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Since this has gotten discussion recently, I have some thoughts on what a Minskyan profits tax would look like. First, it would be a financial profits tax. Leaving room for depreciation games, the transfer of "intangible" property etc. is not Minskyan. 1/N
A Minskyan profits tax should be aimed at regulating the financial positions of the corporate sector. Including non-financial aspects of profits distorts this functions and encourages perverse behavior. 2/N
Second, a Minskyan profits tax should tax a "broader" conception of profits. In other words, it should consider certain expenditures as allocations of profits. CEO pay, CEO Amenities, entertainment, advertising, legal,admin & accounting expenditures should all be on the table 3/N
At the very least, expenditures beyond a certain level on these categories should be considered an allocation of profits. This is aimed at discouraging the kind of expenditures Minsky identified as unproductive. 4/N
Whether Investment is legally treated as an allocation of profits should depend on the type of investment and policymaker's macroeconomic goals. As above, you could consider investment expenditures above a certain level an allocation of profits. 5/N
As an aside, discretion over the categorization of investment spending and the level of "non-profit" investment spending would be an interesting and administratively simple discretionary Administrative Agency tool for macroeconomic stabilization. 6/N
As should be obvious,such a Minskyan approach should consider interest payments as an allocation of profits.Thus, while spending on investment would reduce financial profits up to a certain point, leverage would be discouraged because of the taxing of future interest outflows 7/N
This doesn't necessarily need to be an income tax. This is certainly how an excess profits tax for the Green New Deal era should be structured. We want to encourage economy of expenditure by corporations and reduce "bullshit jobs", as Minsky was focused on long ago. 8/8
Postscript- corporate income taxes paid abroad by a holding company should be considered a "financial cost" to the enterprise, but this should be balanced by the company reporting overall entity financial profits and getting assessed over "total entity" financial profits.
In this way, financial transfers between parents and subsidiaries would have no effect over the overall tax bill. by definition, non-financial transfers would have no effect.
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