For the record, I'm just a non English speaker and it's really painful for us strangers to see things like this after so many years spent learning "academic" English :)
Kudos on leaving your statement in full transparency anyway :)
This is where I really don't understand the concept of trying to force your law/will/idea(ls) on other people.
-Today I posted an image of an apple on my web-page.
-The city in the next town over has decided that images of apples are bad/wrong/evil and has passed a law banning the display of apples.
-The city that I live in gets an angry letter from the other city upset about the portrayal of apples and the wanton disregard for their laws.
Why oh why can't we live in a world where the concept of "If this material is illegal in your country, you shouldn't be looking at it."
or
"Be aware of laws that pertain to you and respect them or change them if you disagree."
The concept you describe is a philosophy in and of itself. Sounds like a great place to me, but I think it's fair to say that at least some people on this planet would rather live under a different set of governing principles. At a higher level, I want to live in a world where they can live in that different society, and we can live in ours.
> This is where I really don't understand the concept of trying to force your law/will/idea(ls) on other people.
You should have wrote: "on other people that live under the same legal jurisdiction".
Your attitude towards the law is a real problematic attitude that is currently more common in this 'generation' (generation not referring exactly to people of a certain age, but more as people living in a certain time). Since we have internet now and there are many movements that promote 'freedom' in all of their possible interpretations, many people find it easy to go over the top and start demanding things like "Be aware of laws that pertain to you and respect them _or change them if you disagree_".
You guys should take time to understand what law is and why is it good for it to exist, and also, why you should respect the jurisdiction pertaining to other regions or other people (EVEN IF YOU DISAGREE WITH IT). If the majority of citizens in this world understood this really simple civical principle, most of the current problems with the world would be nonexistant.
> why you should respect the jurisdiction pertaining to other regions
Some of us highly value open debate and discussion. Perhaps because it's a core value in some cultures around the world, but maybe that's overly romantic. I suspect many of us have just read Milton's Areopagitica [1] or Mill [2], and have yet to hear any convincing refutations.[3]
So those of us who recognize the value of open sharing of ideas will chafe at any suggestion that ideas are best refuted with suppression.
Others in the world don't share these views.
So we're left with a dilemma that cannot be resolved through mutual respect. You can't both openly debate controversial topics and be silent about them. There's no middle ground. There's no "respecting others beliefs" on this. These are strictly incompatible views on the world, on what information I'm allowed to discuss with my neighbor.
I don't believe any government should have the power of thought control, so I reject the attempt of (especially foreign governments) telling me what I can or cannot discuss with their citizens. I respect the people around the world, but I cannot always respect their laws.
You guys should take time to understand what law is and why is it good for it to exist, and also, why you should respect the jurisdiction pertaining to other regions or other people (EVEN IF YOU DISAGREE WITH IT). If the majority of citizens in this world understood this really simple civical [sic] principle, most of the current problems with the world would be nonexistant. [sic]
If the majority of rulers in this world subjected themselves to the law, it might become an institution worthy of a citizen's respect.
"Profit" is very easy to hide. Income, not so much.
The difference is 'net' vs 'gross'.
The horrid nature of current tax law is geared towards lawyers and accountants being creative. The system is geared to reward con-men and punish the honest.
A flat-rate tax system based on income might be more effective but the real danger is the tax-breaks that companies get. I see this all the time with Ford/Chrysler/GM. "We will build a factory in your city/state/county if you give us X-billion in tax breaks."
My thoughts: You want to sell your product don't you? In Canada we had a law called "The AutoPact" [1] which basically said that for every 3 cars that you sell in Canada, 1 must be built here.
Corporate welfare will always be a greater hindrance to tax-coffers then personal welfare will ever be.
Why are we paying companies so they have the privilege of taking our money?
Unfortunately, taxing gross income instead of profits simply won't work for corporate taxes. The cost of doing business varies wildly between industry, or even between different business models in the same industry. You'd end up putting low-margin industries out of business, and taxing (e.g.) software companies almost nothing.
It's a hard problem that doesn't lend itself to simple solutions.
Actually one of the strongest arguments against corporate taxation is the corruption/tax-break angle. Big organizations are always going to be able to lobby more effectively than small ones or individuals.
A reasonably fair personal income tax or VAT can be implemented reliably (and has, in virtually all of the industrialized world). A fairly distributed corporate tax is nearly impossible (again, the existence proof being its absence basically everywhere). No matter how well the statutes are written, a big enough entity will be able to lobby the government into changing the law to its benefit.
I have thought for a while it would be better not to tax businesses at all, instead tax individuals when they draw funds from the business, either as dividends or salary.
I'm not sure how you could get from here to there though.
But then you use the same loophole where you write all your personal expenses off as business write offs, except its even worse because you can tax exempt everything under the pretense of it being a business purchase.
The real proper tax is a transaction tax. Not a flat sales tax or anything, just whenever money changes hands between entities (personal or institutional) in exchange for goods or services (including you paychecks, which are an exchange of your time for money) you get flat taxed on that.
The exception to this is capital gains, since those are not really transactions, just money you are making for owning some form of the means of production. You would definitely want a strict yet simple progressive tax on that, to curtail wealth concentration of the pandemic nature we see happening today. Rather than tax brackets, they should just use a linear function with no capital gains below the happiness threshold up to, say, (now these numbers are fudged and should be researched) 100% tax on capital gains over 1000 times that threshold.
Those are in fact transactions, at least when they're realized, and are supported by a huge class of apparatus of the State, from property laws to courts to communications infrastructure, and more.
In the UK we already have rules that stop that sort of thing, for instance if you use a company owned vehicle for personal use you have to pay tax on that. You also have the fact that these avoidances are local so are easier for the tax authority to stop.
Really it doesn't matter where, specifically, you draw funds from. Taxing corporations makes their products more expensive. Taxing individuals reduces their purchasing power in the economy, which is sort of the same thing. Taxing all transactions with a VAT is the cleanest expression of this idea, the government basically ends up being (by definition) a fixed size relative to the economy.
A VAT or sales tax has the advantage of efficiency and ease of implementation. A personal income tax can be made more progressive and socially fair more easily. Most western governments have settled on some mix of these for the bulk of their revenue.
I don't disagree, I wasn't arguing about VAT or sales tax, rather corporation tax which international companies seem able to avoid but their smaller competitors end up paying.
Congress shall make no law [...] abridging the [...] right of the people [...] to petition the Government for a redress of grievances.
Yes, we're talking about a UK law, but the principle remains valid. "Lobbying" is just the advocacy for the government to do something. Most of the time it's a good thing, because governments on their own tend not to have many good ideas. Making that illegal in general is (quite literally) isomorphic to living in a totalitarian regime.
I suspect what you really mean is that lobbying by "bad people" should be illegal. Well... good luck defining that in statute. You say banana and I say banana.
Let's say you have a horse-and-buggy paratransit company (call it "Unter" for short) that you think is a great idea. But it turns out that existing cities have dumb, ancient laws that disallow horse-drawn carriages. But your users love your service and everyone agrees that it's a great idea. So you call up a legislator to pitch them on the idea of updating the law.
...and end up in jail, because you're a "corporation"?
I think what he means is money should not buy you the ear of government. Using it for this purpose should be illegal, otherwise you no longer have a system where one vote buys you one unit of power, you instead have a system where one unit of wealth buys you one unit of power. Which in some people's opinion, is fascism.
Buying the ear of government with money already is a crime, though. "Lobbying" is regulated already, and certainly does not involve bribery. The problem is far deeper and more complicated than that.
You aren't going to drive much social justice if you paint your enemies as cartoon characters.
A flat-tax based on gross income would be unworkable. Wal-Mart has an operating income of $27 billion on $476 billion in revenues. A 5% flat-tax on gross would wipe out almost all of their profit. Apple, in comparison, has $52 billion in operating income on $182 billion in revenues. A 5% tax on their gross would leave them paying less than what they pay today.
I recommend that everyone read up on the basic mechanics of the U.S. income tax: http://www.amazon.com/Chirelstein-Zelenaks-Taxation-Concepts... (this book is very approachable, and quite short). Things that seem like "creativity" if you're not actually thinking, actually fall out from the mathematics of what you're trying to tax: gains in wealth over time. Things that seem like unnecessary complexity arise naturally in response to the challenge of sampling a continuous function (the value of assets) at discrete points (yearly, or at the time of sale).
The bones of the tax code are pretty elegant. It's complex, but it's complex because accounting is itself very complex. But nobody argues that the complexity of GAAP is a form of corporate welfare. Yes, there's nonsensical cruft layered on top in the form of tax breaks, but those are actually pretty simple in comparison.
Your main point is that there will be winners and losers no matter the tax system. That's a given. There is a point to be made that an abrupt and radical change in the tax code would be a net negative, but I don't think anyone is arguing for that.
If a tax code becomes simpler and some businesses are no longer viable, why should I care? So Wal-Mart doesn't make sense anymore? So iPhones should be more profitable than they are now? I'm not sure why I should care about that.
It's not a choice between two arbitrary systems with different winners and losers. It's a choice between one system that makes sense (taxing net income), and another system that's mathematically and rationally indefensible (taxing gross income).
It's the classic programmer's dilemma: do you implement the complex algorithm that gets the right answer, or the simple one that gets the wrong answer?
I still don't buy your logic. How is a transaction tax (sales tax) practically different than a gross income tax?
I'm all for simpler algorithms, but assuming that's our goal, I'm not sure all this discussion about income taxes isn't starting from the wrong point. We should be looking for taxes that are relatively easier to enforce, like property taxes.
One is a tax on consumption, the other is a tax on income. One is applied to only the final sale, while the other applies at every sale in a production chain. One can never result in a company owing more tax than it makes in profit, the other can. Note that sales taxes that do apply at every step of the production chain (VAT taxes), have the same problem of computing net versus gross: the tax is applied to the difference in value between the outputs and inputs at each step.
Yes, one way to avoid the complexity of implementing a proper income tax is to tax something other than income. But there are reasons we tax income rather than consumption or property. Consumption taxes are regressive--poor people carry more of the overall tax burden. Property taxes have the undesirable characteristic that they often require you to pay money you don't have in cash. Just because your house doubles in value doesn't mean you have the cash to pay double the property taxes on it. Except in certain cases involving inheritance or gifts, income taxes don't force you to sell property that increases in value just to pay the tax on it. Also, with property taxes you run into complexity in defining "property." You'll either draw arbitrary lines (land is property, but stock isn't), and distort the economy as people invest more in untaxable property, or run into trouble valuating intangible property like stock ownership and IPR.
There's a reason why every developed nation has settled on income taxes. The basic principle is something people can get behind. The existence of society and government helps you gain wealth, so it seems reasonable to people to tax a percentage of that gain in wealth. Moreover, people keep track of changes to wealth even without the tax regime (modern accounting predates the modern income tax by centuries), which makes income taxes relatively easier to administer.
Do you care to address the interesting part of what I linked?
A gross receipts tax is similar to a sales tax, but it
is levied on the seller of goods or service consumers.
...I'm thinking this is a distinction without a difference, which is really my point. They're both transaction taxes. And a fair gross income tax rate would probably be set lower than a fair tax on profits since the amount of taxes paid per business should probably be roughly the same, at least on average.
Will some low-profit and no-profit businesses have problems? Sure, but I'm not sure why they shouldn't have to contribute to the general fund just like all the other businesses. If their business models aren't sustainable while paying taxes, I'm not sure why I should be upset. What we have now is overly complex (deducting losses from previous years) and amounts to a subsidy for losing money.
He did address the gross receipts tax. There's an immense difference between a sales tax and a gross receipts tax: sales taxes happen at final sale, and gross receipts taxes apply to every transaction.
The gross receipt tax distorts the economy: it rewards firms that integrate every step of their production rather than focusing on their comparative advantage. The railroad that owns its own steel mill is tax-advantaged over the one that buys steel. That policy is inefficient: the economy should reward the most competitive steel mill, rather than insuring that the largest consumers of steel are more or less required to operate their own crappy mills.
Here's a more immediate example: imagine a tax policy that essentially fined Dropbox for not owning its own chip fab, and forced it to compete with huge companies like Apple that did.
Wal-Mart versus Apple is a bad example, because the two companies are in radically different lines of business. Instead, imagine a tax policy that fined Whole Foods, which sources the goods it sells from a variety of different vendors, while rewarding Safeway. And, of course, the point Rayiner was making was that turnover taxes penalize all of direct-to-consumer-retail; it doesn't just pick Target instead of Wal-Mart, but rather penalizes companies that rely on logistics and distribution at all.
> What we have now is overly complex (deducting losses from previous years) and amounts to a subsidy for losing money.
Say company A makes $10m in year 1, loses $10m in year 2, and makes $20m in year 3. Net gain in wealth = $20m. Say company 2 makes $10m in years 1 and 2, and breaks even in year 3. Also has a net gain of $20m.
Say the tax rate is 20%. In any sane tax system, both companies will pay $4m in taxes over three years. So how do you handle the loss for company 1? Does the IRS write them a check in year 2 for $2m? If not, company A pays $6m in taxes over three years, versus $4m for company B.
Loss carry-forwards are not a "subsidy for losing money." They're a mechanism for getting the right answer integrating a continuous function at discrete intervals, without allowing for negative tax due. Your solution to the complexity is to just punt and give the wrong answer.
When you're talking about "low-profit" businesses you're talking about every single retail establishment from Amazon to Walmart to your neighborhood hardware store to every single restaurant you've ever been to.
I think you'd be pretty upset if all of those businesses closed their doors due to a massive tax increase.
At the basic level, corporations should be able to operate and turn a profit, regardless of whether they're low or high margin. That shouldn't even matter in a discussion, since both high and low margin businesses create jobs, and are a good thing for the economy. Some businesses just need bigger scale, but that doesn't make them worse businesses.
Yes, they're avoiding taxes, but a lot of these companies are still highly profitable without the tax avoidance aspect of it. That's just the 'icing on the cake', and I'm pretty sure if they didn't, some (activist) shareholder could probably force them to do so. This is the world we live in. In the end, tax is just another corporate expense.
This tax problem can't be solved without significant international cooperation, and I'm a big fan of simplifying the tax code of countries globally.
> At the basic level, corporations should be able to operate and turn a profit, regardless of whether they're low or high margin.
Nobody has a right to the profits they are accustomed to. Buggy whip manufacturers have no right to make a living. And businesses that require exotic tax exemptions to exist might fall in the same category. Again, I think it's more fair to gradually phase out current tax schemes and phase in new ones so the economy isn't shocked by a massive rule change, but I don't see why any business has the right to broadly fix the current tax rules in place forever.
And, at the end of the day, any tax increases will be (and are) passed on to end consumers. It's not as if gas stations go out of business because their expenses go up (oil prices, credit card fees, etc.). They raise and lower their prices to accommodate price changes. And longer term, they adjust their business models as well.
All that being said, I don't even really care about gross vs. net taxation. I just believe this line of thinking doesn't add up.
The comment you're responding to is appealing to efficiency, not to entitlement and proprietary rights to profits. The problem with turnover taxes is that they're inefficient, not that they're immoral.
Actually, I suspect the law was in place more to entrench existing Canadian factories than promote new ones. (eg, 1 or more of the 3 cars were already made in Canada)
The bridge between Windsor, Ontario and Detroit, Michigan is likely the most-travelled on the continent, carrying 25% of US-Canadian trade, and $13Bn of assets, mainly due to the large auto industries of both countries.
Yeah, it sounds like this is specifically geared around a disincentive for moving jobs out of the country. I couldn't see anything like this being applied in the digital world, since it's not as easy to move your offices out of Toronto of Vancouver to Mexico or China as it is to move your factory.
It is literally impossible to charge corporations on income instead of profit.
Let's walk through an example. I call a plumber to replace a water heater, which they provide. They charge me retail for that water heater. Plus sales tax. Now of course, they have to charge me corporate income tax for that whole amount. Including the sales tax, by the way, because that's income.
The hilarity doesn't end there. The plumber bought the water heater from the manufacturer. Let's assume that was at some discounted rate, maybe a 20% discount off of retail. Ok, so 80% of the retail value of that water heater is income to the manufacturer. They have to pay corporate income tax on that whole amount now. But wait, corporate income tax was already paid for 100% of it by the pluming company.
We're still not done. It turns out that water heaters are a commodity and there isn't much margin in the business. They already can't afford to pay the corporate income tax, but it still gets better. All the manufacturer does is assemble the parts. They buy the parts from other companies, and some components go through multiple companies. At each step, each of those components was income for the manufacturer or assembler of the part.
Basically you end up triple taxing or more, the various parts of the system.
Believe it or not, it gets worse!!!
An astute observer would notice that the easiest way to avoid as much corporate tax as possible is vertical integration. In other words, if the plumber, water heater manufacturer, and all of the subcontractors and sub-manufacturers involved all worked for a single giant corporation, they'd only have to pay corporate income tax once on the water heater and all of the components within it.
In short, companies would be forced to move to countries that did not implement corporate taxes. Companies that are unable to do that would be forced to combine into as few companies as possible to avoid corporate taxes.
Remember, taxes discourage the behavior that is being taxed. Corporate income tax discourages the transfer of money between corporations. That just means there would be fewer, larger corporations. And of course, more expensive goods and services. Assuming the entire world implemented corporate income tax simultaneously. Without that, there would just be massive shifts of businesses away from countries with corporate income tax.
The OP specifically is advocating for something without loopholes that just looks at top line revenue.
VAT is absolutely not that.
I was illustrating how impossible it is to just look at top line revenue of a corporation.
Also, if by solved you mean prevents double taxing through a production pipeline then sure. But it boils down to a sales tax which in general is regressive compared to typically progressive income tax.
Yes, I meant the former. I didn't mean the latter since that's your conjecture (three in fact: 1. VAT boils to sales tax; 2. sales tax is regressive; 3. VAT is regressive) that I don't necessarily agree with.
The devil is in the details but the principle of taxing money where it is made is sound.
Taxing revenue instead of profits could be a solution for example by shifting all the tax to the VAT (and then having a single VAT rate in the EU). Then Apple and Google would start paying back on the property rights, patent rights, copyrights, trademark rights, infrastructure, rule of law and well educated consumers they enjoy in Europe.
This might sound reasonable on paper but in reality it's a pretty big deal. Taxing corporate profit (however ineffectively) is very different from taxing consumption like VAT does.
Inasmuch as the tax gets passed on to companies, it can push teetering companies out of business. A company with no profits 9for real) pay no corporate tax. Second, corporate taxes are more or less like capital gains tax, in many cases a capital gains tax on foreign citizens that own shares in that company. Taxing the rich is hard. Taxing the poor is relatively fruitless and morally questionable. This is why a lot of the burden (as a percentage of income) falls on the middle class, who are easiest to tax. A VAT is a "flat" or moderately regressive tax. To replace corporate tax revenues with more VAT, poor and middle class people would have to pick up the share currently paid by rich people and foreigners.
The current tax systems with the various types of taxes are evolved to maximize tax revenue, and to a certain extent GDP. A fairer system that "costs" the tax office 5-10% of their revenue is off the table. Most kinds of taxes are maxed to the point where raising them would either (1) not actual produce more taxes^ (2) produce immediate political reactions (3) harm the overall economy too much.
When you are super-optimzed for one thing, its' hard to optimize for something else, like fairness.
^EG, if the high marginal income tax is 50%, increasing to 70% will not realist in a 40% increase in revenues from that tax bracket because the incentive to earn (declared) income goes down.
A single EU VAT rate would be very harmful because no gov would be able to boost consumption by reducing VAT rate, it would also force small business to collect VAT as soon as they sell their first product.
What exactly would be the argument for allowing individual small governments to play with their economies like that? The risk analysis gets completely skewed by the fact that the EU implicitly backs the economy anyway. That just sounds like a recipe for another Greece.
The EU implicitly backs Eurozone countries because it has to, the UK is not a Eurozone country. The UK should definitely be able to control it's own taxes, the only alternative is fiscal union.
Sorry, I heard "Single EU VAT" and assumed you were talking about the Eurozone. Unifying taxation in the absence of unified monentary policy makes no sense to me anyway, so sure: I agree then. :)
I'm not sure how your conclusion follows. Why would having a single shared VAT rate imply that you couldn't have a minimum threshold before VAT registration is required?
If anything about VAT is going to cause grief for small B2C tech businesses in Europe, it seems more likely to be the changes affecting them from 1 January 2015 precisely because the VAT rates in different European countries are different.
Taxing profit is silly because you care about the "pointer management" that companies do, which requires things like costing QA done in another country. It is far easier to just tax property, sales, dividends, personal income, and capital gains than it is profit. Roughly in that order too.
To be fair -- taxing profit does encourage companies to spend their money.
Also, taxable personal income and capital gains are taxes on profit -- I don't understand how that's easier. Any money spent on personal needs is taxable (see "The Situation" who tried to say tanning was a company expense) regardless of whether a person or company spends it. You're also able to write off business expenses whether you're a company or a person just the same too. Income tax is really a tax on profit, not total income. It just happens that people tend to have mostly profit (since they save their money or spend it on personal needs) and for most close to 100% of their income is taxable so they assume big bad corporations are getting some advantage they aren't entitled to which isn't really true at all.
> Income tax is really a tax on profit, not total income.
If you run a business, that's largely true, as your sole-proprietor income tax is calculated very similarly to how business profits is calculated. But individuals who earn their income via employment (which is most of them) more often pay a tax on their income rather than profits. Some expenses are deductible, but many of the most common ones are not. For example, commute expenses are typically not deductible [1], even though they are probably the most frequent cost incurred solely as part of earning income. Work clothes are also often not deductible: they are only deductible if they are both formally required by the company, and of a kind that is dissimilar from non-work clothing. So e.g. buying a suit for interviews and/or meetings is not deductible, even if you only bought it for and only wear it for income-earning purposes (I have personally never worn my suit in a non-work context). It's also difficult to deduct the cost of a computer, even if your field is computing and you use it mainly for work and skills development (though it's possible in some cases, if the employer formally requires you to have one at home and doesn't provide it).
I'm generally not a fan of income tax, since I think it creates a bunch of problems and economic inefficiencies, like the middle class cleaning their own houses while there is a sizeable unemployed section of the economy, but the huge difference between corporate profit and personal income is that a person has citizenship (generally), has to live somewhere, cannot expense the majority of his or her purchases, and cannot be financially controlled by a foreign entity with differing laws.
Yes it does create problems like "is driving to work a work expense?" but those problems are generally solved.
The fact that they wrote it as profit rather than revenue tells me that the people drafting it were either on the Banker's doll such that it is just window dressing, or the legislators are criminally inept.
The incentives to give back don't exist unless you take a chunk of the money before it can be put back into their own pockets. Not that I think this should be done this way, but it's silly to think they are going to be able to recover significant profits from these banks.
Well, those practices for manufacturing have carried over into tech datacenters with all the kickbacks FB/Goog et. al. are getting from States like Iowa (iirc).
When, in naval-gazing films and TV, an entertainer character insists on x % of "gross" revenue, this is why.
There've been many articles and posts cited on HN that go into the tortured, and very profitable, machinations of entertainment industry financing and accounting.
Some argue towards making such finance, e.g. taxes, simple to the point where it can't be gamed. The tradeoff is that finance is used as much if not more so than overt legislation, to steer policy, investment, and ultimately -- imperfect as they are -- outcomes.
I'm not saying simplification is wrong. But keeping your system intact while you do it, is... well, not as simple as it might seem.
But there is a lot of potential benefit. How much further would clean(er) energy be, if we weren't propping up carbon fuels to the tune of billions in subsidies every year (including a substantial part of e.g. the U.S. military budget)? Would the Mid-East be quite such a mess, if no one was continually pouring money into its weapons systems and dictatorships?
Anyhoo, I typed way more than I intended.
When an outfit is doing fantastically well, to all appearances, yet the profit is missing, then start looking at / going after the gross. They have to pay their way, just like everyone else. Perhaps all the more so, the more they insist upon being a "corporate person" with "personal" rights (e.g. speech, et al.).
----
P.S. As an actual person, with a few policy-minded exemptions aside, I am taxed on my gross income. Not my net. (E.g. I don't get to deduct my groceries, nor my auto insurance, nor...) (Although, state sales tax in the U.S. does vary by state and is often, when lowered, meant to lessen the regressive nature of said tax for low income earners with respect to essential goods -- you gotta eat.)
Home owners get to deduct mortgage interest, while renters get no such break even though a significant chunk of their rent may effectively be paying the interest on the landlord's mortgage for the property. Pushing home ownership in the U.S. as a policy that apparently veered into the extreme, providing lots of marginal loans as raw inputs into the financial machinations that propelled the 2008 Great Recession.
Anyway... I'm taxed against my gross income. There's no magic rule that says businesses can only be taxed against their net. It's all policy -- not natural law. And when they game the system beyond all measure, they should expect that, sooner or later, policy will be changed.
The problem is in good part that, if they can make it later enough, they become another "too big". They've captured their regulation.
I get to deduct a select subset of expenses. And if I try to claim I am living from year to year with a negative net, the IRS is going to want to know how this is possible -- in detail.
At one point, I personally rolled up the annual corporate net profit for over a billion U.S. dollars of gross revenue. It came out to (for various reasons I won't go into, here) circa 4 million. That's a much larger percentage of expense than I get to deduct in my personal life.
I realize this is a simplistic example. But when things start to get this extreme, we need to take a look at who is paying the taxes that benefit whom? Is this anywhere close to in balance and each "entity" paying their own way?
Paying their own way not just on principle, but because if they aren't, they may have a distorted and "inefficient" (I might chose the word "destructive") business model.
Should we in the U.S. really have to e.g. provide food stamps and other benefits out of tax revenue -- which has increasingly shifted to come primarily from individuals rather than businesses -- to Wal-Mart employees?
And many of the investment entities and their management that benefit in outsized measure from such... subsidization, are ostensibly paying a 15% rate -- before they whittle this down even further.
It's harder to compete with the "big boys", when you are facing an entirely different cost structure. Not just economies of scale, but finance and policy of scale.
Why are we paying companies so they have the privilege of taking our money?
Companies don't pay taxes. Ever. Their money comes from customers buying their products and services. If they are not taxed, they can offer a lower price to the customers. If they are taxed, that simply means higher prices for customers.
> If they are not taxed, they can offer a lower price to the customers.
This assumes the owners are targeting some set return rather than pricing their products at whichever point the market can bear, which is a giant, unsubstantiated assumption.
If GM was paying an effective 5% tax rate, which was then cut to 0%, do you honestly think they would lower prices? Yes, I know the theory that Ford would get the same benefit, then lower their prices in competition, but history has repeatedly shown that this is unlikely to result in a price war. Informal collusion is fairly easy to maintain and it's unlikely that the marginal loss in sales from a 5% price premium would be enough to offset an additional 5% booked straight to profits.
I don't think it does. Any sensible business avoids tax i.e., minimizes its tax bill. If it gets up to what are perceived as evident shenagans to do this, governments can change the law (as has been announced today in the UK) and consumers can decide if they still want to do business with the company. 'Don't drink their coffee' would be the advice re Starbucks, would it not? Good deals usually but not always add up to good business which equates with making more money. If Starbucks offer a lousy deal then presumably they'll either have to change the deal or go down. Plenty of other places to drink coffee.
> If they are not taxed, they can offer a lower price to the customers. If they are taxed, that simply means higher prices for customers.
Conversely, if employees were not taxed, they could work for lower salaries. Individual taxation simply means higher labor costs for businesses.
Corporate taxation is part of a complicated system. It's easy to isolate it and say that companies don't pay taxes because they simply pass the costs onto consumers but the same argument can be made the other way, because they're both part of an integral whole.
It boggles my mind that otherwise intelligent people have a hard time grasping this simple concept. Taxes are simply another cost of doing business, especially if they are applied to whole categories.
Even if they are applied to specific companies (to favor domestic companies, for instance), then they still have largely the same effect, since they allow the domestic competitors to compete in the market inefficiently, raising prices on the consumer.
It's easy to understand that taxes are simply a cost of doing business, but intelligent people disagree that prices would decrease with any certainty if taxes were cut.
Companies don't set prices for products to achieve some specific return, they set prices at the highest point the market can bear. Cutting their tax rate doesn't have any impact on the greater market, so it's unlikely that prices would move at all. The more likely outcome is that owners and shareholders would see higher profits -- which definitely isn't a bad thing, but it's a very different proposition than a general price decrease for consumers.
I have used it, but it is too limited. If they had made it a variable scale (i.e. 0-5 stars) that would have made it vastly more practical and functional.
The way that it is presented as a "remember this item" or "note this for later reference", is completely redundant when you consider that everything you archive is "save this for later".
So to actually answer your question: No. I tried and gave up.
Will the KDE people get the message?
</troll>
Sorry I had to get that out of the way.
In all seriousness, 'Semantic Web' has always felt like a SciFi inspired version of AI intelligence. A concept that sounds cool, but in reality can't ever work.
Take movie ratings & "suggested viewings" for example.
Jim, Bob, and Steve all watch the same movie.
Jim thinks it's funny because of the physical gags.
Bob thinks it's funny because of the dialog & jokes.
Steve likes it because the hot new actress is naked.
Dave likes the director and cinematography.
All 4 guys give it a rating of 4/5.
With this one data point Streaming-movie-place.com cannot ever 'guess' what to suggest to these guys to offer more movies for them to watch.
The hope is that once these guys start watching and rating other films a pattern will emerge. That pattern can then be marketed and offer valid suggestions.
BUT reality is too different. We like different things for different reasons, and no algorithm can ever get it 100% right. How many of you have a Netflix queue of things that you want to see, but the suggested movies are full of crappy suggestions? most or all of us I bet.
Which brings me back to my point; it's a sci-fi illusion. It can never exist in real life. Humans are too damn fickle. (Which brings me back to KDE; I wish they would give up on neopunk/symantic desktop crap. it's bloated, slows the system down and offers nothing in return. Or I am just using it wrong.)
</rant>
I must be in the minority (based on the comments that I have read), but I hate it.
The other day the PHB announces to the office: We are going to use Slack and move away from IM, Skype, etc.
So I signed up.
What I don't like:
-you need to keep a a tab open all the time,
-you need to keep an eye on that tab in case something comes up,
-the 'notifications' don't work all the time (Archlinux + Firefox)
It's like somebody took all the bad qualities of IRC, and shoehorned it into a web-page and all the horror that brings.
The features that I don't understand:
search-able logging of messages. Email and/or Pidgin already does that.
Group messages: Email already does that.
Transferring of files: Email and/or corporate LAN shares already do that.
But it does add the necessity of stopping my workflow every 5-10 minutes so I can check to see if there are any messages that _might_ apply to me.
The quicker it can be killed with fire the happier I will be. Or am I missing the point?
curmudgeonly - check
beard - check
Unix admin - check
Perhaps there is no hope for me. Next thing you know people will want to take pictures with their cellphones! =)
That's a bummer. I use Slack on Mac+iOS with the "native" app (which really just frames the web app but helps integrate notifications, etc.)
For the most part I experience none of the issues you mention. I get pinged when my name is @'d or on some emergency channels where I have it set to ping me on any message. I find it massively more useful and less distracting than IM+Email.
The one notification challenge I do have with it is that channels can move quickly enough that if I get @'d more than once while I'm afk for a bit it's easy for me to to respond to the latest ping I got but not catch earlier ones. I'd really like it to have a separate view that summarizes your mentions.
As for the features you don't understand:
- Email doesn't give you search for conversations you weren't a part of to begin with. That's the huge upside of a transparent-by-default tool like Slack when it comes to search. I can search for "Solr latency" and find conversations I wasn't a part of, from a time I may not have even been an employee. That's huge.
- File transfers - same, see above for email. Corp Lan shares rarely get search/indexing right.
Oh and FWIW I'm at least 70% curmudgeonly neckbeard too :)
Honestly, there is now way on earth I'd allow my company to use Slack given their Termination clause. It's a nice idea, but total loss of control of your data is just not worth it.
<snip>
We also reserve the right to terminate your account (or the access privileges of any end user) and this TOS at any time for any reason, or no reason, with or without notice. Upon termination of your account, we will have no obligation to maintain or provide Your Data, and will delete or destroy all copies of Your Data in our possession or control, in a reasonably expedient way, unless legally prohibited.
</snip>
"We can terminate your account for any reason" is a legal term which should be in every SaaS's (default) terms of service. Your lawyer will be happy to explain why. If you'd like a less formal explanation, consider what happens when you get a phone call at 4 AM in the morning which begins "Hello, is this the owner of $COMPANY? Great. This is Sgt. Stevens with the $CITY police department. I have a lawyer named John Smith in my office here. Mr. Smith alleges that you're assisting in the violation of a temporary restraining order."
Data retention is a separate issue, but I can envision reasons why I'd want to reserve a maximally "We don't owe it to you" clause, as a SaaS operator. (Slack, for example, allows arbitrary file uploads. This is a high risk feature, for a lot of reasons, data security, copyright compliance, and explosive reputational risk being only three of them.)
As a separate matter: if these clauses discomfit you, speak to enterprise sales. For $10,000+ you can negotiate better ones. If you do not wish to pay $10,000+, that's fine, but you don't get custom legal language.
> "We can terminate your account for any reason" is a legal term which should be in every SaaS's (default) terms of service. Your lawyer will be happy to explain why.
For a free account this might well work.
For a paid account, a unilateral-termination right, if not worded properly, could kill all the legal protections of the terms of service by turning the TOS into an "illusory contract." [1] The SaaS provider could lose its limitations of liability, choice-of-law and choice-of-forum clause, arbitration provision, etc.
A better approach might be to provide that the SaaS provider can temporarily suspend the account for good reason, and perhaps enumerate some example reasons. That could be coupled with a termination for cause clause (with termination following notice and an opportunity to cure except in egregious cases).
Usual disclaimer: I'm not your lawyer, this isn't legal advice, YMMV, small differences in fact can make big differences in outcome, check with your own lawyer before making decisions, etc., etc.
I guess I don't get it. When you terminate the account you can stop accepting payments and auto-trigger a pro-rated refund. Then the consideration is "the service, while you used it" or "the money, while we accepted it", depending on which party you are. Can you expand on that idea?
> When you terminate the account you can stop accepting payments and auto-trigger a pro-rated refund. Then the consideration is "the service, while you used it" or "the money, while we accepted it", depending on which party you are.
That sounds right --- the key difference is the refund, which wasn't mentioned in Patrick's original post.
If termination is for cause, you might not have to give a refund (although it'd look better to outsiders, and thus be more defensible in court, if you did give a refund).
Sure, as a provider, you want to have absolutely no binding obligation to the person you are providing service to.
Of course, conversely, as the person receiving service, you absolutely want the provider to have binding obligations -- and "we can cancel this at any time for any reason or no reason with no obligation to give you anything, including your data, afterwards" isn't what you want from a service you are relying on in any kind of business use.
> As a separate matter: if these clauses discomfit you, speak to enterprise sales.
Or just don't use the service that offers them. The reason services use boilerplate like this isn't that its essential, its that the perceived cost/benefit ratio warrants it because most people don't read TOS and don't change behavior based on them.
I think your comment conflates purpose and efficiency. This might be because you've only used slack for a few days now, and haven't realized its full power.
While email can be used for group communication, it's not ideal for the typical, constant interactions of a small team. Let's consider one use case. In email, file sharing with an individual is a multi-step process (new message, select recipient, insert subject, add attachment, write comments, send). In slack, you click upload, select file, and it's sent. No formality or friction in creating a new thread, selecting recipients, ad infinitum. Not to mention, it's hard to discover all the files shared between you and a group of people via email. This is important in an organization. A similar argument could be made for search and group messaging.
This snap judgement is the equivalent of suggesting that you'd forgo wearing gloves in the winter because wrapping warm pieces of fabric around your hands serves the same purpose. Purpose ≠ efficiency.
p.s. the desktop app > keeping a tab constantly open :)
> While email can be used for group communication, it's not ideal for the typical and constant interactions of a small team. Let's consider one use case. In email, file sharing with an individual is a multi-step process (new message, select recipient, insert subject, add attachment, write comments, send).
That's not so much a feature of "using email" as "the UX of a typical general-purpose email client". But, heck, the UX of sharing-via-email from even a typical Android app is somewhat more streamlined than what you present, and the same is true of many desktop apps that have email distribution as a feature. The recieving side is still a problem, though the kind of progress in email clients we've seen with -- just to look at gmail as an example -- schema-based actions and Inbox's workflow -- suggests that we may not be too far from the time when the recieve workflow for document-sharing-via-email is improved, after a fairly long period where email client workflows were fairly static.
> Do you realize you can connect w/ any IRC client?
Isn't that an horrific end-run around corporate security? or does irc.slack.com provide IP address whitelisting to restrict connections to those from within the company? Client SSL cert checking?
It just seems like a remarkable focal point that could give access to a lot of sensitive corporate data.
Look at all the sibling replies.... You just have to get a Mac - works great there! It's like Windows of 15 years ago, redux.
I've had the same experience as you with Slack and Hipchat. The front end guys with the shiny tools love it, and I live with it.
To the extent you're missing the point... it lets people that might not be able to set it up otherwise have secure messaging across desktop and mobile, and a unified place to have all the features that you mentioned vs getting familiar with nc/scp/ftp, grepping chat logs, etc.
That said, they must have one hell of a demo deck (or secret master plan) to get a $1B+ valuation.
I can't help but feel that HipChat have somewhat got the rug pulled from under them. Yes, they have done ok in their own right, but they've missed a few tricks as well.
One of the most important for our team is the ability to be signed into multiple organisations/accounts at the same time. Slack handles this perfectly, and HipChat not at all. I don't think I've seen a uservoice request with more votes than HipChat has for this http://help.hipchat.com/forums/138883-suggestions-ideas/sugg...
At least with hipchat I managed to get desktop notifications working in KDE + Firefox. I tried connecting to hipchat via the XMMP interface but it was horrible and didn't work very well. <rant> I fail to see what any of these "new-fangled" chat systems bring over IRC with a bot that tracks all the convos for history searching. </rant>
* > <rant> I fail to see what any of these "new-fangled" chat systems bring over IRC with a bot that tracks all the convos for history searching. </rant>
Easy: our entire agency (70+ people, half designers/developers, half management, client and accounts, etc) is using it, no matter how tech-savvy they are.
I love IRC, and I ran an IRC server for us developers for a good 6 months, but got us to switch over to Slack for the sole reason that accounts management and PMs are happy to use it, and we get transparent searching across every chat :)
Yup, I evaluated Slack and HipChat about a year ago and went with HipChat mostly because of Slack's lame Windows user experience. (IMHO, the Slack client also had too many bells and whistles. I would've like a default "simple" mode that just is an IM client with group chat.)
The funny thing is, I'm pretty sure the HipChat client is (or at least was) mostly just a shim around a web browser with some notification stuff bolted on. This doesn't need to be a huge undertaking.
Maybe it's changed since I last looked, but they didn't have a client at all. You could download Chrome and then install an "app" through the Chrome store. Well, some of my users prefer Firefox... I don't know, it just wasn't a great onboarding experience.
In retrospect, though, I might've gone too far the other way -- hipchat is pretty bare bones.
Slack's lack of a native Windows app sunk it for our org - then the rest adopted Hipchat and I think it is too late for us. I would love to use Slack, alas.
> people that might not be able to set it up otherwise
And also people who want it, are able to set it up, but would prefer to pay someone else to do it for them. Lots of useful services simply deliver something that people want, could do themselves, but prefer not to. Like and email providers and restaurants.
The valuation "sounds high", but they've shown that they can deliver a product that many users love and many individuals businesses will pay actual money for. I was shocked when I read the amount, but at least they sell a product!
I follow a public company that reported earnings recently, is in a fragmented multi-10-billion segment, has fundamental patents in it's field, and has 9-figure revenue. They have a valuation 1/10 of Slack's. I have no beef with Slack, but the valuation seems completely detached from fundamentals, or reality for that matter. I'm not hating, I hope all the founders & early contributors do great and never have to work again... but it is a high valuation.
I'm not sure those two mean real downside protection - but your point is correct - the VCs are betting on the very small chance that Slack is actually adopted by a huge number of businesses. Right now I'd guess it has a fairly narrow adoption among leading edge companies and SF/Valley natives. I'm sure there are exceptions to this - or maybe they truly have moved beyond that core audience and that's what is driving the valuation.
But that's what VCs do - make a large number of bets that will fail and one that blows it out the park.
Their valuation is a reflection of the growth in Slack's business - meaning they have strong enough growth that they can command that kind of valuation on a huge raise. It is also like a reflection on the limited number of companies that have that kind of growth.
But these kind of valuations also create a high-wire act for the companies in my experience. Growth must be maintained at all costs to justify the valuation. They spend like they're going out of style because of this.
From an information management perspective. Fewer clients (that Slack supports) and oauth2 integration (identity mgmt/password policies). Fewer opportunities to shoot yourself in the foot managing it, IMO.
Chrome lets you create apps that open in separate windows.[0] Then it's precisely as bad as any other IM app.
> you need to keep an eye on that tab in case something comes up
If your team members don't @ you when something might be relevant to you, sure. However, if they don't, you can just check every hour or so and get back to them. That's the beauty of Slack - it sits somewhere between IM and email, not everything has to be instant (because everything's saved and you can read it at your pace) but it has the ability to be used as such when enough people are around.
Eleven Giants, the team working on repairing Tiny Speck's previous game, uses Slack like this. Nobody's ever all going to be on at the same time, but everyone can join discussions.
> the 'notifications' don't work all the time (Archlinux + Firefox)
Never had this issue - I'd blame you using a "bleeding edge" distro.
I'm sure Firefox can do the same thing (allow you to create a shortcut to open a Firefox window in chromeless mode to a website), but I'm not sure how - hence only mentioning Chrome.
I'm with you. Maybe I'm too old to 'get it'. The progression of chat tools I've used for work collaboration: AIM -> Jabber -> HipChat -> Slack.
HipChat & Slack have some convenient features like emailing you if someone @'s you while you are away. Otherwise, I've used them all exactly he same way. I really don't get the hype.
I find the design and polish of Slack to be significantly superior to that of HipChat. Feature-wise though, I'm with you and couldn't pinpoint the differences.
HipChat is significantly cheaper and purports to offer video chat (didn't work for us the one time we tried it).
I too generally find Slack to be a more appealing user experience, though along with others I find the advantages over, say, Skype plus email to be fairly nugatory.
Because I work on a bunch of different teams for different organisations, I currently have open Slack, HipChat, Skype, and Apple's Messages, and I have to use Google Hangouts (which periodically completely kills Chrome for me) for a daily standup. I sort of miss those happy days when you could just use Adium for everything.
I still use Adium for most of my chat needs. Aim, Facebook, Gchat, IRC, Slack, etc. I'm agnostic to what service everyone else is using as long as I can login from Adium :)
The thing that I find really pleasant about Slack is that it syncs state between multiple clients really well. If I get a direct message and read it on my phone, my desktop client doesn't show it as unread. It doesn't send push notifications to my phone when I've got the desktop client open. It seems to strike a good balance between getting my attention for stuff that matters and letting me ignore stuff that doesn't.
Other group chats I've used don't do this as well. Skype is particularly awful in this regard.
For the most part, this is true, but they don't have it working quite right on Android. Opening the app from the launcher doesn't clear active notifications as it would if you launch the app by clicking on the notification. I've also gotten into a broken state where it tried to open one #channel in the wrong organization and just gave up until I quit the app and tried again.
Hopefully with this new money they can invest a bit more in their Android development efforts.
That's one of the main shortfalls I find in IRC as well. If it weren't for that (and basically requiring a bouncer/remote tmux session), I'd probably stick to IRC for quite a bit longer.
My experience is quite the opposite. I frequently get push notifications to my phone 15 minutes after reading and replying to PMs on my OS X native client.
I had the same general reaction when we tested it at our office, but I'm open to the idea that perhaps I'm missing the point.
In the press release, Butterfield says: "As the leader of a brand new product category, we have a huge advantage right now."
Does anyone know what product category he's referring to?
Enterprise collaboration seems like a quite old category to me, but maybe this is where I'm missing the point. Would be interested in hearing where I'm wrong.
I think the category he means is chat-based collaboration with a ton of seamless third-party integrations. Enterprise collaboration is too broad and elides the differences between Slack and, say, email or a wiki.
Of course, you might agree with the person you're responding to and think the differences are being exaggerated. Personally that has not been my experience.
I think he's referring to real-time enterprise collaboration. Things like Slack and Hipchat (and maybe Google Wave, but obviously that wasn't successful).
I am not the fan either, especially that even the "native" version is just a packaged web browser, and some features (like file upload) were broken when I tried. Unfortunately I do think it's a trend. Maybe someone who actually uses it could tell me why and also what makes it a 1B company?
Hm, that's a shame about the notifications. Their Mac desktop app (obviously doesn't apply that much to you) is pretty decent, I just keep it in the same workspace as my email client. I just see it as another way of communicating mostly, nothing necessarily too special. My favourite feature though is their service hooks, we have separate channels for Twitter (posts anytime our Twitter posts or gets @mentioned), Github for any activity on our repos, so I get notifications anytime someone pushes, creates an issue, etc. Obviously GH already sends email but this way all the communication is centralized, plus I hate email notifications.
I can't say I've fallen in love with it, but it's okay. The Mac app provides decent notifications - but I actually don't use it that much, I've installed the Android app on my phone and that works pretty well.
The notifications are clever enough to not ping me again on the phone if the Mac app is already running.
Integration with other things is dead simple - I had Sensu alerts sent to Slack in a matter of minutes.
I don't know. It's instant messaging, it's not like they've reinventing rocket science from scratch, but it's a good implementation of the concept, multiplatform, well integrated.
I also had slack forced on me after moving from IM to partychat, to hipchat and now slack. I didn't think it was all that great at first. However, it's really grown on me. It works really well for teams that include contractors and it's not the same level of distraction as IM.
My experience has been the exact opposite. I was reluctant to try yet another collaboration tool despite my teammates enthusiasm but after giving it a chance for a few days, I found the OSX and iOS apps extremely functional and well designed making Slack a real pleasure to use.
I think this comment will be dragged up in the future every time there's a post about the success of Slack, not unlike that first thread about Dropbox on HN.
Could the fickle finger of fate easily
cross their Buffet moat, i.e., could
this be a short term fad that fades?
If they have something solid, that is,
a much better solution for an important
problem where their solution will have
a significant barrier to entry, maybe
Fred Wilson's "large network of engaged
userrs" who have a significant switching
cost, then okay. Do they?
I think they do. We introduced slack at my employer a few months ago and we now have nearly 400 users on there. Traffic to our core mailing lists has dropped to almost nothing, I've replaced several weekly status meetings with low traffic slack channels and most of my co-workers now consider it indispensable. It's also been crucial in helping us establish a new remote office and some other remote workers.
If it's anywhere bear as transformational for other companies, I can see it continuing to grow for a long time.
I don't know about linux support, but they have native apps. This is much better than having an extra tab open all the time. As for your other concerns, you have listed a bunch of technologies that "already [do] that." Sure, there are plenty of them, but it's nice to have everything together.
Yes, as jscheel points out the native apps are far superior to the in browser option. We also link it into our production services such as pivotal, circleCI, etc to send notifications for build failures of deliverables. It's definitely a service that gets better the more you integrate it with your workflow. One stop shop and ease of use has also been a big selling point for my team
I'm on Linux and I've created a Chrome application shortcut for it (File>Create application shortcuts). At least means I don't accidentally close the tab and can launch it with Kupfer/your launcher of choice.
This is amazing, thank-you.
I would love to see the addition/option of adding static geometric shapes.
In other words this would make for an awesome wind-tunnel simulator.
I don't think I have work on the brain right now.