Zero Percent Corporate Tax. Is It a good idea?

[bbinacan]

I think it may be. Follow me closley here. If a corp can relocate or start in the US, would that not mean more jobs for US workers?

[marmar]

1. Won't happen. US labor is too pricey. They might incorporate here.....

...... but hire most of their workers in a place where they can pay slave wages.

[Deja Q]

56. +111111111111111111^999

[Oregone]

2. Disaster

That means all corporate earnings can pass straight to shareholders with a mere 15% capital gains tax on the personal end. Get ready to not only see a massive reduction in revenue, but the mass starvation of workers and company infrastructure. Itd be time to cash out.

[Incitatus]

18. How about 0 percent corporate and 40% capital gains?

[Oregone]

24. It becomes a bit like an S-Corp then

Which I have no probs with beyond the current structure's problem. In an S-Corp, profits pass through automatically as income (and are taxed as such) to shareholders.

But that wont encourage more companies. That structure already exists in the US.

[Vincardog]

33. Bingo the Parasitic corporations are already evading their low tax rate. How about an AMT for Cos?

[eShirl]

3. you mean zero corporate welfare too?

[bbinacan]

7. That works for me. n/t

[eShirl]

15. All the better for the voodoo to trickle down, I suppose.

[bbinacan]

25. Or does it

trickle up? Now there's an exercise in thought.

[eShirl]

43. Or is it?

ooo...

[Marr]

65. Good.

Frankly, it seems like your thinker could use some exercise. Why don't you play with that one for awhile and come back next month.

[wtmusic]

4. Terrible idea.

A big reason the budget deficit is out of control is that corporate taxes are about 40% of what they were in the 70s.

They are already among the lowest in the world here, and you want to make them lower? Bah.

[bbinacan]

5. And we know what

a gem the 70s were.

[Psephos]

38. ?? US corporate tax rates are among the HIGHEST in the West.

I despise the corporatists as much as the next guy, but we can't play fast and loose with the facts and expect to win arguments.

http://taxprof.typepad.com/taxprof_blog/2009/08/us-corporate-tax-rate.html

[Hassin Bin Sober]

52. Hey, not so fast ...

Figure actual taxes and that statement is wrong:

http://www.cbpp.org/cms/index.cfm?fa=view&id=784

Putting U.S. Corporate Taxes in Perspective
PDF of this report (3pp.)
By Chye-Ching Huang and Chad Stone

October 27, 2008
Related Areas of Research
Tax — Federal
Businesses
The U.S. corporate tax burden is smaller than average for developed countries.<1> Corporations in 19 of the member states of the Organization for Economic Co-operation and Development paid 16.1 percent of their profits in taxes between 2000 and 2005, on average, while corporations in the United States paid 13.4 percent.

Nevertheless, some have argued that U.S. corporate tax rates unduly burden U.S. companies by pointing to the country’s top statutory tax rate, which is 35 percent. For example, a recent Wall Street Journal editorial calling for corporate tax cuts noted that this is the second highest top statutory tax rate among developed countries.<2> While true, this gives the false impression that the corporate tax burden is greater here than in other developed countries. Because the U.S. tax code offers so many deductions, credits, and other mechanisms by which corporations can reduce their taxes, the actual percentage of profits that U.S. corporations pay in taxes — or what analysts refer to as their effective tax rate — is not high, compared to other developed countries.

Because the average U.S. corporate tax burden is low, many economists believe a revenue-neutral corporate tax reform that reduces statutory corporate tax rates, while broadening the tax base by eliminating costly tax breaks, could improve economic efficiency and likely benefit the U.S. economy.

■Effective tax rate much lower than top statutory rate. Government and independent researchers have long pointed out that the top statutory corporate tax rate is an incomplete measure at best of the burden of corporate taxes. It does not take into account the generous depreciation rules, exemptions, deductions, and credits (some of which are sometimes termed “loopholes”) that corporations may be eligible for. Those special provisions lower corporations’ effective tax rate, or the share of their profits they actually pay in taxes, and do so in a way that creates different tax rates for different industries. These differential tax rates across industries are generally regarded as more harmful to economic efficiency than any burden due to the current top statutory rate.

more at link

[Psephos]

60. Actually, that's a great point, and one I've made often.

The high US corporate tax rate is an engine of "creative" accounting and a powerful stimulus for loophole lobbying.

The corporate tax rate should be reset to a level similar to other OECD countries, and the Byzantine loophole-infested tax code simplified so that corp-welfare deductions are eliminated, and perverse incentives tossed aside.

The current system, even if it worked as intended, is grossly inefficient, as it feeds an entire industry of accountants, attorneys, and lobbyists. And - it doesn't work as intended.

I stand by my earlier point, however, that we have an obligation to respect facts.

[alittlelark]

6. My brain just exploded.... but then I was given the RED pill.

And I can now think clearly again.

[Ruby the Liberal]

8. Capital Gains under Reagan, 28%. Capital gains under Bush/Obama, 15%

And that is only shareholders.

[marmar]

10. What about Clinton?

nt

[Ruby the Liberal]

13. Steady to 1997, then lowered to 20%

Had to look that up as I couldn't recall. :D

[baldguy]

9. No.

That's the type of idea that got us INTO this mess.

[Ardent15]

11. +1. nt

[Ruby the Liberal]

12. Oh, and if they get to influence our elections and Representatives, no Representation without

taxation.

Take away their voice and make their contributions illegal, and I will get behind your RW scheme. With banners and balloons.

[bbinacan]

17. Wasn't it

no taxation without representation?

[Ardent15]

20. Yes, but it should go both ways. nt

[Ruby the Liberal]

22. How is the inverse any different?

Unless you are Libertarian, then I give you a pass...

[Fresh_Start]

14. sure as long as we stop subsidizing them so that

right now their effective tax rate is negative.

But since the corporations won't be taxes, then investments should be fully taxed, right now they have a preferential tax rate since its supposedly a 'double taxation'.

[bbinacan]

23. It is double taxation

corporate taxes plus taxation on dividends. What is so hard to figure out here?

[Fresh_Start]

28. its only double taxation if the corporation was actually taxed

since most of them are not paying taxes, its not double taxation

and if you remove the corporate tax as suggested in this thread it is clearly not double taxation so the preferential treatment should be eliminated

[Ruby the Liberal]

30. Tax is corporate gains. Capital gains (15%) is on shareholder gains.

Thought when I rejoined a month or so ago that you were a tool. Thanks for confirming.

[gristy]

48. And double taxation is what? Unfair?

So I'm supposed to cry that I pay income tax and sales tax? :cry:

[bbinacan]

58. Yes. n/t

[NoUsername]

71. Speaking of negative tax rates...

here's a prime example:

"John W. Snow, President Bush’s choice to replace the fired Paul O’Neill as Secretary of the Treasury, is the CEO of a champion corporate tax dodger, CSX Corporation.

CSX’s 2001 annual report states the following company motto: “CSX will pursue all available opportunities to pay the lowest federal, state and foreign taxes.”

As a result of those efforts, CSX reports that:

* In three of the past four years, CSX paid no federal income tax at all.
* In fact, instead of paying taxes, CSX supplemented its $934 million in pretax U.S. profits over the four years with a total of $164 million in tax rebate checks from the federal government.

“If the President’s goal is to encourage even more corporate tax sheltering, then Mr. Snow looks like a fine choice to help him do so,” said Robert S. McIntyre, director of Citizens for Tax Justice."

http://www.ctj.org/html/jwsnow.htm

Can you imagine not only not paying taxes but also getting a huge rebate back at the end of the year? I sure can't but then again, I'm not a multi-million-dollar corporation. I'm just a lowly serf whose lot in life is to supplement the income of those large corporations with tax-payer-funded rebates. Or so I'm told.

[Marr]

16. No. If you want to give corporations an incentive, you do it with tariffs and

those sorts of things. Our leverage comes from our status as a market. We can deny access to this market if we choose, and we can charge admission. If you only pander to these people it's a race to the bottom-- and I guarantee you there will always be a country willing to give the big corporations a little more freedom than you're willing to.

[Ruby the Liberal]

19. But, but, but - what bouut NAFTA?

:cry:

[bbinacan]

26. Knock Knock

Is that you Pat Buchanan?:evilgrin:

[Marr]

34. It's common sense. What you're suggesting is corporate servility.

The nation doesn't have to beg and plead with big corporations. We have all the leverage, and we can literally dictate terms.

[bbinacan]

45. And they go elsewhere

and you are left with a Pyrrhic victory. Let me know if you need a lesson on Pyrrhus and his loss to Rome.

YOU dictate terms? We are not Venezuela, China, North Korea, etc. This talk scares the hell out of me.

[Ruby the Liberal]

47. Your libertarian stance scares the shit out of me

So I balance you.

[bbinacan]

51. So are you evaporating it all?

It seems so.

[me b zola]

50. I think that they should go somewhere else

I would love to see the return of small business to the US. More people are owners, and the people that they employ are generally treated better.

[Marr]

54. They'll go elsewhere? Don't be absurd.

Tell me- who is going to replace the US Government on Haliburton's accounting sheet? You think GE will just hop out and replace that client named "United States" to save a few bucks on corporate tax? These corporations are completely dependent upon our market and our government. They have nowhere else to go.

If the thought of government power being above corporate power seems wrong to you, you're at the wrong website. The fact that you equate such a widely-accepted idea with communism says a lot.

Most people outgrow Ayn Rand by the time they can legally drink, btw.

[quaker bill]

21. Only if they renounce corporate "personhood"

If corporations are people, people pay taxes.

[bbinacan]

29. You certainly added to

the conversation.:eyes:

[dhpgetsit]

27. The way to restore American labor

would be to end all this "free trade" crap and impose tariffs on products we should be making here.

[bbinacan]

36. I agree, but

how much more will the "working family" agree to pay? That's the whole damned problem. Give me the cars, boats, campers, etc. We, as people need to live within our means. Our government too.

[Marr]

40. They'll be willing to pay more in time, because they'll have more.

They'll have better jobs and more money to spend.

We've been selling ourselves off for decades now, and it's all been to enrich a very small number of people at the top of the heap. Building things back up would be a slow process, but the only alternative is to continue ceding more and more ground, more and more wealth, and more and more power to corporations. We'll end up broke *and* broken.

[Ruby the Liberal]

41. Economics 101 - Deficit Spending while in growth mode

Matters not whether you are in blue collar work and need a van/truck + tools, white collar work and need a computer or the government building a library.

If you are building a business/economy, deficit spending (investing in the tools of your future) is good.

Not-good examples of deficit spending? Living for today. Using a credit card to take a cruise or throwing money out of the Bernake helicopter in Iraq.

In the former, you are in deficit for future gains. In the latter, you are in deficit for no fucking reason.

Your proposal is the latter.

[dhpgetsit]

76. Wages will have to be adequate to allow working families to live.

Raising minimum wages and empowering labor will have no effect unless we also fix trade policies and impose the tariffs.

[OffWithTheirHeads]

31. I think most people don't quite get the concept of the tax breaks

you can get under the corporate shield. If your corporation is financially strong enough, not only can you influence politicians, you can write off almost ALL of your lifestyle. Wanna play golf at Pebble Beach? No problem, business expense. Breakfast, lunch, dinner at the French Laundry? business expense. Sky box at the Super bowl? Business expense. Limo, Lear jet? Business expense.

The term "Business expense" = taxpayer funded corporate welfare and the folks at the top get almost everything at the expense of the proletariat taxpayer. They actually pay almost nothing of their predatory salaries for actual living expenses. Instead, they dump it on the rest of us while they sit on the beach in San Trope.

It's time to eat them.

[havocmom]

32. +1

[Ardent15]

35. Worse idea than a flat tax. nt

[Ruby the Liberal]

42. ?

[Ardent15]

64. Sorry, that was meant to be in response to the OP. nt

[Ruby the Liberal]

69. Check. nt

[bbinacan]

39. Thanks. n/t

[Ruby the Liberal]

44. ?

[bbinacan]

46. ?

[Ruby the Liberal]

37. Amen brother/sister

[Warpy]

49. No. The more their taxes went down, the more jobs they offshored

and the worse they got to their workers and the more Congressmen they bought.

It's a terrible idea. Their taxes need to go up, not down. Those corporate "persons" are now of paramount importance and we the people have been shoved aside, our needs discounted and their needs catered to.

Those "persons" need to start paying their own way, at least.

[bbinacan]

53. Please provide a link.

Thanks.:toast:

[Warpy]

57. Have you been in a coma for the past 30 years?

Seriously, dude, get help.

[Ruby the Liberal]

59. You are talking to a Libertarian tool. I appreciate your patience with it.

:)

[Warpy]

67. Thank you

I hadn't read its responses to the rest of the thread, but a petulant demand for a link to the obvious just couldn't go unremarked.

I'm glad it wasn't too much.

[Ruby the Liberal]

68. Been annoying me with Ayn Rand talking points for weeks

I really need to find a job and get off the net again. The more things change, the more they stay the same.

[bridgit]

55. Would that not mean more jobs for US workers? How could you verify that it would?

Tie any 'no corp tax' tax to jobs creation at a local/regional level, maybe beyond; show them a sliding scale starting at '0' but able to flow back round their ankles as part of a performance/compliance metric of their original prospectus? Maybe. Someone has to bell that fat cat. We've been handing them our money for too long. It is time for them to start handing some back

Corporate ShareHolderHood is not more important than people themselves

[bbinacan]

62. I would say common sense.

Think of this metric. Keep US corps based in the US and keep US employees here. As far as metrics and bell curves. I'd love to see your data and we can look at the standard deviations. Thanks.

[bridgit]

72. Suggesting a tax free, no strings attached status for corps like religion has coveted

throughout is a non starter in todays climate after watching just Levis, as one for instance, take their 1st g.w. bush tax giveaway and ship it all off to China; you may as well suggest no taxes for anyone along with an introduction to The Libertarian Thunderdome that would follow closely behind absent an actionable agreement to dissuade corrosive elements otherwise

We have a dear friend, his dad's a multi-millionaire. His metric, by all account, took off exponentially when he moved his photo-lithographic reduction facilities (yep, puter chips) to China. But he's not there for the low taxes, and still complains about paying too much for what are in essence: brides, monies, costs and fees able to attenuate themselves from the dirt it sits on to Hong Kong and back, no...

He's there for the cheap labor and the woeful lack of Chinese worker's rights. It's better imo to tack these people down going in, they are much slipperier than many people think they are - common sense says that's part of how we got here :)

[Merlot]

61. Sounds like a trickle down theory to me

and we know how well those work.

[bbinacan]

63. See reply 25

[Merlot]

66. either way - up or down - it's a trickle

[Ruby the Liberal]

70. It is Rand/Paul-ism

Good call...

[TomCADem]

73. Well, the liberal argument against the Cadillac Plan Health Insurance Tax Is That It Gets Passed On

So, i guess under that logic, some folks may favor such a tax reduction.

[TexasObserver]

74. No. Why should a corporation, which enjoys rights of personhood, be exempt?

[anigbrowl]

75. We already have that. Most US corporations pay virtually no taxes.

The GOP goes on abot high corporate tax rates but hey only ever quote the nominal rate, not mentioning the vast list of deductions and so on. I'd rather see a low corporate tax, like 10%, but vigorous enforcement and few loopholes*, so that if a company can declare a profit to its shareholders, then we can also be assured that 10% of that went to the treasury.

I don't mind tax credits for things like new hires or new investment; tax policy can be useful that way...but more often than not it consists of back-scratching.

[ddeclue]

77. NO it won't - it will just mean their P.O. Box is in the U.S.A.

I say 100% tax if you want to make it elsewhere but sell it here.

:P