The NEVER-answered question on Trump's tax reform proposals

[nat4900]

Fully realizing that our tax system is thoroughly corrupt, the mantra by Trump has always been that our economy suffers because our corporate tax of 35% (the highest in the world) impedes businesses to hire more workers.......

HOWEVER, the never-answered question is to name a half dozen or so of ANY large corporation that actually PAYS the 35%.............and the answer may well be ZERO.

The average tax rate paid by corporations is 20% or much,much less.

So, the high tax rate is just a "straw-man" to be attacked, and probably the 35% that is currently on the books was likely pushed by these corporations themselves to create the support by corrupt, elected republicans .......fully aware that, given the countless tax-break schemes, NO large corporation would even come close to paying that 35%....EVER.

Nothing more than yet ANOTHER "trickle-down" scheme to screw the middle class and reward donors and lobbying firms.

 

[deannalw]

I like turtles

 

[g5000]

Fully realizing that our tax system is thoroughly corrupt, the mantra by Trump has always been that our economy suffers because our corporate tax of 35% (the highest in the world) impedes businesses to hire more workers.......

HOWEVER, the never-answered question is to name a half dozen or so of ANY large corporation that actually PAYS the 35%.............and the answer may well be ZERO.

The average tax rate paid by corporations is 20% or much,much less.

So, the high tax rate is just a "straw-man" to be attacked, and probably the 35% that is currently on the books was likely pushed by these corporations themselves to create the support by corrupt, elected republicans .......fully aware that, given the countless tax-break schemes, NO large corporation would even come close to paying that 35%....EVER.

Nothing more than yet ANOTHER "trickle-down" scheme to screw the middle class and reward donors and lobbying firms.

The playing field has been tilted in the favor of some players, at the expense of others.

The real cure to our corrupt tax scheme is to eliminate all tax expenditures. Tax expenditures are how our politicians pick the winners and the losers. And they pick those winners and losers based on how much each player paid into their re-election campaigns.

If we eliminated all tax expenditures, we could lower the corporate tax rate to 25%, maybe even lower.

But the special interests, and the congressmen and senators owned by them, do not want that to happen. Ever.

And the congressmen and senators who are owned absolutely depend on the stupidity of their constituents never figuring out what is going on.

"It's the goddam MEXICANS! Build the wall! Build the wall! Build the wall!"

 

[bendog]

Fully realizing that our tax system is thoroughly corrupt, the mantra by Trump has always been that our economy suffers because our corporate tax of 35% (the highest in the world) impedes businesses to hire more workers.......

HOWEVER, the never-answered question is to name a half dozen or so of ANY large corporation that actually PAYS the 35%.............and the answer may well be ZERO.

The average tax rate paid by corporations is 20% or much,much less.

So, the high tax rate is just a "straw-man" to be attacked, and probably the 35% that is currently on the books was likely pushed by these corporations themselves to create the support by corrupt, elected republicans .......fully aware that, given the countless tax-break schemes, NO large corporation would even come close to paying that 35%....EVER.

Nothing more than yet ANOTHER "trickle-down" scheme to screw the middle class and reward donors and lobbying firms.

The playing field has been tilted in the favor of some players, at the expense of others.

The real cure to our corrupt tax scheme is to eliminate all tax expenditures. Tax expenditures are how our politicians pick the winners and the losers. And they pick those winners and losers based on how much each player paid into their re-election campaigns.

If we eliminated all tax expenditures, we could lower the corporate tax rate to 25%, maybe even lower.

But the special interests, and the congressmen and senators owned by them, do not want that to happen. Ever.

And the congressmen and senators who are owned absolutely depend on the stupidity of their constituents never figuring out what is going on.

"It's the goddam MEXICANS!"

Well, you're right in the answer to the OP question. The reason the corp tax rates hurts growth and jobs is that it rewards tax evasion rather than efficiency.

 

[Toddsterpatriot]

Fully realizing that our tax system is thoroughly corrupt, the mantra by Trump has always been that our economy suffers because our corporate tax of 35% (the highest in the world) impedes businesses to hire more workers.......

HOWEVER, the never-answered question is to name a half dozen or so of ANY large corporation that actually PAYS the 35%.............and the answer may well be ZERO.

The average tax rate paid by corporations is 20% or much,much less.

So, the high tax rate is just a "straw-man" to be attacked, and probably the 35% that is currently on the books was likely pushed by these corporations themselves to create the support by corrupt, elected republicans .......fully aware that, given the countless tax-break schemes, NO large corporation would even come close to paying that 35%....EVER.

Nothing more than yet ANOTHER "trickle-down" scheme to screw the middle class and reward donors and lobbying firms.

HOWEVER, the never-answered question is to name a half dozen or so of ANY large corporation that actually PAYS the 35%

When you're averaging in their lower off-shore tax payments, of course their overall rate is lower than 35%.

 

[NightFox]

Fully realizing that our tax system is thoroughly corrupt, the mantra by Trump has always been that our economy suffers because our corporate tax of 35% (the highest in the world) impedes businesses to hire more workers.......

HOWEVER, the never-answered question is to name a half dozen or so of ANY large corporation that actually PAYS the 35%.............and the answer may well be ZERO.

That's the wrong question, the right question is what is the TOTAL tax burden that a dollar of U.S. corporate earnings is subject to versus that of their foreign competitors (federal income taxes don't exist in a vacuum), what are the spreads between industries (which ones get the tax advantage goodies and which don't ), the spreads between companies of different sizes (again where are the goodies going) and finally what impact will a flattening (removal of breaks and loop holes) and reduction to X% have on federal revenues, U.S. corporate earnings, domestic competitiveness and the attractiveness of the U.S. for both domestic and foreign capital investment.

Corporate income taxes only account for what 9-10% of total federal revenues? so it's not likely to have that big of an impact from a revenue perspective but it *can* be a big deal from both a competitiveness and attracting capital investment standpoint, depending on the details of how it's implemented.

The average tax rate paid by corporations is 20% or much,much less.

The average is a bit under that, the average however doesn't tell you much that's useful in evaluating any given proposal since the number is distorted by tax favoritism (aka cronyism).

 

[nat4900]

Actually, relevant responses to this thread.......

Let me ask the salient questions in a different way:

Has the trickle down theory on tax reform for corporation been tried before?

If the answer to the above is "yes", how has our economy (unemployment and middle class income) benefited from such a trickle down tax reform scheme ??

 

[g5000]

HOWEVER, the never-answered question is to name a half dozen or so of ANY large corporation that actually PAYS the 35%

A half dozen? How about 66?

Here you go: The 35 Percent Corporate Tax Myth

The table on this page summarizes what the 258 companies paid (or didn’t pay) in effective U.S. income tax rates on their pretax U.S. profits.

• 30 companies paid effective eight-year tax rates between zero and 10 percent. Their average effective tax rate was 6.9 percent.

• Even worse is that 18 companies paid less than 0 percent over the eight-year period. Their effective tax rate averaged -4 percent.

• 66 companies (about a quarter of the companies in this report), paid effective eight-year tax rates of more than 30 percent. Their average effective tax rate was 33.6 percent.

 

[g5000]

From my last link:

Almost as obvious is how the wide variation in tax rates among industries, and among companies within particular industries, gives relatively high-tax companies and industries a legitimate complaint that federal tax policy is helping their competitors at their expense.

Just like I said. Our paid off American Politboro picks the winners and losers.

 

[nat4900]

From the link.....

WHO’S PAYING CORPORATE TAXES — AND WHO’S NOT

On paper at least, federal tax law requires corporations to pay 35 percent of their profits in federal income taxes. In fact, while some of the 258 corporations in this study did pay close to the 35 percent official tax rate, the vast majority paid considerably less. And some paid nothing at all. Over the eight years covered by this study, the average effective tax rate (that is, the percentage of U.S. pretax profits paid in federal corporate income taxes) for all 258 companies was only 21.2 percent.

 

[NightFox]

Has the trickle down theory on tax reform for corporation been tried before?

Apples and oranges since the proposal(s) currently on the table aren't representative of trickle down economics and aren't being sold that way. "Trickle down" is essentially a political gimmick wherein all tax cuts are deemed to be created equal and that they stimulate economic growth which "trickles down" to the benefit of those at or near the bottom of the economic ladder, there is some historical evidence to support this but it's mostly anecdotal.

The argument that the Administration is and has been making all along is to achieve competitiveness parity with the rest of the global, to re-repatriate accumulated earnings currently being held offshore by domestic corporations, to "bring jobs back" and to stimulate domestic capital investment. The relevant questions that need to be answered involve assessing the opportunity costs of keeping the current system in place or adopting the new proposal(s) partially or completely; will they in fact increase domestic capital investment above and beyond the current rate? if so by how much? what is sacrificed in the process? Is the new proposed system more or less equitable than the current one? will the new system result in re-patriotion of jobs? if so, what kind of jobs and from where?

One thing is for certain, capital investment is the key to economic growth and the expansion of the PPF and in order for the U.S. Economy to remain competitive (and the top dog on the planet) we need to accelerate our average growth rate (at an average of 2% it'll take 36 years to double our GDP, while the Chinese at 6% average will double theirs in 12 years) and we need to critically examine any and all fiscal policy mechanisms for ways to achieve it.

IMHO there's really no way to know any of the answers regarding The Trump Administration proposal(s) at this point because what's been published is far too vague to produce any meaningful projections.

 

[Toddsterpatriot]

HOWEVER, the never-answered question is to name a half dozen or so of ANY large corporation that actually PAYS the 35%

A half dozen? How about 66?

Here you go: The 35 Percent Corporate Tax Myth

The table on this page summarizes what the 258 companies paid (or didn’t pay) in effective U.S. income tax rates on their pretax U.S. profits.

• 30 companies paid effective eight-year tax rates between zero and 10 percent. Their average effective tax rate was 6.9 percent.

• Even worse is that 18 companies paid less than 0 percent over the eight-year period. Their effective tax rate averaged -4 percent.

• 66 companies (about a quarter of the companies in this report), paid effective eight-year tax rates of more than 30 percent. Their average effective tax rate was 33.6 percent.

Thanks for the link.

2. Method of Calculation

Conceptually, our method for computing effective corporate tax rates was straightforward. First, a company’s domestic profit was determined and then current state and local taxes were subtracted to give us net U.S. pretax profits before federal income taxes. (We excluded foreign profits since U.S. income taxes rarely apply to them, because the taxes are indefinitely “deferred” or are offset by credits for taxes paid to foreign governments.) We then determined a company’s federal current income taxes. Current taxes are those that a company is obligated to pay during the year; they do not include taxes “deferred” due to various federal “tax incentives” such as accelerated depreciation. Finally, we divided current U.S. taxes by pretax U.S. profits to determine effective tax rates.[13]

So, if a company earned $100 million in "net U.S. pretax profits before federal income taxes" but then has "excess" depreciation of $20 million and $30 million in stock option expenses, they report their taxable income to the IRS as $50 million. They pay a 35% rate for a tax bill of $17.5 million.

The Institute on Taxation and Economic Policy comes along and says it's not fair that they used accelerated depreciation and it's not fair that they deducted stock option expenses, so we're going to consider their "real net profit" to be $100 million and their actual income tax payments means their effective rate is 17.5%.

That's even funnier than I expected it to be.

 

[whitehall]

Why can't lefties understand that corporations pass on tax increases to the consumer? The crazy and angry left thinks they are getting a good deal when they tax corporations and they are surprised when everything costs more and the poor get poorer. Will the left's "plan B" embrace fascism where the government regulates the manufacture and production of goods and services?

 

[bendog]

Why can't lefties understand that corporations pass on tax increases to the consumer? The crazy and angry left thinks they are getting a good deal when they tax corporations and they are surprised when everything costs more and the poor get poorer. Will the left's "plan B" embrace fascism where the government regulates the manufacture and production of goods and services?

No one is talking about increasing the corp tax rate. The dems under Obama were open to reducing it if the tax revenues were made up elsewhere