View Full Version : Hey corporations, pay your taxes!
A meeting of the fixthedebt.org campaign was disrupted by protestors who said that if corporations paid their fair share, we would not be in this mess:
http://www.commondreams.org/headline/2013/02/13-5
I don't know anything about either group, but when an article tosses out a statement like this....
The CEO-led Fix the Debt campaign promotes fear over the national debt as a guise for lowering the corporate income tax rate and cutting necessary social support programs like Social Security and Medicare.
I think the source has pretty much played their hand and there is little, if any, chance that a rational discussion will ensue. And FWIW, beyond simple planning and logical structuring of assets, I have never discovered the mythical "loopholes, tax havens and tax cuts" that Flip The Debt claims are undermining the country.
We've been pounded with the idea that our national debt is due to "entitlements" which must be cut. Are you really denying that fixthedebt and other similar groups are saying that?
and sadly, the coporate loopholes and tax havens are not mythical. Check out David Cay Johnston's latest book:
http://www.amazon.com/Fine-Print-Companies-Plain-English/dp/1591843588/ref=sr_1_1?s=books&ie=UTF8&qid=1361116985&sr=1-1&keywords=david+cay+johnston+the+fine+print
fwiw, Johnston's a registered Republican.
Yossarian
2-17-13, 12:28pm
the coporate loopholes and tax havens are not mythical. Check out David Cay Johnston's latest book
Of course, if someone claimed something in a book it must be true. It's all one big conspiracy.
http://upload.wikimedia.org/wikipedia/en/3/34/The_Smoking_Man_%28X-Files%29.jpg
"a" book? How many book titles do you want?
"Plutocrats - the Rise of the New Global Super-Rich and the Fall of Everone Else" - Chrystal Freeland
"The Great Unraveling" - Paul Krugman
"Bad Money - Reckless Finance, Failed Politics and the Global Crisis of American Capitalism" - Kevin Phillips
your turn - please show how these tax havens and loopholes are "mythical"
your turn - please show how these tax havens and loopholes are "mythical"
It's only babble by people who demonize corporations as the scourge of our society. The simple truth is that intelligently run corporations, like intelligent individuals, take all the legal steps available to them to reduce their tax burden. Officers of publicly traded corporations have a fiduciary duty to do exactly that. Besides, the shareholders, including most of us here as owners of IRAs, 401ks, individual accounts, etc., demand that so we can get the best possible return on our investments. As far as individuals go a lot of us realize we may have to pay more to get our country out of the mess we're in, but do you know anyone who has voluntarily paid more than they legally owe? I don't. I haven't read it in many, many years, but isn't there a discussion in YMOYL regarding how to structure your investments/retirement/income to keep your tax burden as low as possible? If there isn't there should be.
The reason I pay no attention whatsoever to groups like Flip the Debt is that their organizers have not exercised enough gray matter to even realize what their perceived problem is. If they want corporations to "pay their fair share" (a loaded and ambiguous statement in itself, but I'll just go with it) they should be applying constant pressure to Congress because that is where any change to the tax code would happen. To do otherwise is simply proof of a complete lack of understanding of how the real world works. At that point they come across as just another group of people eating sour grapes who have nothing better to do with their time. Since I do I ignore those groups.
So I guess the whole "pay your fair share" concept is moot. We're just siiting around the table seeing who we can make pick up the check.
Yossarian
2-18-13, 12:35pm
most of us here as owners of IRAs, 401ks
Good example in another way too- for certain policy reasons the govt decided to favor some types of investments. Does making those investment (e.g. investing in your retirement accounts) mean you are doing what the govt tried to incentivize you to do, or are you taking advantage of "loopholes" and shady accounts by which you defer taxable income and avoid paying your share. So I agree, it's just babble until someone has specifics.
So I guess the whole "pay your fair share" concept is moot.
Personally, I think any policy or law based upon the premise of "fair share" should be moot as it would invariably be based upon opinion and prejudice.
Rather than condemn those individuals or entities who follow the law and pay what is required, regardless of anyone's feelings of fairness, maybe we should be condemning the government itself who set the rules we must abide by.
If we really wanted to ensure that everyone paid their "fair share" and we had an interest in resurrecting the "justice is blind" meme, we'd first have to eliminate progressive tax schedules and discourage our government from incentivizing certain actions or behaviors. The fact that we prefer not to do so tells us that we're the problem, not the corporations.
The logical reciprocal to our current method would be to eliminate corporate taxes altogether. It would certainly eliminate the conversation regarding a corporation's "fair share". The additional profits would be passed along to the shareholders who would then make larger payments to the Treasury. I am assuming it is obvious that money would not simply sit dormant in corporate accounts. If we take it all the way and move to a flat tax on individuals it would seem to also eliminate the "fair share" argument there since everyone would be paying the exact same share (of their income).
Personally, I think any policy or law based upon the premise of "fair share" should be moot as it would invariably be based upon opinion and prejudice.
Rather than condemn those individuals or entities who follow the law and pay what is required, regardless of anyone's feelings of fairness, maybe we should be condemning the government itself who set the rules we must abide by.
If we really wanted to ensure that everyone paid their "fair share" and we had an interest in resurrecting the "justice is blind" meme, we'd first have to eliminate progressive tax schedules and discourage our government from incentivizing certain actions or behaviors. The fact that we prefer not to do so tells us that we're the problem, not the corporations.
When I have my own teams of lawyers, accountants, lobbyists and high end employees that revolve between government jobs and my bottom line, I'll agree with you. But I'm feeling a bit outgunned
By this argument, everyone with their hand out to the government that gets something put into it is just our own fault as well, not theirs.
The logical reciprocal to our current method would be to eliminate corporate taxes altogether. It would certainly eliminate the conversation regarding a corporation's "fair share". The additional profits would be passed along to the shareholders who would then make larger payments to the Treasury. I am assuming it is obvious that money would not simply sit dormant in corporate accounts. If we take it all the way and move to a flat tax on individuals it would seem to also eliminate the "fair share" argument there since everyone would be paying the exact same share (of their income).
Maybe we could allow households to incorporate - and then we can just pay taxes on the profits every year.
Maybe we could allow households to incorporate - and then we can just pay taxes on the profits every year.
You already can.
By this argument, everyone with their hand out to the government that gets something put into it is just our own fault as well, not theirs.
Exactly! Our government is a reflection of ourselves and as long as we allow it to pick winners and losers, to act in arbitrary ways for the benefit of some over others, to re-distribute wealth and engage in social justice, we get exactly what we deserve. I think it's well past time to get back to the basics.
The logical reciprocal to our current method would be to eliminate corporate taxes altogether. It would certainly eliminate the conversation regarding a corporation's "fair share". The additional profits would be passed along to the shareholders who would then make larger payments to the Treasury. I am assuming it is obvious that money would not simply sit dormant in corporate accounts. If we take it all the way and move to a flat tax on individuals it would seem to also eliminate the "fair share" argument there since everyone would be paying the exact same share (of their income).
This is what Germany does. It has a lower corporate tax rate but taxes dividends at 25% before you get them.
Exactly! Our government is a reflection of ourselves and as long as we allow it to pick winners and losers, to act in arbitrary ways for the benefit of some over others, to re-distribute wealth and engage in social justice, we get exactly what we deserve. I think it's well past time to get back to the basics.
Well said.
ApatheticNoMore
2-18-13, 3:49pm
Exactly! Our government is a reflection of ourselves and as long as we allow it to pick winners and losers, to act in arbitrary ways for the benefit of some over others, to re-distribute wealth and engage in social justice, we get exactly what we deserve.
That's what government does and has always done (ruled in the interest of those with wealth and power) and functioning large scale anarchist societies well haven't seen them is all. Sometimes the government has some ameliorating aspects for those who aren't life's grand winners (safety nets for the poor etc.). The best to be hoped for is things like limiting the influence of money on politics so it's not pure plutocracy and all other things that serve as counter trends to plutocracy.
Exactly! Our government is a reflection of ourselves and as long as we allow it to pick winners and losers, to act in arbitrary ways for the benefit of some over others, to re-distribute wealth and engage in social justice, we get exactly what we deserve. I think it's well past time to get back to the basics.
And when were we at these "basics" we should go back to?
And when were we at these "basics" we should go back to?
Certainly not in my lifetime, and perhaps we never were, despite the best intentions of our founders. As soon as we began to stray from a republican form of government and started down the path of pure democracy we pretty much guaranteed that some groups will always be unequal, that special interests would prevail and that a paternalistic government would hand out favors accordingly. We approve of those favors when they benefit us and dis-approve when they benefit others. We're a fickle bunch.
I'm not surprised at the knee-jerk response that "corporations are just following the law."
Do these pro-corporation laws just drop out of the sky?
Government doesn't set the rules, corporations tell government what they want, even to the point of writing the laws for them to pass. And it will continue until we get campaign finance reform.
In the meantime, like creaker, I'll see if my budget will allow my K Street lobbyist to send some of that government gravy my way.
Certainly not in my lifetime, and perhaps we never were, despite the best intentions of our founders. As soon as we began to stray from a republican form of government and started down the path of pure democracy we pretty much guaranteed that some groups will always be unequal, that special interests would prevail and that a paternalistic government would hand out favors accordingly. We approve of those favors when they benefit us and dis-approve when they benefit others. We're a fickle bunch.
I'd kind of lean towards the "never were". People have used government to turn things their way ever since there were governments, here it's been no exception since day 1.
I do prefer we've moved beyond the white, male landowner thing of our founders and onto more universal suffrage. As far as "We approve of those favors when they benefit us and dis-approve when they benefit others" - I expect many do, but it's really not that black and white even if one was just looking out for their own self-interest.
I'd kind of lean towards the "never were". People have used government to turn things their way ever since there were governments, here it's been no exception since day 1.
And yet those who disapprove the loudest are generally in favor of even more governmental influence. Go figure.
And yet those who disapprove the loudest are generally in favor of even more governmental influence. Go figure.
Different isn't always "more". Although I do agree our system seems to do a better job of adding than taking away. Those in power will always be very unlikely to disempower themselves. But the golden rule (those that have the gold make the rules) has always been very much in play.
I'm not surprised at the knee-jerk response that "corporations are just following the law."
Knee jerk? Well, I suppose it is predictable that a response would be to point out that entities are simply working within the framework that is in place. Would you expect anything else? Would anyone? Remove any utopian delusions and the only possible answer is "no".
Is campaign finance reform your real goal Lainey? I can't be sure, but if so then you've left the group from the OP in the intellectual dust. The last election should have been proof of the problems with campaign finance to everyone who paid any attention at all. The people who stomp their feet and yell "pay your damn taxes" are just (and I'm being kind here) lazy. They obviously haven't traced the issue any farther back than some Randi Rhodes soundbite. That approach changes nothing regardless of the political philosophy behind it.
Knee jerk? Well, I suppose it is predictable that a response would be to point out that entities are simply working within the framework that is in place. Would you expect anything else? Would anyone? Remove any utopian delusions and the only possible answer is "no".
Is campaign finance reform your real goal Lainey? I can't be sure, but if so then you've left the group from the OP in the intellectual dust. The last election should have been proof of the problems with campaign finance to everyone who paid any attention at all. The people who stomp their feet and yell "pay your damn taxes" are just (and I'm being kind here) lazy. They obviously haven't traced the issue any farther back than some Randi Rhodes soundbite. That approach changes nothing regardless of the political philosophy behind it.
Again, that "framework" didn't just happen - it was put in place by people with money who could pay our congress to do their bidding.
and flipthedebt.org bases their argument on the statistics from citizens for tax justice - ctj.org You may not like their tactics (because they've realized that sending polite letters to their congressmen didn't seem to work) but you can't dispute the facts.
you can't dispute the facts.
I looked at their website. They appear to have no interest in facts, just incoherent and misleading ranting.
There is actually a decent chance there will be some major changes in the tax code in the next year or so. I guess we will just have to stay tuned to see what happens.
...you can't dispute the facts.
Then show me some and we can have a discussion.
Here's the report: http://www.ctj.org/taxjusticedigest/archive/2013/01/new_ctj_report_congressional_r.php
If you dispute this, let's hear it -
From the link (emphasis mine):
...most of the tax dodges practiced by U.S. corporations to shift their profits to tax havens are actually legal.
While there are no specifics, examples, documentation or anything else of value in a real debate referenced here, it is nonetheless exactly the reason I applaud you for trying to dig deeper. To attack the corporations that engage in these practices is not even a legitimate pursuit because they aren't technically doing anything wrong. It would be nice if there was a place for a sense of morality in this (do the "right thing" as it were) and maybe there is, but not in the way the 'flippers' think there is. Those groups forget that corporations don't owe their allegiance to the USA, they simply exist as an entity designed to conduct business in a way that maximizes the return on investment for the shareholders. In that regard they are almost required to engage in practices such as this offshore accounting.
The prudent way to regulate corporations would be to assume that all of them engage in these practices and that they will also dump toxic waste on the school playground because its cheaper and that they will all do anything else to maximize profits. Assume there are no limits and you will never be surprised. That being said, it all comes right back to the discussion we've had here a hundred times. We don't need more laws, we need more regulators. With one exception there are plenty of laws on the books. Campaign finance reform is the likely exception if you want to limit the sphere of influence from the corporate side. The problem with that is that you are asking the people who can make the changes to cut their own lifelines. IMO that is why writing polite letters to your Congressperson doesn't work.
Yossarian
2-20-13, 12:12pm
If you dispute this, let's hear it -
They are mixing up issues. Once you parse through all the fluff their main idea is to end deferral, which is just a structural element to our system and not really a moral issue.
Funny thing is from both a policy and political perspective the better thinking is to move from a overzealous residency based system to a territorial system in which deferral isn't really an issue.
See http://www.reuters.com/article/2013/01/31/us-usa-tax-territorial-idUSBRE90U15J20130131
We are talking past each other.
We already agree that these corporations aren't doing anything "technically wrong" and that it is their prime directive to maximize their profits.
What flipthedebt.org is saying is that system is not working for us as a society. And that it really takes some brass balls for corporate CEOs who have dodged paying multi millions of dollars in taxes to take the podium to blame the dwindling middle class as the main cause of the country's debt because they might actually want some health care and a social security check in their retirement years.
We are talking past each other.
We already agree that these corporations aren't doing anything "technically wrong" and that it is their prime directive to maximize their profits.
What flipthedebt.org is saying is that system is not working for us as a society. And that it really takes some brass balls for corporate CEOs who have dodged paying multi millions of dollars in taxes to take the podium to blame the dwindling middle class as the main cause of the country's debt because they might actually want some health care and a social security check in their retirement years.
Not trying to pick on you Lainey, but your post graphically illustrates a big part of the problem. The first part is lucid and logical and a good starting point because people can find common ground. The second paragraph veers off into the emotional wasteland where all these groups live. They want so badly to BLAME someone. If you really think about it does it make one iota of difference what any CEO thinks or says about the middle class? No, it doesn't. Corporations, and by extension their officers, are not only not doing anything technically wrong, they are doing something technically RIGHT. Their responsibility is to the shareholders, not the taxpayers in any particular jurisdiction, but the flippers can't seem to get a grip on that. Corporate officers are NOT taking steps to minimize their taxes in order to destroy the middle class or anyone else, only to maximize profits. Are their negative consequences to that? Of course there are, but the burden to self-correct those negatives does not fall on the corporations. The burden falls very clearly and very specifically on Congress.
Flipthedebt and all the others of their ilk are systematically getting suckered. They fall for the emotional traps of chasing the evil corporations and the dark lords that run them every single time. It never fails. Never. You have to know that everyone on the hill loves being off the radar of these protesters. When a group comes along that will pull back the curtain and hold CONGRESS responsible things might change. Until then the protests will continue to be held by rag-tag groups of romantically inclined college kids, disgruntled professional protesters who need some (read: any) cause to jump on and homeless and unemployed folks who don't have anything else to do with their time. At best they will be another flash and fizzle like occupy.
Not trying to pick on you Lainey, but your post graphically illustrates a big part of the problem. The first part is lucid and logical and a good starting point because people can find common ground. The second paragraph veers off into the emotional wasteland where all these groups live. They want so badly to BLAME someone. If you really think about it does it make one iota of difference what any CEO thinks or says about the middle class? No, it doesn't. Corporations, and by extension their officers, are not only not doing anything technically wrong, they are doing something technically RIGHT. Their responsibility is to the shareholders, not the taxpayers in any particular jurisdiction, but the flippers can't seem to get a grip on that. Corporate officers are NOT taking steps to minimize their taxes in order to destroy the middle class or anyone else, only to maximize profits. Are their negative consequences to that? Of course there are, but the burden to self-correct those negatives does not fall on the corporations. The burden falls very clearly and very specifically on Congress.
Flipthedebt and all the others of their ilk are systematically getting suckered. They fall for the emotional traps of chasing the evil corporations and the dark lords that run them every single time. It never fails. Never. You have to know that everyone on the hill loves being off the radar of these protesters. When a group comes along that will pull back the curtain and hold CONGRESS responsible things might change. Until then the protests will continue to be held by rag-tag groups of romantically inclined college kids, disgruntled professional protesters who need some (read: any) cause to jump on and homeless and unemployed folks who don't have anything else to do with their time. At best they will be another flash and fizzle like occupy.
Well said. I work in government, and I often see two diametrically opposed but equally nonsensical attitudes toward private and public organizations. The first is the demand that private corporations act more like social service agencies. That’s as silly as insisting wolves switch to a vegan diet. If you take away the profit motive, which ultimately generates the taxable wealth needed to support social spending, you probably do more harm than good to the aims of the flippers. I think it’s just as foolish to demand government act like business. The Postal Service could go a long way toward saving itself by divesting unprofitable zip codes or charging more for rural delivery , but that would seem at odds with it’s core purpose.
A big issue is not just taxes, but outsourcing costs. Which not just includes avoiding whatever taxes they can, but pushing their costs onto others whenever possible. And government is often a vehicle for doing this.
If you take away the profit motive, which ultimately generates the taxable wealth needed to support social spending, you probably do more harm than good to the aims of the flippers.
And this is one of the reasons why I find it hard to give idiots like the flippers a free pass. They are trying to use populist rhetoric to stir up the torches and pitchfork crowd around an issue they either don't understand or intentionally misrepresent. Their positions make US companies less competitive and help gut the very middle class jobs they claim to champion.
.. pushing their costs onto others whenever possible. And government is often a vehicle for doing this.
Exactly. There is little point in going to Congress because it it just doing what corporations tell it to do.
fixthedebt.org is a dog-and-pony show funded by CEOs. Protestors have every right to stand up and complain that this expensive public relations blitz which targets Medicaid/Medicare as the main debt reason is conveniently forgetting to state the actual reason for the debt: the drastic reduction in corporate taxes which has slashed government income. Until fixthedebt acknowledges that as part of the solution, they are the ones seeking to push blame onto others, not the other way around.
Well said. . If you take away the profit motive. . .
flipthedebt is not saying that. Why does every discussion of corporate tax rates devolve into accusations of socialism?
. . . Their positions make US companies less competitive .
Funny how the tens of millions paid to CEOs, along with stock options and many other perks, doesn't seem to be included in the equation of being competitive. Always plenty of money for that, right? Yet when it's time to pay taxes they can't complain fast enough about how they can't afford it.
Funny how the tens of millions paid to CEOs, along with stock options and many other perks, doesn't seem to be included in the equation of being competitive.
Everyone has to make their own decisions, but I try to pay my employees above market so I can attract the best talent and hopefully make more in extra profit then I lose in extra compensation. I don't think my higher salaries make my business less competitive.
Reminds me of this joke about outsourcing the presidency:
"Congress Votes to Outsource Presidency
Washington, DC -- Congress today announced that the office of President of the United States of America will be outsourced to India as of March 1, 2008. The move is being made in order to save the President's $500,000 yearly salary, and also a record $521 billion in deficit expenditures and related overhead that his office has incurred during the last 5 years. It is anticipated that $231 billion can be saved to the end of the President's term. "We believe this is a wise financial move. The cost savings are huge," stated Congressman Thomas Reynolds (R-WA). "We cannot remain competitive on the world stage with the current level of cash outlay," Reynolds noted.
Mr. Bush was informed by e-mail this morning of his termination. Preparations for the job move have been underway for some time.
Gurvinder Singh of Indus Teleservices, Mumbai , India will assume the office of President as of September 1, 2007. Mr. Singh was born in the United States while his Indian parents were vacationing at Niagara Falls, NY, thus making him eligible for the position. He will receive a salary of $320 (USD) a month, but no health coverage or other benefits."
flipthedebt is not saying that. Why does every discussion of corporate tax rates devolve into accusations of socialism?
I wouldn't accuse this group of that. Human folly takes many forms, one of which is socialism. From the post, it isn't clear to me that this group rises to the minimal level of intellectual rigor real socialism requires. It's more of a visceral demand that those who have must surrender to those who have not to honor some undefined measure of "fairness".
Funny how the tens of millions paid to CEOs, along with stock options and many other perks, doesn't seem to be included in the equation of being competitive. Always plenty of money for that, right? Yet when it's time to pay taxes they can't complain fast enough about how they can't afford it.
Again, a very accurate representation of the disconnect. Read the annual report of any publicly traded company; all the expenses are in there for investors to read. If, among other things, those investors decide the expenses are in line with the company's operations the stock will sell, if not, it won't. The CEO's compensation package (including all perks), to cherry pick the common liberal target, is viewed as an investment by the company. When a large salary is paid there is an expectation of a significant return on that investment through astute leadership. The cost of the corner office or corporate jet are not lost in the shuffle, its just that competitiveness is derived straight from the bottom line rather than item by item.
Taxes OTOH are viewed purely as an expense that should be minimized in any (legal) way possible. One rose colored way to change that would be for the government to demonstrate responsible stewardship of the taxpayer's money. If deficit spending were eliminated, because every CEO knows it is not a sound practice, and more of the revenue was allocated in ways that would benefit the corporations there would be far less effort dedicated to tax reduction strategy. For example, infrastructure development and improvement. There aren't many corporations that could take on building roads or dams or smart grids, but they would almost all benefit from improvements in those areas right along with every individual taxpayer. As usual, all roads lead to Congress.
Exactly. There is little point in going to Congress because it it just doing what corporations tell it to do.
Voters ultimately have a much louder voice than lobbyists do. Without the votes no one in Congress would have a job. Not that its easy, but educate the public enough to demand change and any corporate influence will die on the vine.
...a record $521 billion in deficit expenditures and related overhead that his office has incurred during the last 5 years.
Ahhh...the good old days!
I wouldn't accuse this group of that. Human folly takes many forms, one of which is socialism. From the post, it isn't clear to me that this group rises to the minimal level of intellectual rigor real socialism requires. It's more of a visceral demand that those who have must surrender to those who have not to honor some undefined measure of "fairness".
I get tired of the "socialism" accusations. As if we aren't firmly entrenched in socialism already.
I get tired of the "socialism" accusations. As if we aren't firmly entrenched in socialism already.
+1
Yeah, and it's the ones on SS and medicare, sitting on the computer in the library, who 'fear, rant and rave' about socialism the most!;)
+1
Yeah, and it's the ones on SS and medicare, sitting on the computer in the library, who 'fear, rant and rave' about socialism the most!;) Ha ha - don't forget all those parents who don't have to pay for their kids education for 12 years irregardless of their incomes - heck they even get a tax break for just having kids - they generally seem to be in the "don't raise my taxes for social services" anti-socialism camp for the most part.
Corporations paying minimal taxes, thanks to their K Street lobbyists, is another big reason why we have the deficit in the first place.
If you don't believe that's true, there's the disconnect.
Corporations paying minimal taxes, thanks to their K Street lobbyists, is another big reason why we have the deficit in the first place.
If you don't believe that's true, there's the disconnect.
There is exactly ONE reason we have a deficit: we spend more than we make.
As far as corporations paying minimal taxes, the US has THE highest corporate tax rate in the WORLD (http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx). NO one has any higher. Talk about an inconvenient truth. At least we're #1 at something...
There is exactly ONE reason we have a deficit: we spend more than we make.
As far as corporations paying minimal taxes, the US has THE highest corporate tax rate in the WORLD (http://www.kpmg.com/global/en/services/tax/tax-tools-and-resources/pages/corporate-tax-rates-table.aspx). NO one has any higher. Talk about an inconvenient truth. At least we're #1 at something...
Highest corporate tax rate, but a higher amount of legislated loopholes, which makes the tax rate a farce. No one actually pays that.
Spending more than we take in is the definition of deficit. Now we have to figure out how to get out of it.
Spending more than we take in is the definition of deficit. Now we have to figure out how to get out of it.
There's more than one option.
We're currently spending a higher percentage of GDP than we have since WWII. Perhaps if we took positive steps to increase GDP, the resultant increase in tax revenue would take care of the problem. But, in order for that to happen we first have to get the spending under control.
As I recall, the last time the annual budget was balanced, it was a result of the technology boom and Congressionally imposed fiscal discipline, which was reluctantly approved by the sitting President. Our current President and one of the two houses of Congress have shown no appetite for the fiscal discipline thing, and taking even more money out of private enterprise doesn't lead to boom times.
Highest corporate tax rate, but a higher amount of legislated loopholes, which makes the tax rate a farce. No one actually pays that.
Just for clarity, can you explain what is the difference between a deduction or credit and a loophole?
Even after deductions the effective corporate tax rate in the US is significantly above many of our competitors.
http://www.aei-ideas.org/wp-content/uploads/2012/02/022212hassett1.jpg
ApatheticNoMore
2-22-13, 9:07pm
Yeah, and it's the ones on SS and medicare, sitting on the computer in the library, who 'fear, rant and rave' about socialism the most
actually it mostly seems to be government workers
actually it mostly seems to be government workers
You gotta explain that one...
Spending more than we take in is the definition of deficit. Now we have to figure out how to get out of it.
Exactly. I will assume that reducing spending is an axiom (to those of us here, that is). What we cut is obviously open to debate, but it should be obvious to everyone that we do, in fact, need to cut. The other side of the coin is increasing revenue and taxation is the primary method by which governments can do that. Regarding corporations I see a couple of pretty straightforward possibilities...
1. Raise the tax rate on corporations. Eliminating their credits and deductions has that net effect or you could simply raise their rate. The end results is that this takes money out of the hands of individuals because it lowers dividends and lowers the value of investments. That takes money out of the economy and leads to a contraction, a recession or any number of other less than desirable results. Yes, the government would be spending money instead of consumers, but there are myriad studies showing that government spending is a far less effective form of economic stimulus than consumer spending. Long story short, its too concentrated.
2. Reduce or eliminate taxes on business. Contrary to popular opinion this does not reduce government revenue, it increases it. You have to remember that corporations, or any other business structure, is merely a pass through. The money flow is not static, it does not stop in company accounts. Whatever a company has left after paying bills is either re-invested to further build the business, which builds the value of the business, or is distributed to the investors/owners. That's how it works whether you're talking about Hank's Feed Store or Exxon-Mobil. The beauty of this approach is that all of a sudden those investors (read: anyone with a IRA, 401k or any other kind of account that invests in companies) all have more money to spend. This being the US, they would spend it and that would stimulate economic growth which would generate more taxable income. Anything "lost" from reductions on the business side are more than made up for on the consumer side. It would be a political gold mine because everyone in the country would, in effect, get a big fat raise. To REALLY push the point home you could wheel and deal with business and say we'll eliminate taxes, but we want to increase the minimum wage to $14/hour (or whatever). Think about that one!
The only reason #2 would not be the political gold mine is because of people's perception of what a corporation really is. All the flippers of the world have this view that corporations are some gigantic incarnation of Mr. Potter. Greedy, uncaring, profit at all costs beings. They are not. First, they aren't alive and have no feelings good or bad and a company can't get rich because money doesn't stop there. A corporation, LLC, LTD or any other business structure is simply a construct. An idea. It is a method of organizing resources to apply to a specific purpose or goal. Nothing more. The cartoon version of the grim reaper standing in for a company is only a fantasy of the uninformed. It only serves a purpose for people who have no idea what companies really are or how they really work. Apparently the flippers fall into that category. I'm sure they would implode at the notion of eliminating taxes on business because all they would see is some dark caricature from the op-ed pages rolling in dough. It's an interesting image, but not really valuable to anyone because the real version doesn't exist.
Just for clarity, can you explain what is the difference between a deduction or credit and a loophole?
Even after deductions the effective corporate tax rate in the US is significantly above many of our competitors.
http://www.aei-ideas.org/wp-content/uploads/2012/02/022212hassett1.jpg
So all we need to is lower tax rates and we can have an booming economy like - Turkey - or Greece?
Looking at the this table it makes me wonder how relevant coporate taxes are.
2. Reduce or eliminate taxes on business.
This I really disagree with - businesses use infrastruture, government services, etc. Are you saying these costs should be shifted to everyone else? I would think it would be a big incentive for businesses to lobby to have government pick up more and more of their costs, since they won't be the ones paying for it.
Yossarian
2-23-13, 12:29pm
So all we need to is lower tax rates and we can have an booming economy like - Turkey - or Greece?
Nah, we are already headed toward being Greece, no changes needed.
This I really disagree with - businesses use infrastruture, government services, etc. Are you saying these costs should be shifted to everyone else? I would think it would be a big incentive for businesses to lobby to have government pick up more and more of their costs, since they won't be the ones paying for it.
Not that I was making a stand for one option or the other, but your reply demonstrates the problem. "They won't be the ones paying for it." "They" is the problem because "they" is us. People in the course of doing business do use public infrastructure. In many of those cases that infrastructure helps a business complete their task and, hopefully, earn a profit. The problem is that people just can't get over the hump of thinking it is the business that gets the profit. It is not, or at least it does not keep the profit. Profits pass straight through a business. Depending on how it is structured those profits can go to the owner, the shareholders, the investors, the employees, the customers, anyone else designated by the company charter or any combination of those groups.
If you completely eliminate taxes on business all the money that is not going to pay those taxes now would end up in the hands of any or all of the groups above. Those individuals would then pay taxes on that increased income. Dividends would be taxed as income because the corporate tax burden would be lifted so any argument that it would benefit the 1% is automatically out the window (on a progressive scale they would pay more). From your example creaker, the people who make money from use of the infrastructure would be the ones paying for it. The more you make from it, the more you pay for it. Government revenue would actually increase because all the corporate deductions and credits, "loopholes" for the MSNBC crowd, would be gone. Any lower tax rates on dividends, the actual "secret" of the wealthy, would also be gone.
The only other thing that is done with corporate profits, beside distribution, is investment. Equipment, training, technology, facilities, leases, hiring new employees, etc. Expenditures like that are investments. Yes, the goal is to make the company more profitable in the future, but once again it is NOT for the company, it is for the return on investment to the people who support the enterprise. Investment like that is how this country got built. People were willing to take a little less now to build something that would be more beneficial later. They still are, but the environment that encourages that type of investment does not currently exist in the US. We're screwed because we are living hand to mouth on credit, but that's another thread...
There's more than one option.
We're currently spending a higher percentage of GDP than we have since WWII. Perhaps if we took positive steps to increase GDP, the resultant increase in tax revenue would take care of the problem. But, in order for that to happen we first have to get the spending under control.
As I recall, the last time the annual budget was balanced, it was a result of the technology boom and Congressionally imposed fiscal discipline, which was reluctantly approved by the sitting President. Our current President and one of the two houses of Congress have shown no appetite for the fiscal discipline thing, and taking even more money out of private enterprise doesn't lead to boom times.
Fiscal discipline? Republican presidents since Reagan had increased our national debt due to their supply-side economics, the theory that the more you cut taxes, the more the economy will grow. It Does Not Work.
The idea that Newt Gingrich "forced" budget cuts on the Clinton/Gore administration doesn't jive with the fact that Clinton/Gore had already proposed budget cuts in their campaign. The difference is they knew they had to raise revenue too. The other difference is that they were not going to clean up the deficit on the backs of the middle class and the poor.
Here's a simple summary in this editorial:
http://www.nytimes.com/2013/02/22/opinion/why-taxes-have-to-go-up.html?_r=4&
[QUOTE=Lainey;130253]Fiscal discipline? Republican presidents since Reagan had increased our national debt due to... [QUOTE]
Yes, yes, and our national debt has increased by $6,000,000,000,000,000 under this president... Don't you think its about time we all wake up and realize it is our system that is broken? In my layman's analysis neither party is any better than the other at reducing spending. The only difference is one wants to spend it in ways they believe will result in increased revenues which can be used to fund social programs, the other wants to implement social programs and then try to increase revenue. Neither really wants to reduce spending because that would reduce their voter base. As long as all the finger pointing is going on and people only try to blame the other side nothing will get done. The enemy is us.
Here's a simple summary in this editorial:
http://www.nytimes.com/2013/02/22/opinion/why-taxes-have-to-go-up.html?_r=4&
I liked Jim Taranto’s take on this editorial:
http://online.wsj.com/article/SB10001424127887324503204578320243541059144.html?m od=WSJ_Opinion_MIDDLETopOpinion (http://online.wsj.com/article/SB10001424127887324503204578320243541059144.html?m od=WSJ_Opinion_MIDDLETopOpinion)
Give the New York Times credit for honesty. (Wait, did we just write that?) In an editorial today, the paper describes, as the headline has it, "Why Taxes Have to Go Up." And it isn't only the rich they want to soak:
"To reduce the deficit in a weak economy, new taxes on high-income Americans are a matter of necessity and fairness; they are also a necessary precondition to what in time will have to be tax increases on the middle class. . . . There will never be a consensus for more taxes from the middle class without imposing higher taxes on wealthy Americans, who have enjoyed low taxes for a long time."
Call it the gorge-the-beast theory: Higher taxes on the wealthy make it easier to avoid spending cuts now, creating more dependence on the government and making it necessary to sock it to the middle class, and hard, in the long run. If you join Barack Obama's class war on the theory that you aren't part of the enemy class, it's likely you'll eventually become a casualty anyway.
from Gregg: "Reduce or eliminate taxes on business. Contrary to popular opinion this does not reduce government revenue, it increases it. You have to remember that corporations, or any other business structure, is merely a pass through. The money flow is not static, it does not stop in company accounts. Whatever a company has left after paying bills is either re-invested to further build the business, which builds the value of the business, or is distributed to the investors/owners. That's how it works whether you're talking about Hank's Feed Store or Exxon-Mobil. The beauty of this approach is that all of a sudden those investors (read: anyone with a IRA, 401k or any other kind of account that invests in companies) all have more money to spend. This being the US, they would spend it and that would stimulate economic growth which would generate more taxable income. Anything "lost" from reductions on the business side are more than made up for on the consumer side. It would be a political gold mine because everyone in the country would, in effect, get a big fat raise. To REALLY push the point home you could wheel and deal with business and say we'll eliminate taxes, but we want to increase the minimum wage to $14/hour (or whatever). Think about that one!"
It's not an "opinion" that revenue is reduced when business taxes are cut, it's a fact.
And everything you said about corporations being a pass-through for money? also applies to individual households. My household, like every other, will either spend the money, or save it for investment purposes. My household, along with the millions of other middle-income households, are the consumers who drive our economy. That's a fact.
from Gregg: "Reduce or eliminate taxes on business. Contrary to popular opinion this does not reduce government revenue, it increases it. You have to remember that corporations, or any other business structure, is merely a pass through. The money flow is not static, it does not stop in company accounts. Whatever a company has left after paying bills is either re-invested to further build the business, which builds the value of the business, or is distributed to the investors/owners. That's how it works whether you're talking about Hank's Feed Store or Exxon-Mobil. The beauty of this approach is that all of a sudden those investors (read: anyone with a IRA, 401k or any other kind of account that invests in companies) all have more money to spend. This being the US, they would spend it and that would stimulate economic growth which would generate more taxable income. Anything "lost" from reductions on the business side are more than made up for on the consumer side. It would be a political gold mine because everyone in the country would, in effect, get a big fat raise. To REALLY push the point home you could wheel and deal with business and say we'll eliminate taxes, but we want to increase the minimum wage to $14/hour (or whatever). Think about that one!"
It's not an "opinion" that revenue is reduced when business taxes are cut, it's a fact.
And everything you said about corporations being a pass-through for money? also applies to individual households. My household, like every other, will either spend the money, or save it for investment purposes. My household, along with the millions of other middle-income households, are the consumers who drive our economy. That's a fact.
+1 well said.
And everything you said about corporations being a pass-through for money? also applies to individual households. My household, like every other, will either spend the money, or save it for investment purposes. My household, along with the millions of other middle-income households, are the consumers who drive our economy. That's a fact.
If you save it then it doesn't pass through, does it? That is the whole point.
It's not an "opinion" that revenue is reduced when business taxes are cut, it's a fact.
No, its not. Ask any German. But if you would like to offer statistics from a source more reliable than Huffington or the Village Voice I'd be happy to check them out.
From a Washington think tank:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3849
If you save it then it doesn't pass through, does it? That is the whole point.
like I said, save it for investment, just like corporations. Money in my bank savings account means the bank has more to lend. My dollars as just as green as the corporations' dollars. My money in the stock market gives more capital to companies who need it. My dollars buying stocks are just like corporations investing in their own, or others, stocks.
If you mean save it by stuffing it under the mattress, then yes, that's not "passing through" my household.
Free will be able to explain this better, but I believe in accounting terms cash held on deposit is a liability for a bank, not an asset. To an individual cash on hand is an asset (not a good investment, but still an asset). That is one difference.
As far as money invested beyond savings the idea for an individual and a corporation is that it will come back to you with some kind of premium added on, so you're right about that part. The difference is that you are the final destination, a corporation is not. The corporation makes investments designed to increase value for the shareholders. You are the shareholder. You have the option of keeping your dollars or turning them over in another investment. A corporation does not have that choice. With the exception of what is akin to an individual's emergency fund, a corporation has to either reinvest the money it receives or return it to shareholders (pay a dividend). When it comes to individuals, the buck stops here, as it were.
Also remember, corporations do not buy there own stock back. They don't do anything. They aren't sentient beings. They are simply a tool used to accomplish the goal of the tool's owner (the shareholders). If XYZ, Inc. buys back stock it is because the shareholders think that is a good way to create more value. Nothing more.
Also remember, corporations do not buy there own stock back. They don't do anything. They aren't sentient beings.
http://thinkprogress.org/justice/2013/02/22/1628631/montana-bill-would-give-corporations-the-right-to-vote/
And yet this Montana legislator wants to give them the right to vote in municipal elections.
http://thinkprogress.org/justice/2013/02/22/1628631/montana-bill-would-give-corporations-the-right-to-vote/
And yet this Montana legislator wants to give them the right to vote in municipal elections.
Well, ya' can't fix stupid.
Finally, I wanted to add that I appreciated the overall tone of this discussion. That's what makes these Boards so far beyond many other internet discussion groups.
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