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A MINORITY VIEW
BY WALTER E. WILLIAMS
RELEASE: WEDNESDAY, MARCH 18, 2009 AND THEREAFTER
Prosperity Lost
Ask the average person which is the correct answer to the following question: Which president gave the biggest tax cuts for the rich -- Reagan or Bush? I would bet the rent money that you would not get the correct response, which is: Presidents have no taxing authority. Article I, Section 8 of the U.S. Constitution says: "The Congress shall have power to lay and collect taxes, duties, imposts and excises." I know that many politicians and news media people read my column. How do we characterize them if they continue to speak of presidents cutting or raising taxes?
Another tax question: If there's an imposition of a property tax on your land, who pays the tax? I guarantee you that land does not pay taxes; only people pay taxes. That means a tax on your land is a tax on you. You say, "Williams, that's pretty elementary, isn't it?" But what do you say to a politician or news media people who propose increasing corporate taxes as means to get rich corporations to pay their rightful share of government? They should be told that they speak nonsense because corporations, like land, do not pay taxes; only people pay taxes.
If a tax is levied on a corporation, and if it is to survive, it must raise the price of its product, or lower dividends or lay off workers. In each case, it is people, not some legal fiction called a corporation, who bear the burden of any tax levied on the corporation. An important subject area in economics called tax incidence says that the entity upon whom a tax is levied does not necessarily bear the burden of the tax. Some of the tax burden can be shifted to another party. That's precisely what corporations do and as such they are merely government tax collectors.
Here's another tax question: Which worker receives the higher pay: a worker on a road construction project moving dirt with a shovel or a worker moving dirt atop a giant earthmover? If you said the guy on the earthmover, go to the head of the class. But why? It's not because he's unionized or that employers just love earthmover operators. It's because having more capital (tools) makes him more productive and therefore earn higher wages.
It's not rocket science to conclude that whatever lowers the cost of capital formation enables workers to have more capital to work with and enjoy higher wages. Policies that raise the cost of capital formation such as capital gains taxes, low depreciation allowances and high corporate income taxes, and thereby reducing capital formation, serves neither the interests of workers, investors nor consumers.
Taxes also reduce transactions. I need my computer repaired. You and I agree that the job is worth $200. Suppose there's the imposition of a 30 percent income tax on you. That means you would net only $140 and might refuse the job. You might suggest that if I were willing to pay you $285 you would do the job because at that price your after-tax earnings will be $200 -- what doing the job is worth to you. There's a problem. The repair job was worth $200 to me, not $285. So it's my turn to say the heck with it, or would we and society be better off if you and I agreed to the repair job but did not tell anybody? I'd say yes, but we'd be criminals.
You might wonder how congressmen can get away with taxes and other measures that reduce our prosperity potential. Part of the answer is the anti-business climate promoted in academia and the news media. The more important reason is that prosperity foregone is invisible. In other words, we can never tell how much richer we would have been without today's level of congressional interference in our lives and therefore don't fight it as much as we should.
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at Creators Syndicate - Celebrating 20 Years as a World-Class Syndicate Of Talent.
COPYRIGHT 2009 CREATORS SYNDICATE, INC.
Prosperity Lost
A MINORITY VIEW
BY WALTER E. WILLIAMS
RELEASE: WEDNESDAY, MARCH 18, 2009 AND THEREAFTER
Prosperity Lost
Ask the average person which is the correct answer to the following question: Which president gave the biggest tax cuts for the rich -- Reagan or Bush? I would bet the rent money that you would not get the correct response, which is: Presidents have no taxing authority. Article I, Section 8 of the U.S. Constitution says: "The Congress shall have power to lay and collect taxes, duties, imposts and excises." I know that many politicians and news media people read my column. How do we characterize them if they continue to speak of presidents cutting or raising taxes?
Another tax question: If there's an imposition of a property tax on your land, who pays the tax? I guarantee you that land does not pay taxes; only people pay taxes. That means a tax on your land is a tax on you. You say, "Williams, that's pretty elementary, isn't it?" But what do you say to a politician or news media people who propose increasing corporate taxes as means to get rich corporations to pay their rightful share of government? They should be told that they speak nonsense because corporations, like land, do not pay taxes; only people pay taxes.
If a tax is levied on a corporation, and if it is to survive, it must raise the price of its product, or lower dividends or lay off workers. In each case, it is people, not some legal fiction called a corporation, who bear the burden of any tax levied on the corporation. An important subject area in economics called tax incidence says that the entity upon whom a tax is levied does not necessarily bear the burden of the tax. Some of the tax burden can be shifted to another party. That's precisely what corporations do and as such they are merely government tax collectors.
Here's another tax question: Which worker receives the higher pay: a worker on a road construction project moving dirt with a shovel or a worker moving dirt atop a giant earthmover? If you said the guy on the earthmover, go to the head of the class. But why? It's not because he's unionized or that employers just love earthmover operators. It's because having more capital (tools) makes him more productive and therefore earn higher wages.
It's not rocket science to conclude that whatever lowers the cost of capital formation enables workers to have more capital to work with and enjoy higher wages. Policies that raise the cost of capital formation such as capital gains taxes, low depreciation allowances and high corporate income taxes, and thereby reducing capital formation, serves neither the interests of workers, investors nor consumers.
Taxes also reduce transactions. I need my computer repaired. You and I agree that the job is worth $200. Suppose there's the imposition of a 30 percent income tax on you. That means you would net only $140 and might refuse the job. You might suggest that if I were willing to pay you $285 you would do the job because at that price your after-tax earnings will be $200 -- what doing the job is worth to you. There's a problem. The repair job was worth $200 to me, not $285. So it's my turn to say the heck with it, or would we and society be better off if you and I agreed to the repair job but did not tell anybody? I'd say yes, but we'd be criminals.
You might wonder how congressmen can get away with taxes and other measures that reduce our prosperity potential. Part of the answer is the anti-business climate promoted in academia and the news media. The more important reason is that prosperity foregone is invisible. In other words, we can never tell how much richer we would have been without today's level of congressional interference in our lives and therefore don't fight it as much as we should.
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at Creators Syndicate - Celebrating 20 Years as a World-Class Syndicate Of Talent.
COPYRIGHT 2009 CREATORS SYNDICATE, INC.
Let's see, On this board I hear liberals complaining about the "Bush Tax Cuts", and that corporations don't "pay their fair share" of taxes.
Quite telling.
the person buying the product or service is the one paying the corporate taxes, which is how it should be.
the taxes are only paid on pure profit made, not on their revenues generated....so even though as per your example a corporation may be taxed at a 30% rate, their effective tax rate averages only 6%, once they take all of their deductions....which is one of the LOWEST corporate tax rates in the world.
corporate taxes for most our history in collecting taxes, paid for 1/2 of our tax burden as a country and corporate taxes now only pay for 10-20% of our total tax burden while income taxes now pay for a greater portion of our tax burden because of the major lowering of corporate tax rates.
I'm not certain how this relates to your article, but these are important facts that should be known and a quick google of corporate tax history could serve to enlighten one on the topic.
Care
mustang....the person buying the product or service is the one paying the corporate taxes, which is how it should be.
the taxes are only paid on pure profit made, not on their revenues generated....so even though as per your example a corporation may be taxed at a 30% rate, their effective tax rate averages only 6%, once they take all of their deductions....which is one of the LOWEST corporate tax rates in the world.
corporate taxes for most our history in collecting taxes, paid for 1/2 of our tax burden as a country and corporate taxes now only pay for 10-20% of our total tax burden while income taxes now pay for a greater portion of our tax burden because of the major lowering of corporate tax rates.
I'm not certain how this relates to your article, but these are important facts that should be known and a quick google of corporate tax history could serve to enlighten one on the topic.
Care
Care, you've mixed the scenarios; the 30% tax rate (you) mentioned was for an individual's income (repairing a computer) going for taxes, and not a corporation's, so the ratios apply as stated. Secondly, the fact that such a small part of revenue is gained from taxing corporations, suggests that it shoud be abandoned. And although the corporate tax rate is applied to net corporate income, and not to gross sales/income, it still has to be made up for in the margin, where it is much more than the 6% you mentioned. There is a reason that Ireland with the lowest corporate tax rate in Europe has the fastest growing economy in Europe (and N.A.)
the person buying the product or service is the one paying the corporate taxes, which is how it should be.
the taxes are only paid on pure profit made, not on their revenues generated....so even though as per your example a corporation may be taxed at a 30% rate, their effective tax rate averages only 6%, once they take all of their deductions....which is one of the LOWEST corporate tax rates in the world.
...
Another more recent analysis estimates that the effective corporate rate in the U.S. peaked at nearly 32% in 2000 but has declined to 25% by 2005.
Tax Analysts: Featured Articles: Economic Analysis: Despite Rapid Growth, Corporate Tax Receipts Fall Short
Another more recent analysis estimates that the effective corporate rate in the U.S. peaked at nearly 32% in 2000 but has declined to 25% by 2005.
Tax Analysts: Featured Articles: Economic Analysis: Despite Rapid Growth, Corporate Tax Receipts Fall Short
I wonder where care got 6%?
the person buying the product or service is the one paying the corporate taxes, which is how it should be.
the taxes are only paid on pure profit made, not on their revenues generated....so even though as per your example a corporation may be taxed at a 30% rate, their effective tax rate averages only 6%, once they take all of their deductions....which is one of the LOWEST corporate tax rates in the world.
corporate taxes for most our history in collecting taxes, paid for 1/2 of our tax burden as a country and corporate taxes now only pay for 10-20% of our total tax burden while income taxes now pay for a greater portion of our tax burden because of the major lowering of corporate tax rates.
I'm not certain how this relates to your article, but these are important facts that should be known and a quick google of corporate tax history could serve to enlighten one on the topic.
Care
Care, you've mixed the scenarios; the 30% tax rate (you) mentioned was for an individual's income (repairing a computer) going for taxes, and not a corporation's, so the ratios apply as stated. Secondly, the fact that such a small part of revenue is gained from taxing corporations, suggests that it shoud be abandoned. And although the corporate tax rate is applied to net corporate income, and not to gross sales/income, it still has to be made up for in the margin, where it is much more than the 6% you mentioned. There is a reason that Ireland with the lowest corporate tax rate in Europe has the fastest growing economy in Europe (and N.A.)
Let's see, On this board I hear liberals complaining about the "Bush Tax Cuts", and that corporations don't "pay their fair share" of taxes.
Quite telling.
I beg to differ.Let's see, On this board I hear liberals complaining about the "Bush Tax Cuts", and that corporations don't "pay their fair share" of taxes.
Quite telling.
Yes, calling these tax policies by the Administration which they occured is misleading, I quite agree.
Corporations, however, are entities which in some weird kind of legal way are treated similarly to individuals. (hey don't blame me, blame the supreme court!)
So I don't think it's necessarily wrong to say that a corporation is pay taxes.
Because that entity IS paying taxes
I beg to differ.Let's see, On this board I hear liberals complaining about the "Bush Tax Cuts", and that corporations don't "pay their fair share" of taxes.
Quite telling.
Yes, calling these tax policies by the Administration which they occured is misleading, I quite agree.
Corporations, however, are entities which in some weird kind of legal way are treated similarly to individuals. (hey don't blame me, blame the supreme court!)
So I don't think it's necessarily wrong to say that a corporation is pay taxes.
Because that entity IS paying taxes
For example, were the government to raise taxes on on a corporation by 100% (not a 100% tax rate, but a 100% increase in their tax rate), I guarantee you that the price of their product would increase, thus rendering that corporation a tax collector, not a tax payer. To call it anything else is (in my humble opinion) is intellectually dishonest.
Prosperity Lost
A MINORITY VIEW
BY WALTER E. WILLIAMS
RELEASE: WEDNESDAY, MARCH 18, 2009 AND THEREAFTER
Prosperity Lost
Ask the average person which is the correct answer to the following question: Which president gave the biggest tax cuts for the rich -- Reagan or Bush? I would bet the rent money that you would not get the correct response, which is: Presidents have no taxing authority. Article I, Section 8 of the U.S. Constitution says: "The Congress shall have power to lay and collect taxes, duties, imposts and excises." I know that many politicians and news media people read my column. How do we characterize them if they continue to speak of presidents cutting or raising taxes?
Another tax question: If there's an imposition of a property tax on your land, who pays the tax? I guarantee you that land does not pay taxes; only people pay taxes. That means a tax on your land is a tax on you. You say, "Williams, that's pretty elementary, isn't it?" But what do you say to a politician or news media people who propose increasing corporate taxes as means to get rich corporations to pay their rightful share of government? They should be told that they speak nonsense because corporations, like land, do not pay taxes; only people pay taxes.
If a tax is levied on a corporation, and if it is to survive, it must raise the price of its product, or lower dividends or lay off workers. In each case, it is people, not some legal fiction called a corporation, who bear the burden of any tax levied on the corporation. An important subject area in economics called tax incidence says that the entity upon whom a tax is levied does not necessarily bear the burden of the tax. Some of the tax burden can be shifted to another party. That's precisely what corporations do and as such they are merely government tax collectors.
Here's another tax question: Which worker receives the higher pay: a worker on a road construction project moving dirt with a shovel or a worker moving dirt atop a giant earthmover? If you said the guy on the earthmover, go to the head of the class. But why? It's not because he's unionized or that employers just love earthmover operators. It's because having more capital (tools) makes him more productive and therefore earn higher wages.
It's not rocket science to conclude that whatever lowers the cost of capital formation enables workers to have more capital to work with and enjoy higher wages. Policies that raise the cost of capital formation such as capital gains taxes, low depreciation allowances and high corporate income taxes, and thereby reducing capital formation, serves neither the interests of workers, investors nor consumers.
Taxes also reduce transactions. I need my computer repaired. You and I agree that the job is worth $200. Suppose there's the imposition of a 30 percent income tax on you. That means you would net only $140 and might refuse the job. You might suggest that if I were willing to pay you $285 you would do the job because at that price your after-tax earnings will be $200 -- what doing the job is worth to you. There's a problem. The repair job was worth $200 to me, not $285. So it's my turn to say the heck with it, or would we and society be better off if you and I agreed to the repair job but did not tell anybody? I'd say yes, but we'd be criminals.
You might wonder how congressmen can get away with taxes and other measures that reduce our prosperity potential. Part of the answer is the anti-business climate promoted in academia and the news media. The more important reason is that prosperity foregone is invisible. In other words, we can never tell how much richer we would have been without today's level of congressional interference in our lives and therefore don't fight it as much as we should.
Walter E. Williams is a professor of economics at George Mason University. To find out more about Walter E. Williams and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at Creators Syndicate - Celebrating 20 Years as a World-Class Syndicate Of Talent.
COPYRIGHT 2009 CREATORS SYNDICATE, INC.
Let's see, On this board I hear liberals complaining about the "Bush Tax Cuts", and that corporations don't "pay their fair share" of taxes.
Quite telling.
That is because far too many liberals, while reaping the benefits of a free market system, fail to actually understand how those benefits are created. They then wrap their intellectually flaccid minds around the pre-packaged political slant on what the free market is, and isn't, and march along to that tune like happy monkeys to the organ grinder's message, crying out the mind numbing phrases equating success with evil and working class with nobility, when each are not always the exclusive right of the other.
America is being nailed to the cross of liberalism, mocked and ridiculed, gutted and bled, and the nation is left shaking its weary head and crying out, "Forgive them - they know not what they do."
As much as I enjoy the finger pointing and blamestorming of Mr Obama's tax challenged appointee's, a lot of it still boils down to a tax code that is so convoluted that even the government officials that determine tax law can't manage to file their taxes properly.If the corporate rate were lowered to say, 10% - the economy would BOOM. Job creation would take off, start ups would increase, and in a relatively short amount of time, more tax revenue would be generated.
The tax code is this country is an absolute nightmare, and as such, it is suffocating economic growth.
Time to let the potential of this great nation show its stuff - reduce and simplify our idiotic tax code!
As much as I enjoy the finger pointing and blamestorming of Mr Obama's tax challenged appointee's, a lot of it still boils down to a tax code that is so convoluted that even the government officials that determine tax law can't manage to file their taxes properly.If the corporate rate were lowered to say, 10% - the economy would BOOM. Job creation would take off, start ups would increase, and in a relatively short amount of time, more tax revenue would be generated.
The tax code is this country is an absolute nightmare, and as such, it is suffocating economic growth.
Time to let the potential of this great nation show its stuff - reduce and simplify our idiotic tax code!
As much as I enjoy the finger pointing and blamestorming of Mr Obama's tax challenged appointee's, a lot of it still boils down to a tax code that is so convoluted that even the government officials that determine tax law can't manage to file their taxes properly.If the corporate rate were lowered to say, 10% - the economy would BOOM. Job creation would take off, start ups would increase, and in a relatively short amount of time, more tax revenue would be generated.
The tax code is this country is an absolute nightmare, and as such, it is suffocating economic growth.
Time to let the potential of this great nation show its stuff - reduce and simplify our idiotic tax code!
