Should Corporate Tax Be Lowered in US?

I don't care about taxes because everyone pays them. If you don't like the tax situation in one state or country then relocate until you find tax bliss.

Sorry but reducing taxes does not necessarily relate to lower prices on goods and services.

BTW; a company can spend every penny it earns and not have any profits. If there are profits this means the company has bought everything they wish to buy and more spending is meaningless and wasteful until the demand on their products increase.

Corporate taxes are not going away so why even believe this? The USA has $1 trillion deficits and $16 trillion in debt and you think tax revenues will be lowered? Or will you have the people make up for the taxes that corporations don't pay?

 

Do you think giving politicians more money will reduce the deficit and debt?

Lets try a though experiment, comparing 2 tax strategies:

1. Push taxes on business profits to 90%, and eliminate all loop holes, netting $800B. Then reduce income taxes on individuals by 50% to make up the difference.
2. Reduce taxes on corporations to zero, and increase income taxes on individuals by 21% to make up the loss.

Wait 10 years.

Which will result in more business?
Which will result in more economic growth?
Which will result in less need for safety nets?
Which will result in high income?

 

I thought this thread was about corporate taxation?

Regarding additional taxation I would not give another penny in taxes until there is a per capita spending cap.

Regarding your experiment...your assumptions are flawed. If you increase corporate taxes to 90%, this will have a detrimental effect on the economy and in the long term net nothing. It has proven impossible to increase taxes on individuals and your 21% is higher than the current average effective tax rate paid by individuals. Your experimental question is impossible to implement to why discuss it?

Reducing corporate tax rates will not necessarily increase sales or employment. However, reducing corporate taxes which are an expense on business is a positive action.

Americans and business today only fund $2.3 trillion and whine like babies when asked to pay more. Debt is mounting because we have a spending problem which is about $1 trillion above what Americans are willing to fund.

You need to define what your root problem is that you are trying to solve?? Changing corporate tax rates solves what problem? Changing personal tax rates solves what problem?

 

It is.

Nor I.

The point was to show how the same "apparent" federal income can have very different impacts on the economy.

You agree a 90% tax is detrimental, but won't agree that having the highest corporate tax rate is also detrimental.

Do you agree lower corporate tax rates will increase the amount of profit realized in the US? You're assuming that will have no impact on hiring, I believe most of that money will create new jobs - the truth lays somewhere in between.

We have a spending problem because we grew government by spending the payroll tax surpluses, borrowing when that wan't enough. We didn't vote the bums out, so they kept doing it. We are spending $1T more than we take in, and can't find a way to trim $85B without massive layoffs and economic collapse.

Stimulating the economy, and that lowering personal tax rates have less effect than lowering corporate tax rates.

Of course, we also need to kill the regulations that hamper business with no measurable benefit in employee / consumer safety.

 

If only individuals were taxed and not businesses, then businesses would stay here and the US as a nation would be tax bliss for creation of business.

Competition relates to lower prices on goods and services and if only individuals were taxed and not businesses, there would be plenty of competition by creation of many businesses.

I've heard tell that only 53% of people pay federal tax now. I'm sure if you cut corporate taxes, you could just tax the other 47% that are in a constant state of "tax bliss" right now.

The housing bubble wouldn't have destroyed the economy if there were more jobs to begin with and there would be more jobs in America if it didn't cost endless taxes to create said jobs.

All these things that are "made in China"...

One of these days, the cost of Chinese labor will rise and things that are so cheap now will cost us more than reducing the taxes to get the jobs back here now

You can count on that.

Flat tax on individuals and no loopholes. Period.

 

The biggest problem with taxes on corporations these days is that corporations can avoid paying any taxes at all, anywhere. This was on the agenda at the most recent G20 meeting and the OECD, which is the body that has the most influence on how nations treat corporate tax law, has promised a new set of recommendations in June which will address the G20 concerns about corporate structures for tax avoidance. This is hugely significant since it was OECD recommendations that created the national laws that allowed the current situation of massive corporate tax avoidance to flourish.

 

IMO it is beneficial to maximize the cash in the hands of people and business and minimize government. And we must define a government which we can fund...if we can't fund it then it must be changed! The US government spending cannot be sustained so why do we continue down this path? The Democrats just put forth a $3.7 trillion budget, and it assumes an additional $100 billion per year in taxation, but I did not see what the deficit spending might be...probably another $1 trillion...and this IS NOT sustainable! I'm guessing even if all of the current unemployed who wish to work suddenly found a job, these jobs will on average be middle to low paying, meaning almost no increase in tax revenue.

I never disagreed or agreed about the current 35% corporate tax. Someone here will know the 'effective' corporate tax rate and I'm sure this is much lower than 35%...like maybe 20% at the most. Taxes are an expense to the corporation so they impact the bottom line, but a reduction in taxes does not guarantee an increase in employment. I'm a business owner and the feds can cut my taxes to 0% and I won't hire another worker because my sales revenue did not change...I'll just pocket the money. Few if any companies are going to hire employees simply because they have more cash...they will hire more employees when their products and services require more output.

If you watched Bill Maher last night, his first guest was an economist from the Obama administration and Maher asked him if we have a 'spending problem' and he basically said no. IMO he was just another political idiot drinking the political Koolaid...either the nation must demand $1 trillion more per year in taxation, or reduce government spending by $1 trillion, or some of both...or continue down the path of $1 trillion deficits. Obviously, the political idiots and people are happy with the path of $1 trillion deficits...

 

Businesses are here now and are not leaving because of tax rates??

If individuals paid the entire tax revenue they would have less cash for consumption meaning companies will go out of business. It's a waste of time to discuss this because Americans will not allow tax increases. Half of them pay no federal income tax as it is. So you want to place a huge tax burden on the other 1/2 and I suggest this will bring the economy to a halt! The answer is screw taxes and reduce government spending.

The economy is what it is and can only create so many jobs meaning no guarantees that everyone can have the job of their choice. You cannot force the economy to grow so what you can force is how we live and how government functions. IMO the ONLY way to greatly grow the economy is to increase exports, which means we need government to support international trade, and we must be competitive within the global marketplace.

All this talk about jobs and taxes IMO is meaningless because I see them as two totally separate entities. The economy will do what it does and government will do what it does. When the government is abusing this situation by $1 trillion spending deficits...this is a government problem...not an economy problem...

 

In reality...a root problem is...that people and business are hell-bent on avoiding taxation. I think this exists because we are given too many tax rules that allow us to manipulate our profits and spending, etc. It's also obvious that the IRS does a (*)(*)(*)(*)-poor job an enforcement. And this is not just about the wealthy or corporations; half of Americans don't pay a dime of federal income taxes, and I'll guess one-half or more cheat on their taxes, and does every person report every dime they earn throughout the year...hell no! It's probably time to create an entirely new tax system, without all the options, just a rate assessed on whatever transactions, which includes ALL Americans, which is automatic...

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In reality...a root problem is...that people and business are hell-bent on avoiding taxation. I think this exists because we are given too many tax rules that allow us to manipulate our profits and spending, etc. It's also obvious that the IRS does a (*)(*)(*)(*)-poor job an enforcement. And this is not just about the wealthy or corporations; half of Americans don't pay a dime of federal income taxes, and I'll guess one-half or more cheat on their taxes, and does every person report every dime they earn throughout the year...hell no! It's probably time to create an entirely new tax system, without all the options, just a rate assessed on whatever transactions, which includes ALL Americans, which is automatic...

 

Corporations should not be taxed at all. Just distributions.

 

The problem of tax code complexity is a direct result of interests seeking advantage through political manipulation. This is the consequence of the ever increasing cost of political campaigning which puts politicians in the position of forwarding some particular interest strictly to ensure funding for their endless campaigning. If there was no way to gain political influence through campaign donations the tax code would be far, far less complex in the vastly confusing myriad of business taxes credits and deductions.

The reason half of Americans pay no income tax is because the median income has stagnated while the national income has more than doubled. This had resulted in an ever larger number of income earners falling below the income tax threshold, which has risen with national income while their wages have not. Besides that, about 1/2 of the top 1% of income earners also pay no income tax despite an increase in their average earnings of over 600%, while the top 10% pay an average tax of around 15% on their incomes. The result is that the tax burden is shifting more and more to the middle class and their stagnating incomes and away from those whose incomes are rising.

The reality is that there has been a vast shift in who benefits from the economic growth of the past few decades. The top 20% has received all the gains, the middle 40% has stagnated and the bottom 20% has seen a decline in their incomes. Since 84% of the wealth in the US is held by the top 20%, their incomes will only increase as corporations avoid taxes.

Continuing with the current system, or any sort of variation that relies on taxing income is not a viable option since it will always be subject to political influence and manipulation. The entire tax system should be replaced with a universal electronic transaction tax of a few hundredths of a percent collected at the point of transaction. It would be completely automatic. Various studies have put the rate necessary to eliminate all other taxes and pay down the national debt at between 0.002 and 0.07%, mostly depending on whether or not all state and local taxes are also eliminated. At the most that is less than a dime of tax on a $100 transaction.

Think about that for a minute, by paying less than a dime of tax on every $100 you spend you would not have pay any more taxes anywhere, to anyone, ever.

 

How do you remove political influence? By minimizing the influence government has over those that would be tempted to bribe them. By limiting campaign contributions to only those you can vote for

Those 50% have no skin in the game, and will vote against anyone that wants them to pay some taxes so they pay more attention to what government is spending it's money on.

That acumulation of wealth didn't come from paying 15% in taxes instead of paying 35%. If that was the case the bottom 50% would be rich.

Don't get me wrong, government influence directly increased their wealth, but by regulated monopolies, not tax policy. I'd wager any public increase in taxes on the rich will be more than offset by behind the scene regulation.

In true competition, greedy are pitted against each other, doing a much better job in keeping prices low, products safe and innovative than any regulator.

I disagree - see above

You don't think politicians couldn't find a way to spend every penny they get, and need more? Especially when it is giving that money away that gets most politicians re-elected. "Hey, but only $1 per hundred, no one goes broke living on 99%, 97%, 90%....."

 

By eliminating the private financing of political campaigns.

Those 50% may not pay any income tax but they pay all the other taxes. That gives them plenty of skin in the game and more interest in what the government spends its money on than the imbeciles who obsesses about them not paying any income tax while ignoring how that cam about.

15% of nothing is still nothing but 15% of a $1Million is a lot less than 35%, or 70% which was the tax rate in the 1970.

We'll see about that.

No, history has not born that out, and never will. Greed will always gravitate to expedience over concern for others.

Giving money away gets politicians re-elected but not in the way you think. They give money away to those who pay them the most. This is not the 50% do not pay any taxes, or the 99%, but the 1% who also pay no taxes thanks to their generous political contributions.

 

0% corporate tax rate is the only one that makes sense. Who would lose? The Government maybe. Lobbyist who earn their pay getting special deals for sure. Who would win? The Corporation itself as entity, corporate shareholders, the retirement accounts of all Americans, employees, and the companies they make purchases from and do business with; and the consumer. But I don't think it will come in the form of lower prices. Prices are set to maximize profit always, or they should be. The taxes hit on the reinvestment side. (Although over time costs will go down as investment tends to reduce marginal costs in the future, or improve the value per marginal cost in a successful firm)

Medical research firms would produce better and more medicine with the extra money. That is what they have always done with it, or pay their people more.
Automobile manufcatures make better cars, or pay pay people or shareholders more
Caterpillar makes a better tractor..
Construction firms build stronger materials.. etc...

All these things enrich our lives more then government, or are paid out to the pockets of people who work for the company, and contrary to what you hear from Michael Moore, 80% or more of labor costs of companies are paid to mid level manager employees and lower. I know some CEOS make 300 times their employees when you skew some math around,but even those companies tend to have tens of thousands of employees.

People will say "Oh but that will just make rich people rich and there will be no money for the poor" - if you believe government helps the poor, (I have my doubts), then tax the income of the people who work for the corporation and their shareholders who are more geographically bound, and are more likely to spend income on consumption rather then investment in R&D and service to new markets of people etc... In the case the investor is not geographically bound, they will at least be pouring their money into our economy, and should they receive a greater reward for it b/c of our low tax rate allowed the corporation grow then I expect we will see them investing again next year.

But why tax an entity that can do nothing with money other then investment, and has proven itself capable by the very existence of their profits? The only possible answer is to enrich special interests, slow technological growth, and reduce hiring.

People shouldn't be worried about stealing low wage low skill work from the developing world. They should worry about how we remain the leader in the First.