It's Time to Lower Corporate Taxes

[Darkwind]

That's 4 POINT 6 Percent not 46.

Boeing paid only 4.6 percent MAXIMUM since 2004.

Yes, I know. I read it. Something like a third of large corporations paid no taxes at all for much of the 00s.

You want lower Corporate Taxes but you also want to raise Boeings' Taxes?

What am I missing here?

Table 6. Additional Financial Information Fourth Quarter Full Year
(Dollars in Millions)

2013 2012 2013 2012
Revenues
Boeing Capital Corporation $105 $129 $408 $468
Other segment $22 $27 $102 $106
Unallocated items and eliminations $123 ($358) ($65) ($610)
Earnings from Operations
Boeing Capital Corporation $9 ($12) $107 $88
Other segment income/(expense) ($99) $31 ($156) ($186)
Unallocated items and eliminations excluding unallocated
pension/postretirement expense ($532) ($200) ($1,105) ($492)
Unallocated pension/postretirement expense ($323) ($212) ($1,314) ($899)
Other income, net $15 $23 $56 $62
Interest and debt expense ($96) ($112) ($386) ($442)
Effective tax rate 14.0% 36.3% 26.4% 34.0%

Might want to try that again...

Source: http://www.google.com/url?sa=t&rct=...6Mc37de57MKVpfmlBlMmwpA&bvm=bv.71778758,d.aWw

Page 5

 

[Dad2three]

Yes, I know. I read it. Something like a third of large corporations paid no taxes at all for much of the 00s.

You want lower Corporate Taxes but you also want to raise Boeings' Taxes?

What am I missing here?

Table 6. Additional Financial Information Fourth Quarter Full Year
(Dollars in Millions)

2013 2012 2013 2012
Revenues
Boeing Capital Corporation $105 $129 $408 $468
Other segment $22 $27 $102 $106
Unallocated items and eliminations $123 ($358) ($65) ($610)
Earnings from Operations
Boeing Capital Corporation $9 ($12) $107 $88
Other segment income/(expense) ($99) $31 ($156) ($186)
Unallocated items and eliminations excluding unallocated
pension/postretirement expense ($532) ($200) ($1,105) ($492)
Unallocated pension/postretirement expense ($323) ($212) ($1,314) ($899)
Other income, net $15 $23 $56 $62
Interest and debt expense ($96) ($112) ($386) ($442)
Effective tax rate 14.0% 36.3% 26.4% 34.0%

Might want to try that again...

Source: http://www.google.com/url?sa=t&rct=...6Mc37de57MKVpfmlBlMmwpA&bvm=bv.71778758,d.aWw

Page 5

A PRESS RELEASE? That proves it *shaking head*

One of the biggest aerospace companies in the world also flies by on some blessedly low tax rates. From 2004-2009, Boeing made $17.5 billion pre-taxes. That’s nothing to sneeze at. But they only paid $796 million in taxes, thanks to tax breaks on sales made outside the United States, and a full 38 subsidiaries in tax havens outside of the US. One estimate has the company’s 2007-9 tax rate at -0.8%; its tax rate since 2004 has hit a maximum of only 4.6%. Add the recent $35 billion federal military contract to the cockpit, and Boeing has a mighty sweet relationship with the government.

25 Corporations That Pay Less Taxes Than You Do


Corporate Taxpayers & Corporate Tax Dodgers 2008-10


http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersReport.pdf

 

[Dad2three]

1} Corporate taxes paid for a quarter of the U.S. federal budget during the 1950′s. They paid for 20% of the federal budget in the 1960s. By the late 1990′s, corporations were only paying for 11% of the federal budget. Today, corporate taxes pay for a mere 6% of the federal government’s expenses.

 

[Ravi]

1} Corporate taxes paid for a quarter of the U.S. federal budget during the 1950′s. They paid for 20% of the federal budget in the 1960s. By the late 1990′s, corporations were only paying for 11% of the federal budget. Today, corporate taxes pay for a mere 6% of the federal government’s expenses.

Pretty soon we'll be giving them tax payer money instead of collecting it from them.

Oh, wait

 

[EdwardBaiamonte]

1} Corporate taxes paid for a quarter of the U.S. federal budget during the 1950′s. They paid for 20% of the federal budget in the 1960s. By the late 1990′s, corporations were only paying for 11% of the federal budget. Today, corporate taxes pay for a mere 6% of the federal government’s expenses.

Pretty soon we'll be giving them tax payer money instead of collecting it from them.

Oh, wait

why not give them money since they provide our products and jobs? Its far better than giving it to lib commie monopolistic govt that can only waste it.

 

[william the wie]

A 19% tax rate would get us below Ireland and probably bring in the most revenue.

 

[boedicca]

It's not enough. We need to restructure our entire tax code. Move to a flat or near flat rate with very few (if any) deductions for business and for individuals/families. Under this system Filing taxes would be as simple as ordering from Amazon.

And it has the added benefit of removing a way for politicians to profit by doling out tax favors.

 

[Toro]

1} Corporate taxes paid for a quarter of the U.S. federal budget during the 1950′s. They paid for 20% of the federal budget in the 1960s. By the late 1990′s, corporations were only paying for 11% of the federal budget. Today, corporate taxes pay for a mere 6% of the federal government’s expenses.

Pretty soon we'll be giving them tax payer money instead of collecting it from them.

Oh, wait

Forgot one point earlier.

S-corps are taxed in a similar manner as partnerships, which pass through income. If I elected to pay Canadian personal income taxes, I could write off most personal income taxes paid in Canada on my 1040. I can't do that as a C-corp IIRC.

 

[Luddly Neddite]

2) free of the tax our industries would be more competitive.

Could I also add:
"free of the tax our People would be more Free".

It's fine that Boeing pays 4.6% Tax if I can have that rate too!

but you do in effect!! The less they pay in taxes the less their airplanes cost and the cheaper it is for you to fly!

Oh lordy.

I fly a lot but jeeeez, even Ed dear should know that most people are not going to realize a lower tax rate by FLYING.

So uh, [MENTION=34008]EdwardBaiamonte[/MENTION] - How many miles do I gotta log to have my effective tax rate the same as Boeing? And just how much do you think those miles will cost me?

 

[Ravi]

1} Corporate taxes paid for a quarter of the U.S. federal budget during the 1950′s. They paid for 20% of the federal budget in the 1960s. By the late 1990′s, corporations were only paying for 11% of the federal budget. Today, corporate taxes pay for a mere 6% of the federal government’s expenses.

Pretty soon we'll be giving them tax payer money instead of collecting it from them.

Oh, wait

Forgot one point earlier.

S-corps are taxed in a similar manner as partnerships, which pass through income. If I elected to pay Canadian personal income taxes, I could write off most personal income taxes paid in Canada on my 1040. I can't do that as a C-corp IIRC.

I dunno that much about C corp taxation, until my accountant sez we need to be one. Regardless, there are so many loopholes.

I can't really disagree with your 15% corp tax. But since most corps don't pay that much, they aren't going to like it.

 

[OnePercenter]

2) free of the tax our industries would be more competitive.

Could I also add:
"free of the tax our People would be more Free".

It's fine that Boeing pays 4.6% Tax if I can have that rate too!

You do. Take your total federal income tax paid and divide it by your total income.

 

[Dad2three]

Pretty soon we'll be giving them tax payer money instead of collecting it from them.

Oh, wait

Forgot one point earlier.

S-corps are taxed in a similar manner as partnerships, which pass through income. If I elected to pay Canadian personal income taxes, I could write off most personal income taxes paid in Canada on my 1040. I can't do that as a C-corp IIRC.

I dunno that much about C corp taxation, until my accountant sez we need to be one. Regardless, there are so many loopholes.

I can't really disagree with your 15% corp tax. But since most corps don't pay that much, they aren't going to like it.

" I can't really disagree with your 15% corp tax. But since most corps don't pay that much, they aren't going to like it. "

Obama proposed dropping it from the current THIRTY FIVE PERCENT (For Ed B, who 'believes' it's 40%) to 28% (getting rid of loopholes) and guess who is lobbying against it?

President Obama will ask Congress to scrub the corporate tax code of dozens of loopholes and subsidies to reduce the top rate to 28 percent, down from 35 percent, while giving preferences to manufacturers that would set their maximum effective rate at 25 percent

http://www.nytimes.com/2012/02/22/b...orate-tax-rate-to-28.html?pagewanted=all&_r=0

As the article points out, a lot of small businesses are taxed at the individual rate.

 

[Toro]

From last month, Japan plans to cut corporate taxes.

Japan will start lowering its baseline corporate income tax rate next year and reduce it by 20-45 per cent over “several years”, Shinzo Abe said on Friday, in his clearest statement yet on an issue that is at the heart of his business-friendly economic agenda. ...

“We will aim to reduce [the tax] to somewhere in the 20s [per cent] within several years. We will start next year and we will firmly secure other revenue sources,” Mr Abe told reporters after a meeting with his economy and finance ministers and the head of the internal tax committee of his Liberal Democratic party.

Japan’s corporate income tax rate of more than 35 per cent is the second highest among countries in the Organisation for Economic Co-operation and Development, although the unprofitable nature of many businesses, combined with a range of loopholes, exemptions and credits, means that in practice a majority of companies pay no income tax at all.

Mr Abe’s mention of “other revenue sources” was a reference to still unspecified plans to shrink or eliminate some of those loopholes, in order to widen the tax base and minimise the impact of baseline rate cuts on the government’s finances. ...

On corporate taxes, some of Mr Abe’s advisers have spoken of the OECD average tax rate of 25 per cent as a possible final landing point for cuts, while in an interview with the Financial Times in October Mr Abe mentioned Germany, where the level is 29 per cent, as a possible benchmark.

Japanese business leaders are especially sensitive to tax rates in neighbouring South Korea, where consumer-technology companies such as Samsung have surpassed once-dominant Japanese groups and other industries such as carmaking are increasingly seen as a threat. South Korea imposes a corporate income tax rate of 24 per cent, a shade below the OECD average and more than 10 points less than Japan.

Japan?s Abe sets corporate tax cut target - FT.com

 

[TakeAStepBack]

I hate that governments consider stolen money "revenue".

 

[TakeAStepBack]

And the problem we face is that lawmakers have put these favoritism-style loopholes into the tax codes (that usually benefit specific industries, companies, etc..) because they were riled by lobbyists to do so for other favors. So we continue to find ways around this problem instead of addressing it head-on formally in congress.

 

[Kimura]

I guess I can get on board with a 15% corporate tax rate. Considering that certain players, such as Goldman, GE, etc.., barely pay a penny, so it seems pragmatic now that I actually think about.

Even Hyman Minsky, one the most prolific economists, at least in my opinion, wasn't fond of corporate taxation at all.

Minsky:

A corporate income tax, which allows interest to be deducted prior to the determination of taxable income, induces debt-financing and is therefore undesirable. A corporate income tax also allows nonproduction expenses such as advertising, marketing, and the pleasures of the executive suites to be charged against revenues in determining the taxable income. As advertising and marketing are techniques for building market power and as ’executive style’ is a breeder of inefficiency, the corporate income tax abets market power and inefficiency just as the corporate income tax abets the use of debt-financing. Elimination of the corporate income tax should be on the agenda.

As someone who understands taxes as functional finance, I should have known better to begin with. Sometimes trying to be a good progressive short circuits the logic center of my brain.

 

[Againsheila]

Yeah, somehow, I don't think our taxes on corporations can get any lower.

These 26 Companies Pay No Federal Income Tax

 

[Skull Pilot]

I'm for one tax rate for both corporations and individuals.

10% of all income from the first dollar. Done.

No accountants needed, no tax lawyers needed, and we could gut the fucking IRS to the bone.

 

[Ravi]

How is it that Japanese companies have off shored to the US, where taxes are higher?

 

[Shanty]

America is uncompetitive from a tax standpoint. We have the highest corporate tax rate in the world. American companies are choosing to relocate abroad because we have become so uncompetitive.

Note in this article that Bill Clinton's former Chair of the Council of Economic Advisers agrees, and we are getting beaten on deals by companies in France. France! Rather than the President mealy-mouth companies about being unpatriotic, he and Congress have to get off their butts and do something about it.

Time to lower corporate taxes. I say to 15%. And get rid of all these ridiculous loopholes.

The U.S. has the highest corporate income-tax rate in the developed world. While U.S. corporations face a combined federal-state statutory tax rate of 39.1%, our competitors in the Organization for Economic Cooperation and Development (OECD) face an average rate of 25%.

According to Laura Tyson, former chairwoman of President Clinton's Council of Economic Advisers, "America's relatively high rate encourages U.S. companies to locate their investment, production, and employment in foreign countries, and discourages foreign companies from locating in the U.S., which means slower growth, fewer jobs, smaller productivity gains, and lower real wages." ...

At the same time, the U.S. adheres to a system of international taxation discarded by most other countries. American businesses are taxed on a world-wide basis regardless of where in the world revenue is earned. That means U.S. multinationals pay taxes twice, first to the foreign country in which they do business and then to the U.S. after they repatriate their profits. ...

As with the relatively high corporate tax rate, America's world-wide system of taxation hinders growth, encourages companies to relocate outside of the U.S., makes U.S.-based companies vulnerable to foreign takeover, and puts American businesses at a competitive disadvantage internationally.

At Emerson, the St. Louis-based manufacturing and technology company where I retired last year as vice chairman, the business has seen and experienced the deleterious effects of the U.S. tax code firsthand. Here is one example:

In 2006, Emerson sought to acquire a company called American Power Conversion (APC). This was a Rhode Island-based company that made more than half of its earnings outside the U.S. Unfortunately, Emerson competed against Schneider Electric, SU.FR +0.49% a French company, to acquire APC. Emerson offered more than $5 billion, but ultimately Schneider acquired APC by offering a bid in excess of $6 billion.

Why was Schneider willing to offer more? Schneider outbid us because France's tax code—typical of most OECD countries—exempts 95% of foreign-source income from taxation, while the U.S. tax code fully taxes such income. APC's profits were worth more to Schneider because, once absorbed, APC's global profits (net of the taxes paid in the countries where those profits were earned) could be repatriated to Schneider's headquarters in France, where they would be taxed at less than 2%.

In contrast, earnings repatriated to the U.S. are subject to a tax rate of nearly 40%, with a credit for taxes paid abroad on that income.

Walter Galvin: Why Corporate Inversions Are All the Rage - WSJ

Our nominal corporate tax rate is around 35%, but it's a pointless number compared to the effective tax rate. Corporate taxes account for around 1.3% of GDP, while most other industrialized countries are at 2.5% of GDP. FYI, the GAO found that 55% of US companies paid ZERO federal income taxes during at least one year over a seven-year period. This was back 2008 if I recall. With that being said, I have no problems closing loopholes and getting rid of useless parts of the tax code.

A single-payer health care system would make US companies more competitive. As long as health care is a marginal cost of production, it's going to be difficult to compete with Germany, South Korea, France, Japan, etc.

I totally agree on the health care. The other way to do it is to expand on the regulations of insurance companies further, to lower costs.

Steering clear of strong dollar policies by the fed would also help US exports and limit imports. The currency manipulation and other protectionism that our "trading partners" engage in, with no response from the US, is insane.