So do we need a corporate income tax?

[Trakar]

Originally Posted by WildCat

What part of that link do you think is relevant wrt limited liability corporations?

For the purposes of what we are discussing do you see limited liability corporations as different from any other defendant in a lawsuit against multiple parties?

Yes, I would prefer to eliminate "corporations" entirely and force business to operate under the context of sole or joint proprietorships (general partnerships) only, but in the link I provided and many others that are available*, I see no distinction regarding the nature of the parties being sued (especially given the context of our discussion which would not even include the existence of limited liability corporations re:post)

*-hilites are to draw attention to statements I find particularly relevent to discussion, but I encourage the reading of the entire link as I find them all supportive of my understanding and see nothing that counters my understanding in any of the links.

http://legal-dictionary.thefreedicti...eral+liability

Joint and several liability is a form of liability that is used in civil cases where two or more people are found liable for damages. The winning plaintiff in such a case may collect the entire judgment from any one of the parties, or from any and all of the parties in various amounts until the judgment is paid in full. In other words, if any of the defendants do not have enough money or assets to pay an equal share of the award, the other defendants must make up the difference

related link to above - http://legal-dictionary.thefreedicti...verally+liable

Joint and several liability is a form of liability that is used in civil cases where two or more people are found liable for damages. The winning plaintiff in such a case may collect the entire judgment from any one of the parties, or from any and all of the parties in various amounts until the judgment is paid in full. In other words, if any of the defendants do not have enough money or assets to pay an equal share of the award, the other defendants must make up the difference.

http://www.lexisnexis.com/lawschool/...ts/torts13.htm

Under traditional common law, each joint tortfeasor is “jointly and severally” liable for the plaintiff's total damages. This means that each individual is fully liable to the plaintiff for the entire damage award. If the plaintiff is unable to collect a co-tortfeasor's portion of the liability, the tortfeasor(s) from whom the plaintiff can collect are responsible for the other tortfeasor's (s') share.

many more available, none of which seem to support your contention that under a situation where there is no limited liability protection that an investor in a pension fund which buys a single share in a baby car seat manufacturer, then they might likely be held solely and individually responsible for damages in a situation where that car seat was found to be at fault in injury or death.

[Trakar]

Originally Posted by Jaggy Bunnet

You appear not to understand the information in that link.

The definition in para 1 of the document you linked to:

"Liability that may be apportioned either among two or more parties or only one or a few select members of the group, at the adversary’s discretion. Thus, each liable party is individually responsible for the entire obligation, but a paying party may have a right of contribution and indemnity from nonpaying parties."

The first paragraph is a generalized overview, the following paragraphs modify and define in detail the various aspects of the issue. What I am particularly focussed upon is the fact that in order to be arbitrarily selected and held solely responsible for the totality of damage awards in a situation where there is no limited liability in place and the co-defendants are everyone who invested (directly or indirectly - potentially 10s of thousands of individuals) in a company, it must be determined that the other defendants are judgement proof.

In the absence of limited liability this may be more of an issue in the eight states which have pure several and joint liability issues, but even here, I would expect it to be an extraordinary and highly implausible situation where an individual personal small investor in a retirement fund company which had a minor investment in another company was judged to be solely at fault due to injury or death resulting from one of the second company's products.

[Trakar]

Originally Posted by Francesca R

I suggest it is a lot less supportive of the public interest than incorporation (with limited liability) is.

I disagree, but am interested in the supporting case you would make for that contention.

What do you perceive as the public interest and how do you see the removal of limited liability (incorporation) to be a detriment to that interest?

[Trakar]

Originally Posted by WildCat

I think I see your problem, you think I'm talking about "joint liability" and "several liability" when I'm talking about "joint and several liability". Single term.

Which is the law in 46 of the 50 states. And in the states where it isn't presumably you'd have to file separate lawsuits for every shareholder for their proportional amount of the damages in your LLC-free utopia. I wonder what the filing fees alone are for, say, filing 500,000 lawsuits?

Old lady snark aside, you make my point for me. If filings are made jointly against all defendents in one suit, you don't get to select who pays and who doesn't if you win your suit. The courts may or may not allocate porpotionate responsibility (its a bit less clear in the 8 states that have pure joint and several liability) but the plaintiff is not allowed to arbitrarily select who pays what, the courts establish this, and the only reason any of the defendants wouldn't pay in this situation would be because they are judgement proof (lacking sufficient collectible assets to pay the judgment in full or even in proportionate part).

To take this back to your asserted situation, please explain the likelihood of a typical retiree who is invested in a pension fund which invests in a baby car seat manufacturer being the only plaintiff found not to be judgement proof for damages.

[Francesca R]

Originally Posted by Trakar

What I am particularly focussed upon is the fact that in order to be arbitrarily selected and held solely responsible for the totality of damage awards in a situation where there is no limited liability in place and the co-defendants are everyone who invested (directly or indirectly - potentially 10s of thousands of individuals) in a company, it must be determined that the other defendants are judgement proof.

You are still muddling this up. The claimant is not affected by how the defendant can or cannot recover her losses. The claimant can still sue one party for all sums.

[Francesca R]

Originally Posted by Trakar

What do you perceive as the public interest and how do you see the removal of limited liability (incorporation) to be a detriment to that interest?

The formation of privately operated profit-seeking businesses is in the public interest, and massively so. Joint-stock corporations with limited liability approximately co-incide with the rise in living standards since pre-industrial revolution. Abruptly ending this convention (which has been copied all across the rich and emerging world) in order to address some (unquantified) social concern may do more harm than good, to put it mildly. That kind of thing.

[Trakar]

Originally Posted by psionl0

There is little point in you putting up links until you appreciate how the legal concept of "ownership" can vary from the common concept.

The common idea where you pay for property and become its sole owner is referred to as "fee-simple". Several people can own a share of a property but they don't have to own it under identical conditions. A typical way to divide up fee simple ownership is a "trustee/beneficiary" relationship. Since a beneficiary is usually in no position to direct the operations of a trust (he may not even know the terms of the trust), it would not be reasonable to hold him liable for the operation of the trust. That responsibility falls squarely on the shoulders of the trustee.

A corporation can be considered a special type of trust. The shareholders are the beneficiaries of that trust while the directors assume the role of trustee. Although the corporation might have limited liability, the directors might not.

The context of this discussion, however, is in the setting of the absence of existence of limited liability corporations. Investors become partners in the business with proportionate liability/responsibility according to the value of their investment.

Originally Posted by psionl0

Ultimately, the concept of "unlimited liability" can't exist in practice. Once an individual loses everything, he goes bankrupt and the creditors have to eat what is left of the debt - regardless of how much it is.

Or to shift the perspective, why many defendants are considered judgement proof.

[Trakar]

Originally Posted by NewtonTrino

I do think Trakars idea is an interesting way to think about the problem. If investors were liable for the actions of those they invested in then they would probably think about something damn hard before investing. Of course this might kill the ability of companies to get investment.

Personally I would have a hard time being in business without at least some corporate shield. I don't really want to put my life savings on the line just for buying an etf or something. I suppose it would boost investment in things like property that have lower risk.

I don't think it would kill the ability to get investment, it would alter the dynamics of investments and force investors to give a lot more consideration to the businesses they were investing in. Think of climate change issues and the people invested in fossil fuel industries.

The only major change I see is that it would enhance the liability insurance industry, and though I'm not very big on the insurance industry, if it is run as a non-profit almost all of my objections and issues disappear.

[Trakar]

Originally Posted by ngc6205

Actually, the wikipedia article does support his post.

No, wiki supports the contentious legitimacy of "deep pocket" suits, but it does not support his statement that an individual small investor in a company that buys one share of a manufacturing company that is found at fault in a product liability case is likely or reasonably culpable for the entire damages due to that faulty product.

[Jaggy Bunnet]

Originally Posted by Trakar

For the purposes of what we are discussing do you see limited liability corporations as different from any other defendant in a lawsuit against multiple parties?

Yes, I would prefer to eliminate "corporations" entirely and force business to operate under the context of sole or joint proprietorships (general partnerships) only, but in the link I provided and many others that are available*, I see no distinction regarding the nature of the parties being sued (especially given the context of our discussion which would not even include the existence of limited liability corporations re:post)

*-hilites are to draw attention to statements I find particularly relevent to discussion, but I encourage the reading of the entire link as I find them all supportive of my understanding and see nothing that counters my understanding in any of the links.

http://legal-dictionary.thefreedicti...eral+liability

Joint and several liability is a form of liability that is used in civil cases where two or more people are found liable for damages. The winning plaintiff in such a case may collect the entire judgment from any one of the parties, or from any and all of the parties in various amounts until the judgment is paid in full. In other words, if any of the defendants do not have enough money or assets to pay an equal share of the award, the other defendants must make up the difference

related link to above - http://legal-dictionary.thefreedicti...verally+liable

Joint and several liability is a form of liability that is used in civil cases where two or more people are found liable for damages. The winning plaintiff in such a case may collect the entire judgment from any one of the parties, or from any and all of the parties in various amounts until the judgment is paid in full. In other words, if any of the defendants do not have enough money or assets to pay an equal share of the award, the other defendants must make up the difference.

http://www.lexisnexis.com/lawschool/...ts/torts13.htm

Under traditional common law, each joint tortfeasor is “jointly and severally” liable for the plaintiff's total damages. This means that each individual is fully liable to the plaintiff for the entire damage award. If the plaintiff is unable to collect a co-tortfeasor's portion of the liability, the tortfeasor(s) from whom the plaintiff can collect are responsible for the other tortfeasor's (s') share.

many more available, none of which seem to support your contention that under a situation where there is no limited liability protection that an investor in a pension fund which buys a single share in a baby car seat manufacturer, then they might likely be held solely and individually responsible for damages in a situation where that car seat was found to be at fault in injury or death.

Read the bits I have highlighted. You are denying this is possible when your own links say it is.

[Trakar]

Originally Posted by Francesca R

You are still muddling this up. The claimant is not affected by how the defendant can or cannot recover her losses. The claimant can still sue one party for all sums.

Ah, but wildcat isn't talking about suing one individual, he is talking about suing all 10,000 investors and then after receiving a judgement selecting who they want to pay damages.

The argument Wildcat has made amounts to this: A child's car seat fails to protect a child in a minor automobile accident resulting in the injury or death of the child. As a result of this the parents sue everyone who has even a remote financial interest in manufacturer of the car seat. After the suit is won and a settlement of $10M has been awarded, the parents decide that they really aren't that interested in the money, but they do know a neighbor who they really dislike that has $5,000 invested in a state workers pension fund that had invested a minute amount of money in that manufacturer. Now since the money isn't that important, and they have won their suit against the entire group of listed direct and indirect investors, then they can take advantage of the situation to legally take all the assets of the neighbor they don't like and don't care that it is no where near the judgement award.

What I see you saying is that the plaintiff can choose who to sue, among a group of potential defendants. I have no problems with that, I wish their attorney lots of luck in seeking to attribute sole culpability for the child's injury/death on a single minor investor in a company that was a minor investor in the company who made the child car seat.

[Jaggy Bunnet]

Originally Posted by Trakar

Ah, but wildcat isn't talking about suing one individual, he is talking about suing all 10,000 investors and then after receiving a judgement selecting who they want to pay damages.

The argument Wildcat has made amounts to this: A child's car seat fails to protect a child in a minor automobile accident resulting in the injury or death of the child. As a result of this the parents sue everyone who has even a remote financial interest in manufacturer of the car seat. After the suit is won and a settlement of $10M has been awarded, the parents decide that they really aren't that interested in the money, but they do know a neighbor who they really dislike that has $5,000 invested in a state workers pension fund that had invested a minute amount of money in that manufacturer. Now since the money isn't that important, and they have won their suit against the entire group of listed direct and indirect investors, then they can take advantage of the situation to legally take all the assets of the neighbor they don't like and don't care that it is no where near the judgement award.

What I see you saying is that the plaintiff can choose who to sue, among a group of potential defendants. I have no problems with that, I wish their attorney lots of luck in seeking to attribute sole culpability for the child's injury/death on a single minor investor in a company that was a minor investor in the company who made the child car seat.

They don't need to attribute sole culpability - if the company is responsible and, due to the removal of the limit on liability, the shareholders are jointly and severally liable then they can sue any single shareholder for the whole amount without needing to prove ANYTHING about the culpability of that shareholder.

You really do not appear to understand joint and several liability at all - even in your hypothetical, once they have bankrupted the neighbour they don't like they can pursue other shareholders for the balance, not give up on it as you suggest.

[EdG]

Originally Posted by WildCat

...those companies already paid income taxes to the country in which that income was earned so this is double taxation.

That is a fallacy. Companies deduct income taxes already paid by using the Foreign Tax Credit on their US returns. There is little or no double taxation of income earned in another country.

From the IRS: US taxpayers claimed over $90 billion of foreign tax credits on US individual and corporate tax returns in 2005. Foreign tax credits allow US taxpayers to avoid or reduce double taxation.

[Trakar]

Originally Posted by Francesca R

The formation of privately operated profit-seeking businesses is in the public interest, and massively so.

Are you trying to imply that limited liability incorporations are the only viable form of business structure, or are they merely popular because they limit liability?

Quote:

Joint-stock corporations with limited liability approximately co-incide with the rise in living standards since pre-industrial revolution.

Without getting into issues of correlation vs. causation, are you saying that limited liability is the only (or even best) way to achieve a rise in living standards, or is it merely the more popular way because it limits accountability and responsibility for profit making considerations?

[/quote]Abruptly ending this convention (which has been copied all across the rich and emerging world) in order to address some (unquantified) social concern may do more harm than good, to put it mildly. That kind of thing.[/quote]

"abruptly" is your strawman not anything I stated, the rest is (thus far unsupported) speculation at best.

[Trakar]

Originally Posted by Jaggy Bunnet

Read the bits I have highlighted. You are denying this is possible when your own links say it is.

Do you really read this way? With no regard to context and surrounding qualification?

[EdG]

Originally Posted by Bob001

... top corporate income tax rates at 35% ... He also says that the corporate tax provides only a small percentage of total tax revenues.

That's an odd argument. Corporate income tax contribution to Federal income tax revenue has fallen from 45% in the 1970s to just 7% today. That hardly seems like a case of overtaxation. What you're basically saying is that the top rate is 35% but no corporations are paying that rate or anything near it, so we should cut the rate further so they can pay even less.

[Trakar]

Originally Posted by Jaggy Bunnet

They don't need to attribute sole culpability - if the company is responsible and, due to the removal of the limit on liability, the shareholders are jointly and severally liable then they can sue any single shareholder for the whole amount without needing to prove ANYTHING about the culpability of that shareholder.

You really do not appear to understand joint and several liability at all - even in your hypothetical, once they have bankrupted the neighbour they don't like they can pursue other shareholders for the balance, not give up on it as you suggest.

THis isn't what WIldcat has asserted. If they wish to sue individual investors that is indeed their choice. What wildcat has suggested is that they can sue the manufacturer and all investors (direct and indirect) of the manufacturer and then if they win their case they may choose who among those sued they wish to be held fully liable for the damages.

[stilicho]

Originally Posted by Bob001

This writer makes an interesting point: With top corporate income tax rates at 35% and state rates added, U.S.-based multinational corporations have a strong incentive to keep overseas profits abroad. He also says that the corporate tax provides only a small percentage of total tax revenues. Others argue that corporate taxes are ultimately paid by consumers anyway as part of a company's basic overhead. So, what would happen if the corporate income tax was eliminated, or reduced to, say, 10% with most credits and other breaks abolished?
http://www.slate.com/blogs/moneybox/...stockpile.html

I am not sure the author of the article is right about "stashing" money abroad. The story tracks back ultimately to a claim made by a Richard Lane, who is supposedly an analyst for Moody's Investors Services. He claims that Apple holds $74 billion overseas but it's not clear this asset is unreported on their balance sheet or has not already been taxed. Lane is not listed on Moody's site either. Does anyone know who this man is and how he came to the conclusion that he did?

Apple's 10Q doesn't show $100 billion in cash but does have a sizeable chunk of long-term investments which is likely what "Richard Lane" is referring to. Even there, though, at least 35% is held in US government treasuries or securities, and a little less than half are under the corporate securities umbrella.

( Link to AAPL 10-Q: 10-Q )

[Francesca R]

Originally Posted by Trakar

What wildcat has suggested is that they can sue the manufacturer and all investors (direct and indirect) of the manufacturer and then if they win their case they may choose who among those sued they wish to be held fully liable for the damages.

I haven't seen that asserted. Quote where it is asserted please. I think you made that up. Several people who are more knowledgable than you on this matter have told you you are incorrect. To keep on trucking in the face of that, brandishing ignorance and bluster as though it was a badge of honour or something, is bizarre behaviour.

Give it up. You are wrong. OK?

[Francesca R]

Originally Posted by Trakar

Are you trying to imply that limited liability incorporations are the only viable form of business structure, or are they merely popular because they limit liability? [ . . . ] are you saying that limited liability is the only (or even best) way to achieve a rise in living standards

No, or I would have said that.

Quote:

"abruptly" is your strawman not anything I stated

You want to eliminate incorporation. See post 3. How slow do you want to do it if not abruptly?

[psionl0]

Originally Posted by Trakar

The context of this discussion, however, is in the setting of the absence of existence of limited liability corporations. Investors become partners in the business with proportionate liability/responsibility according to the value of their investment.

Originally Posted by Trakar in post 3

The primary issue involved with incorporation is the dissociation of individual liability . . . .

Move the goal posts much?

Even if this thread was not about corporations, you provide no justification whatsoever for your position that an individual investor with no say in running a business should be equally as liable as an investor who manages the business. Under your simplistic scenario, it would not be possible to have a trust because the beneficiaries would all have unlimited liability. Anybody who loans money to a business risks being classified as an investor (otherwise investors would classify their investments as loans to limit liability).

You clearly haven't looked at any of the links regarding joint/several liability. They definitely show that it is theoretically possible for an individual pensioner to be held liable for the losses of a business that his pension fund invested in. Of course, this is extremely unlikely. It is just an irrelevant objection of yours. Your attempt to imply that absent such risk, there is no problem with unlimited liability isn't fooling anybody.

[ngc6205]

Originally Posted by Trakar

No, wiki supports the contentious legitimacy of "deep pocket" suits, but it does not support his statement that an individual small investor in a company that buys one share of a manufacturing company that is found at fault in a product liability case is likely or reasonably culpable for the entire damages due to that faulty product.

Actually, that was not his statement. It was his question to you based upon your statement that you believe that it is not in the best interest of citizens or nations to allow limited liability to owners (i.e. shareholders) of corporations. See post #3 of this thread.

Under the concept of joint and several liability and the concept of the agent-principal relationship, without limited liability, each shareholder could be independently liable for the full extent of the liability. See here, here and here for more information about agency.

[ngc6205]

Originally Posted by Trakar

Or to shift the perspective, why many defendants are considered judgement proof.

A defendant is only considered judgement proof if they are already broke. The following is a possible unlimited liability scenario...

Three friends, Tom, Dick and Harry, each agree to invest $100,000 into a business. After a couple of years, the business has failed. They liquidate the assets for $400,000 but have $1 million in debt remaining after using the liquidation funds to pay it down. The creditors sue Tom, Dick and Harry for payment. Tom has a net worth of $75,000, Dick has a net worth of $350,000, and Harry has a net worth of $1.5 million. Assuming the creditors win the suit and since Harry has a net worth of $1.5 million, the creditors can demand that Harry pay them the full $1 million owed. It would then be up to Harry to get what he can from Tom and Dick. That may not make sense to you, but that is how it works.

[WildCat]

Originally Posted by Trakar

Which doesn't address your claims regarding "double taxation."

Did you see the "taxed again" part of the post you quoted?

[WildCat]

Originally Posted by Trakar

For the purposes of what we are discussing do you see limited liability corporations as different from any other defendant in a lawsuit against multiple parties?

Yes, I would prefer to eliminate "corporations" entirely and force business to operate under the context of sole or joint proprietorships (general partnerships) only, but in the link I provided and many others that are available*, I see no distinction regarding the nature of the parties being sued (especially given the context of our discussion which would not even include the existence of limited liability corporations re:post)

*-hilites are to draw attention to statements I find particularly relevent to discussion, but I encourage the reading of the entire link as I find them all supportive of my understanding and see nothing that counters my understanding in any of the links.

http://legal-dictionary.thefreedicti...eral+liability

Joint and several liability is a form of liability that is used in civil cases where two or more people are found liable for damages. The winning plaintiff in such a case may collect the entire judgment from any one of the parties, or from any and all of the parties in various amounts until the judgment is paid in full. In other words, if any of the defendants do not have enough money or assets to pay an equal share of the award, the other defendants must make up the difference

related link to above - http://legal-dictionary.thefreedicti...verally+liable

Joint and several liability is a form of liability that is used in civil cases where two or more people are found liable for damages. The winning plaintiff in such a case may collect the entire judgment from any one of the parties, or from any and all of the parties in various amounts until the judgment is paid in full. In other words, if any of the defendants do not have enough money or assets to pay an equal share of the award, the other defendants must make up the difference.

http://www.lexisnexis.com/lawschool/...ts/torts13.htm

Under traditional common law, each joint tortfeasor is “jointly and severally” liable for the plaintiff's total damages. This means that each individual is fully liable to the plaintiff for the entire damage award. If the plaintiff is unable to collect a co-tortfeasor's portion of the liability, the tortfeasor(s) from whom the plaintiff can collect are responsible for the other tortfeasor's (s') share.

many more available, none of which seem to support your contention that under a situation where there is no limited liability protection that an investor in a pension fund which buys a single share in a baby car seat manufacturer, then they might likely be held solely and individually responsible for damages in a situation where that car seat was found to be at fault in injury or death.

I have no idea how you think what you posted supports your claim and not mine.

[WildCat]

Originally Posted by Trakar

Ah, but wildcat isn't talking about suing one individual, he is talking about suing all 10,000 investors.

Slow down Trakar, read my post again. That scenario was if and only if you got your way and ended limited liability. It is not the case now, because there is limited liability so the corporation is sued instead of the thousands of individual investors.

[WildCat]

Originally Posted by EdG

That is a fallacy. Companies deduct income taxes already paid by using the Foreign Tax Credit on their US returns. There is little or no double taxation of income earned in another country.

That's right, and then the profits (less taxes paid) are taxed again.

How does this not support my case?

[Francesca R]

Originally Posted by EdG

What you're basically saying is that the top rate is 35% but no corporations are paying that rate or anything near it

Which suggests an abundance of distortionary behaviour and unproductive effort in negotiating a highly complex code of exemptions. IIRC most tax design experts argue that a broader tax base with a lower rate is less inefficient than a narrow one with a high rate riddled with loopholes. The latter also indicates a legacy of politically motivated pandering to special interests who have succeeded in regulatory capture.

Quote:

we should cut the rate further so they can pay even less.

Or reform the tax code. Except the evidence to date is that this is beyond reach of US politicians.

[Jaggy Bunnet]

Originally Posted by Trakar

Do you really read this way? With no regard to context and surrounding qualification?

Project much?

I know what joint and several liability is because I need to know it to do my day job.

You don't, as is obvious from your posts here. For some reason you are choosing to ignore all the people who are telling you what it means and continue to insist your misunderstanding is in any way connected to reality.

Why?

[EdG]

Originally Posted by WildCat

That's right, and then the profits (less taxes paid) are taxed again.

Where do you draw this erroneous conclusion from? Here's an extremely simplified example: US Corporation XYZ earns one million dollars in England. The corporate tax rate in England is 26%, so XYZ pays $260,000 in taxes to England. The corporate tax rate in the US is 28%, or $280,000 on one million in earnings. XYZ claims the Foreign Tax Credit of $260,000 paid to England, leaving a balance due of $20,000 to the US.

As I said, there is no double taxation of foreign earnings and your statements claiming such are wrong. The only earnings associated with corporations that can be considered as double taxed are dividends paid to shareholders, which are taxed at a reduced rate of 15% because of the imputed double taxation.

[Trakar]

Originally Posted by WildCat

I have no idea how you think what you posted supports your claim and not mine.

Because what I am quoting seems to be saying that the culpability for damages is determined by who has the ability pay, not by any preference choice made by the plaintiff. I am understanding your statements to be saying that the plaintiff can select at will who, among the defendants, must pay any judgement.

[psionl0]

You must have ngc6205 on ignore.

[Metullus]

Originally Posted by Trakar

Because what I am quoting seems to be saying that the culpability for damages is determined by who has the ability pay, not by any preference choice made by the plaintiff. I am understanding your statements to be saying that the plaintiff can select at will who, among the defendants, must pay any judgement.

No, he is saying that the plaintiff can select who, among the possible defendants, he wants to sue and from whom he will seek recovery off the entirety of his claimed damages.

ETA: If the plaintiff sues more than one defendant and prevails against them all, and if they are jointly and severally liable, the plaintiff can collect his damages from any of them. They are each on the hook for the entirety of the judgement.

[Trakar]

Originally Posted by Jaggy Bunnet

They don't need to attribute sole culpability - if the company is responsible and, due to the removal of the limit on liability, the shareholders are jointly and severally liable then they can sue any single shareholder for the whole amount without needing to prove ANYTHING about the culpability of that shareholder.

You really do not appear to understand joint and several liability at all - even in your hypothetical, once they have bankrupted the neighbour they don't like they can pursue other shareholders for the balance, not give up on it as you suggest.

This isn't about who is sued, the entire group of investors is sued in one suit, it is about the plaintiff choosing after the case has been won, which individual defendant they want to pay the damages. I say that the plaintiff doesn't have the right to pick and choose who they want to let off the hook and who they want to pay the damages. Wildcat seems to be saying that they can arbitrarily choose among the defendants who they want to be held liable.

[Trakar]

Originally Posted by Francesca R

I haven't seen that asserted. Quote where it is asserted please. I think you made that up.

http://forums.randi.org/showpost.php...2&postcount=35

Originally Posted by Francesca R

Several people who are more knowledgable than you on this matter have told you you are incorrect. To keep on trucking in the face of that, brandishing ignorance and bluster as though it was a badge of honour or something, is bizarre behaviour.

Give it up. You are wrong. OK?

Until someone points toward something that compellingly supports what Wildcat has actually stated, then it doesn't matter how many people support things that are kinda similar if they were reworded and meant something different. If my understanding is mistaken, then I am mistaken, but until I have compelling support for a different understanding I have no basis for changing my current understandings.

Here is my understanding of WIldcat's statement:

"In a world without the protections of limited liability afforded by incorporation a person could jointly sue all people who had any imaginable financial interest in a company (example he gave was an individual invested in a pension fund that purchased one share of a company that manufactured child car seats) and if they won the suit they could select any single person from that group of potentially 10s of thousands of people with a financial interest, whom they wished and hold them entirely liable for the damages."

IF this understanding of Wildcat's statements (which I've reiterated as such several times) is mistaken, then our disagreement is based upon mistaken impressions of what has been stated. If wildcat rejects the above paraphrasing as wrong, incorrect and not what he was trying to state or imply then my objections are removed.

It would have been much more simple, however, if he had just corrected me, when I asked him about this understanding in my first several replies to him.

http://forums.randi.org/showpost.php...7&postcount=10

http://forums.randi.org/showpost.php...0&postcount=17

[WildCat]

Originally Posted by EdG

Where do you draw this erroneous conclusion from? Here's an extremely simplified example: US Corporation XYZ earns one million dollars in England. The corporate tax rate in England is 26%, so XYZ pays $260,000 in taxes to England. The corporate tax rate in the US is 28%, or $280,000 on one million in earnings. XYZ claims the Foreign Tax Credit of $260,000 paid to England, leaving a balance due of $20,000 to the US.

As I said, there is no double taxation of foreign earnings and your statements claiming such are wrong. The only earnings associated with corporations that can be considered as double taxed are dividends paid to shareholders, which are taxed at a reduced rate of 15% because of the imputed double taxation.

Huh?

The company owes no money at all to the US government on profits earned overseas, until and unless they bring those profits back to the US, in which case it is taxed as income all over again. So they leave it offshore where it sits until needed elsewhere.

I'm unaware of any other country that does this, and I don't think it's good policy to encourage US corporations to leave their foreign profits outside of the US.

[WildCat]

Originally Posted by Trakar

Because what I am quoting seems to be saying that the culpability for damages is determined by who has the ability pay

You are quite wrong, and appear to have little ability to comprehend written English.

Is English not your native language?

[WildCat]

Originally Posted by Trakar

This isn't about who is sued, the entire group of investors is sued in one suit, it is about the plaintiff choosing after the case has been won, which individual defendant they want to pay the damages. I say that the plaintiff doesn't have the right to pick and choose who they want to let off the hook and who they want to pay the damages. Wildcat seems to be saying that they can arbitrarily choose among the defendants who they want to be held liable.

No, what I'm saying is that you only have to sue a single investor in the group of investors for the entire amount. And if the tort has merit the court in a state with joint and several liability (46 of the 50 states) will hold that single investor to the entire amount of the lawsuit, and it is up to that investor to sue the others for their part.

If there are 1,000 shareholders in the corporation I only have to sue any single one of them I choose, I don't have to file 1,000 separate lawsuits, one for each investor.

[Trakar]

Originally Posted by Francesca R

No, or I would have said that.

If that is not what you are stating, then I don't understand the relevence of your statement in response to my question re: "...how do you see the removal of limited liability (incorporation) to be a detriment to that interest?"

Originally Posted by Francesca R

You want to eliminate incorporation. See post 3. How slow do you want to do it if not abruptly?

I would imagine a restructuring of this nature would require both transitional mechanisms and a transitional time frame. IF nothing else it is going to take a lot of planning and reorganization for people to transfer holdings from corporate assets into individual or partnership business assets, likewise assignments of debts and obligations will take time to sort through. Additionally there is the issue of all the corporate contracts and agreements that would need to be renegotiated. From the time such a course was decided upon until it could be fully adopted and implemented would probably take at least a decade.

[Trakar]

Originally Posted by psionl0

Originally Posted by Trakar

The context of this discussion, however, is in the setting of the absence of existence of limited liability corporations. Investors become partners in the business with proportionate liability/responsibility according to the value of their investment.

Originally Posted by Trakar

The primary issue involved with incorporation is the dissociation of individual liability in terms of financial and tort obligations with regards to profit-making activities

Move the goal posts much?

What goal posts do you perceive as being shifted? The second quote is from my first post in this thread, which established why I dislike the concept of (limited liability) incorporation:

"The primary issue involved with incorporation is the dissociation of individual liability in terms of financial and tort obligations with regards to profit-making activities. I do not think it is in the best interest of most citizens/consumers or nations to allow this dissociation. I've no problem eliminating corporate taxation, provided such is accomplished through the elimination of incorporation."

the first quote is from later in the discussion where I am discussing how businesses would continue to function in the absence of (limited liability) incorporation:

"

Originally Posted by Trakar

The context of this discussion, however, is in the setting of the absence of existence of limited liability corporations. Investors become partners in the business with proportionate liability/responsibility according to the value of their investment.

Originally Posted by psionl0

Even if this thread was not about corporations, you provide no justification whatsoever for your position that an individual investor with no say in running a business should be equally as liable as an investor who manages the business.

I don't argue for or support that contention.

Originally Posted by psionl0

Under your simplistic scenario, it would not be possible to have a trust because the beneficiaries would all have unlimited liability. Anybody who loans money to a business risks being classified as an investor (otherwise investors would classify their investments as loans to limit liability).

I am undecided about the details of individual limited liability terms and the handling of such, my primary objection is to the formation of fictitious individuals (corporations) in order to dissassociate individuals from their liabilities and responsibilities.

Quote:

You clearly haven't looked at any of the links regarding joint/several liability. They definitely show that it is theoretically possible for an individual pensioner to be held liable for the losses of a business that his pension fund invested in.

And as I've stated previously, I've no problem with this. It is the idea that an individual pensioner could be arbitrarily selected from the pool of investors, post law suit, by the plaintiff, and held solely culpable for all the damages awarded by that prior law suit that I find incredible, and unsupported.

Quote:

Of course, this is extremely unlikely. It is just an irrelevant objection of yours. Your attempt to imply that absent such risk, there is no problem with unlimited liability isn't fooling anybody.

I have never claimed there are no other issues or problems to be dealt with, I'm merely refuting that the proposal as I understand it would be a serious and realistically imminent threat to most investors in a situation where incorporation is not allowed.