Thread: America officially has the highest taxes in the World...

Originally Posted by Reiver

We certainly can refer to inefficiencies within the tax codes in general, often encouraged by influence costs on our easily corrupted politicians. Happy to agree to that (just seems to be strange to refer to it in a thread based on misinformation, typically the means to ensure a lack of accountability for those politicians)

I brought it up because the OP's misinformation really highlights the inefficiencies to me. What's the point of having such a high marginal rate when it's so easily chipped away on its way to the effective? And what about those small corporations that don't have the money to hire Big-4 firms to fully exploit the tax code? We obviously have to look to Washington to answer that question. Obama and company seem much more content to play the class warfare game with the new Buffett rule. $47 billion over 10 years is a drop in the bucket compared against public debt.

Originally Posted by IgnoranceisBliss

I brought it up because the OP's misinformation really highlights the inefficiencies to me. What's the point of having such a high marginal rate when it's so easily chipped away on its way to the effective?

It can improve industrial policy. For example, we'd arguably want lower effective rates on certain manufacturing industries and higher rates on finance. We can then have more revenue raising flexibility whilst considering means to increase specific types of investment and capital deepening.

Originally Posted by Reiver

This is a nonsensical response. To make any relevant international comparison of corporate tax rates we have to refer to effective rates. There is no debate in that. You haven't referred to such rates, preferring to stick diligently to a piece of misinformation. You need to put it right. Can you or can't you?

The U.S. is most certainly one of the highest. This data is a little old. Japan has lowered its rates recently.

Check it out: http://businessroundtable.org/upload...Rate_Study.pdf

Originally Posted by onalandline

Check it out: http://businessroundtable.org/upload...Rate_Study.pdf

Not what we need. Refers only to the 2,000 largest companies (an industry comparison would be more useful). However, it did reject your opening post as wrong.

Originally Posted by Reiver

Not what we need. Refers only to the 2,000 largest companies (an industry comparison would be more useful). However, it did reject your opening post as wrong.

I said that the U.S. has the highest corporate tax rate. Still true my friend.

Originally Posted by Reiver

It can improve industrial policy. For example, we'd arguably want lower effective rates on certain manufacturing industries and higher rates on finance. We can then have more revenue raising flexibility whilst considering means to increase specific types of investment and capital deepening.

I'm not against all tax exemptions or loopholes, I just think they need to be DRAMATICALLY reduced. Rather than providing thousands of pages of complicated codes, why not have the government specifically target industries or even individual companies? They could have temporary tax breaks that expire over time or under certain conditions. They could establish several "zones" with lower tax rates or tax credits. They could have four or five "zones" with different across the board exemptions. Companies could then be assigned into these zones depending on Congress' desires at the time..i.e. green energy, heavy industry etc. I think this could be more effective than thousands of pages of complicated loopholes that EVERYONE can take advantage of. The Finance types are always going to be a step ahead of other industries in avoiding taxes. Things like executive compensation could also be factored into each zone. It would be difficult to build from scratch, but it'd be easier and more centralized once it was in effect. It wouldn't be every company vs the U.S. government's massive "rule book." There would be lobbying to get into better zones, but there would be more standardization and much less inefficiency.

Originally Posted by onalandline

I said that the U.S. has the highest corporate tax rate. Still true my friend.

It has the highest marginal tax rate. That doesn't mean that much when compare to effective rate.

Originally Posted by IgnoranceisBliss

It has the highest marginal tax rate. That doesn't mean that much when compare to effective rate.

We are still high when comparing effective rates, but my OP was not about effective rates. If we add together federal and state taxes, depending on the State, they are even higher.

Originally Posted by IgnoranceisBliss

I'm not against all tax exemptions or loopholes, I just think they need to be DRAMATICALLY reduced. Rather than providing thousands of pages of complicated codes, why not have the government specifically target industries or even individual companies?

The issue is the extent that it distorts markets (in terms of net losses of course). There's certainly a wealth of literature that would suggest more specific policy is superior (i.e. the use of regional policy can enhance productivity and wages, while tax rate differences could actually harm wages by negatively impacting on investment hurdles). However, I wouldn't suggest that its conclusive. We therefore cannot necessarily reject the usefulness of differences in these tax rates to have structural gains for the ecoonomy

reiver is often wrong, but never in doubt.

This refers to effective rates.

http://taxfoundation.org/files/sr195.pdf