Prosperity Lost

[alan1]

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.

Exactly - though I do believe some of our elected officials actually believe they are above the laws of us poor common folk...

Without a doubt, some do.

 

[Chris]

Eliminate the capital gains tax and make up for it with a higher tax on wealthy incomes. If they reinvest the capital gains, no tax. If they don't reinvest the capital gains, tax it as income.

That's the way I would do it to encourage investment.

 

[Indiana Oracle]

An interesting question is if our tax code allows corporations to escape taxes, and please do not try to lay this one on Bush 43 because it is as old as the hills, why? Assuming full cynicism in that regard, if we were to change the corporate tax code, would the Congress actually close all loopholes?

I highly doubt it.

 

[Newby]

That's the same point that I always make whenever someone brings up the whole 'effective tax' crap whenever talking about corporate taxes. Who allows them to only pay that small percentage of taxes if the actual bracket has them at 35%? Who passes the laws which allow them to legally defer paying all of those taxes? They can talk about presidents all they want, but it's the Congress that controls that, and this is what is at the very heart of one of the biggest problems in our country with regards to politicians and CEO's. They all scratch each other's backs, regardless of their party, and all of these fools are out here fighting a verbal battle about the 'evil corporations' like their Dem politicians in Congress are doing everything they can to protect them. The Dem politicians are in charge now, so why do all of the loop holes still exist? Why are the lobbyists still in Washington? Why is the Obama administration full of them?

 

[alan1]

An interesting question is if our tax code allows corporations to escape taxes, and please do not try to lay this one on Bush 43 because it is as old as the hills, why? Assuming full cynicism in that regard, if we were to change the corporate tax code, would the Congress actually close all loopholes?

I highly doubt it.

Loopholes that allow corporations from being tax collectors?

 

[Newby]

An interesting question is if our tax code allows corporations to escape taxes, and please do not try to lay this one on Bush 43 because it is as old as the hills, why? Assuming full cynicism in that regard, if we were to change the corporate tax code, would the Congress actually close all loopholes?

I highly doubt it.

Loopholes that allow corporations from being tax collectors?

I agree that they are only tax collectors, I've also stated the same thing many different times. They choose not to hear it, as shown in this thread by the immediate use of the term 'effective' tax, they choose to completely miss the point.

 

[Indiana Oracle]

No arguement that corporations are effectively tax collectors. So, shall we stop them from passing it back to their customers? This is a knotty problem.

 

[Newby]

No arguement that corporations are effectively tax collectors. So, shall we stop them from passing it back to their customers? This is a knotty problem.

Absolutely not. No more power for the government to meddle in private industry, they're already showing that they're not to be trusted.

 

[Care4all]

i have a question.....i own a company ....my company pays zero corporate taxes.....why.....because we issue the profits to the shareholders and they pay taxes on it....

who else here owns a corporation.....do you really pay corprate taxes on your profits then take what is left over and give it to the shareholders and then have them pay taxes on what is left.....

small businesses don't get hit with corporate tax rates...

are you an S-corp? I don't believe corporate taxes apply, there is a level in which they do....I will try to get that number.... or try googling it.

 

[Care4all]

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.

...

Please post a link for this. Thanks.

here ya go!

ataxingmatter: Tax Foundation and Competitive Environments: more bunk!

sorry i am so LATE in getting back to you! i meant to link this before i went to florida for the month, then completely forgot about it!

care

 

[editec]

Corporation are legal entities, and in many ways are treated like people.

So before you start whining that only people pay taxes not corporations, do bear in mind that those stockholders enjoy ownership but are not subject to being held responsible for that corporation's mistakes either.

That's exactly why corporations exist, but that also means that corporations SHOULD pay taxes, too.

Consider the advantages of corporations for their stockholders.

If the corporation gets sued, the stock owners don't.

If the corporation goes bankrupt stockholders are not responsible for its debts.

If the corporation's officers commit crimes, the stockholders are not held accountable.

So when somebody is going to whine about coporations and FORGET why corporations were created to begin with, then all I can say is they are either be pretty fucking stupid or purposefully ignoring the ENTIRE STORY about what corporations REALLY are.

 

[Amanda]

Here's the bottom line; we need to collect taxes, and we need to collect enough to cover goverenment spending. We cannot continue to borrow from our children and grandchildren. The solution is twofold; cut costs and tax everyone fairly, a flat tax across the board. Everyone pays the same less a standard deduction. Income tax, Corporate tax, Capital Gains, and Inheritance taxes, all one rate, simple and fair to everyone.

Speaking as 1 of the children.... we're not happy with you guys handing this debt to us. Please stop. We're not benefitting and we sorta resent paying the bill. Thanks.

 

[editec]

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.

You can differ without begging. Well...okay, you can beg if you want.

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.

I don't realy understand your point. Or at least I don't understand your point as you've directed it to what I just wrote.

It doesn't seem to in any way address my points, MM.

What exactly is intellectually dishonest? I merely stated the facts as they exist today.

I called the taxes that entities called corporations pay "TAXES" because that's what they are...taxes on that entity.

Corporations are ENTITIES which have RIGHTS just as individuals have.

You can disagree, but your disagreement isn't with me ... it's with the Supreme Courts which gave them that legal status.

Were it up to me, I would drastically change that policy.

But were it up to me, when a corporation got sued if that suit bankrupted the corporation, then the plantiffs could go after the stockholders assets, too.

THEN it might make sense NOT to tax corporations since they wouldn't be an ENTITY unto itself, like they are now.

So before you decide that you don't want corporations to have the same responsibilities to pay taxes as we citizens have, you may want consider that corporations also give the stock holders many advantages that mere business owners don't get.

 

[Iriemon]

i have a question.....i own a company ....my company pays zero corporate taxes.....why.....because we issue the profits to the shareholders and they pay taxes on it....

who else here owns a corporation.....do you really pay corprate taxes on your profits then take what is left over and give it to the shareholders and then have them pay taxes on what is left.....

That is an "S" corp, I believe? Basically for smaller corporations owned by one or a few people.

The "C" corp taxes profits before dividends, I believe.

 

[Iriemon]

Eliminate the capital gains tax and make up for it with a higher tax on wealthy incomes. If they reinvest the capital gains, no tax. If they don't reinvest the capital gains, tax it as income.

That's the way I would do it to encourage investment.

I'm sure the trust fund babies and hedge fund managers and Republicans would kiss your feet for this.

But I personally have an issue with paying a 33% marginal rate on my income while Warren Buffet would pay about -0-% on his.

 

[xsited1]

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.

...

Please post a link for this. Thanks.

here ya go!

ataxingmatter: Tax Foundation and Competitive Environments: more bunk!

sorry i am so LATE in getting back to you! i meant to link this before i went to florida for the month, then completely forgot about it!

care

That's more of an editorial. Do you have something with actual data?

 

[Iriemon]

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.

They were the Bush tax cuts. The Bush administration proposed them and he got his part to pass them. Just like they were the Reagan tax cuts in the 80s.

Corporations should not be taxed at all, or a very low tax.

Whether corporations can pass some or all of the tax to consumers is a matter of debate, (the CBO in its income distribution charts, for example, attributes all corporation taxes to owners, none to consumers) but I think its fair to same some percentage is. So in a sense the corporate tax is a sales tax.

The tax should be levied instead on the individuals who profit from the corporation in terms of salaries, dividends and cap gains.

I agree; slash corp taxes, and jack up taxes on CEOs and shareholders instead.

 

[Iriemon]

Here's the bottom line; we need to collect taxes, and we need to collect enough to cover goverenment spending. We cannot continue to borrow from our children and grandchildren. The solution is twofold; cut costs and tax everyone fairly, a flat tax across the board. Everyone pays the same less a standard deduction. Income tax, Corporate tax, Capital Gains, and Inheritance taxes, all one rate, simple and fair to everyone.

A one rate tax is not fair at all, unless you think it is fair that some pay taxes from money needed for necessities while other pay from monies only used for luxuries.

 

[xsited1]

Here's the bottom line; we need to collect taxes, and we need to collect enough to cover goverenment spending. We cannot continue to borrow from our children and grandchildren. The solution is twofold; cut costs and tax everyone fairly, a flat tax across the board. Everyone pays the same less a standard deduction. Income tax, Corporate tax, Capital Gains, and Inheritance taxes, all one rate, simple and fair to everyone.

A one rate tax is not fair at all, unless you think it is fair that some pay taxes from money needed for necessities while other pay from monies only used for luxuries.

I agree that taxing things like food is immoral, but what about everything else? If you have a consumption tax of, say, 15%, everyone pays it. If you buy something for $100, you pay $15 in taxes. If you're rich and buy something for $1,000,000, you pay $150,000 in taxes. Sounds fair to me.

 

[Iriemon]

Here's the bottom line; we need to collect taxes, and we need to collect enough to cover goverenment spending. We cannot continue to borrow from our children and grandchildren. The solution is twofold; cut costs and tax everyone fairly, a flat tax across the board. Everyone pays the same less a standard deduction. Income tax, Corporate tax, Capital Gains, and Inheritance taxes, all one rate, simple and fair to everyone.

A one rate tax is not fair at all, unless you think it is fair that some pay taxes from money needed for necessities while other pay from monies only used for luxuries.

I agree that taxing things like food is immoral, but what about everything else? If you have a consumption tax of, say, 15%, everyone pays it. If you buy something for $100, you pay $15 in taxes. If you're rich and buy something for $1,000,000, you pay $150,000 in taxes. Sounds fair to me.

Let's take two examples. And let's make a realistic comparison -- you'll need about a 30% tax rate to just get the same revenues as the current tax system.

Family A makes $20,000. They can't afford to save a dime, in fact they don't have enough to pay for basic things like health care and education.

They spend all their money. In effect they spend about 15,400, and pay about 4,600 (which is 30% of 15,400) in taxes, money they desparately need to pay for necessities they are doing without. That gives them an effective tax rate of about 23% (4600/20,000).

Family B makes $20,000 [Edit: should be $20 million] They save and invest $10 million and spend $10 million. Of that $10million they spend, about 2.3 million is taxes, the balance or 7.7 million is for products and services. Obviously Family B is not sacrifices health care or junior's education to pay the tax!

The effective tax rate for Family B is 2.3m/20m or 11.5%

Now, I personally don't think that a system in which a family making $20k and paying a higher tax rate with money they desparately need for necessities than a family making $20 million in any way is fair, and I really don't see how any one else could either.

Unless your goal is to make the rich richer at the expense of keeping the poor poorer, which IMO is exactly the goal of lots of folks who promote such tax plans.