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The Library => The SGA => Topic started by: Townhallsavoy on July 25, 2011, 10:09:58 PM
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Gist of one of Obama's points: The Republicans only want to implement cuts and don't want the wealthiest Americans and corporations to have any responsibility for the national debt.
Is this true?
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Gist of one of Obama's points: The Republicans only want to implement cuts and don't want the wealthiest Americans and corporations to have any responsibility for the national debt.
Is this true?
I actually watched both Obomanu's speech and Boners response. No way they get a deal done in my opinion. Two completely different approaches. Obewon's whole deal is that the only way to cut the deficit is to tax the "wealthy" even harder. Basically, it was a campaign speech.
Boehner (sp?) said no way. The gubment spending is out of control and it has to stop.
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I understand their points of view.
What I don't understand is when Obama accused Republicans of wanting to continue a policy that allows the wealthy corporations to go untaxed.
One of the biggest premises used in wanting to change taxes is that the rich get off scott-free.
Is that true?
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I understand their points of view.
What I don't understand is when Obama accused Republicans of wanting to continue a policy that allows the wealthy corporations to go untaxed.
One of the biggest premises used in wanting to change taxes is that the rich get off scott-free.
Is that true?
Some points...
- The United States has the 2nd highest corporate tax rate in the world at 36%.
- The top 1% of tax payers pay nearly 40% of all personal income taxes yet earn less than 20% of all federally reported personal income.
This is nothing other than class envy/warfare where they demonize the successful with the hopes of maintaining power. If they can convince enough of the ignorant masses, it will work.
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I actually watched both Obomanu's speech and Boners response. No way they get a deal done in my opinion. Two completely different approaches. Obewon's whole deal is that the only way to cut the deficit is to tax the "wealthy" even harder. Basically, it was a campaign speech.
Boehner (sp?) said no way. The gubment spending is out of control and it has to stop.
I am not going to say that there is not going to be a tax increase, more than likely will, but what Boehner is saying is the only thing that is making sense right now.
We spend way too much money and if we keep going we are all fucked. Upper, middle and lower. Part of the problem is that all politicians want to get re-elected and keep that office. It's going to take some unselfish action form our congress to step and make the tough and non popular decisions on what to cut.
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I understand their points of view.
What I don't understand is when Obama accused Republicans of wanting to continue a policy that allows the wealthy corporations to go untaxed.
One of the biggest premises used in wanting to change taxes is that the rich get off scott-free.
Is that true?
No it is not. Garman summed it well. We already have a progressive tax code, which is technically unconsitutional as we are to only have an apportioned tax on GAINS. Anyone making even decent money or above is already getting nailed for roughly a third of their paycheck or more. The ones who make the most are already taxed the most. By a country mile. This is rhetoric for his naive constituency to swallow hook, line and sinker.
Those big bad rich white people. Shame on them for earning their dollar with hard work and intuition. Let's take that money since they have plenty. As garman said, its class warfare.
Pffffffttttt.
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I am not going to say that there is not going to be a tax increase, more than likely will, but what Boehner is saying is the only thing that is making sense right now.
We spend way too much money and if we keep going we are all effed. Upper, middle and lower. Part of the problem is that all politicians want to get re-elected and keep that office. It's going to take some unselfish action form our congress to step and make the tough and non popular decisions on what to cut.
We should not compromize. The Cut, Cap and Balance plan is perfect. Taxing the wealthy... Taxing corporations... That's just the opposite of what we need in a slow economy.
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We should not compromize. The Cut, Cap and Balance plan is perfect. Taxing the wealthy... Taxing corporations... That's just the opposite of what we need in a slow economy.
It isn't when you are purposefully trying to drive the free market off of a cliff. Then the state will control everything. Just like these goons want. To control the means of production and elements of life. Socialism. These commies don't want the private sector doing anything. Think about it.
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Sort of related to the topic, the tax code needs to be cleaned up. Tax rates may or may not need to be dropped, but there is a lot of shit in the tax code that is complicating everything.
As an example, corporations have relatively high taxes. But, they don't necessarily pay the amount in taxes due to a variety of deductions, exemptions, credits, and other useless shit that we really wouldn't need if we'd just lower some of the tax rates. A few years ago, I think it was a little more than 50% of American companies didn't have to pay anything in taxes due to the absurd number of tax breaks.
Ultimately, the tax system needs to be simplified. In addition to cutting spending, of course.
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Sort of related to the topic, the tax code needs to be cleaned up. Tax rates may or may not need to be dropped, but there is a lot of shit in the tax code that is complicating everything.
As an example, corporations have relatively high taxes. But, they don't necessarily pay the amount in taxes due to a variety of deductions, exemptions, credits, and other useless shit that we really wouldn't need if we'd just lower some of the tax rates. A few years ago, I think it was a little more than 50% of American companies didn't have to pay anything in taxes due to the absurd number of tax breaks.
Ultimately, the tax system needs to be simplified. In addition to cutting spending, of course.
Damn, I'm at a loss here vv. Agree totally.
But I think we can guess why we pay the taxes up front (quarterly, every paycheck, etc) and then get some back later. Basically the government is getting interest free borrowing money all during the year. They give a lot if it back to the citizens during filing season, but interest free. If we just flattened the tax and simplified the taxcode, the govt wouldnt , in their minds, get as much of a revenue stream during the year. It's bs. I'm with you - simplify it and deal with it. At the least it needs to be apportioned and not progressive.
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Sort of related to the topic, the tax code needs to be cleaned up. Tax rates may or may not need to be dropped, but there is a lot of poop in the tax code that is complicating everything.
As an example, corporations have relatively high taxes. But, they don't necessarily pay the amount in taxes due to a variety of deductions, exemptions, credits, and other useless poop that we really wouldn't need if we'd just lower some of the tax rates. A few years ago, I think it was a little more than 50% of American companies didn't have to pay anything in taxes due to the absurd number of tax breaks.
Ultimately, the tax system needs to be simplified. In addition to cutting spending, of course.
Hold me...
:fag:
The tax code is nothing short of gubm'et socio-economic engineering. While the corporations might have an absurd amount of deductions, many of those deductions are designed to offset expenses thrown on them by the government in the first place. I'm really just saying that the government needs to get back to its core purpose and stay out of our way.
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Hold me...
:fag:
The tax code is nothing short of gubm'et socio-economic engineering. While the corporations might have an absurd amount of deductions, many of those deductions are designed to offset expenses thrown on them by the government in the first place. I'm really just saying that the government needs to get back to its core purpose and stay out of our way.
Someone cue Born in the USA.......
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So essentially, the best solution would be a perfect compromise.
Reduce the "variety of deductions, exemptions, credits, and other useless shit."
Heavily cut spending.
Make everyone pay taxes.
Cut spending.
Cut spending again.
What's truly absurd is how much government spends and controls. But it is we the people who enable them.
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Hold me...
:fag:
The tax code is nothing short of gubm'et socio-economic engineering. While the corporations might have an absurd amount of deductions, many of those deductions are designed to offset expenses thrown on them by the government in the first place. I'm really just saying that the government needs to get back to its core purpose and stay out of our way.
The complexity of the tax code with all of its tax breaks has led Americans to be professional tax evaders. Most developed countries collect almost twice in corporate tax than America (proportional to each country's GDP, of course).
If we just got rid of the options for tax evasion and made companies and people pay flat rates, then there would be fewer chances for evasion and more chances for collection. I'd even venture to say that the overall amount of taxes collected would increase.
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We should not compromize. The Cut, Cap and Balance plan is perfect. Taxing the wealthy... Taxing corporations... That's just the opposite of what we need in a slow economy.
Not saying we should compromise, just saying get ready for a tax hike. I think they will do it.
Cut spending, cut some more spending, then cut a little more spending. Once you do those three things, go back in and cut a little more. We can't continue on this spending spree that we have been on for the past 10 or 12 years. It has to stop or we are seriously fucked. I know I sound like Glen Beck on that, but goddamint congress, STOP YOUR SPENDING!!!
I work in the DoD field as a contractor, we hire people, who do nothing but sit at a desk, read a book, paper or magazine all day long for 4 days out of 5. Honest to god. We have to hire those people, b/c the more people we hire, the more we can charge the Gov't and the Gov't allows it. There are ways to make cuts in defense spending and things like that without killing a company, sacrificing anything for our troops, and things of vital importance.
VV hit on something to irks me as well, our tax code, toooooo fucking complicated. Scrap that shit, give me my entire salary and gives us a consumption tax. Oh, that illegal that was paid cash for pouring your concrete driveway, if that fucker shops at Wally World then he will have to pay his fair share.
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What's truly absurd is how much government spends and controls. But it is we the people who enable them.
Ding, Ding Ding! It is also "we the people" that need to open our eyes and send almost all of them home packing. There are some good ones up there that are trying to do the right thing, but they are few and far between. Most are just worried about hanging on to their seat and the power and perks that come with it.
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Gist of one of Obama's points: The Republicans only want to implement cuts and don't want the wealthiest Americans and corporations to have any responsibility for the national debt.
Is this true?
THS, please click here and watch this short 9 min video. Then come back here and let me know if you now understand why SPENDING CUTS are the only way to correct this mess.
http://www.tigersx.com/forum/the_sga/eat_the_rich_quotshould_be_required_listening_everyonequot_14557.0.html
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The complexity of the tax code with all of its tax breaks has led Americans to be professional tax evaders. Most developed countries collect almost twice in corporate tax than America (proportional to each country's GDP, of course).
If we just got rid of the options for tax evasion and made companies and people pay flat rates, then there would be fewer chances for evasion and more chances for collection. I'd even venture to say that the overall amount of taxes collected would increase.
And, you were doing so well... As an attorney, you of all people should know the difference between evasion and avoidance. Don't confuse the terms. Evasion is illegal. Avoidance is encouraged.
The average effective corporate tax rate in the United States is greater than 25%, so your suggestion that most other counties collect more is simply false. Add to that, the portion of payroll taxes that employers must pay for their employees. And on top of that, most states also collect taxes from corporations. After you sum everything, the average effective tax burden on corporations in America can easily exceed 35-45%.
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And, you were doing so well... As an attorney, you of all people should know the difference between evasion and avoidance. Don't confuse the terms. Evasion is illegal. Avoidance is encouraged.
Oh, trust me, they've become experts at tax evasion as well. I do represent these people, afterall.
The average effective corporate tax rate in the United States is greater than 25%, so your suggestion that most other counties collect more is simply false.
This study (http://www.ctj.org/pdf/oecd201106.pdf), which includes the graph shown below, indicates that the amount of corporate taxes as a percentage of the GDP is lower than all other nations. This reflects the amount of taxes actually collected, as opposed to general tax rates which don't take into account deductions.
While most other nations do have lower corporate tax rates, they've also gotten rid of many deductions and loopholes, whereas the U.S. has increased them.
(http://thinkprogress.org/wp-content/uploads/2011/07/final-chart.png)
Add to that, the portion of payroll taxes that employers must pay for their employees.
Well, yes, but if we're still talking about the top 1% of earners, then it's worth mentioning that they pay only 4.1% of federal payroll taxes. But if you're referencing this tax merely to point out that it's arbitrarily present for the purpose of collecting more taxes from businesses, then yes, I agree.
And on top of that, most states also collect taxes from corporations. After you sum everything, the average effective tax burden on corporations in America can easily exceed 35-45%.
Yes, the rates themselves are higher. But these rates are only applied to your taxable income. When you factor in all of the deductions that are available, your taxable income decreases. Again, this is why the U.S. actually collects less corporate taxes (and all taxes in general) as a percentage of GDP than other countries.
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Oh, trust me, they've become experts at tax evasion as well. I do represent these people, afterall.
This study (http://www.ctj.org/pdf/oecd201106.pdf), which includes the graph shown below, indicates that the amount of corporate taxes as a percentage of the GDP is lower than all other nations. This reflects the amount of taxes actually collected, as opposed to general tax rates which don't take into account deductions.
While most other nations do have lower corporate tax rates, they've also gotten rid of many deductions and loopholes, whereas the U.S. has increased them.
(http://thinkprogress.org/wp-content/uploads/2011/07/final-chart.png)
Well, yes, but if we're still talking about the top 1% of earners, then it's worth mentioning that they pay only 4.1% of federal payroll taxes. But if you're referencing this tax merely to point out that it's arbitrarily present for the purpose of collecting more taxes from businesses, then yes, I agree.
Yes, the rates themselves are higher. But these rates are only applied to your taxable income. When you factor in all of the deductions that are available, your taxable income decreases. Again, this is why the U.S. actually collects less corporate taxes (and all taxes in general) as a percentage of GDP than other countries.
Youre actually right. The more simple and flat they make the tax code, the less people can and want to evade. The revenues WILL go up. So why doesn't he do it? When you can get more by requiring less, then why not do it? The guy has some serious issues.
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Oh, trust me, they've become experts at tax evasion as well. I do represent these people, afterall.
Oh come on... Really? Corporations have just as much of a self-preservation instinct as individuals. There's no doubt that there are some shady operations out there, like Enron and others, but most don't evade taxation.
This study (http://www.ctj.org/pdf/oecd201106.pdf), which includes the graph shown below, indicates that the amount of corporate taxes as a percentage of the GDP is lower than all other nations. This reflects the amount of taxes actually collected, as opposed to general tax rates which don't take into account deductions.
OK... OK... We're dancing around each other on this one. You're using GDP for your relative comparison. You're not using the effective tax rates or the actual total revenues collected. Your GDP comparison is simply smoke-and-mirrors. You've also referenced a pro-tax organization's study. You've got to be phucking kidding me!!!
While most other nations do have lower corporate tax rates, they've also gotten rid of many deductions and loopholes, whereas the U.S. has increased them.
Agreed...
Well, yes, but if we're still talking about the top 1% of earners, then it's worth mentioning that they pay only 4.1% of federal payroll taxes. But if you're referencing this tax merely to point out that it's arbitrarily present for the purpose of collecting more taxes from businesses, then yes, I agree.
You love the games... We're talking about corporations that typically employ individuals at various levels. It is approximately 7.5% for individuals earning less than $106,800, and because of the cap for Social Security, they only pay 2.9% on income above that level.
Yes, the rates themselves are higher. But these rates are only applied to your taxable income. When you factor in all of the deductions that are available, your taxable income decreases. Again, this is why the U.S. actually collects less corporate taxes (and all taxes in general) as a percentage of GDP than other countries.
Well... Yes... But, does that mean we need to tax corporations further? I mean, if you confiscate more of the corporation's profits through increased taxation, isn't it obvious that they'll have less money to invest in corporate development initiatives and the hiring of additional employees? And, if you let the corporation hire additional resources with those profits, wouldn't the government also collect more revenues on the personal income paid to those new employees? I know this is simplified, but you understand my point.
Aside from that, do we follow suit just because other nations are doing it? The United States is not like other nations. While they are collecting higher revenues as a percentage of GDP, we are collecting higher actual revenues because we have encouraged economic growth and prosperity at rates that have historically exceeded all other nations. We have far more corporations than most other countries. This is not necessarily a function of our population. It's a function of our economic freedoms. I continue to be astonished by the level of taxation in Europe. Somehow, many believe that we should be judged by those thresholds. The comparable payroll taxes in many European nations approach 100%. Why start a company? Why stay in business? Why operate in a country like that? Do you really want to bring that here? Spain's unemployment rate exceeds 20% now. In fact, most unemployment rates throughout Europe have far exceeded that of the US over the last several decades. Is that what you would propose for the United States?
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I think the following best summarizes my position on this...
A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities.
Thomas Jefferson, First Inaugural Address, 1801
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No wonder Jefferson died penniless in Monticello.
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"It is a good thing for an uneducated man to read books of quotations." -- Winston Churchill
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Oh come on... Really? Corporations have just as much of a self-preservation instinct as individuals. There's no doubt that there are some shady operations out there, like Enron and others, but most don't evade taxation.
I didn't say that most evaded taxation. What I'm saying is that the complexity of the tax code has created a variety of deductions, many of which can be obtained by utilizing "creative accounting." Just because something looks correct on paper doesn't mean it's actually so.
You're using GDP for your relative comparison. You're not using the effective tax rates or the actual total revenues collected.
GDP can be calculated in a few different ways, but generally speaking, it's representative of companies' and individuals' economic profitability. If you're collecting a lower percentage of GDP, then you're collecting a smaller percentage of their collective incomes. Smaller percentage of income = lower actual tax rate, regardless of what the base tax rates are.
But, even if this doesn't persuade you, look at it this way: A Government Accountability Office study determined that, between 1998 and 2005, a majority of U.S. controlled corporations (meaning they were domestically incorporated and not foreign corporations) reported no tax liability each year. And by majority, I mean that the statistic consistently hovered around 60% of corporations that reported no tax liability.
Even assuming that the other 40% of corporations paid the absolute maximum of 45% in corporate taxes (which is highly unlikely), this would mean that the average percentage paid in corporate taxes (taking into account the 60% of those corporations who paid 0% due to reducing their taxable income to $0 with deductions) is 18%. This is slightly more than half of Japan's corporate tax rate, and would put the U.S. somewhere around 30th in comparison to other countries' tax rates.
You've also referenced a pro-tax organization's study. You've got to be phucking kidding me!!!
Pro-tax? They were a driving factor in bringing about the 1986 tax reform which cut taxes. Yes, they're in favor of making sure the rich pay their fair share, but I wouldn't classify this as being "pro-tax," or even "pro-tax for the rich."
If you've ever read any of their publications, then you'll notice a theme that is recurring, and it's a theme that is very similar to what I've stated here: Many corporations don't pay any tax at all due to deductions and loopholes, and many others pay much less in taxes than the tax rate would indicate. In comparison to other countries, many companies in America pay less in taxes than they would elsewhere.
All of them? No, of course not. There are those companies that may not qualify for many of the deductions, but most do.
But, just in case you still don't trust the CTJ, you can reference others, including government agencies and economic scholars, who have stated the same:
http://www.nytimes.com/2011/05/03/business/economy/03rates.html?_r=1
You love the games... We're talking about corporations that typically employ individuals at various levels. It is approximately 7.5% for individuals earning less than $106,800, and because of the cap for Social Security, they only pay 2.9% on income above that level.
There aren't any games here. I'm merely pointing to a statistic which states that 4.1% of the total payroll taxes are paid by the top 1% of taxpayers. I was just pointing out the fact that, if we were still referencing the top 1% of earners, then they pay very little into payroll.
Well... Yes... But, does that mean we need to tax corporations further? I mean, if you confiscate more of the corporation's profits through increased taxation, isn't it obvious that they'll have less money to invest in corporate development initiatives and the hiring of additional employees? And, if you let the corporation hire additional resources with those profits, wouldn't the government also collect more revenues on the personal income paid to those new employees? I know this is simplified, but you understand my point.
I didn't say they should be taxed further. I was just pointing out that the comparison of the tax rates here to other countries' tax rates is flawed, because it is not taking into account the variety of deductions which ultimately reduces the final percentage you pay in the form of tax.
Aside from that, do we follow suit just because other nations are doing it? The United States is not like other nations. While they are collecting higher revenues as a percentage of GDP, we are collecting higher actual revenues because we have encouraged economic growth and prosperity at rates that have historically exceeded all other nations. We have far more corporations than most other countries. This is not necessarily a function of our population. It's a function of our economic freedoms. I continue to be astonished by the level of taxation in Europe. Somehow, many believe that we should be judged by those thresholds. The comparable payroll taxes in many European nations approach 100%. Why start a company? Why stay in business? Why operate in a country like that? Do you really want to bring that here? Spain's unemployment rate exceeds 20% now. In fact, most unemployment rates throughout Europe have far exceeded that of the US over the last several decades. Is that what you would propose for the United States?
Again, there was no advocating that we follow other countries' examples. I was merely pointing out the flaw in comparing base tax rates.
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Youre actually right. The more simple and flat they make the tax code, the less people can and want to evade. The revenues WILL go up. So why doesn't he do it? When you can get more by requiring less, then why not do it? The guy has some serious issues.
I would assume it's a political thing. Cutting taxes for the middle and lower class, who make up the majority of your voters, sounds better than raising taxes for them. The CTJ has pushed over the years for the reduction of taxes in combination with the reduction of tax loopholes. Reagan somewhat listened to them, but since then a variety of new loopholes and deductions have come about.
Throwing out thousands of statutory provisions related to tax is a scary concept. I agree that this is what we need to do, but from a legislative and judicial point of view, it's a daunting task. I think the best case scenario would be for the government to slowly but surely cut back the tax code until we reach an ideal and simple tax code that allows for less evasion/avoiding, and promotes fairness in rates by having all individuals pay the same percentage, all corporations pay the same percentage, etc.
Unfortunately, this would probably take more than a decade to do. You don't want to freak out the majority of voters by making sudden and drastic changes, even if realistically that is what is needed; people in masses don't think (or, rather, vote) clearly. So with these gradual changes, you'd have to assume that your successor is going to continue it. Otherwise, you'd never reach your end goal.
Someone is just going to have to swing their dick out and do it. But because doing so would likely disenfranchise voters, especially if it wound up having negative effects (temporary or not), I don't foresee any politician choosing to take this route for quite some time.
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GDP can be calculated in a few different ways...
But, even if this doesn't persuade you, look at it this way: A Government Accountability Office study determined that, between 1998 and 2005, a majority of U.S. controlled corporations (meaning they were domestically incorporated and not foreign corporations) reported no tax liability each year. And by majority, I mean that the statistic consistently hovered around 60% of corporations that reported no tax liability.
Do you realize how many corporations exist that do not make a profit? If there's no profit, there's no tax liability, and that's before we ever get into the deductions and depreciation. This 60% figure does not phase me, and I'm surprised that it's not significantly higher. I know of several companies that have been operating at a loss for years... A certain Detroit based industry comes to mind. How do you squeeze blood from a turnip?
Even assuming that the other 40% of corporations paid the absolute maximum of 45% in corporate taxes (which is highly unlikely), this would mean that the average percentage paid in corporate taxes (taking into account the 60% of those corporations who paid 0% due to reducing their taxable income to $0 with deductions) is 18%. This is slightly more than half of Japan's corporate tax rate is, and would put the U.S. somewhere around 30th in comparison to other countries' tax rates.
OK... We're not following each other. Let's try this... The federal corporate tax rate in the US is 35%. By the time you apply depreciation and other deductions, it's less than that. You're claiming that we likely end up around 18% with your fuzzy-math above, but PWC claims that it's nearly 10 points higher at 27.7% exceeding that of Europe by 5+%.
(http://businessroundtable.org/uploads/general/Effective%20Rates%2004%2014%2011.jpg)
Now, we haven't really touched on this, but here's the fallacy behind many of these "Corporate tax rate - GDP comparisons" to other countries. Even if you look at corporate tax returns submitted to the IRS and compare them with our nation's GDP to get the "Percentage of GDP", does this adequately represent the level of taxation of America's business community, and would you expect that value to be a statistic to compare with other countries? What about the advent of "new" pass-through entities? I know of several former corporations and partnerships that converted to LLCs and LLPs. No more corporate tax returns... No more tax revenues collected or necessarily reported as corporate income... Doesn't this dilute the statistic? (The CBO believes so...)
Pro-tax? They were...
If you've ever read any of their publications, then you'll notice a theme that is recurring, and it's a theme that is very similar to what I've stated here: Many corporations don't pay any tax at all due to deductions and loopholes, and many others pay much less in taxes than the tax rate would indicate. In comparison to other countries, many companies in America pay less in taxes than they would elsewhere.
It's not a loophole if it's law, but don't take me wrong here. I agree that we need to simplify the tax code, but I do not believe that we should look to confiscate more profits from the job creators. That's what I saw in that study.
All of them? No, of course not. There are those companies that may not qualify for many of the deductions, but most do.
But, just in case you still don't trust the CTJ, you can reference others, including government agencies and economic scholars, who have stated the same:
http://www.nytimes.com/2011/05/03/business/economy/03rates.html?_r=1
It's slightly dated, but here's one for you from the Congressional Budget Office... Look at the "Effective Marginal Tax Rates" and note their similarity to PWC's results. The term "effective" identifies the physical rate as a percentage of actual income paid as federal tax revenue.
http://www.cbo.gov/ftpdocs/69xx/doc6902/11-28-CorporateTax.pdf
There aren't any games here. I'm merely pointing to a statistic which states that 4.1% of the total payroll taxes are paid by the top 1% of taxpayers. I was just pointing out the fact that, if we were still referencing the top 1% of earners, then they pay very little into payroll.
It's games with numbers, and it's intentionally misleading. The 4.1% rate is a blended rate for the top 1% of wage earners. While their effective percentage may be less as a portion of overall income, they pay the maximum amount of Social Security tax and continue to pay 2.9% across all of their income as their Medicare tax.
I didn't say they should be taxed further. I was just pointing out that the comparison of the tax rates here to other countries' tax rates is flawed, because it is not taking into account the variety of deductions which ultimately reduces the final percentage you pay in the form of tax.
The PWC chart above covers this...
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Do you realize how many corporations exist that do not make a profit? If there's no profit, there's no tax liability, and that's before we ever get into the deductions and depreciation. This 60% figure does not phase me, and I'm surprised that it's not significantly higher. I know of several companies that have been operating at a loss for years... A certain Detroit based industry comes to mind. How do you squeeze blood from a turnip?
If 60% of America's corporations aren't making a profit, then we've got more problems than tax rates. Do you seriously think that this many corporations aren't paying taxes due to the fact that they are not making a profit? I run a business that's only two years old, and even I've had to pay taxes on taxable profits for both years that we filed.
But just to show you how absurd corporate taxes in the United States can be, Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.
Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.
Over the past five years, General Electric made $26 billion in profits in the United States, yet it received a $4.1 billion refund from the IRS.
Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.
Valero Energy, the 25th largest company in America with $68 billion in sales last year, received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.
Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.
Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.
These statistics are from Senator Bernie Sanders, and I honestly haven't taken the time to prove or disprove them, but I personally can believe that they're true. I've seen enough shenanigans pulled with the tax code to know that zeroing out your income, even as a multi-million dollar corporation, is entirely possible.
If all corporations were being raped by the United States tax system, then I could agree with you. But in light of what many corporations have been able to get away with, I simply can not sympathize with multi-million and billion dollar industries that are paying no taxes whatsoever.
OK... We're not following each other. Let's try this... The federal corporate tax rate in the US is 35%. By the time you apply depreciation and other deductions, it's less than that. You're claiming that we likely end up around 18% with your fuzzy-math above, but PWC claims that it's nearly 10 points higher at 27.7% exceeding that of Europe by 5+%.
The PWC study to which you're referring only took into account the 2,000 largest world companies listed by Forbes.
http://businessroundtable.org/uploads/studies-reports/downloads/Effective_Tax_Rate_Study.pdf
When you take into account all corporations within the United States, as the study that I cited did, then you see that the majority of them report no tax liability whatsoever.
Now, we haven't really touched on this, but here's the fallacy behind many of these "Corporate tax rate - GDP comparisons" to other countries. Even if you look at corporate tax returns submitted to the IRS and compare them with our nation's GDP to get the "Percentage of GDP", does this adequately represent the level of taxation of America's business community, and would you expect that value to be a statistic to compare with other countries? What about the advent of "new" pass-through entities? I know of several former corporations and partnerships that converted to LLCs and LLPs. No more corporate tax returns... No more tax revenues collected or necessarily reported as corporate income... Doesn't this dilute the statistic? (The CBO believes so...)
First, these pass through entities aren't new. LLCs are treated as partnerships for tax purposes, and partnerships have been around for a loooong time. But, even if you were to narrow the discussion down to LLCs and similar entities, they've been around since the 1970's. So, generally speaking, they're not so new.
Second, the graph that I posted addresses your concerns either way. It not only shows the percentage of GDP that the U.S. collects from corporate taxes, but it shows the percentage of GDP that the U.S. collects from all taxes. This would include taxes from LLCs and other pass through entities, such as partnerships.
It's not a loophole if it's law, but don't take me wrong here. I agree that we need to simplify the tax code, but I do not believe that we should look to confiscate more profits from the job creators. That's what I saw in that study.
If you don't think that there are loopholes in the law, then I don't know what to tell you.
It's slightly dated, but here's one for you from the Congressional Budget Office... Look at the "Effective Marginal Tax Rates" and note their similarity to PWC's results. The term "effective" identifies the physical rate as a percentage of actual income paid as federal tax revenue.
http://www.cbo.gov/ftpdocs/69xx/doc6902/11-28-CorporateTax.pdf
I find it somewhat ironic that the study to which you refer compares the taxes collected to the GDP, and also shows that the United States is inferior to many other countries in that regard.
Additionally, the study to which you refer focuses upon the investment incentives of corporations; it is not focused upon a pure comparison of corporate tax rates amongst various countries.
Why is this important? Well, because the CBO study didn't take into account all corporations. Your cited study states the following on page 14: "CBO has limited the comparisons it presents to the top corporate tax rates in those schedules. An international comparison of, for example, intermediate statutory corporate tax rates would add little information about investment incentives because most corporate investment is undertaken by corporations that face the highest statutory rates."
Therefore, just as with the PWC study, only the largest corporations with the highest tax rates were taken into consideration. If you want to talk about number games and only examining one piece of the puzzle, then the studies that you've cited exemplify that very well.
It's games with numbers, and it's intentionally misleading. The 4.1% rate is a blended rate for the top 1% of wage earners.
I don't think you understand what I am saying. The 4.1% is not the rate that they're paying. The 4.1% statistic represents a part of what was collected overall.
To simplify it, if the United States government collected a total of $100 in payroll taxes, the top 1% of income earners would have paid $4.10 in payroll taxes. The remainder ($95.90) is paid by the other 99% of taxpayers. This comes from companies that aren't in the top 1% of earners, as well as self-employed individuals who pay both the employee and employer's share of payroll taxes.
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Even if you concede the top 1% with the 4.1% number, that's still a progressive tax system by a 4 to 1 margin.
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Even if you concede the top 1% with the 4.1% number, that's still a progressive tax system by a 4 to 1 margin.
If you're looking at it from the perspective that they are only 1% of income earners, yet they're paying 4.1% of a particular tax, then yes, it's a 4 to 1 ratio in regard to payment vs. number of people.
But, you do have to take into consideration that the top 1% earns significantly more, and thus the amount of taxes that they pay is going to be higher. So it shouldn't be compared with a ratio that represents payment vs. number of people; it should be compared with a ratio that represents payment vs. taxable money. Afterall, the amount of taxes that you pay is dependent upon the amount of taxable money. Just because a group of people makes up 1% of taxpayers doesn't mean they'll pay 1% of the total tax collected.
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If you're looking at it from the perspective that they are only 1% of income earners, yet they're payoing 4.1% of a particular tax, then yes, it's a 4 to 1 ratio in regard to payment vs. number of people.
But, you do have to take into consideration that the top 1% earns significantly more, and thus the amount of taxes that they pay is going to be higher. So it shouldn't be compared with a ratio that represents payment vs. number of people; it should be compared with a ratio that represents payment vs. taxable money. Afterall, the amount of taxes that you pay is dependent upon the amount of taxable money. Just because a group of people makes up 1% of taxpayers doesn't mean they'll pay 1% of the total tax collected.
I guess what I'm saying is that it should. That's what a flat tax is all about. You basically have the top 50% earners paying about 80-90% of the tax. That is not apportioned, its progressive. And extremely arbitrary must admit. Some politicians simply have issues with people who make more money, as if they just have it to blow. The tax system should not be ran like Robinhood. At least he admitted to that ideology with Joe the Plumber - "spread the wealth". If those who make the most could keep most of it, the wealth would spread by the natural free market means via investment and job creation. It works and has historically. It's pretty apparent the ONEs way does not. The proof is in the pudding.
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I guess what I'm saying is that it should. That's what a flat tax is all about. You basically have the top 50% earners paying about 80-90% of the tax. That is not apportioned, its progressive. And extremely arbitrary must admit. Some politicians simply have issues with people who make more money, as if they just have it to blow. The tax system should not be ran like Robinhood. At least he admitted to that ideology with Joe the Plumber - "spread the wealth". If those who make the most could keep most of it, the wealth would spread by the natural free market means via investment and job creation. It works and has historically. It's pretty apparent the ONEs way does not. The proof is in the pudding.
I think I may be misunderstanding you, or vice versa.
If a flat tax rate on income is imposed, then you've still got to use the ratio of payment vs. taxable money, as opposed to payment vs. number of people. Let's say you have a society of 100 people. Those 100 people collectively earn $1,000. One guy earns $200, which is 20% of the society's total income. The other 99 people collectively earn $800.
If the flat tax rate is 10%, then that one guy will pay $20. The other 99 people will collectively pay $80. In total, $100 was collected in tax. The one guy who earned much more than everyone else paid 20% of the total tax collected, but he only constitutes 1% of the population.
So even with the flat rate, the top 1% is not going to pay only 1% of the total taxes collected. The only way that would happen is if the top 1% of earners only earned 1% of the total income reported for all citizens. And if that were the case...well, then they would no longer be the top 1% of income earners.
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I say that we do away with inheritance and impose a 100% death tax.
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If 60% of America's corporations aren't making a profit, then we've got more problems than tax rates. Do you seriously think that this many corporations aren't paying taxes due to the fact that they are not making a profit? I run a business that's only two years old, and even I've had to pay taxes on taxable profits for both years that we filed.
Seriously... Two of my last employers had failed to turn a profit for most of the time that I have known of them. Another only recently started turning a profit. This should not be surprising...
But just to show you how absurd corporate taxes in the United States can be, Exxon Mobil made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.
Wow... Now, let's look at the facts pulled from their latest annual report.
- To earn the $19B, they conducted $301B in business. That's a profit margin of 6.3%. Pretty crappy if you ask me...
- According to page 62 of their latest annual statement, they actually paid over $15B in various income taxes with an effective tax rate of 47%.
- On the same page, they paid another $26B in sales-based taxes.
- Also on the same page, they paid another $37.5B in various other taxes and duties.
- In summary, they paid nearly $79B to various federal, state and local taxing authorities taking what-could-have-been a 30% profit margin all the way down to 6.3%.
Those mean-ol' bad-ol' corporations... They need to pay their fair share!!! Of course, the various gubm'et taxing authorities profited more from Exxon's operations than the company itself. Maybe, they did receive a federal rebate for $156M, but the feds got their money out of them. I'm sure of it.
Bank of America received...
Over the past five years, General Electric made...
Chevron received...
Valero Energy...
Goldman Sachs...
Over the past five years, Carnival Cruise Lines made...
These statistics are from Senator Bernie Sanders, and I honestly haven't taken the time to prove or disprove them, but I personally can believe that they're true. I've seen enough shenanigans pulled with the tax code to know that zeroing out your income, even as a multi-million dollar corporation, is entirely possible.
I disproved the first one. These stats are not entirely accurate. They're dishonest interpretations of the facts designed to demonize corporations.
If all corporations were being raped by the United States tax system, then I could agree with you. But in light of what many corporations have been able to get away with, I simply can not sympathize with multi-million and billion dollar industries that are paying no taxes whatsoever.
Exxon's getting raped, if you ask me... And, the rapists are getting away with it.
The PWC study to which you're referring only took into account the 2,000 largest world companies listed by Forbes.
http://businessroundtable.org/uploads/studies-reports/downloads/Effective_Tax_Rate_Study.pdf
When you take into account all corporations within the United States, as the study that I cited did, then you see that the majority of them report no tax liability whatsoever.
Of course!!! Again, many corporations exist with a minimal profit. I know of several publicly traded software companies that have been in existence for 10+ years with hundreds of employees that have never turned a profit. By the way, that doesn't necessarily mean that they don't pay any federal taxes. It just means that they don't pay a substantial amount of federal income tax.
First, these pass through entities aren't new. LLCs are treated as partnerships for tax purposes, and partnerships have been around for a loooong time. But, even if you were to narrow the discussion down to LLCs and similar entities, they've been around since the 1970's. So, generally speaking, they're not so new.
This is an example of why you were recently singled out. I used quotations around the term, "new". I realize that they are not actually new, but relatively recent legislation has made LLCs and LLPs attractive alternatives to the typical C Corp structure. Many organizations including some relatively large corporations reorganized under these pass-through entity structures. Their income is no longer reported as "corporate income" and would not show up in most of the corporate comparison studies that you referenced.
Second, the graph that I posted addresses your concerns either way. It not only shows the percentage of GDP that the U.S. collects from corporate taxes, but it shows the percentage of GDP that the U.S. collects from all taxes. This would include taxes from LLCs and other pass through entities, such as partnerships.
Sure... But, the way the corporate chart had been referenced was intentionally misleading.
If you don't think that there are loopholes in the law, then I don't know what to tell you.
Most of the time, those loopholes that you reference are intentional.
I find it somewhat ironic that the study to which you refer compares the taxes collected to the GDP, and also shows that the United States is inferior to many other countries in that regard.
There you go again using terms like inferior. Really? Didn't you also say, "there was no advocating that we follow other countries' examples"??? YOU just judged the US as being inferior. Personally, I find it to be far superior along with all of our economic freedoms...
Additionally, the study to which you refer focuses upon the investment incentives of corporations; it is not focused upon a pure comparison of corporate tax rates amongst various countries.
Why is this important? Well, because the CBO study didn't take into account all corporations. Your cited study states the following on page 14: "CBO has limited the comparisons it presents to the top corporate tax rates in those schedules. An international comparison of, for example, intermediate statutory corporate tax rates would add little information about investment incentives because most corporate investment is undertaken by corporations that face the highest statutory rates."
Therefore, just as with the PWC study, only the largest corporations with the highest tax rates were taken into consideration. If you want to talk about number games and only examining one piece of the puzzle, then the studies that you've cited exemplify that very well.
Unbelievable... Your pure comparisons of corporate tax rates amongst various countries is incomplete as I have explained. These studies were designed to intentionally misrepresent the facts. And then, you use terms like inferior referencing your incomplete and misleading studies.
I don't think you understand what I am saying. The 4.1% is not the rate that they're paying. The 4.1% statistic represents a part of what was collected overall.
OK... So, it's not really their effective rate. It's just their percentage of the total paid into the system.
At a minimum, it will be 2.9% plus the portion of the 7.5% on the first $106,800 they earn. There are approximately 1.5M taxpayers making up this top 1% who earn approximately $2T. Doing the math from those numbers, the average approximate effective rate is 3.25% with those at the bottom of the group paying an effective rate of 5.2% and those at the top paying a minimum of 2.9%. Of course, you don't necessarily pay this tax on dividends or other forms of income, so this is just an ugly approximation.
To simplify it, if the United States government collected a total of $100 in payroll taxes, the top 1% of income earners would have paid $4.10 in payroll taxes. The remainder ($95.90) is paid by the other 99% of taxpayers. This comes from companies that aren't in the top 1% of earners, as well as self-employed individuals who pay both the employee and employer's share of payroll taxes.
Yes... That seems more reasonable than the income tax disparity. We all know, or should realize, that the top 1% will never receive any of those benefits. Confiscating a portion of their income for the benefit of others is theft.
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I say that we do away with inheritance and impose a 100% death tax.
I say that we revert back to our founding principles and abolish most forms of regulation and taxation on our job creators for half a decade. We would reassert our global economic dominance and turn nation's economy around overnight.
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VV, I would take Bernie Sanders with a cup of salt. A grain won't do. The guy thinks Obama is a right winger. In other words, he so out there to the left, he's about to fall off the edge. He isn't gonna paint capitalism or corporations in a positive light.
Garman, I hope wreckingball was kidding.
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Garman, I hope wreckingball was kidding.
Oh, I know, but I wasn't...
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I think I may be misunderstanding you, or vice versa.
If a flat tax rate on income is imposed, then you've still got to use the ratio of payment vs. taxable money, as opposed to payment vs. number of people. Let's say you have a society of 100 people. Those 100 people collectively earn $1,000. One guy earns $200, which is 20% of the society's total income. The other 99 people collectively earn $800.
If the flat tax rate is 10%, then that one guy will pay $20. The other 99 people will collectively pay $80. In total, $100 was collected in tax. The one guy who earned much more than everyone else paid 20% of the total tax collected, but he only constitutes 1% of the population.
So even with the flat rate, the top 1% is not going to pay only 1% of the total taxes collected. The only way that would happen is if the top 1% of earners only earned 1% of the total income reported for all citizens. And if that were the case...well, then they would no longer be the top 1% of income earners.
All I really want is for the tax RATE to be the same for all. I get the rest of what you're saying. I think we agree.
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All I really want is for the tax RATE to be the same for all. I get the rest of what you're saying. I think we agree.
Flat tax everyone using the same rate across corps and personal and introduce modest regulations and reasonable deductions over time... You can't enforce Clean Air standards on a company overnight without giving them the opportunity to offset those costs. If our gubm'et keeps it up, more are just going to offshore everything or transfer to Bermuda, Ireland and New Zealand as many have already done.
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Seriously... Two of my last employers had failed to turn a profit for most of the time that I have known of them. Another only recently started turning a profit. This should not be surprising...
Wow... Now, let's look at the facts pulled from their latest annual report.
- To earn the $19B, they conducted $301B in business. That's a profit margin of 6.3%. Pretty crappy if you ask me...
- According to page 62 of their latest annual statement, they actually paid over $15B in various income taxes with an effective tax rate of 47%.
- On the same page, they paid another $26B in sales-based taxes.
- Also on the same page, they paid another $37.5B in various other taxes and duties.
- In summary, they paid nearly $79B to various federal, state and local taxing authorities taking what-could-have-been a 30% profit margin all the way down to 6.3%.
I disproved the first one. These stats are not entirely accurate. They're dishonest interpretations of the facts designed to demonize corporations.
The fact still stands that they paid no federal income taxes for tax year 2009, regardless of what they did or didn't do in 2010. This alone proves my point that many corporations, even multi-million dollar corporations, are able to zero out their taxable income due to the variety of deductions, exemptions, and credits that exist.
Essentially, I think you're missing my main point here. No, not every corporation zeroes out its taxable income with deductions. And no, even those corporations who can do that aren't able to do it every year. But the fact that they can and do zero out their income completely despite making millions in profits exemplifies why the tax code as it stands is completely screwy.
Do I think that corporations which have paid 47% of their income into taxes should be taxed more just because they still have millions of dollars left over? No, of course not. My only point is that even this particular corporation which got raped in 2010 didn't pay anything in 2009 in income taxes. The fact that they did this in 2009, even if they get raped in subsequent years, shows me that there's a problem with the tax code that needs to be fixed. And yes, the fact that they then turned around in 2010 and got raped also shows me that there's a problem with the tax code on the opposite end of the spectrum that needs to be fixed.
Sure... But, the way the corporate chart had been referenced was intentionally misleading.
All of the studies you referenced dealt with corporations, not "companies" which could include pass through business entities. All of your initial posts prior to the chart I presented was in reference to the corporate tax rates. It wasn't until after the chart was posted that you brought up pass through entities, so I'm not sure how my use of a corporate tax rate chart was misleading when the topic was, in fact, corporate tax rates.
There you go again using terms like inferior. Really? Didn't you also say, "there was no advocating that we follow other countries' examples"??? YOU just judged the US as being inferior. Personally, I find it to be far superior along with all of our economic freedoms...
You're creating strawman arguments and comparing apples and oranges at the same time.
Strawman argument: I didn't state that we should follow their examples. Yes, our current method of assessing and collecting taxes is inferior to many other countries, as other countries are able to collect a larger percentage of the GDP in the form of tax. This doesn't mean that we should implement their system of collecting taxes. What it means is that we need to better our system of collecting taxes. Whether we should do so by adopting their system or creating our own system is an entirely different point, and I've never made any statements addressing that point one way or the other.
Erroneous comparison: The fact that the U.S. has more economic freedoms doesn't relate to whether its ability to assess and collect taxes is better than other countries' abilities to do so. Just because I state that we are inferior in one aspect doesn't mean that I also believe we're inferior in all other aspects, or that we're inferior in general.
Unbelievable... Your pure comparisons of corporate tax rates amongst various countries is incomplete as I have explained. These studies were designed to intentionally misrepresent the facts.
Ignore my study for a moment; we can get back to its accuracy or completeness at a later point in time if you desire to do so.
Look at what you've just said, and then look at your own studies. Completeness? Your studies didn't compare all corporations. One compared the 2,000 largest corporations, and the other only compared corporations with the highest tax rates. How is this a "complete" study which shows the average effective tax rate for American corporations when it doesn't even compare all American corporations? How do you get an average by looking at the largest, most taxed corporations? Am I going to get the average weight of Americans by studying the 2,000 fattest people? That sounds incomplete to me.
Misrepresenting facts? You're attempting to tell me that American corporations pay an average effective tax rate of X% by using a study which only took into account corporations with the highest tax rates. And the purpose of the study wasn't even to compare tax rates; it was to look at investment incentives for corporations. That sounds like a misrepresentation of facts to me, or at the very least a misapplication of a study to prove something that it wasn't meant to prove, nor is it capable of proving because it doesn't use statistics from all American corporations.
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I say that we revert back to our founding principles and abolish most forms of regulation and taxation on our job creators for half a decade. We would reassert our global economic dominance and turn nation's economy around overnight.
On the topic of inheritance tax:
Others wanted to go much further; Thomas Paine, like Smith and Jefferson, made much of the idea that landed property itself was an affront to the natural right of each generation to the usufruct of the earth, and proposed a "ground rent" — in fact an inheritance tax — on property at the time it is conveyed at death, with the money so collected to be distributed to all citizens at age 21, "as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property."
And...
The US did not become a global economic dominant force until after WWII and it was due to every other industrialized power being annihilated.
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VV, I would take Bernie Sanders with a cup of salt. A grain won't do. The guy thinks Obama is a right winger. In other words, he so out there to the left, he's about to fall off the edge. He isn't gonna paint capitalism or corporations in a positive light.
Yeah, politically, the guy is a nutbag. But the statistics he quotes seem to pan out, at least from a cursory review of his accusations.
Even if they're not entirely accurate, I still stand by the fact that there is just too much shit in the tax code. The rates need to be dropped and a majority, if not all, of these bullshit credits and deductions need to be removed.
The government may collect less from some companies that have previously been raped, but it will also collect more from those companies which have creatively "avoided" taxes in the past. The cost of filing taxes will be reduced, as you wouldn't necessarily need an accountant to fiddle with your numbers and figure out the best deductions for you, and the cost of tax administration for the government would be reduced, as you won't have complex laws to decipher when trying to figure out whether your assessment of taxes due is correct.
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The fact still stands that they paid no federal income taxes for tax year 2009, regardless of what they did or didn't do in 2010. This alone proves my point that many corporations, even multi-million dollar corporations, are able to zero out their taxable income due to the variety of deductions, exemptions, and credits that exist.
I'm talking about 2009. They paid lots of taxes in 2009. In fact, their taxes exceeded their profits in 2009.
Essentially, I think you're missing my main point here. No, not every corporation zeroes out its taxable income with deductions. And no, even those corporations who can do that aren't able to do it every year. But the fact that they can and do zero out their income completely despite making millions in profits exemplifies why the tax code as it stands is completely screwy.
I generally agree... But, don't believe for one second that they are still not paying significant taxes. They may not be paying corporate income tax, but they still paid an exhorbatant amount of taxes compared to their actual earnings.
Do I think that corporations which have paid 47% of their income into taxes should be taxed more just because they still have millions of dollars left over? No, of course not. My only point is that even this particular corporation which got raped in 2010 didn't pay anything in 2009 in income taxes. The fact that they did this in 2009, even if they get raped in subsequent years, shows me that there's a problem with the tax code that needs to be fixed. And yes, the fact that they then turned around in 2010 and got raped also shows me that there's a problem with the tax code on the opposite end of the spectrum that needs to be fixed.
Again, my facts are from 2009, so your response is pointless.
All of the studies you referenced dealt with corporations, not "companies" which could include pass through business entities. All of your initial posts prior to the chart I presented was in reference to the corporate tax rates. It wasn't until after the chart was posted that you brought up pass through entities, so I'm not sure how my use of a corporate tax rate chart was misleading when the topic was, in fact, corporate tax rates.
No... If you're going to use pure comparisons of corporate tax rates amongst various countries as a percentage of GDP, you simply cannot make a reasonable comparison with countries that do not recognize or support pass-through entities. If the vast majority of their economic activity is conducted by corparate structures, those statistics cannot be compared with similar statistics in the United States as the majority of our employers typically fall into pass-through entity structures. To further clarify, more than 50% of our workers are employed by small businesses. The majority of small businesses as well as a number of large ones are structured as pass-through entities. This represents a siginificant portion of the US economy (and the GDP) that does not fall under corporate taxation. Again, there is no comparison. It's smoke-and-mirrors nonsense.
You're creating strawman arguments and comparing apples and oranges at the same time.
Strawman argument: I didn't state that we should follow their examples. Yes, our current method of assessing and collecting taxes is inferior to many other countries, as other countries are able to collect a larger percentage of the GDP in the form of tax. This doesn't mean that we should implement their system of collecting taxes. What it means is that we need to better our system of collecting taxes. Whether we should do so by adopting their system or creating our own system is an entirely different point, and I've never made any statements addressing that point one way or the other.
This is pointless... The comparison is flawed from the start. Your conclusions are nonsense.
Erroneous comparison: The fact that the U.S. has more economic freedoms doesn't relate to whether its ability to assess and collect taxes is better than other countries' abilities to do so. Just because I state that we are inferior in one aspect doesn't mean that I also believe we're inferior in all other aspects, or that we're inferior in general.
You're assuming that this pure comparison of corporate tax rates amongst various countries as a percentage of GDP somehow concludes that the US's ability to assess and collect taxes is a problem. Aside from the fact that the US tax system is actually fukt, you cannot arrive at that conclusion from this study as explained above. To borrow your characterization, it is an erroneous comparison and a false conclusion.
Look at what you've just said, and then look at your own studies. Completeness? Your studies didn't compare all corporations. One compared the 2,000 largest corporations, and the other only compared corporations with the highest tax rates. How is this a "complete" study which shows the average effective tax rate for American corporations when it doesn't even compare all American corporations? How do you get an average by looking at the largest, most taxed corporations? Am I going to get the average weight of Americans by studying the 2,000 fattest people? That sounds incomplete to me.
Fair enough... You're technically correct, but I would still be inclined to take the 2000 largest corporations as an adequate subset of which to compare global corporate taxation. We're not talking 2000 of the US's corporations compared to all corporations of other countries. This is an apple-to-apple comparison of global taxation on the Forbes Global 2000 list. We're not comparing Exxon to Pedro's Tiki Bar.
Misrepresenting facts? You're attempting to tell me that American corporations pay an average effective tax rate of X% by using a study which only took into account corporations with the highest tax rates. And the purpose of the study wasn't even to compare tax rates; it was to look at investment incentives for corporations. That sounds like a misrepresentation of facts to me, or at the very least a misapplication of a study to prove something that it wasn't meant to prove, nor is it capable of proving because it doesn't use statistics from all American corporations.
Stop your whining... Again, it was a comparison of similar-to-similar. If you can't see that, it's not my problem.
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On the topic of inheritance tax:
Others wanted to go much further; Thomas Paine, like Smith and Jefferson, made much of the idea that landed property itself was an affront to the natural right of each generation to the usufruct of the earth, and proposed a "ground rent" — in fact an inheritance tax — on property at the time it is conveyed at death, with the money so collected to be distributed to all citizens at age 21, "as a compensation in part, for the loss of his or her natural inheritance, by the introduction of the system of landed property."
And...
The US did not become a global economic dominant force until after WWII and it was due to every other industrialized power being annihilated.
Carnegie, Ford, Vanderbilt and Rockefeller scoff at your last statement.
And ww2, if anything, brought the us of the great depression. Not fdr's utopian policies. He is an example of liberalism turning a recession into a depression. Say it ain't so.
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I'm talking about 2009. They paid lots of taxes in 2009. In fact, their taxes exceeded their profits in 2009.
Well, now I'm confused about what year you're talking about then, because you're not being very clear with your wording. You stated:
Wow... Now, let's look at the facts pulled from their latest annual report.
Their latest annual report filed with the SEC was for the 2010 tax year. My references were to what was paid for the 2009 tax year, and their report which indicated that no income taxes were owed.
So either you're talking about their latest annual report like you initially stated, which would be 2010, or you're talking about their 2009 annual report, but it can't be both.
I generally agree... But, don't believe for one second that they are still not paying significant taxes. They may not be paying corporate income tax, but they still paid an exhorbatant amount of taxes compared to their actual earnings.
Sure, they do usually pay an exorbitant amount of taxes in other areas. But I was more or less focusing on income tax. And so was the discussion. The "corporate tax rate," which we've been discussing for the vast majority of this thread, is the income tax rate for corporations. It doesn't include payroll taxes, sales taxes, use taxes, or anything else; it's an income tax on corporations.
So when you suggested that the effective corporate tax rate of Exxon was 47% based on all of the taxes they paid, you're incorrect. And when you compare the corporate tax rate of corporations in one country to the average rate of all types of taxes paid by corporations in America, you're comparing two different numbers and types of taxes.
In order to pay no income tax, or even a significantly small amount of income tax, you have to reduce your taxable income. If you're a multi-million dollar corporation, this means you have to reduce millions (or even billions) of dollars of gross income in order to reach a taxable income of $0 (or reach a significantly small taxable income amount). Being able to do so just goes to show that the tax code and the vast number of deductions are a little absurd, and far too complex.
No... If you're going to use pure comparisons of corporate tax rates amongst various countries as a percentage of GDP, you simply cannot make a reasonable comparison with countries that do not recognize or support pass-through entities. If the vast majority of their economic activity is conducted by corparate structures, those statistics cannot be compared with similar statistics in the United States as the majority of our employers typically fall into pass-through entity structures.
Sure, I see your point there. But yet again, the second chart reinforces what the first chart concludes. Even when you go outside of corporate tax rates, the amount of general taxes collected as a percentage of GDP is far higher in other countries than it is here.
Fair enough... You're technically correct, but I would still be inclined to take the 2000 largest corporations as an adequate subset of which to compare global corporate taxation. We're not talking 2000 of the US's corporations compared to all corporations of other countries. This is an apple-to-apple comparison of global taxation on the Forbes Global 2000 list. We're not comparing Exxon to Pedro's Tiki Bar.
To use your own argument against you, if there are countries that have more corporations because they don't utilize pass through entities, then doesn't that skew the results in your study just as much as it did mine?
Additionally, we have to look at the number of corporations that "represented" each country. The study used 484 American corporations, and 1,336 corporations from 58 countries. This means that, on average, the other countries were represented by 23 corporations each. It's not a "similar to similar" comparison unless you have a similar number of corporations evaluated from each country.
Further, what if many of these other countries have a flat tax rate? While their top 23 corporations may pay less in taxes than American corporations, their smaller corporations are paying the same tax rate as the big corporations. But in America, the smaller corporations generally pay less due to the progressive tax structure that we have, so ultimately America's average tax rate for corporations may very well be lower.
Last but not least, were studies done on the other countries to see how corporate tax rates were structured and how they were affected? Maybe the top four earning corporations in Cambodia paid less in taxes than 300 of America's top earning corporations, but what did the fifth ranked Cambodian corporation pay? Or the tenth? Could they have paid higher percentages than those corporations which were ranked higher then them? With an average of 23 corporations per country, there's simply not a large enough pool to get meaningful numbers regarding average tax rates, especially when you're comparing them to 484 American corporations.
Stop your whining... Again, it was a comparison of similar-to-similar. If you can't see that, it's not my problem.
Don't be so grumpy. It's not my fault you decided to incorrectly use the term "average," and then later corrected your terminology after you were called out on it.
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Carnegie, Ford, Vanderbilt and Rockefeller scoff at your last statement.
And ww2, if anything, brought the us of the great depression. Not fdr's utopian policies. He is an example of liberalism turning a recession into a depression. Say it ain't so.
Carnegie, Ford, Vanderbilt and Rockefeller would be scoffing themselves due to the Monroe Doctrine, which pretty kept the US isolated in regards to foreign affairs until the Theodore Roosevelt Corollary. The US begin to emerge as a power after the turn of the 20th century and became a hegemony after WWII. Not really sure why you are bringing FDR into this anyways, I never said he brought the US out of the Great Depression. The destruction of every other major industrial power led to the economic dominance of the US.
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Carnegie, Ford, Vanderbilt and Rockefeller would be scoffing themselves due to the Monroe Doctriune, which pretty kept the US isolated in regards to foreign affairs until the Theodore Roosevelt Corollary. The US begin to emerge as a power after the turn of the 20th century and became a hegemony after WWII. Not really sure why you are bringing FDR into this anyways, I never said he brought the US out of the Great Depression. The destruction of every other major industrial power led to the economic dominance of the US.
I brought it up because wwII saved his "legacy" of pulling the country out of the great depression. It was an economic boom for the U.S....you're right though, the U.S. became an elite superpower post wwII. They were already a pretty big power due to the industrial revolution. That was my point earlier.
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Many small-business corporations have a zero balance because their stockholders (i.e. employee-owners) pay out any profit at year-end as bonus to themselves individually. In lieu of a 35% corporate rate, taxes are paid at the lower marginal tax rate for the individual owners. Tax avoidance, not evasion. From a sheer numbers standpoint, I would expect that most incorporated businesses would be considered small, so I am surprised that only 60% are zeroing out.
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Many small-business corporations have a zero balance because their stockholders (i.e. employee-owners) pay out any profit at year-end as bonus to themselves individually. In lieu of a 35% corporate rate, taxes are paid at the lower marginal tax rate for the individual owners. Tax avoidance, not evasion. From a sheer numbers standpoint, I would expect that most incorporated businesses would be considered small, so I am surprised that only 60% are zeroing out.
This is a prime example of why the tax code is far too complicated and most people don't understand some of the minute details contained within it.
You can generally deduct a bonus paid to an employee if you intended the bonus as additional pay for services and the services were performed. You can't just give an employee a bonus because there were excess profits lying around and you wanted to zero out your business's income; there has to be additional services that they performed, or the employee exceeded expectations, or something "extra" to warrant the extra payment.
This doesn't mean that you can't give bonuses for shits and giggles, like most companies do at Christmas time. It just means that, according to the tax code, you can't deduct a bonus unless it was paid as additional compensation for additional services.
If you're choosing to distribute excess profits to shareholders, then it's referred to as a dividend, and it's also not tax deductible. So, whether you classify it as a "bonus" or a dividend, it's simply not tax deductible, unless it actually is a bonus, which would require that those who received the bonus performed additional services.
Of course, I'm not saying that businesses don't get away with paying bonuses and deducting them improperly. The problem here is that, based on the tax return alone, the I.R.S. doesn't have much of a reason to flag the return and audit the company. And even if they do audit the company, the company could likely get away with it by making a bullshit excuse about how all of their shareholder-owners put in extra work and earned those bonuses.
The only thing that would be a dead giveaway is if the "bonus" that is paid to each shareholder-owner just so happens to be proportional to the percentage of stock they own. That would indicate that it's a dividend, but there still could be a bullshit excuse about the fact that each shareholder-owner did perform additional services, and that the company merely decided to calculate the bonus based upon their percentage of ownership.
This is the type of "creative accounting" that I was talking about. You can make it look correct on your return, and even if the I.R.S. were to audit you, you could probably get away with making up shit about how the shareholder-owners performed additional services. But just because it passes muster on paper doesn't make it true.
And that, my friend, is tax evasion made possible by a complicated tax code with many provisions that are virtually impossible to enforce.
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This is a prime example of why the tax code is far too complicated and most people don't understand some of the minute details contained within it.
Zack Lee.
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Zack Lee.
http://rivals.yahoo.com/footballrecruiting/football/recruiting/player-Zach-Lee-64816
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http://rivals.yahoo.com/footballrecruiting/football/recruiting/player-Zach-Lee-64816
Ok, I will admit..... :bugs:
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Really? You're keeping this up???
Well, now I'm confused about what year you're talking about then, because you're not being very clear with your wording. You stated:
Their latest annual report filed with the SEC was for the 2010 tax year. My references were to what was paid for the 2009 tax year, and their report which indicated that no income taxes were owed.
So either you're talking about their latest annual report like you initially stated, which would be 2010, or you're talking about their 2009 annual report, but it can't be both.
Ummmm... Well, if you've ever reviewed a ANY corporation's 10K, 10Q or Annual Report, you'd know that they include the financial stats for prior calendar periods along with the stats of the current reporting period. Exxon's 2010 annual report includes the stats for 2008, 2009 and 2010. Their 2009 financials DO NOT indicate that they had no income tax liability in 2009. As stated, they paid $15B in various income taxes for the 2009 period. That doesn't necessarily mean that Bernie Sanders is wrong... It just means that he hasn't shared all of the facts.
Sure, they do usually pay an exorbitant amount of taxes in other areas. But I was more or less focusing on income tax. And so was the discussion. The "corporate tax rate," which we've been discussing for the vast majority of this thread, is the income tax rate for corporations. It doesn't include payroll taxes, sales taxes, use taxes, or anything else; it's an income tax on corporations.
So when you suggested that the effective corporate tax rate of Exxon was 47% based on all of the taxes they paid, you're incorrect. And when you compare the corporate tax rate of corporations in one country to the average rate of all types of taxes paid by corporations in America, you're comparing two different numbers and types of taxes.
Well, you're wrong again... In 2009, Exxon's profits were reported as $19B, and their income taxes were reported as $15B. They also reported their effective income tax rate as 47%. Doing the math for you, after all other taxes, there was approximately $34B (19+15) left over of which to pay income taxes and report profits. Now, when I divide $15B by $34B, I only calculate 44% as their effective tax rate, so they likely included something else to arrive at the 47% figure. Again, this DOES NOT INCLUDE the other taxes that I reported.
In order to pay no income tax, or even a significantly small amount of income tax, you have to reduce your taxable income. If you're a multi-million dollar corporation, this means you have to reduce millions (or even billions) of dollars of gross income in order to reach a taxable income of $0 (or reach a significantly small taxable income amount). Being able to do so just goes to show that the tax code and the vast number of deductions are a little absurd, and far too complex.
Again, in 2009, Exxon paid $15B in income taxes. I do know what you mean regarding taxable income, but it's not nearly as ridiculous as you may believe.
Sure, I see your point there. But yet again, the second chart reinforces what the first chart concludes. Even when you go outside of corporate tax rates, the amount of general taxes collected as a percentage of GDP is far higher in other countries than it is here.
Of course, it is... After merging all of their tax receipts, compared to the US, taxes in Europe are outrageous. The VAT alone is typically a minimum of 15% on top of EVERYTHING else. It's crazy.
To use your own argument against you, if there are countries that have more corporations because they don't utilize pass through entities, then doesn't that skew the results in your study just as much as it did mine?
On the PWC analysis, the answer would be no... They're comparing global corporations of similar traits without regard to GDP, so the results would not be skewed. They would tend to be more realistic.
Additionally, we have to look at the number of corporations that "represented" each country. The study used 484 American corporations, and 1,336 corporations from 58 countries. This means that, on average, the other countries were represented by 23 corporations each. It's not a "similar to similar" comparison unless you have a similar number of corporations evaluated from each country.
That's just silly... We're talking about corporations that met the standards to be listed on the Forbes Global 2000. That establishes similarities between the corporations. You don't need to compare 500 corporations from each country to determine approximate effective tax rates across various countries.
Further, what if many of these other countries have a flat tax rate? While their top 23 corporations may pay less in taxes than American corporations, their smaller corporations are paying the same tax rate as the big corporations. But in America, the smaller corporations generally pay less due to the progressive tax structure that we have, so ultimately America's average tax rate for corporations may very well be lower.
What if... Are you kidding me? What are you suggesting? Should we tax smaller corporations at a higher effective rate, perhaps as much as we tax our larger corporations?
Last but not least, were studies done on the other countries to see how corporate tax rates were structured and how they were affected? Maybe the top four earning corporations in Cambodia paid less in taxes than 300 of America's top earning corporations, but what did the fifth ranked Cambodian corporation pay? Or the tenth? Could they have paid higher percentages than those corporations which were ranked higher then them? With an average of 23 corporations per country, there's simply not a large enough pool to get meaningful numbers regarding average tax rates, especially when you're comparing them to 484 American corporations.
Sorry... This is ridiculous. As stated above, we're talking about corporations that met the standards to be listed on the Forbes Global 2000. That establishes similarities between the corporations. You don't need to compare 500 corporations from each country to determine approximate effective tax rates across various countries.
Don't be so grumpy. It's not my fault you decided to incorrectly use the term "average," and then later corrected your terminology after you were called out on it.
Don't be such an idiot. Research some of this stuff for yourself rather than believing the popular rhetorical soundbites used by the moonbat community. And, I don't know what you mean regarding this "average" term...
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This is a prime example of why the tax code is far too complicated and most people don't understand some of the minute details contained within it.
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And that, my friend, is tax evasion made possible by a complicated tax code with many provisions that are virtually impossible to enforce.
Well after painfully reading your rambling nonsense, in the end, this tax avoidance strategy only shifts the tax burden to the shareholder or employee. Taxes will still be paid, perhaps at a lower rate.
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(http://www.reactiongifs.com/wp-content/uploads/2011/05/popcorn_2.gif)
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Sort of related to the topic, the tax code needs to be cleaned up. Tax rates may or may not need to be dropped, but there is a lot of shit in the tax code that is complicating everything.
As an example, corporations have relatively high taxes. But, they don't necessarily pay the amount in taxes due to a variety of deductions, exemptions, credits, and other useless shit that we really wouldn't need if we'd just lower some of the tax rates. A few years ago, I think it was a little more than 50% of American companies didn't have to pay anything in taxes due to the absurd number of tax breaks.
Ultimately, the tax system needs to be simplified. In addition to cutting spending, of course.
You may be educated, but that doesn't prevent you from being an idiot.
Don't pay the taxes? Yeah. That's what's happening. Wish my accountant would get on board with all these deductions, exemptions and credits...
That's all I care to say on this subject.
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Just an FYI random statistic for those that think the wealthy should pay more taxes.
45% of Americans didn't pay taxes last year. 45%
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Tax reform does need to happen but that is only one small section of the problem.
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Tax reform does need to happen but that is only one small section of the problem.
Don't disagree that tax reform MUST happen, but it's not because businesses are piling up deductions and credits to avoid paying taxes.
That's idiotic.
Yeah, we try to find every bit of assistance we can get because the fucking government is chewing up 30% or more of gross revenue. That's unacceptable.
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Don't disagree that tax reform MUST happen, but it's not because businesses are piling up deductions and credits to avoid paying taxes.
That's idiotic.
Yeah, we try to find every bit of assistance we can get because the fucking government is chewing up 30% or more of gross revenue. That's unacceptable.
Oh I totally agree. I was just pointing out that taxes are only a part of a larger scale issue.
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Don't pay the taxes? Yeah. That's what's happening. Wish my accountant would get on board with all these deductions, exemptions and credits...
That's all I care to say on this subject
THIS.
Just an FYI random statistic for those that think the wealthy should pay more taxes.
45% of Americans didn't pay taxes last year. 45%
And THIS.