Corporate taxes suffocate growth.

[danielpalos]

The OP sounds like the usual Reaganean woodoonomics.

There is no correlation between individual shareholder profits and economic investment.

isn't the capital gains preference supposed to help with full employment by making it easier for capitalists to invest in businesses?

 

[danielpalos]

The compromise will probably end up at 22 1/2% effective for 2017.

corporate tax is passed on to us in higher prices. Corporations are tax collectors not tax payers. We have tax only to pander to pure ignorance of liberals who want to punish evil corporations. Business efficiency, competitiveness, and job creation would be greatly enhanced if business was free to conduct business rather than waste time money energy dodging taxes. 1+1=2

Most importantly , USA is at very top in terms of pushing corporations, jobs, and investment capital off shore with the highest tax rate in the world that, after off shore deductions, collects little revenue but does provide great incentive to move off shore.

Yes, corporations are tax collectors. But eliminating the tax on them will have no consequence on trade or wages, or employment, or anything you put here. This has been proven by history many times, most recently by the bush tax cuts.

i take the opposite approach. Firms can afford to hire entire departments to help them conform to rational choice theory or fill out corporate welfare forms in triplicate, if necessary.

Individuals, usually don't.

Why not end the income tax for real persons and let artificial persons pay our "income" taxes.

 

[anotherlife]

The OP sounds like the usual Reaganean woodoonomics.

There is no correlation between individual shareholder profits and economic investment.

isn't the capital gains preference supposed to help with full employment by making it easier for capitalists to invest in businesses?

I believe the capital gains preference is more like a tool for portfolio investment for retirement. If it generates employment at all, it is in the countries that have the lowest currency exchange rate. But I think it is more used in speculating on bundled securities, selling them on.

 

[anotherlife]

The compromise will probably end up at 22 1/2% effective for 2017.

corporate tax is passed on to us in higher prices. Corporations are tax collectors not tax payers. We have tax only to pander to pure ignorance of liberals who want to punish evil corporations. Business efficiency, competitiveness, and job creation would be greatly enhanced if business was free to conduct business rather than waste time money energy dodging taxes. 1+1=2

Most importantly , USA is at very top in terms of pushing corporations, jobs, and investment capital off shore with the highest tax rate in the world that, after off shore deductions, collects little revenue but does provide great incentive to move off shore.

Yes, corporations are tax collectors. But eliminating the tax on them will have no consequence on trade or wages, or employment, or anything you put here. This has been proven by history many times, most recently by the bush tax cuts.

i take the opposite approach. Firms can afford to hire entire departments to help them conform to rational choice theory or fill out corporate welfare forms in triplicate, if necessary.

Individuals, usually don't.

Why not end the income tax for real persons and let artificial persons pay our "income" taxes.

Once upon a time, there was no individual tax, and corporate taxes were levied at cross border trade as export import taxes. Then ww1-2 was cleverly used to introduce the current scheme and those who control the US government will not let it go without a fight. Firms will only spend money if they are forced to do so, aggressively. Monaco's tax system is interesting, they tax your foreign operations, not your domestic ones. But Monaco is also not a dollar based economy so they can compete with low exchange international labor.

 

[Winston]

Corporate taxes reduce the profits of business owners. This is true because net income is reduced by the tax rate. For example, Firm X, with a $100 investment, earning a 7% return has an income — before taxes — of $7. With a 10% corporate tax rate, net income — after taxes — is $6.30. Firm X now has earned a 6.3% return. In contrast, a corporate tax rate of 40% reduces net income after taxes by $2.80 to $4.20, or a 4.2% after-tax return. This rise in taxes, on the margin, reduces the profit-seeking incentive to take business risks. Why risk starting a biotech company when inflation-protected T-bill's will give you the same return?

Firm X has a decision. They can INVEST the hundred dollars back into the business and get a return of seven dollars before taxes. Or, they can TAKE THE MONEY OUT OF THE BUSINESS. With a 40% marginal tax rate that means they can take out sixty dollars. So, the choice is sixty dollars in your pocket or a hundred dollars in the business. The "cost" of the investment is not one hundred dollars, it is sixty dollars.

If we cut the marginal tax rate to ten percent the COST of the investment that gets you seven dollars is not sixty dollars, it is ninety dollars. Now it cost you ninety dollars to get seven back. And nobody pays taxes on that seven dollars until they TAKE IT OUT OF THE BUSINESS.

So yes, when we cut marginal taxes it encourages businesses to TAKE PROFITS instead of reinvest them. In this case, the owner is much more likely to take out the money at the ten percent tax rate than the forty percent tax rate. I mean why RISK the ninety dollars by INVESTING it. Better to pay the tax, SAVE IT, and draw interest.

 

[danielpalos]

The OP sounds like the usual Reaganean woodoonomics.

There is no correlation between individual shareholder profits and economic investment.

isn't the capital gains preference supposed to help with full employment by making it easier for capitalists to invest in businesses?

I believe the capital gains preference is more like a tool for portfolio investment for retirement. If it generates employment at all, it is in the countries that have the lowest currency exchange rate. But I think it is more used in speculating on bundled securities, selling them on.

seems more like a scam for persons of wealth to defer taxes.

The existence of the capital gains tax is controversial on partisan grounds. In 1995, to support the Contract with America legislative program of House Speaker Newt Gingrich, Stephen Moore and John Silvia wrote a study for the Cato Institute. In the study, they proposed halving of capital gains taxes, arguing that this move would "substantially raise tax collections and increase tax payments by the rich" and that it would increase economic growth and job creation. They wrote that the tax "is so economically inefficient...that the optimal economic policy...would be to abolish the tax entirely."[21] More recently, Moore has written that the capital gains tax constitutes double taxation. "First, most capital gains come from the sale of financial assets like stock. But publicly held companies have to pay corporate income tax....Capital gains is a second tax on that income when the stock is sold."[22]--https://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States#Rationale

However, comparing capital gains tax rates and economic growth in America from 1950 to 2011, Brookings Institution economist Leonard Burman found "no statistically significant correlation between the two", even after using "lag times of five years." Burman's data are shown in the chart at right.[38][40]--https://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States#Rationale

Why not just end the capital gains preference and simply tax, ordinary income.

 

[Winston]

Why not just end the capital gains preference and simply tax, ordinary income.

Ding, ding, ding---and we have a winner. Yes

LEVEL THE PLAYING FIELD

 

[Skull Pilot]

In the free market people pay top dollar for the best. The US is the best economy and market in the world and there is no reason we should lowball our price to corporations for all the benefits we as a nation give them.

Unlike the OP, I am an employer, business owner and payer of corporate taxes. I'd prioritize lowering the debt and draining the swamp over tax reduction. With a functioning government we wont need high taxes on anyone.

So you own a C corp?

Why would you do that when you can avoid the double taxation by running as an S corp like 62% of all corporations in this country?

 

[anotherlife]

There is a story in the Old Testament, that a servant or something goes to King David, and tells him that there is a wealthy man on the land that has 1000 sheep but wants still to take away the 1 sheep that the poor pastor has. King David asks, who is that wicked man, bring him in front of me so that I can punish him. The servant answers, it is you master David. Such are today's tax laws too, written by the largest corporations to make you pay and let them off free.

 

[Skull Pilot]

The OP sounds like the usual Reaganean woodoonomics.

There is no correlation between individual shareholder profits and economic investment.

isn't the capital gains preference supposed to help with full employment by making it easier for capitalists to invest in businesses?

I believe the capital gains preference is more like a tool for portfolio investment for retirement. If it generates employment at all, it is in the countries that have the lowest currency exchange rate. But I think it is more used in speculating on bundled securities, selling them on.

People who speculate don't usually benefit from the lower long term capital gains rate since short term gains are taxed as ordinary income

 

[Moonglow]

The US has been taxing companies since day one....

 

[Skull Pilot]

Why not just end the capital gains preference and simply tax, ordinary income.

Ding, ding, ding---and we have a winner. Yes

LEVEL THE PLAYING FIELD

why not just tax all income including capital gains at one low flat rate?

 

[danielpalos]

Why not just end the capital gains preference and simply tax, ordinary income.

Ding, ding, ding---and we have a winner. Yes

LEVEL THE PLAYING FIELD

why not just tax all income including capital gains at one low flat rate?

why not just end the income tax by abolishing our useless wars on crime, drugs, poverty, and terror?

 

[Skull Pilot]

Why not just end the capital gains preference and simply tax, ordinary income.

Ding, ding, ding---and we have a winner. Yes

LEVEL THE PLAYING FIELD

why not just tax all income including capital gains at one low flat rate?

why not just end the income tax by abolishing our useless wars on crime, drugs, poverty, and terror?

and how do you make up the rest of the revenue because those annual expenditures are less than the total income tax collected

 

[danielpalos]

Why not just end the capital gains preference and simply tax, ordinary income.

Ding, ding, ding---and we have a winner. Yes

LEVEL THE PLAYING FIELD

why not just tax all income including capital gains at one low flat rate?

why not just end the income tax by abolishing our useless wars on crime, drugs, poverty, and terror?

and how do you make up the rest of the revenue because those annual expenditures are less than the total income tax collected

i don't think so. however, i haven't actually looked into it, except for the war on drugs.

You have to remember, our alleged "wars" on crime, drugs, and terror, are right wing, national socialist programs that are cost centers, not revenue centers.

According to a 2008 study published by Harvard economist Jeffrey A. Miron, the annual savings on enforcement and incarceration costs from the legalization of drugs would amount to roughly $41.3 billion, with $25.7 billion being saved among the states and over $15.6 billion accrued for the federal government. Miron further estimated at least $46.7 billion in tax revenue based on rates comparable to those on tobacco and alcohol ($8.7 billion from marijuana, $32.6 billion from cocaine and heroin, remainder from other drugs).--https://en.wikipedia.org/wiki/War_on_Drugs#Costs_to_taxpayers

we will see cost reductions to government.

 

[Skull Pilot]

Why not just end the capital gains preference and simply tax, ordinary income.

Ding, ding, ding---and we have a winner. Yes

LEVEL THE PLAYING FIELD

why not just tax all income including capital gains at one low flat rate?

why not just end the income tax by abolishing our useless wars on crime, drugs, poverty, and terror?

and how do you make up the rest of the revenue because those annual expenditures are less than the total income tax collected

i don't think so. however, i haven't actually looked into it, except for the war on drugs.

You have to remember, our alleged "wars" on crime, drugs, and terror, are right wing, national socialist programs that are cost centers, not revenue centers.

According to a 2008 study published by Harvard economist Jeffrey A. Miron, the annual savings on enforcement and incarceration costs from the legalization of drugs would amount to roughly $41.3 billion, with $25.7 billion being saved among the states and over $15.6 billion accrued for the federal government. Miron further estimated at least $46.7 billion in tax revenue based on rates comparable to those on tobacco and alcohol ($8.7 billion from marijuana, $32.6 billion from cocaine and heroin, remainder from other drugs).--https://en.wikipedia.org/wiki/War_on_Drugs#Costs_to_taxpayers

we will see cost reductions to government.

funny how the past 8 years a left wing administration carried them all out isn't it?

And I have always been in favor of legalizing all drugs and ending the war on drugs so you're mistaken (again) if you think I support it.

 

[Jomama]

moronic liberal fool!! Jobs invents the iphone, pays 2 bucks to hire a sheriff,

I'll just leave that there as a monument to Ed's understanding of civics. Steve Jobs has Sheriffs on his payroll. He also bought his own court to handle patent issues. He's a smart guy so sheriff probably also serves as bailiff.

 

[danielpalos]

Ding, ding, ding---and we have a winner. Yes

LEVEL THE PLAYING FIELD

why not just tax all income including capital gains at one low flat rate?

why not just end the income tax by abolishing our useless wars on crime, drugs, poverty, and terror?

and how do you make up the rest of the revenue because those annual expenditures are less than the total income tax collected

i don't think so. however, i haven't actually looked into it, except for the war on drugs.

You have to remember, our alleged "wars" on crime, drugs, and terror, are right wing, national socialist programs that are cost centers, not revenue centers.

According to a 2008 study published by Harvard economist Jeffrey A. Miron, the annual savings on enforcement and incarceration costs from the legalization of drugs would amount to roughly $41.3 billion, with $25.7 billion being saved among the states and over $15.6 billion accrued for the federal government. Miron further estimated at least $46.7 billion in tax revenue based on rates comparable to those on tobacco and alcohol ($8.7 billion from marijuana, $32.6 billion from cocaine and heroin, remainder from other drugs).--https://en.wikipedia.org/wiki/War_on_Drugs#Costs_to_taxpayers

we will see cost reductions to government.

funny how the past 8 years a left wing administration carried them all out isn't it?

And I have always been in favor of legalizing all drugs and ending the war on drugs so you're mistaken (again) if you think I support it.

all i hear from the right wing, is "lip service".

 

[jillian]

The historical and current belief is that taxes in America are low, compared to the world in general. America is the model of free markets, low regulation, and economic freedom. Right? This is simply not the case. The United States has high taxes in general and higher corporate taxes in particular.

The only nations who have a higher corporate tax rate than America are Suriname, Pakistan, Togo, Benin, Republic of Congo, Cameroon, Chad, Libya, and Vietnam. No information was available for The Democratic Republic of Congo, Iraq, North Korea, Montenegro, Serbia, or Sudan. I cannot imagine why.

.....

Corporate taxes reduce the profits of business owners. This is true because net income is reduced by the tax rate. For example, Firm X, with a $100 investment, earning a 7% return has an income — before taxes — of $7. With a 10% corporate tax rate, net income — after taxes — is $6.30. Firm X now has earned a 6.3% return. In contrast, a corporate tax rate of 40% reduces net income after taxes by $2.80 to $4.20, or a 4.2% after-tax return. This rise in taxes, on the margin, reduces the profit-seeking incentive to take business risks. Why risk starting a biotech company when inflation-protected T-bill's will give you the same return?

After theory and logic tell us what is true, empiricism can confirm our result.

Thankfully, Professors Young Lee (Hanyang University) and Rodger Gordon (UC — San Diego) have done the work for us. In a 2005 journal article they concluded,

This paper finds that the corporate tax rate is significantly negatively correlated with economic growth in a cross-section data set of 70 countries during 1970–1997, controlling for many other determinants/covariates of economic growth.

More specifically, they continue, "The estimates suggest that cutting the corporate tax rate by 10 percentage points can increase the annual growth rate by around 1.1%."[3]

Using these figures, Andrew Chamberlain of the Tax Foundation opines,

by cutting the U.S.'s combined federal and average state corporate tax rate from roughly 40 percent to 30 percent we could boost U.S. economic growth by around 1.1 percent per year — enough to double our nation's wealth every 63 years.[4]

Even better, a cut from the actual corporate tax rate of 35% to a rate of 10% would double our nation's wealth every 30 years.

...

These are examples of what can be seen. As Frédéric Bastiat reminds us, however, it is imperative to also account for what cannot be seen. What would the wealth of our nation be today if the corporate tax rate had always been 10% or less? What creature comforts would have been innovated? What new technologies brought to market? What diseases cured?

Due to a history of high corporate taxes these answers are not known, and we are worse off because of it.

Corporate Taxes Suffocate Growth

mises?

you twits believe anything... except what's actually been shown to happen every time the wingers try to pretend that trickle down economics is actually a thing.

 

[EdwardBaiamonte]

moronic liberal fool!! Jobs invents the iphone, pays 2 bucks to hire a sheriff,

I'll just leave that there as a monument to Ed's understanding of civics. Steve Jobs has Sheriffs on his payroll. He also bought his own court to handle patent issues. He's a smart guy so sheriff probably also serves as bailiff.

Translation: I'm a liberal fool who thinks govt gives to corporations rather than that capitalist corporations are the greatest welfare program in human history sustaining all 7 billion people on earth.