Optimum Federal Corporate Tax Rate

[Truth2Know]

Here’s a question for all you economists. Does it make sense to drop the US Federal tax rate – perhaps all the way to zero?

Here is why I’m asking the question. The sources of Federal government revenue are:

Policy Basics Where Do Federal Tax Revenues Come From Center on Budget and Policy Priorities

Only 11% of Federal revenue comes from the corporate income tax. This is despite the fact that the effective U.S. corporate tax rate of about 27% is among the highest in the world. Does the U.S. have the highest corporate tax rate in the free world PunditFact The high US corporate tax rate negatively affects our competitive position.

IF the corporate tax rate went to zero and IF U.S. manufacturers used this windfall to expand their businesses, or new businesses were started, employment would increase. Would the additional Income Tax and Payroll Tax from higher employment compensate for, or perhaps surpass, the loss of corporate tax revenue?

If a zero federal corporate tax rate isn’t the right number, it seems like there must be some rate (probably lower than the current 27% effective tax rate) that maximizes the benefit to our economy. Decreasing Federal welfare benefits due to higher employment would also be a factor in selecting the optimum corporate tax rate.

Something needs to be done since we can’t keep spending more than we are bringing in.

 

[boedicca]

It's more than the high corporate tax rate that is impeding growth. High personal income tax rates, welfare, and regulations are killing growth.

 

[theDoctorisIn]

Here’s a question for all you economists. Does it make sense to drop the US Federal tax rate – perhaps all the way to zero?

Here is why I’m asking the question. The sources of Federal government revenue are:

Policy Basics Where Do Federal Tax Revenues Come From Center on Budget and Policy Priorities

View attachment 47345
Only 11% of Federal revenue comes from the corporate income tax. This is despite the fact that the effective U.S. corporate tax rate of about 27% is among the highest in the world. Does the U.S. have the highest corporate tax rate in the free world PunditFact The high US corporate tax rate negatively affects our competitive position.

IF the corporate tax rate went to zero and IF U.S. manufacturers used this windfall to expand their businesses, or new businesses were started, employment would increase. Would the additional Income Tax and Payroll Tax from higher employment compensate for, or perhaps surpass, the loss of corporate tax revenue?

If a zero federal corporate tax rate isn’t the right number, it seems like there must be some rate (probably lower than the current 27% effective tax rate) that maximizes the benefit to our economy. Decreasing Federal welfare benefits due to higher employment would also be a factor in selecting the optimum corporate tax rate.

Something needs to be done since we can’t keep spending more than we are bringing in.

Here's the thing.

The "27%" effective tax rate is a pure average - which is meaningless. Small businesses who can't afford good accountants pay much more than the largest and most profitable companies in the country - who pay on average an effective tax rate of less than half that (12.6%).

Let me demonstrate.

Between me and Bill Gates, we're both worth an average of 26 billion dollars.

 

[ScienceRocks]

Personally, I'd get rid of the loop holes and make it around 28%.

 

[theDoctorisIn]

The same thing applies to personal income taxes, too.

My cousin owns his own business, doing the same thing I do (consulting on political campaigns). He's a bit younger than me, and just getting started, but caught a job working on city council campaign as a private contractor. He made about $60,000 for 8 months of work - and ended up paying almost 40% of it in taxes.

On the other hand, a CEO making $10 million a year will end up paying around 10%.

The problem isn't that taxes are too high, it's that the biggest burden is on the wrong people.

 

[Ernie S.]

Here’s a question for all you economists. Does it make sense to drop the US Federal tax rate – perhaps all the way to zero?

Here is why I’m asking the question. The sources of Federal government revenue are:

Policy Basics Where Do Federal Tax Revenues Come From Center on Budget and Policy Priorities

View attachment 47345
Only 11% of Federal revenue comes from the corporate income tax. This is despite the fact that the effective U.S. corporate tax rate of about 27% is among the highest in the world. Does the U.S. have the highest corporate tax rate in the free world PunditFact The high US corporate tax rate negatively affects our competitive position.

IF the corporate tax rate went to zero and IF U.S. manufacturers used this windfall to expand their businesses, or new businesses were started, employment would increase. Would the additional Income Tax and Payroll Tax from higher employment compensate for, or perhaps surpass, the loss of corporate tax revenue?

If a zero federal corporate tax rate isn’t the right number, it seems like there must be some rate (probably lower than the current 27% effective tax rate) that maximizes the benefit to our economy. Decreasing Federal welfare benefits due to higher employment would also be a factor in selecting the optimum corporate tax rate.

Something needs to be done since we can’t keep spending more than we are bringing in.

Cutting corporate tax rates to about 8% would bring a lot of jobs back here] and probably actually increase over all revenue due to increased personal income tax collections.

 

[DrDoomNGloom]

So the CEO pays $100,000 in taxes.

The Worker pays about $24,000 in taxes.

Yet you claim the CEO is not paying his fair share??

So how does that math work, no not in percentages of income, wrong comparison.

Want try again??

 

[theDoctorisIn]

Here’s a question for all you economists. Does it make sense to drop the US Federal tax rate – perhaps all the way to zero?

Here is why I’m asking the question. The sources of Federal government revenue are:

Policy Basics Where Do Federal Tax Revenues Come From Center on Budget and Policy Priorities

View attachment 47345
Only 11% of Federal revenue comes from the corporate income tax. This is despite the fact that the effective U.S. corporate tax rate of about 27% is among the highest in the world. Does the U.S. have the highest corporate tax rate in the free world PunditFact The high US corporate tax rate negatively affects our competitive position.

IF the corporate tax rate went to zero and IF U.S. manufacturers used this windfall to expand their businesses, or new businesses were started, employment would increase. Would the additional Income Tax and Payroll Tax from higher employment compensate for, or perhaps surpass, the loss of corporate tax revenue?

If a zero federal corporate tax rate isn’t the right number, it seems like there must be some rate (probably lower than the current 27% effective tax rate) that maximizes the benefit to our economy. Decreasing Federal welfare benefits due to higher employment would also be a factor in selecting the optimum corporate tax rate.

Something needs to be done since we can’t keep spending more than we are bringing in.

Cutting corporate tax rates to about 8% would bring a lot of jobs back here] and probably actually increase over all revenue due to increased personal income tax collections.

What "jobs" do you believe will "come back" if corporate taxes are lowered to 8%?

 

[theDoctorisIn]

So the CEO pays $100,000 in taxes.

The Worker pays about $24,000 in taxes.

Yet you claim the CEO is not paying his fair share??

So how does that math work, no not in percentages of income, wrong comparison.

Want try again??

Why isn't percentage of income the "right" comparison?

 

[DrDoomNGloom]

Why are others so envious of others wealth / knowledge??

The CEO clearly pays more taxes no matter how you want to paint it??

Is that true or not??

 

[Toddsterpatriot]

The same thing applies to personal income taxes, too.

My cousin owns his own business, doing the same thing I do (consulting on political campaigns). He's a bit younger than me, and just getting started, but caught a job working on city council campaign as a private contractor. He made about $60,000 for 8 months of work - and ended up paying almost 40% of it in taxes.

On the other hand, a CEO making $10 million a year will end up paying around 10%.

The problem isn't that taxes are too high, it's that the biggest burden is on the wrong people.

On the other hand, a CEO making $10 million a year will end up paying around 10%.

That's an interesting claim. Why is the rate so low for the CEO?

 

[Toddsterpatriot]

So the CEO pays $100,000 in taxes.

The Worker pays about $24,000 in taxes.

Yet you claim the CEO is not paying his fair share??

So how does that math work, no not in percentages of income, wrong comparison.

Want try again??

So the CEO pays $100,000 in taxes.

His example would be $1,000,000 in taxes.

 

[DrDoomNGloom]

$1 million dollars is not enough for your greedy ass, how much did you pay last year??

 

[theDoctorisIn]

The same thing applies to personal income taxes, too.

My cousin owns his own business, doing the same thing I do (consulting on political campaigns). He's a bit younger than me, and just getting started, but caught a job working on city council campaign as a private contractor. He made about $60,000 for 8 months of work - and ended up paying almost 40% of it in taxes.

On the other hand, a CEO making $10 million a year will end up paying around 10%.

The problem isn't that taxes are too high, it's that the biggest burden is on the wrong people.

On the other hand, a CEO making $10 million a year will end up paying around 10%.

That's an interesting claim. Why is the rate so low for the CEO?

Because the more money you have, the better accountants you can hire, the more shelters in which to hide your money, the more deductions you can take, and the more money you can hide as "investments".

 

[Toddsterpatriot]

The same thing applies to personal income taxes, too.

My cousin owns his own business, doing the same thing I do (consulting on political campaigns). He's a bit younger than me, and just getting started, but caught a job working on city council campaign as a private contractor. He made about $60,000 for 8 months of work - and ended up paying almost 40% of it in taxes.

On the other hand, a CEO making $10 million a year will end up paying around 10%.

The problem isn't that taxes are too high, it's that the biggest burden is on the wrong people.

On the other hand, a CEO making $10 million a year will end up paying around 10%.

That's an interesting claim. Why is the rate so low for the CEO?

Because the more money you have, the better accountants you can hire, the more shelters in which to hide your money, the more deductions you can take, and the more money you can hide as "investments".

You're talking about salary, not investments. So how is the rate 10%?

 

[DrDoomNGloom]

No the more money you make the fair share of your taxes comprise a smaller percentage and still result in a larger payment than those making less.

While it is a compelling argument for the stupid and ignorant it will not fly past the intelligent.

 

[theDoctorisIn]

The same thing applies to personal income taxes, too.

My cousin owns his own business, doing the same thing I do (consulting on political campaigns). He's a bit younger than me, and just getting started, but caught a job working on city council campaign as a private contractor. He made about $60,000 for 8 months of work - and ended up paying almost 40% of it in taxes.

On the other hand, a CEO making $10 million a year will end up paying around 10%.

The problem isn't that taxes are too high, it's that the biggest burden is on the wrong people.

On the other hand, a CEO making $10 million a year will end up paying around 10%.

That's an interesting claim. Why is the rate so low for the CEO?

Because the more money you have, the better accountants you can hire, the more shelters in which to hide your money, the more deductions you can take, and the more money you can hide as "investments".

You're talking about salary, not investments. So how is the rate 10%?

I'm talking about income, not salary.

 

[Ernie S.]

Personally, I'd get rid of the loop holes and make it around 28%.

That's incredibly stupid. Yes corporations pay taxes to the government, but taxes are a cost of doing business and only increase the prices we pay for their goods.
I own a bar. Let's say the price of a quart of 100 proof bourbon is $20. I don't pay 20 bucks. I pay federal taxes of $13.50/ proof gallon or $3.375 and 56% to the state of Alabama computed on the $20 plus the Federal tax or $37.575.
My margin is roughly 300% which means a shot of Elijah Craig costs $4.71 plus 9% state sales tax or $5.14. I call it 5 bucks
If it weren't for the taxes, the same shot would cost $2.50.
No. I cannot pay city taxes, licensing fees, liability insurance, salaries, and corporate income taxes on a 150% margin. Should I go further in debt to sell you a cheap shot of whiskey? Why should a large corporation absorb taxes?

 

[DrDoomNGloom]

So you kinda dodged the question doc, the CEO paid $58,000 more than your brother in law.

So he took care of at least 2 people while your BIL only covered one.

How many others would YOU like to SPEND HIS MONEY on??

When will you be happy??

How much of his money are we gonna take from him??

I mean we will just vote to take it all nice and legal right??

When will you stop, when he is as broke as the impoverished??

Would you be happy then??

 

[Ernie S.]

Here’s a question for all you economists. Does it make sense to drop the US Federal tax rate – perhaps all the way to zero?

Here is why I’m asking the question. The sources of Federal government revenue are:

Policy Basics Where Do Federal Tax Revenues Come From Center on Budget and Policy Priorities

View attachment 47345
Only 11% of Federal revenue comes from the corporate income tax. This is despite the fact that the effective U.S. corporate tax rate of about 27% is among the highest in the world. Does the U.S. have the highest corporate tax rate in the free world PunditFact The high US corporate tax rate negatively affects our competitive position.

IF the corporate tax rate went to zero and IF U.S. manufacturers used this windfall to expand their businesses, or new businesses were started, employment would increase. Would the additional Income Tax and Payroll Tax from higher employment compensate for, or perhaps surpass, the loss of corporate tax revenue?

If a zero federal corporate tax rate isn’t the right number, it seems like there must be some rate (probably lower than the current 27% effective tax rate) that maximizes the benefit to our economy. Decreasing Federal welfare benefits due to higher employment would also be a factor in selecting the optimum corporate tax rate.

Something needs to be done since we can’t keep spending more than we are bringing in.

Cutting corporate tax rates to about 8% would bring a lot of jobs back here] and probably actually increase over all revenue due to increased personal income tax collections.

What "jobs" do you believe will "come back" if corporate taxes are lowered to 8%?

The ones at corporations that left because, in order to sell their product at a competitive price, moved off shore.
Think about it. If they can save 15% on taxes, they can absorb an increase in wages if they eliminate the cost of shipping goods produced in China.