder investment.

Actually in large corporations, one can get away with having only a plurality of the shares.

Yeah, this is true. If you have the largest single block of votes under your control, you'll usually win an uncoordinated low-turnout plurality vote.

Thank you for finally admitting that.

[Neu Leonstein]

Not to cause too much of a stir here, but isn't the fact that franking credits exist proof that shareholders do pay corporate income taxes, and then (in some countries) get compensated?

[NotnotgnimmiJymmiJ]

Not to cause too much of a stir here, but isn't the fact that franking credits exist proof that shareholders do pay corporate income taxes, and then (in some countries) get compensated?

I imagine the counter-argument will be, "everything you guys do in Australia is backwards, you even flush the toilets backwards!"

[Kurdazistan]

List of Taxes We (Americans) Pay

Accounts Receivable Tax

Building Permit Tax

Capital Gains Tax

CDL license Tax

Cigarette Tax

Corporate Income Tax

Court Fines (indirect taxes)

Dog License Tax

Federal Income Tax

Federal Unemployment Tax (FUTA)

Fishing License Tax

Food License Tax

Fuel permit tax

Gasoline Tax (42 cents per gallon)

Hunting License Tax

Inheritance Tax Interest expense (tax on the money)

Inventory tax IRS Interest Charges (tax on top of tax)

IRS Penalties (tax on top of tax)

Liquor Tax

Local Income Tax

Luxury Taxes

Marriage License Tax

Medicare Tax

Property Tax

Real Estate Tax

Septic Permit Tax

Service Charge Taxes

Social Security Tax

Road Usage Taxes (Truckers)

Sales Taxes

Recreational Vehicle Tax

Road Toll Booth Taxes

School Tax

State Income Tax

State Unemployment Tax (SUTA)

Telephone federal excise tax

Telephone federal universal service fee tax

Telephone federal, state and local surcharge taxes

Telephone minimum usage surcharge tax

Telephone recurring and non-recurring charges tax

Telephone state and local tax

Telephone usage charge tax

Toll Bridge Taxes

Toll Tunnel Taxes

Traffic Fines (indirect taxation)

Trailer registration tax

Utility Taxes

Vehicle License Registration Tax

Vehicle Sales Tax

Watercraft registration Tax

Well Permit Tax

Workers Compensation Tax

[NotnotgnimmiJymmiJ]

Watercraft registration Tax

God damn Socialist government and their Watercraft Registration Tax!

[Caninope]

Watercraft registration Tax

God damn Socialist government and their Watercraft Registration Tax!

He was just listing them, he didn't necessarily give an opinion.

[NotnotgnimmiJymmiJ]

Watercraft registration Tax

God damn Socialist government and their Watercraft Registration Tax!

He was just listing them, he didn't necessarily give an opinion.

Did I say he did?

[Cradled Squads]

How much of that 10% is in the top 10% of highest income households, I wonder.

Not much. More likely that ten percent will be found amongst the extremely poor segment of the population who's total income for the year BEFORE EXPENSES falls well below the poverty level.

Take me, for instance. I'm disabled and on a fixed low income. My total income for last year was a bit less than $6800.00. I'm tax exempt.

The poverty level is just short of 10K a year.

[Cradled Squads]

How much of that 10% is in the top 10% of highest income households, I wonder.

Not much. More likely that ten percent will be found amongst the extremely poor segment of the population who's total income for the year BEFORE EXPENSES falls well below the poverty level.

Take me, for instance. I'm disabled and on a fixed low income. My total income for last year was a bit less than $6800.00. I'm tax exempt.

The poverty level is just short of 10K a year.

BTW, my monthly income is $674.00 and out of that my rent is $424.00, from what remains I have to get my transportation costs and utlities. Both charge sales tax. I get that back from my state in the form of a $25.00 check each month, but I still have to pay it at the time I pay my bills.

[Brandenburg-Altmark]

How much of that 10% is in the top 10% of highest income households, I wonder.

Not much. More likely that ten percent will be found amongst the extremely poor segment of the population who's total income for the year BEFORE EXPENSES falls well below the poverty level.

Take me, for instance. I'm disabled and on a fixed low income. My total income for last year was a bit less than $6800.00. I'm tax exempt.

The poverty level is just short of 10K a year.

BTW, my monthly income is $674.00 and out of that my rent is $424.00, from what remains I have to get my transportation costs and utlities. Both charge sales tax. I get that back from my state in the form of a $25.00 check each month, but I still have to pay it at the time I pay my bills.

$674, I'm currently recieving the same amount due to being diagnosed with a disability. I'm using it to not have to work 70 hours a week to get through school.

[Tahar Joblis]

No, that's precisely not what happens (and you admit as much later).

No, it's precisely what does happen. You're completely failing to comprehend here.

If one person holds a controlling share of (say) 50% + 1 share... that means that the remaining 50% of share votes hold a zero power index in a plurality election.

The most important difference is whether shares must be voted cumulatively or must be voted straight.

Yes, that makes a big difference.

To illustrate the two different voting procedures, imagine that a corporation has two shareholders: Smith with 20 shares and Jones with 80 shares. Both want to be a director. Jones does not want Smith, however. We assume there are a total of four directors to be elected.

However, let's suppose 5, and that Jones holds 50% of the shares, while the remainder is distributed throughout. By distributing his votes in thirds, he insures control of a majority of the seats on the board, albeit not the entire board.

Cumulative voting is in some senses quite a bit better than plurality voting with respect to the distortion of power indices based on a single large holder and a single small holder. However, in general, with low voter "turnouts" and widely distributed holdings, one requires quite a bit less than 50% of stock to essentially hold control over the company, which represents greater than a 2:1 power in de facto leverage.

Even then, as was pointed out, you don't need an absolute majority (or a plurality for that matter) to exercise partial or even complete control over a corporation.

Right.

And more shareholders' rights (notice, creditors don't have any of these rights).

Not all shareholders do, either.

1. The right to share proportionally in dividends paid.

See preferred v. common stock.

2. The right to share proportionally in assets remaining after liabilities have been paid in liquidation.

Also see preferred v. common stock.

3. The right to vote on matters of great importance to stockholders, such as a merger, usually decided at the annual meeting or a special meeting.

See voting v. non-voting stock.

4. The right to share proportionally in any new stock sold. This is called the preemptive right.

From Answers.com:

Right giving existing stockholders the opportunity to purchase shares of a New Issue before it is offered to others. Its purpose is to protect shareholders from dilution of value and control when new shares are issued. Although 48 U.S. States have preemptive right statutes, most states also either permit corporations to pay stockholders to waive their preemptive rights or state in their statutes that the preemptive right is valid only if set forth in the corporate charter. [b]As a result, preemptive rights are the exception rather than the rule. Where they do exist, the usual procedure is for each existing stockholder to receive, prior to a new issue, a Subscription Warrant indicating how many new shares the holder is entitled to buy-normally, a proportion of the shares he or she already holds. Since the new shares would typically be priced below the market, a financial incentive exists to exercise the preemptive right. See also Subscription Right.

So there are exceptions to the pre-emptive "right" as well...

These don't sound like actual rights to me. The list sounds much more like "typical contractual obligations attached to share certificates may include:"

I am. It is a shareholders right to be apathetic just as much as it is another shareholders right to be indignant.

In fact, for common investors, the appropriate strategy is diversification, either directly or through a fund. In the latter case, they don't have available the ability to vote their shares. In the former case, they don't have the informational resources to vote their shares in all the companies they are invested in. Net result is that these shareholders exercise no control, which then amplifies the remaining votes, rendering a greater power index differential between larger and smaller share blocs.

My vote counts as 4.76*10-7 percent of the vote.

Only in the presidential election. There's a lot more to government than presidents, y'know.

Doing "good" things doesn't necessarily entail a waste of shareholder money.

But does imply an alternate primary mission.

Not much logic is required.

Logic is always required.

P = EPS/R +NPVGO
Seems pretty straightforward to me.

Seems pretty meaningless to me. That's a theoretical valuation of what a stock 'should' be worth. Its relationship to what a stock is actually worth, and to the degree of hedging which the investor is engaged, is fairly indirect.

Nevertheless, he and the other shareholders own the corporation.

Only in a very limited and non-transitive sense. As I explained above. Repetition is no substitute for logic.

Actually lawyers don't have specialties,

Yes, they do.

I know, I know, you're thinking "But you don't get a J.D. in insurance law!" However, while a lawyer doesn't necessarily receive specialized certifications and formal training, most choose to be quite narrow in what field they practice in.

Nevertheless, the shareholders still elect the board.

RIght. Elect, not appoint, and a specific subset of shareholders.

Thank you for finally admitting that.

... it is strange that you would say so, since I'm arguing that the structure of corporate governance is fraught with power strikingly disproportionate to share holdings, and the fact that a simple plurality is usually all that is required to exercise de facto control over a corporation is a fact that underlines it. Completely controlling a corporation with a 50% vote share entails a 2:1 and 0:1 amplification/reduction of power. Completely controlling a corporation with a 20% plurality share of the stock represents a 5:1 and 0:4 amplification/reduction of power.

Not to cause too much of a stir here, but isn't the fact that franking credits exist proof that shareholders do pay corporate income taxes, and then (in some countries) get compensated?

Congratulations! In one single line, you've offered more argument in favor of saying that shareholders pay corporate income taxes than Jimmy has in several extended posts.

The franking credits offer a similar structure to VATs, in that you're tracking the same thing through multiple transactions and then trying to manage the total tax on that object. However, there's nothing (theoretically) wrong with taxing the same object through multiple transactions. This happens with the resale of used items in retail settings and sales taxes.

The core mechanism of percentage-based taxation schemes is to apply a fee to a transaction between two entities, and so it's fundamentally nothing strange to tax money both entering and leaving a corporation. See my above post on "double" taxation - money often gets taxed again and again as it passes through different transactions. It's possible to privilege certain transactions, and other transactions are logistically difficult to apply taxes to (barter, for example) but transaction taxes are the cornerstone of most modern taxation schemes IMO. The differences lie in the rates and how the transactions are aggregated.

[NotnotgnimmiJymmiJ]

No, that's precisely not what happens (and you admit as much later).

No, it's precisely what does happen. You're completely failing to comprehend here.

If one person holds a controlling share of (say) 50% + 1 share... that means that the remaining 50% of share votes hold a zero power index in a plurality election.

Only if it's a straight-vote, and only in the very specific circumstance that someone else holds 51% of the shares. But yes, in a shareholder democracy, if you own 51% of the shares, you control the company. Which kind of refutes your own point that shares don't represent legal ownership of a corporation...

The most important difference is whether shares must be voted cumulatively or must be voted straight.

Yes, that makes a big difference.

To illustrate the two different voting procedures, imagine that a corporation has two shareholders: Smith with 20 shares and Jones with 80 shares. Both want to be a director. Jones does not want Smith, however. We assume there are a total of four directors to be elected.

However, let's suppose 5, and that Jones holds 50% of the shares, while the remainder is distributed throughout. By distributing his votes in thirds, he insures control of a majority of the seats on the board, albeit not the entire board.

Yes, the more shares you own, the more control over the corporation you have. Hence, shares represent ownership of a corporation. See how simple it all is?

Cumulative voting is in some senses quite a bit better than plurality voting with respect to the distortion of power indices based on a single large holder and a single small holder. However, in general, with low voter "turnouts" and widely distributed holdings, one requires quite a bit less than 50% of stock to essentially hold control over the company, which represents greater than a 2:1 power in de facto leverage.

Even then, as was pointed out, you don't need an absolute majority (or a plurality for that matter) to exercise partial or even complete control over a corporation.

Right.

And more shareholders' rights (notice, creditors don't have any of these rights).

Not all shareholders do, either.

1. The right to share proportionally in dividends paid.

See preferred v. common stock.

2. The right to share proportionally in assets remaining after liabilities have been paid in liquidation.

Also see preferred v. common stock.

3. The right to vote on matters of great importance to stockholders, such as a merger, usually decided at the annual meeting or a special meeting.

See voting v. non-voting stock.

4. The right to share proportionally in any new stock sold. This is called the preemptive right.

From Answers.com:

Right giving existing stockholders the opportunity to purchase shares of a New Issue before it is offered to others. Its purpose is to protect shareholders from dilution of value and control when new shares are issued. Although 48 U.S. States have preemptive right statutes, most states also either permit corporations to pay stockholders to waive their preemptive rights or state in their statutes that the preemptive right is valid only if set forth in the corporate charter. [b]As a result, preemptive rights are the exception rather than the rule. Where they do exist, the usual procedure is for each existing stockholder to receive, prior to a new issue, a Subscription Warrant indicating how many new shares the holder is entitled to buy-normally, a proportion of the shares he or she already holds. Since the new shares would typically be priced below the market, a financial incentive exists to exercise the preemptive right. See also Subscription Right.

So there are exceptions to the pre-emptive "right" as well...

These don't sound like actual rights to me. The list sounds much more like "typical contractual obligations attached to share certificates may include:"

For which shareholders demand compensation in order to forfeit. I have the right to free speech, but I'm pretty sure if I go into my place of work and start screaming, "God hates Jews!" I can still get fired.

I am. It is a shareholders right to be apathetic just as much as it is another shareholders right to be indignant.

In fact, for common investors, the appropriate strategy is diversification, either directly or through a fund. In the latter case, they don't have available the ability to vote their shares. In the former case, they don't have the informational resources to vote their shares in all the companies they are invested in. Net result is that these shareholders exercise no control, which then amplifies the remaining votes, rendering a greater power index differential between larger and smaller share blocs.

And it is their right to be apathetic.

My vote counts as 4.76*10-7 percent of the vote.

Only in the presidential election. There's a lot more to government than presidents, y'know.

NO WAY, I HAD NO IDEA!

Doing "good" things doesn't necessarily entail a waste of shareholder money.

But does imply an alternate primary mission.

Which doesn't necessarily entail a waste of shareholder money.

Not much logic is required.

Logic is always required.

P = EPS/R +NPVGO
Seems pretty straightforward to me.

Seems pretty meaningless to me. That's a theoretical valuation of what a stock 'should' be worth. Its relationship to what a stock is actually worth, and to the degree of hedging which the investor is engaged, is fairly indirect.

It represents the intrinsic value of a corporation. You can disagree about the correct value of R. You can disagree about the correct value of NPVGO, but the intrinsic value of a share is still equal to EPS/R + NPVGO.

Nevertheless, he and the other shareholders own the corporation.

Only in a very limited and non-transitive sense. As I explained above. Repetition is no substitute for logic.

No, in a literal sense.

Actually lawyers don't have specialties,

Yes, they do.

No, they don't.

I know, I know, you're thinking "But you don't get a J.D. in insurance law!" However, while a lawyer doesn't necessarily receive specialized certifications and formal training, most choose to be quite narrow in what field they practice in.

No, right now I'm thinking "But the Pennsylvania Bar does not permit members to have specialties."

Nevertheless, the shareholders still elect the board.

RIght. Elect, not appoint, and a specific subset of shareholders.

Thank you for finally admitting that.

... it is strange that you would say so, since I'm arguing that the structure of corporate governance is fraught with power strikingly disproportionate to share holdings, and the fact that a simple plurality is usually all that is required to exercise de facto control over a corporation is a fact that underlines it. Completely controlling a corporation with a 50% vote share entails a 2:1 and 0:1 amplification/reduction of power. Completely controlling a corporation with a 20% plurality share of the stock represents a 5:1 and 0:4 amplification/reduction of power.

No, you are arguing that shareholders don't own a corporation. Not very successfully.

[Tahar Joblis]

Only if it's a straight-vote, and only in the very specific circumstance that someone else holds 51% of the shares. But yes, in a shareholder democracy, if you own 51% of the shares, you control the company. Which kind of refutes your own point that shares don't represent legal ownership of a corporation...

In the rather more common circumstance that some agents whose combined voting blocs add up to 25% of the shares are managing to exercise complete control over the company, that means that 75% of the shares are failing to influence the company. It is possible, given a distribution of weighted votes, to determine the power indices for each voter. Even for fairly large bodies, such as the US electoral college, the power/share ratio is going to be very visibly non-constant.

"Legal ownership"? Shifting goalposts any? Nobody will argue that on some piece of paper somewhere, a shareholder legally owns a piece of the company. But said "ownership" is both limited and ultimately non-transitive in nature. In terms of its essential characteristics, it much more closely resembles a loose contract.

Yes, the more shares you own, the more control over the corporation you have. Hence, shares represent ownership of a corporation. See how simple it all is?

Leverage. Understanding it yet?

For which shareholders demand compensation in order to forfeit. I have the right to free speech, but I'm pretty sure if I go into my place of work and start screaming, "God hates Jews!" I can still get fired.

Demand? It's up to the issuing corporation to decide what types of stock to issue. Prospective purchasers can choose to purchase or not purchase those shares at their leisure.

NO WAY, I HAD NO IDEA!

Clearly the words of someone who has no idea how easy it is to cause a political impact in the arena that matters the most in your day-to-day life: The local level.

It represents the intrinsic value of a corporation.

In theory.

You can disagree about the correct value of R.

Substantially. And can even disagree over whether treatment of r as a constant is even appropriate.

You can disagree about the correct value of NPVGO,

Substantially.

but the intrinsic value of a share is still equal to EPS/R + NPVGO.

Theoretically, based on certain set of assumptions (including long-term macro-scale stability of percentile economic growth). There are several competing models for the valuation of stock, most similar to each other, and most disconnected from reality unless you have perfect information. Ultimately, these are simply estimates - guesses - as to how much money you'll get from a stock when.

If I knew that management is very optimistic about their new product and that most of the shareholders are going to find management's optimism very convincing for at least another year, I might want to hang onto stock from a company I expect to continue losing money, hoping that the market price of the shares will continue to climb in spite of the bad earnings reports, thinking I'll be able to unload them near the peak of the bubble.

Foolish, perhaps, but it's not at all uncommon for the change in a stock's price to represent a more important factor in how much money I gain (or lose) by buying stock than the dividends.

No, they don't.

They do.

No, right now I'm thinking "But the Pennsylvania Bar does not permit members to have specialties."

And completely ignoring the national picture.

Not that I don't doubt that laywers in Pennsylvania specialize, as a matter of de facto reality, regardless of whether they have some de jure status as non-specialists. Oh, look, it took me five seconds to find a lawyer claiming national certification as a specialist, working in Pennsylvania. So right now, I'm thinking you're pretty disconnected from reality.

No, you are arguing that shareholders don't own a corporation. Not very successfully.

I'm arguing that shareholders do not, in any meaningful sense of the term, pay corporate income taxes, and that therefore, choosing to include corporate income taxes as part of the tax burden calculated as a share of income for the purpose of comparing the relative tax burdens of different income groups ranges from inappropriate and inaccurate to downright dishonest.

I expect that with that dishonest element removed, the NYT graph in question would show that the very wealthiest actually shoulder a smaller tax burden in terms of income percentage. Certainly were the graph plotted with respect to wealth rather than income, it would.

[The Black Plains]

To clarify, I posted this because people were bitching at me how almost half of Americans don't pay taxes, and the rich are the ones who are doing most of it anyway (arguing against raising their rates).

The fact that Exxon Mobil gets away with paying zilch is just so very sad, imo.

Yea we put taxes on them that shouldn't be there in the first place and they aren't even thankful. Ungrateful bastards.

[The Adrian Empire]

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html?src=me&ref=business

But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

So stop bitching about how 47% of American's don't pay taxes, perhaps income taxes, but there are other federal taxes, not to mention state and local taxes as well.

In addition, the argument that the wealthy are paying for the entire burden is ridiculous:

There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.

While they are paying for a good chunk of it, their income has grown the fastest, and their tax rates have dropped significantly.

I would prefer to "bitch" that we are taxed at all, I personally don't care what percentage don't pay income tax or any federal tax, though I would much prefer flat taxation if it must be, I care more that any hardworking person is forced to pay the government at all.
Now don't get me wrong, I do believe the government has a legitimate purpose, and that taxation may be a necessary evil to fund it, but I would prefer a system of voluntary taxation.

Forgive me if this sounds insane, but wouldn't it be indeed better that a person could choose how much money he or she gives to the government each year, why it could be from 0% to 99% if they so choose, if a person so believes the state to be operating to their satisfaction there is no reason he wouldn't pay for it if he is capable, the person would know that if he does not support the state, it will not be able to support him.
So I would suspect that he would come to a fair decision on what he was willing to pay, not much unlike a charity really, if he feels that he can't spare the money well then he can't end of story, no men in black suits coming to bar his house from him. But he would be under the realization that his lack of payment may hinder the governments services.
Regardless of your views this system works:
If man is selfish and self-serving, then he has to lose by not paying his taxes through all the services provided to him, since without funds they will be gone, and if he should want them back then he will learn the lesson of it and pay for his services the next year round.
If man is altruistic at heart, then he will obviously support the system with all or most of his income, thus no problems with funding should arise.
If man is neither and both, then the system will go as it does today, with those dutifully paying their taxes and those dodging them, the government will however remain at peril to it's people.

[NotnotgnimmiJymmiJ]

Only if it's a straight-vote, and only in the very specific circumstance that someone else holds 51% of the shares. But yes, in a shareholder democracy, if you own 51% of the shares, you control the company. Which kind of refutes your own point that shares don't represent legal ownership of a corporation...

In the rather more common circumstance that some agents whose combined voting blocs add up to 25% of the shares are managing to exercise complete control over the company, that means that 75% of the shares are failing to influence the company. It is possible, given a distribution of weighted votes, to determine the power indices for each voter. Even for fairly large bodies, such as the US electoral college, the power/share ratio is going to be very visibly non-constant.

"Legal ownership"? Shifting goalposts any?

Did I ever claim that shareholders have non-legal ownership?

Nobody will argue that on some piece of paper somewhere, a shareholder legally owns a piece of the company. But said "ownership" is both limited and ultimately non-transitive in nature. In terms of its essential characteristics, it much more closely resembles a loose contract.

A "loose contract" that represents ownership and is legally enforceable.

You keep on trying to make this into some kind of morality play. The relationship between the shareholder and the corporation is a legal and a financial one.

Yes, the more shares you own, the more control over the corporation you have. Hence, shares represent ownership of a corporation. See how simple it all is?

Leverage. Understanding it yet?

Yes. The more shares you own, the more control you have.

For which shareholders demand compensation in order to forfeit. I have the right to free speech, but I'm pretty sure if I go into my place of work and start screaming, "God hates Jews!" I can still get fired.

Demand? It's up to the issuing corporation to decide what types of stock to issue. Prospective purchasers can choose to purchase or not purchase those shares at their leisure.

Yes, that's called demand.

NO WAY, I HAD NO IDEA!

Clearly the words of someone who has no idea how easy it is to cause a political impact in the arena that matters the most in your day-to-day life: The local level.

For which I will need votes.

It represents the intrinsic value of a corporation.

In theory.

And in reality.

You can disagree about the correct value of R.

Substantially. And can even disagree over whether treatment of r as a constant is even appropriate.

Correct.

You can disagree about the correct value of NPVGO,

Substantially.

but the intrinsic value of a share is still equal to EPS/R + NPVGO.

Theoretically, based on certain set of assumptions (including long-term macro-scale stability of percentile economic growth).

No. That is what you use to help estimate R and NPVGO. That doesn't effect the equation.

There are several competing models for the valuation of stock, most similar to each other, and most disconnected from reality unless you have perfect information. Ultimately, these are simply estimates - guesses - as to how much money you'll get from a stock when.

That's because the information you put into the equation is an estimate. Doesn't change the validity of the equation.

If I knew that management is very optimistic about their new product and that most of the shareholders are going to find management's optimism very convincing for at least another year, I might want to hang onto stock from a company I expect to continue losing money, hoping that the market price of the shares will continue to climb in spite of the bad earnings reports, thinking I'll be able to unload them near the peak of the bubble.

When did I claim that the market value of a stock equals its intrinsic value?

No, you are arguing that shareholders don't own a corporation. Not very successfully.

I'm arguing that shareholders do not, in any meaningful sense of the term, pay corporate income taxes

Except that they own the corporation and the corporation pays the taxes.

[Novistrainia]

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html?src=me&ref=business

But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

So stop bitching about how 47% of American's don't pay taxes, perhaps income taxes, but there are other federal taxes, not to mention state and local taxes as well.

In addition, the argument that the wealthy are paying for the entire burden is ridiculous:

There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.

While they are paying for a good chunk of it, their income has grown the fastest, and their tax rates have dropped significantly.

I would prefer to "bitch" that we are taxed at all, I personally don't care what percentage don't pay income tax or any federal tax, though I would much prefer flat taxation if it must be, I care more that any hardworking person is forced to pay the government at all.
Now don't get me wrong, I do believe the government has a legitimate purpose, and that taxation may be a necessary evil to fund it, but I would prefer a system of voluntary taxation.

Forgive me if this sounds insane, but wouldn't it be indeed better that a person could choose how much money he or she gives to the government each year, why it could be from 0% to 99% if they so choose, if a person so believes the state to be operating to their satisfaction there is no reason he wouldn't pay for it if he is capable, the person would know that if he does not support the state, it will not be able to support him.
So I would suspect that he would come to a fair decision on what he was willing to pay, not much unlike a charity really, if he feels that he can't spare the money well then he can't end of story, no men in black suits coming to bar his house from him. But he would be under the realization that his lack of payment may hinder the governments services.
Regardless of your views this system works:
If man is selfish and self-serving, then he has to lose by not paying his taxes through all the services provided to him, since without funds they will be gone, and if he should want them back then he will learn the lesson of it and pay for his services the next year round.
If man is altruistic at heart, then he will obviously support the system with all or most of his income, thus no problems with funding should arise.
If man is neither and both, then the system will go as it does today, with those dutifully paying their taxes and those dodging them, the government will however remain at peril to it's people.

Alright I want you to ask 1,000 people if they would just give money away, to have a service they may not use or have immediate benefits for.
The reason we wouldn't do volunteer is do you know who would pay taxes, no one.

[Novistrainia]

Also as another point the fact that people are dodging taxes or trying to find loop holes is reason enough to show no one would pay taxes.
Another reason, look at the US under the Articles of Confederation, do you know of any states that gave them money.

Also look at the many laws we have in place just for people.

Speed laws, and most people violate them anyways with the 5 over rule which is bull crap
There are more things to show why some things have to be mandatory or it wouldn't work.

[The Adrian Empire]

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html?src=me&ref=business

But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

So stop bitching about how 47% of American's don't pay taxes, perhaps income taxes, but there are other federal taxes, not to mention state and local taxes as well.

In addition, the argument that the wealthy are paying for the entire burden is ridiculous:

There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.

While they are paying for a good chunk of it, their income has grown the fastest, and their tax rates have dropped significantly.

I would prefer to "bitch" that we are taxed at all, I personally don't care what percentage don't pay income tax or any federal tax, though I would much prefer flat taxation if it must be, I care more that any hardworking person is forced to pay the government at all.
Now don't get me wrong, I do believe the government has a legitimate purpose, and that taxation may be a necessary evil to fund it, but I would prefer a system of voluntary taxation.

Forgive me if this sounds insane, but wouldn't it be indeed better that a person could choose how much money he or she gives to the government each year, why it could be from 0% to 99% if they so choose, if a person so believes the state to be operating to their satisfaction there is no reason he wouldn't pay for it if he is capable, the person would know that if he does not support the state, it will not be able to support him.
So I would suspect that he would come to a fair decision on what he was willing to pay, not much unlike a charity really, if he feels that he can't spare the money well then he can't end of story, no men in black suits coming to bar his house from him. But he would be under the realization that his lack of payment may hinder the governments services.
Regardless of your views this system works:
If man is selfish and self-serving, then he has to lose by not paying his taxes through all the services provided to him, since without funds they will be gone, and if he should want them back then he will learn the lesson of it and pay for his services the next year round.
If man is altruistic at heart, then he will obviously support the system with all or most of his income, thus no problems with funding should arise.
If man is neither and both, then the system will go as it does today, with those dutifully paying their taxes and those dodging them, the government will however remain at peril to it's people.

Alright I want you to ask 1,000 people if they would just give money away, to have a service they may not use or have immediate benefits for.
The reason we wouldn't do volunteer is do you know who would pay taxes, no one.

Precisely, man is self-serving, if you so believe your previous statement; then the government shall go bankrupt, and the private industry will replace it, as market forces must and will supply a demand. No harm, no foul. If you then will reply that the poor will have no services, then you do not believe that man is alone self-serving as you would tend for your weak, whether this care is administered by private charities or public officials is of little consequence.
Edit: Also private insurance companies make a killing on just that promise of provision do they not?

[The Black Plains]

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html?src=me&ref=business

But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

So stop bitching about how 47% of American's don't pay taxes, perhaps income taxes, but there are other federal taxes, not to mention state and local taxes as well.

In addition, the argument that the wealthy are paying for the entire burden is ridiculous:

There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.

While they are paying for a good chunk of it, their income has grown the fastest, and their tax rates have dropped significantly.

I would prefer to "bitch" that we are taxed at all, I personally don't care what percentage don't pay income tax or any federal tax, though I would much prefer flat taxation if it must be, I care more that any hardworking person is forced to pay the government at all.
Now don't get me wrong, I do believe the government has a legitimate purpose, and that taxation may be a necessary evil to fund it, but I would prefer a system of voluntary taxation.

Forgive me if this sounds insane, but wouldn't it be indeed better that a person could choose how much money he or she gives to the government each year, why it could be from 0% to 99% if they so choose, if a person so believes the state to be operating to their satisfaction there is no reason he wouldn't pay for it if he is capable, the person would know that if he does not support the state, it will not be able to support him.
So I would suspect that he would come to a fair decision on what he was willing to pay, not much unlike a charity really, if he feels that he can't spare the money well then he can't end of story, no men in black suits coming to bar his house from him. But he would be under the realization that his lack of payment may hinder the governments services.
Regardless of your views this system works:
If man is selfish and self-serving, then he has to lose by not paying his taxes through all the services provided to him, since without funds they will be gone, and if he should want them back then he will learn the lesson of it and pay for his services the next year round.
If man is altruistic at heart, then he will obviously support the system with all or most of his income, thus no problems with funding should arise.
If man is neither and both, then the system will go as it does today, with those dutifully paying their taxes and those dodging them, the government will however remain at peril to it's people.

Alright I want you to ask 1,000 people if they would just give money away, to have a service they may not use or have immediate benefits for.
The reason we wouldn't do volunteer is do you know who would pay taxes, no one.

Precisely, man is self-serving, if you so believe your previous statement; then the government shall go bankrupt, and the private industry will replace it, as market forces must and will supply a demand. No harm, no foul. If you then will reply that the poor will have no services, then you do not believe that man is alone self-serving as you would tend for your weak, whether this care is administered by private charities or public officials is of little consequence.
Edit: Also private insurance companies make a killing on just that promise of provision do they not?

Then how in God's name do you explain why we need government in the first place? If man's self-service rules all then it should. Whatever. I believe what he was saying is subscription based services. If there is a demand for the services, people need them, which is the only reason the government should provide them in the first place... then people would be willing to subscribe to them.

[The Adrian Empire]

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html?src=me&ref=business

But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

So stop bitching about how 47% of American's don't pay taxes, perhaps income taxes, but there are other federal taxes, not to mention state and local taxes as well.

In addition, the argument that the wealthy are paying for the entire burden is ridiculous:

There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.

While they are paying for a good chunk of it, their income has grown the fastest, and their tax rates have dropped significantly.

I would prefer to "bitch" that we are taxed at all, I personally don't care what percentage don't pay income tax or any federal tax, though I would much prefer flat taxation if it must be, I care more that any hardworking person is forced to pay the government at all.
Now don't get me wrong, I do believe the government has a legitimate purpose, and that taxation may be a necessary evil to fund it, but I would prefer a system of voluntary taxation.

Forgive me if this sounds insane, but wouldn't it be indeed better that a person could choose how much money he or she gives to the government each year, why it could be from 0% to 99% if they so choose, if a person so believes the state to be operating to their satisfaction there is no reason he wouldn't pay for it if he is capable, the person would know that if he does not support the state, it will not be able to support him.
So I would suspect that he would come to a fair decision on what he was willing to pay, not much unlike a charity really, if he feels that he can't spare the money well then he can't end of story, no men in black suits coming to bar his house from him. But he would be under the realization that his lack of payment may hinder the governments services.
Regardless of your views this system works:
If man is selfish and self-serving, then he has to lose by not paying his taxes through all the services provided to him, since without funds they will be gone, and if he should want them back then he will learn the lesson of it and pay for his services the next year round.
If man is altruistic at heart, then he will obviously support the system with all or most of his income, thus no problems with funding should arise.
If man is neither and both, then the system will go as it does today, with those dutifully paying their taxes and those dodging them, the government will however remain at peril to it's people.

Alright I want you to ask 1,000 people if they would just give money away, to have a service they may not use or have immediate benefits for.
The reason we wouldn't do volunteer is do you know who would pay taxes, no one.

Precisely, man is self-serving, if you so believe your previous statement; then the government shall go bankrupt, and the private industry will replace it, as market forces must and will supply a demand. No harm, no foul. If you then will reply that the poor will have no services, then you do not believe that man is alone self-serving as you would tend for your weak, whether this care is administered by private charities or public officials is of little consequence.
Edit: Also private insurance companies make a killing on just that promise of provision do they not?

Then how in God's name do you explain why we need government in the first place? If man's self-service rules all then it should. Whatever. I believe what he was saying is subscription based services. If there is a demand for the services, people need them, which is the only reason the government should provide them in the first place... then people would be willing to subscribe to them.

Exactly, subscription, those who want services will pay for them, those who do not, face the peril of losing them, some may try to ride free of taxes, other might take more then their fair share, but it leaves the decision not to the government but to the individual, who may take part and give what he can, or he may be selfish, either way the services of the government are at his mercy. The funds to support them are extracted from him at his leisure without fear from government reprisal

[Rolamec]

List of Taxes We (Americans) Pay

Accounts Receivable Tax

Building Permit Tax

Capital Gains Tax

CDL license Tax

Cigarette Tax

Corporate Income Tax

Court Fines (indirect taxes)

Dog License Tax

Federal Income Tax

Federal Unemployment Tax (FUTA)

Fishing License Tax

Food License Tax

Fuel permit tax

Gasoline Tax (42 cents per gallon)

Hunting License Tax

Inheritance Tax Interest expense (tax on the money)

Inventory tax IRS Interest Charges (tax on top of tax)

IRS Penalties (tax on top of tax)

Liquor Tax

Local Income Tax

Luxury Taxes

Marriage License Tax

Medicare Tax

Property Tax

Real Estate Tax

Septic Permit Tax

Service Charge Taxes

Social Security Tax

Road Usage Taxes (Truckers)

Sales Taxes

Recreational Vehicle Tax

Road Toll Booth Taxes

School Tax

State Income Tax

State Unemployment Tax (SUTA)

Telephone federal excise tax

Telephone federal universal service fee tax

Telephone federal, state and local surcharge taxes

Telephone minimum usage surcharge tax

Telephone recurring and non-recurring charges tax

Telephone state and local tax

Telephone usage charge tax

Toll Bridge Taxes

Toll Tunnel Taxes

Traffic Fines (indirect taxation)

Trailer registration tax

Utility Taxes

Vehicle License Registration Tax

Vehicle Sales Tax

Watercraft registration Tax

Well Permit Tax

Workers Compensation Tax

woohoo, ain't that America!

[Novistrainia]

http://www.nytimes.com/2010/04/14/business/economy/14leonhardt.html?src=me&ref=business

But the modifiers here — federal and income — are important. Income taxes aren’t the only kind of federal taxes that people pay. There are also payroll taxes and investment taxes, among others. And, of course, people pay state and local taxes, too.

Even if the discussion is restricted to federal taxes (for which the statistics are better), a vast majority of households end up paying federal taxes. Congressional Budget Office data suggests that, at most, about 10 percent of all households pay no net federal taxes. The number 10 is obviously a lot smaller than 47.

So stop bitching about how 47% of American's don't pay taxes, perhaps income taxes, but there are other federal taxes, not to mention state and local taxes as well.

In addition, the argument that the wealthy are paying for the entire burden is ridiculous:

There is no question that the wealthy pay a higher overall tax rate than any other group. That is an American tradition. But there is also no question that their tax rates have fallen more than any other group’s over the last three decades. The only reason they are paying more taxes than in the past is that their pretax incomes have risen so rapidly — which hardly seems a great rationale for a further tax cut.

While they are paying for a good chunk of it, their income has grown the fastest, and their tax rates have dropped significantly.

I would prefer to "bitch" that we are taxed at all, I personally don't care what percentage don't pay income tax or any federal tax, though I would much prefer flat taxation if it must be, I care more that any hardworking person is forced to pay the government at all.
Now don't get me wrong, I do believe the government has a legitimate purpose, and that taxation may be a necessary evil to fund it, but I would prefer a system of voluntary taxation.

Forgive me if this sounds insane, but wouldn't it be indeed better that a person could choose how much money he or she gives to the government each year, why it could be from 0% to 99% if they so choose, if a person so believes the state to be operating to their satisfaction there is no reason he wouldn't pay for it if he is capable, the person would know that if he does not support the state, it will not be able to support him.
So I would suspect that he would come to a fair decision on what he was willing to pay, not much unlike a charity really, if he feels that he can't spare the money well then he can't end of story, no men in black suits coming to bar his house from him. But he would be under the realization that his lack of payment may hinder the governments services.
Regardless of your views this system works:
If man is selfish and self-serving, then he has to lose by not paying his taxes through all the services provided to him, since without funds they will be gone, and if he should want them back then he will learn the lesson of it and pay for his services the next year round.
If man is altruistic at heart, then he will obviously support the system with all or most of his income, thus no problems with funding should arise.
If man is neither and both, then the system will go as it does today, with those dutifully paying their taxes and those dodging them, the government will however remain at peril to it's people.

Alright I want you to ask 1,000 people if they would just give money away, to have a service they may not use or have immediate benefits for.
The reason we wouldn't do volunteer is do you know who would pay taxes, no one.

Precisely, man is self-serving, if you so believe your previous statement; then the government shall go bankrupt, and the private industry will replace it, as market forces must and will supply a demand. No harm, no foul. If you then will reply that the poor will have no services, then you do not believe that man is alone self-serving as you would tend for your weak, whether this care is administered by private charities or public officials is of little consequence.
Edit: Also private insurance companies make a killing on just that promise of provision do they not?

Then how in God's name do you explain why we need government in the first place? If man's self-service rules all then it should. Whatever. I believe what he was saying is subscription based services. If there is a demand for the services, people need them, which is the only reason the government should provide them in the first place... then people would be willing to subscribe to them.

I laugh at people who think the private industry would just take over all the rolls the government has. If that was true then it would have when man had begun developing society, what is shown though is man towards Socialism, I will not specify which type but they do.
As to your post about self-serving Mans need to be self serving has led them to create a society to protect them selves from those stronger who wanted to be self-serving and therefore also hurting themselves, the view point of, if I can't do it nobody can.
Not all of mankind is self serving but the number that isn't is very small and usually heavily disliked by society at large, which ends with them being assassinated or executed in some way.