What keeps the company from reinvesting in the form of company luxury cars for the executives, a company home that they let the CEO live in, and executive compensation. Essentially redirecting the money that would've at least gone to index holders to the shareholders that we felt were getting too much of the pie to begin with.
Can someone explain this to me?
EDIT: just to clarify I don't mean they actually sign over the deed to the house to the ceo but rather the company maintains the house as an "executive" hq that the CEO just happens to live in, and the company doesn't give the execs luxury cars they have company cars that the executive just happen to have they keys to and only the execs. Things like that, the company claiming as corporate assets that are really only used by execs. And I am sure there are baskc laws to try and prevent something like this but there are also highly motivated CFOs to find loopholes.
All those should be taxed like the equivalent of income for those executives, which is a higher rate than the corporate tax rate. If these benefits in kind are not taxed as income, then it is fraud.
https://smallbusiness.chron.com/taxability-employerprovided-...
But to do this you absolutely need to index capital gains for inflation. That’s the reason they get special tax rates in the first place, because when inflation is high a significant part of capital gains are illusionary and you don’t want effective rates to reach over 100% in real use.
So don’t tax profits if reinvested. Task them as income if returned to shareholders (or used as excess compensation).
Other than that, I completely agree with you.
