Filling up a Toyota Camry with gasoline (say 15 gallons) adds about 90 pounds of fuel. A lithium-ion battery with the same energy content would weigh about 5,800 pounds. Clearly electric vehicles will have a difficult time competing with gasoline vehicles no matter how much charging times are reduced or how much better the software gets. It seems that without some breakthrough the sweet spot for battery-electric vehicles is urban driving done after charging overnight at home.
How is it unethical for companies to legally pay low taxes? First, realize that a company's tax isn't money growing on trees. Companies pay these taxes by decreasing profits for shareholders, decreasing wages for employees, or increasing the prices of goods and services to consumers (and usually all three). Someone is hurt by collecting these taxes. The idea that government can then go on to spend this money in a way that is more beneficial to society than the cost imposed underlies the assumption that it somehow a good idea to take from some to benefit others.
Most people believe that the State must collect some taxes from its subjects, but is this corporate income tax the best method? Increasing the cost of goods essentially taxes consumers in a regressive manner, irrespective of their ability to bear these increased costs. Lowering wages of company employees discourages work and lowers the income taxes collected by the government on these reduced wages. Finally, reducing the profits of shareholders reduces the taxes that would have been collected on dividends and capital gains when the shares are sold; more significantly, reducing the value of investing in companies discourages the creation of wealth and jobs for all of us by reducing the incentives to start and invest in companies.
If you think it is unethical to pay few taxes (and realize that for the reasons in the previous paragraph all other countries of the world tax their companies at lower rates than the USA), then you must believe that it is somehow more ethical to pay higher taxes (than is actually owed). If this is so, why aren't you sending in double what you owe in taxes? By your own statements aren't you acting unethically?
Money does not grow on trees; it does however grow in cotton plantations.
Corporate taxes decrease profits for shareholders, but do not decreas wages for employees. By definition, corporate taxes are taxes on profits, so employee wages have already been deducted from corporate revenues by the time the tax liability is determined.
Nobody is "hurt" collecting taxes. Taxes are simply a nonspecific bill from the government for a massive variety of services rendered directly or indirectly on behalf of the taxpayer.
Dividends and capital gains are taxed at lower rates than corporate tax rates. Thus, it is preferrable (from a revenue-generating viewpoint) to collect taxes from the corporation rather than from the dividend payments or the sale of stock. Even if the dividend preference expires, dividends will still be taxed at the individual's marginal rate, which is lower than the corporate income tax rate.
Taxes do not reduce the value of investing in companies. Under the time-value of money theory, if a tax can be deferred for 7-8 years, it is as if the tax was never owed. Thus, high taxes increase the value of investing in companies because the deferral opportunities of the corporate investment form offer greater "savings".
Finally, your last argument is logical nonsense. Paying less than the statutorilly declared tax rate is what people find unethical. Unethical does not mean "less ethical", it means "not ethical".
>Corporate taxes...do not decreas [sic] wages for employees
Given two companies, one that pays no taxes and another that pays 10% of profits in taxes, the former will have something between (a) cheaper access to capital (assuming equal expenditures), or, (b) more cash for R&D, employees, etc. (assuming equal returns). Saying that corporate tax rates have no effect on how much money a company has available to spend is absurd.
>Under the time-value of money theory, if a tax can be deferred for 7-8 years, it is as if the tax was never owed
Assuming AAPL is a AA credit (pessimistic) it would pay an 80 basis point spread for a 10-year borrowing [1]; with the 10-year Treasury at 190 [2] Apple's discount rate by these assumptions for 10 years is 2.7%. The present value of a $6B tax liability 10 years from now would thus be $4.6B, not zero.
First, your are calculating the total collective wages of a corporation's employees. I refer to the individual wages. Corporate taxes do not decrease individual wages, though they may impact the total number of employees hired...in smaller firms which have less resources. In larger companies (i.e., publicly traded companies), the company's tax rates do not affect hiring decisions. Business considerations other than tax rates affect hiring.
Second, you misunderstand the time-value of money theory. The theory posits that the money saved in taxes, if actively invested back in the business or other investments, will result in sufficient income to completely offset the eventual tax payment when it comes due. Low interest rates may change the expected timeframe, but the theory assumes that the company will attempt to maximize the return on its investments.
Empirically, "approximately 50 per cent of an exogenous increase in tax is passed on in lower wages in the long run" [1] through wage bargaining. Generally this will happen through a reduction in real versus nominal wages due to the documented stickiness of wages. Anecdotally, having worked at a private equity firm, taxes are an input into not only hiring capabilities at a firm but the wages and bonuses payable to those hired.
Regarding the time value of money, if a firm defers $1 in taxes today for 8 years it would need to earn about a 9.1% annualised return on that dollar to have $2 at the end of those 8 years, $1 for the taxes deferred and $1 to keep so that it is as if "as if the tax was never owed". Given that the S&P 500 had an annual average return of 3.46% (1.42% annualised) over the past 10 years your assumption that a 7-8 year deferral even nearly wipes out taxes includes a substantial risk assumption. An American firm should expect to wait 26 years for its tax deferral to be wiped out by time if we use the US's average GDP growth rate since the 1970s of 2.7% [2]. Note: above I was doing the inverse of this, asking what the discount rate would have to be to discount $x in 10 years to almost zero today
