The logic flaw of tax cuts.

[Cellblock2429]

While I can understand how tax cuts on the middle class and small to medium businesses can help the economy, I am reluctant regarding giving tax cuts to large corporations. The main reason is that history has proven they engage into speculative investment ( derivatives, stock exchange, money markets).
These activities hardly help the economy or consumption.
The only way around this problem is to either tax capital gains or a tax on wealth.

Now just a definition of large corporation : a corporation with sales exceeding one billion dollars.

/----/ For the 10,000th time - corporations treat taxes as overhead and pass them on to the consumer in the form of higher prices. I don't know about you, but I already pay enough for stuff.

https://www.forbes.com › sites › adammillsap › 2021 › 04 › 28 › higher-corporate-taxes-affect-everyone

Higher Corporate Taxes Affect Everyone - Forbes​

Apr 28, 2021Economists have studied state corporate tax changes for decades, and several studies over the last 15 years find that state corporate tax increase have adverse economic consequences. It...

 

[Mexicano]

/----/ For the 10,000th time - corporations treat taxes as overhead and pass them on to the consumer in the form of higher prices. I don't know about you, but I already pay enough for stuff.

https://www.forbes.com › sites › adammillsap › 2021 › 04 › 28 › higher-corporate-taxes-affect-everyone

Higher Corporate Taxes Affect Everyone - Forbes​

Apr 28, 2021Economists have studied state corporate tax changes for decades, and several studies over the last 15 years find that state corporate tax increase have adverse economic consequences. It...

So, what's the solution? Exempt companies from paying taxes and have only payroll taxes?

 

[Cellblock2429]

So, what's the solution? Exempt companies from paying taxes and have only payroll taxes?

/——-/ Yes, then they will have a competitive edge over the world economy. Tired of buying Chinese crap?

 

[Mexicano]

/——-/ Yes, then they will have a competitive edge over the world economy. Tired of buying Chinese crap?

That's unlikely, profit taxes represent at most 6% of the total revenue ( costs usually represent about 80% to 90% of the sale price). The Chinese currency is undervalued by 50%. Exempting corporations from taxes would hardly make a dent. Only if you got rid of all taxes ( including VAT tax) you would get a significant advantage ( about 20%).
That said, I still have to see prices go down as a result of a tax cut.

 

[Blues Man]

So, what's the solution? Exempt companies from paying taxes and have only payroll taxes?

every dollar a corporation makes gets taxed sooner or later.

When dividends are paid they get taxed
When CEOs sell their stocks they pay tax
All corporate profit ends up as income to someone therefore it will be taxed.

And payroll taxes refer to FICA taxes not income taxes.

You have to pay FICA taxes on W2 and 1099 claimed incomes but there are other incomes like that from rental property which you do not pay payroll taxes

 

[Mexicano]

every dollar a corporation makes gets taxed sooner or later.

When dividends are paid they get taxed
When CEOs sell their stocks they pay tax
All corporate profit ends up as income to someone therefore it will be taxed.

And payroll taxes refer to FICA taxes not income taxes.

You have to pay FICA taxes on W2 and 1099 claimed incomes but there are other incomes like that from rental property which you do not pay payroll taxes

If there were no loopholes, then yes, you would be right: "Every dollar a corporation makes gets taxed sooner or later". But the discrepancy between the tax rate and the effective tax rate is too large for it to be true.
I haven't seen any figures yet,but my guess is the larger the corporation, the larger the discrepancy.

 

[Toddsterpatriot]

If there were no loopholes, then yes, you would be right: "Every dollar a corporation makes gets taxed sooner or later". But the discrepancy between the tax rate and the effective tax rate is too large for it to be true.
I haven't seen any figures yet,but my guess is the larger the corporation, the larger the discrepancy.

But the discrepancy between the tax rate and the effective tax rate is too large for it to be true.

What are the bad reasons the effective tax rate is lower?