Wiping The Corporate Tax Code Clean (of tax loopholes) Could Raise Money And Help The Middle Class
http://thinkprogress.org/economy/2013/07/03/2256471/wiping-the-corporate-tax-code-clean-could-raise-money-and-help-the-middle-class/There is good reason to be wary of Max Baucus and Orrin Hatch’s plan for “blank slate” reform of the individual income tax. But when it comes to the corporate income tax, this approach to reform could be a great opportunity – if it is used to raise substantial revenues.
The corporate income tax is one of the most progressive pieces of our tax code, with the vast majority of the tax borne by wealthy investors. But over the last 50 years, corporate taxes have declined as a share of federal revenues, reducing the progressivity of the tax code overall. The statutory top corporate tax rate is 35 percent, but the code is so riddled with loopholes and special preferences that corporations now pay an average effective tax rate of 12.6 percent — less than many middle class families.
That means that “blank slate” tax reform that wiped out all corporate tax expenditures – the loopholes and special breaks that allow companies to avoid the statutory tax rate – could raise a lot of revenue very progressively while both enhancing efficiency and protecting middle-class families from tax increases and damaging spending cuts. In fact, just repealing one large tax expenditure known as “deferral,” the provision that allows companies like Apple to use offshore subsidiaries to classify their profits as “foreign” and indefinitely avoid U.S. taxes, would raise more than half of the revenue called for in the Senate Budget Resolution.
Yet instead, corporate lobbyists are lining up to tell Congress that corporate reform should be “revenue neutral.” They say the U.S. should lock in the low effective rates corporations have achieved through past lobbying and accounting games, and that even as we are kicking kids off head start and furloughing nurses for returning veterans, corporations should not be asked to contribute any more to our nation’s fiscal needs. Worse, multinationals are pushing for a so-called “territorial” tax system, under which they would never owe tax on any profits they could characterize as overseas. This would magnify the problems created by deferral and potentially lead to even more erosion of the corporate tax base in the future.
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= new reply since forum marked as read
and it won't happen, imo,
just descriptions, not actual shows.
Congress doesn't respect us enough to tell us a plausible lie anymore.
tax rates.
I'll get to actual paid taxes in a moment.
Note that tax breaks favor some industries over others. E.g. the oil industry enjoys considerable tax advantages that others do not.
According to the U.S. Treasury, taxes are not passed onto customers through higher prices, but are born mostly by capital (i.e. stockholders) 82% and 18% by labor (in lower wages). So most of the tax burden, light as it is, born by corporations is passed onto the stockholders in reduced profits. But the tax burden (i.e. the stated tax rates is in the U.S. is among the lowest in the developed world.
First, stated tax rates:
GRAPH: Contrary To GOP Claims, U.S. Has Second Lowest Corporate Taxes In The Developed World
http://thinkprogress.org/economy/2011/07/05/260535/graph-corporate-tax-second-lowest/?mobile=nc
During negotiations regarding raising the nation’s debt limit, congressional Republicans have defended tax loopholes for corporations, claiming that America has a high corporate tax rate that is stifling economic growth and job creation. But the Center for Tax Justice (CTJ) has crunched the most recent data from the Organization for Economic Cooperation and Development (OECD), the Office of Management and Budget, and the Census Bureau, and finds that “the U.S. is already one of the least taxed countries for corporations in the developed world.”
As a share of GDP, the U.S. had the second lowest tax rate, behind only Iceland. This statistic flips on its head the often-repeated Republican charge that America has the second highest corporate tax rate in the world (which is only true on paper). In 2009, U.S. corporate taxes had fallen to only 1.3 percent of GDP, from 4 percent in 1965.
Conservatives love to point out that other OECD countries have lowered their corporate tax rates in recent years, but they conveniently ignore that “these countries have also closed corporate tax loopholes while the U.S. has expanded them.” As CAP Director for Tax and Budget Policy Michael Linden has noted, the U.S. is actually a very low-tax country across the board.
Recently, conservative commentator Bill Kristol chastised his own party for pretending that lowering the corporate tax rate is a cure-all for America’s economic woes. On Fox News Sunday, he interrupted a panelist who again tried to assert the U.S. is suffering from a high corporate tax rate: “Republicans are making a mistake if they focus on big businesses and corporate tax rates. Corporations have a ton of cash. The corporate tax rate is not killing big business in America.”
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[font size="+1"]But now, let's get down to reality, the taxes really paid by corporations after various tax breaks[/font] (built into the tax code due to the efforts of corporate lobbyists (who, when the GOP runs Congress, actually write the laws themselves). Some tax breaks make economic good sense, but some are just in there as payoffs for political financial support.
Corporate Tax Dodgers Pay To Keep Loopholes Open
It's one of the age-old Washington mind-benders: How is it possible that more than two dozen major U.S. companies post enormous profits and pay no taxes?
A report released Wednesday offers one possible explanation: In addition to spending nearly $500 million lobbying in a recent three-year period, those companies spread $41 million to the political campaigns of their friends in Congress.
And while most in Congress got a taste, the lion's share of campaign contributions went to a small group of congressional leaders in positions to stop any proposal to close a corporate tax loophole.
The report, "Loopholes for Sale," is from the U.S. PIRG consumer group and Citizens for Tax Justice, both favoring increased corporate taxation.
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ALSO SEE: Corporate Taxpayers & Corporate Tax Dodgers, 2008-2010: NEW REPORT: 280 Most Profitable U.S. Corporations Shelter Half Their Profits from Taxes.
http://ctj.org/corporatetaxdodgers/
...most of the tax burden that is born by corporations is passed on to the stockholders, the owners, as it should be. But it does not make any sense for corporations to pay less than middle class people - and it certainly doesn't make sense for some corporations to pay zero or negative taxes.
personal experience over the inferences drawn on scientificly based, empirical studies, you think the World is 'obviously' FLAT. You can't figure out how the sun manages to orbit the Earth every 24 hours.
Calling universally relied upon data sources such as the U.S. Census and CIA World Factbook, to name a couple sources used in the article I referenced, decidedly puts you in a Flat Earth Society realm. I must admit, not too many people would come out and admit to refusing to accept such widely accepted, empirically based data sources and call them "bogus".
Enjoy your Stone-Age mentality in a 21st century World. Unfortunately, ignorance is not blissfull.
