Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

[tsetsefly]

I am in favor of this, you cant have the 2nd highest corporate tax rates among developed nations and not expect off shoring to happen. Also at a time when few are willing to take risk, a little extra incentive cant hurt. And its really that much, the OEDC average is 26%.

As for the "revenue" shortage it might create. It's the uncontrolled spending that has to be stopped. Military spending would be a good place to start.

http://dealbook.blogs.nytimes.com/20...orate-tax-cut/

Calls to cut taxes on large corporations may seem odd given that the nation faces a $1.55 trillion budget shortfall for the coming fiscal year. But that is exactly what a couple of senators, one Republican and one Democrat, would like to see happen. They jointly introduced a bill in Congress on Tuesday that would cut the corporate income tax rate to a flat 24 percent from 35 percent by eliminating some tax breaks.
“The United States has the second highest corporate tax rate in the industrialized world,” Senator Judd Gregg, Republican of New Hampshire, said at a news conference to discuss the bill he wrote with Senator Ron Wyden, Democrat of Oregon. “After this law goes into effect, which I certainly hope it will, we will be pretty much competitive with everybody who’s a major player in the corporate world but, certainly, the countries which are our primary competition in Europe and Asia.”
Mr. Gregg said cutting the corporate tax rate to 24 percent would help spur the economy and encourage more investment at home, translating to more jobs. Currently, corporations with income exceeding $18.33 million are charged a flat 35 percent before deductions, although those with income less than that could have a portion taxed at rates as high as 39 percent.
But the proposed tax changes are not necessarily a gift to corporate America. A key point of the plan would be the elimination of certain tax breaks for corporations, mainly for those working in the energy sector, and would also end the practice whereby a multinational company is only taxed on the income generated abroad when it comes back onshore. The senators argue that multinationals will lose the incentive of keeping their cash offshore, allowing for that money to be reinvested in the United States.

[Chomsky]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

I am in favor of this, you cant have the 2nd highest corporate tax rates among developed nations and not expect off shoring to happen. Also at a time when few are willing to take risk, a little extra incentive cant hurt. And its really that much, the OEDC average is 26%.

As for the "revenue" shortage it might create. It's the uncontrolled spending that has to be stopped. Military spending would be a good place to start.

http://dealbook.blogs.nytimes.com/20...orate-tax-cut/

Not sure how much this would change given that most corporations pay zero income taxes.

[iyamwutiam]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

I agree whole-heartedly with this on one condition. That the taxpayer dollars used in Darpa which created iridium satellites, fiber-optics, medicines via NIH and tests such as CT Scans and MRi's be repayed in stock.

For example the Bloom Box -which was the intellectual property of the US tax payer (since it was we who funded the initial fuel cell for oxygen technology and hired Mr. Sridhar) be immediately closed down and all direct funding for any advancement be paid in full to Kleiner -Perkins (probably not more than 75M).

I feel that the US taxpayer demand a National trust -where all patents derived from US taxpayer funded innovation be placed. I would start with IBM/GM/Motorola and of course Bloom. All University patents discovered via US funding (example MIT/HArvard/Prineton ) and its business applications be also placed in a national University trust - to subsidize future innovation.

If they refuse to pay taxes on profits derived from taxpayer research -the value of such innovation should be expropriated in stock and placed in said Trust funds.

[Sharky]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

Too bad they don't have the guts to just abolish corporate taxes all together.

You can't really tax a corporation. After all, corporations aren't people. What you tax is the people who own the corporation (shareholders), and indirectly the people who work there and use their products.

Where does corporate tax money come from? Higher product prices, lower wages, lower valued retirement plans, etc.

[tsetsefly]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

Not sure how much this would change given that most corporations pay zero income taxes.

did you even read the article?:

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.
More than half of foreign companies and about 42 percent of U.S. companies paid no U.S. income taxes for two or more years in that period, the report said.

This also does not make a distinction as to what corporation is not paying taxes, ie. a small one recording losses or very little revenue etc.

Nice headline to sell the story but not much else...

Take a look here and tell me if they collect any corporate taxes: http://www.irs.gov/taxstats/article/...171960,00.html

I love this notion that corporations pay little taxes because of the army of accountants they have. Though they do find loopholes(I think they have harder times finding them than Teresa Heinz and John Kerry did), they still pay taxes and they certainly spend money for those accounting departments...

[thriftyandboringinohio]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

Too bad they don't have the guts to just abolish corporate taxes all together.

You can't really tax a corporation. After all, corporations aren't people. What you tax is the people who own the corporation (shareholders), and indirectly the people who work there and use their products.

Where does corporate tax money come from? Higher product prices, lower wages, lower valued retirement plans, etc.

I've always been confused by that meme that it's impossible to tax a business. Aren't individual people and businesses just participants in the economy? Why does one of them effortlessly and always pass along its taxes while the other must be irrevocably stuck with them? Why does every penny of tax paid by the owners of Kelloggs end up in somebody's box of corn flakes, while not a single penny of the Kellogg employees' tax lands in any box of rice crispies?

[HisHighnessDog]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

I love this idea.

...
I feel that the US taxpayer demand a National trust -where all patents derived from US taxpayer funded innovation be placed. I would start with IBM/GM/Motorola and of course Bloom. All University patents discovered via US funding (example MIT/HArvard/Prineton ) and its business applications be also placed in a national University trust - to subsidize future innovation.

If they refuse to pay taxes on profits derived from taxpayer research -the value of such innovation should be expropriated in stock and placed in said Trust funds...

[Sharky]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

I've always been confused by that meme that it's impossible to tax a business. Aren't individual people and businesses just participants in the economy?

How does a "business" participate in the economy? Isn't it really the employees and shareholders of businesses that actually participate?

Why does one of them effortlessly and always pass along its taxes while the other must be irrevocably stuck with them? Why does every penny of tax paid by the owners of Kelloggs end up in somebody's box of corn flakes, while not a single penny of the Kellogg employees' tax is in any box of rice crispies?

People shouldn't be taxed either -- but that's a different thread.

The point is that those taxes come from somewhere. Where? Corporate profits, right? Where do corporate profits go that aren't spent on taxes? They either flow to shareholders (as dividends) or back into the business. If they go to shareholders, the value of the stock should increase as the dividend rate goes up.

If they go back into the business, how are they spent? More employees? Higher wages for better-performing employees? More capital spending? All of those paths are superior to the alternative, which is having the government choose where to spend that money: wars, congressional pensions, $1B embassies, etc.

The private approach is superior because it's focused on creating wealth; the public approach destroys wealth. The private approach is also the moral approach; the public approach requires legalized theft.

Even if you support the idea of taxation, why not just allow the employees and shareholders to be taxed directly? The only logical reason is because you support the idea of trying to hide the tax; to make it not visible to most people. It's the same game the gov plays with EFICA: social security taxes paid on your behalf "by your employer" -- which is nonsense. Does anyone really believe that EFICA comes out of your employer's pocket any differently than your salary does?

[MulaMan]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

Yes, corporations are in fact people. Needs to be changed.

In fact, a US corporation is more of a person then you are. Why do you think anyone with money in America is incorporated and most of thier wealth is in thier shell corporation, which then pays little in taxes.

Flat tax would be great if deductions / loopholes were removed so corporations actually paid tax.

A new tax on dividends and capital gains vs. tax on corporate profits would be even better. Republicans would call that socialist although.

[bcassill]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

While our corporate tax rate is higher on average, with all of the deductions and write offs our effective corporate tax rate is about the same as it is everywhere else. The ONLY tax breaks we should be giving to businesses is if they hire American workers (sorry, no H1-B visas allowed) and keep the work onshore (or simply bring the offshored jobs back). Higher employment rates means more tax revenue for Uncle Sam. But a plan like this would make too much sense. No, we have to give further tax breaks to companies that have no intention of creating any incremental economic benefit except for greater executive bonuses. To give you a clue just how bad it's gotten, JPM handles the unemployment programs for many states, but who do those jobless folks get to talk to when they have a problem? Why, a call center in India paid for with your tax dollars. Oh, and your tax dollars are also going to buying wind turbines from China instead of domestic manufacturers as part of Obama's "green" stimulus program. Let the plundering continue.

[Sharky]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

Yes, corporations are in fact people. Needs to be changed.

You're confusing law with reality--the law asks us to pretend that corporations are people; but that doesn't make it so. Have you ever spoken with a corporation? Shaken their hand?

Corps have no rights; only people have rights. Corporations are property; people are not property.

I'm not saying that corps don't fill a valid role; they most definitely do. However, the Left is now trying to turn corporations into the enemy. They aren't the enemy, either.

[Chomsky]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

did you even read the article?:

This also does not make a distinction as to what corporation is not paying taxes, ie. a small one recording losses or very little revenue etc.

Nice headline to sell the story but not much else...

Take a look here and tell me if they collect any corporate taxes: http://www.irs.gov/taxstats/article/...171960,00.html

I love this notion that corporations pay little taxes because of the army of accountants they have. Though they do find loopholes(I think they have harder times finding them than Teresa Heinz and John Kerry did), they still pay taxes and they certainly spend money for those accounting departments...

The point is -- few corporations feel the full burden of the corporate tax rate. Many pay no taxes, others pay very low taxes. That's not a controversial statement, is it?

[flintlock]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

A lot of good posts here. About the only chance I'd give the US of making an economic comeback would be dependent on lowering or eliminating taxes on US businesses. We need to bring business back to the US, not send them elsewhere looking for a tax dodge. For corporations that do pay US taxes, do you not think these get passed right along in the form of higher prices and lower wages? Bring back US jobs and increase business sales and you will see tax revenues go up. It's hard for an economy not to thrive with full employment. Of course we need to shut down individual tax shelters at the same time if we do this.

I also thought that story about most corporations not paying taxes was a bit deceptive.

[tsetsefly]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

The point is -- few corporations feel the full burden of the corporate tax rate. Many pay no taxes, others pay very low taxes. That's not a controversial statement, is it?

Few?
what would constitute few, and who are the few? is it a small corporation which has around $1 million in fund, or are google, microsoft, ford, walmart not paying taxes?

That article had little useful information. It is also very unusual for a startup to pay taxes in its first year, even the first couple of years if no money is being made. What would you want them to pay taxes on?

[Ghent12]

Re: Senators Propose Big Corporate Tax Cut (from 35 to 24, around OECD average)

A lot of good posts here. About the only chance I'd give the US of making an economic comeback would be dependent on lowering or eliminating taxes on US businesses. We need to bring business back to the US, not send them elsewhere looking for a tax dodge. For corporations that do pay US taxes, do you not think these get passed right along in the form of higher prices and lower wages? Bring back US jobs and increase business sales and you will see tax revenues go up. It's hard for an economy not to thrive with full employment. Of course we need to shut down individual tax shelters at the same time if we do this.

I also thought that story about most corporations not paying taxes was a bit deceptive.

True, however...
Is the government in a position where it can even lower taxes anymore for very long? President Bush lowered lots of taxes for a while and charged the wars and other things on the American credit card. President Obama is doing the same thing, except he also wants to buy a new health insurance plan and repeated "jobs bills" also charged to the credit card.

If all this crap can be paid for by debt, why even be taxed at all? Surely the innovative former Goldman Sachs government employees can think of creative ponzi debt pyramids to employ on the national scale, and relieve the tax burden from every American forever. Who needs taxes when unlimited debt is the new norm? Are countries going to try to stop shipping us oil? We'll see how well that works out for them.