However, the largest protest or complaint I received were from Obama supporters who insisted there was NO WAY corporate taxes in the US was 40%.
I don't know how else to put this, but;
You're misinformed?
You're ignorant?
You really and genuinely do NOT know what you're talking about?
You have never ever bothered to look up the facts first before forming political opinions, and hypocritically not only vote, but insist others vote based on these foundationless opinions?
I don't know what else to say. It's like arguing with a 3 year old child when you argue with a liberal. And I say that not to be mean or derogatory, but you guys are just plain, flat out are wrong and uninformed.
You HAVE to understand it is NOT a matter of opinion. I am talking about things that are matter of fact. Things that should have no emotion, or philosophy or feelings about it. Things I, and other conservative/capitalists point out are not our "opinion" they are facts. And it is angering, at minimum frustrating when we say something like "the sky is blue" and you say, "no it isn't. You're a racist!"
So, here it is you morons. You uneducated automatons. CORPORATE TAX RATES IN THE US ARE 40 FREAKING %.
HOW MUCH CLEARER CAN I POSSIBLY MAKE IT?
27 comments:
"You HAVE to understand it is NOT a matter of opinion. I am talking about things that are matter of fact. Things that should have no emotion, or philosophy or feelings about it. Things I, and other conservative/capitalists point out are not our "opinion" they are facts. And it is angering, at minimum frustrating when we say something like "the sky is blue" and you say, "no it isn't. You're a racist!"
Cappy, that was AWESOME! In this one paragraph you have a perfectly paraphrased what it is that is so frustrating about arguing with libtards. This is art, man. Art!
Want to know what's REALLY interesting?
Corporations earning between $100K and $333K pay at a (DRUM ROLL!!) 39% (yup, 39%) corporate tax rate.
But the BIG corporations, those making more than $18 million, pay at the 35% rate (and the Democrats argue that it is "unfair" to cut the corporate tax rate to a flat rate).
So let's see, you are a business with profits of $250K (probably equivalent to like a local McDonald's in size for example), you can either be a C-corporation and pay the 39% corporate rate, which means you have to pass on higher prices to your consumers, meanwhile Wal-Mart, in addition to major economies of scale, is taxed at a 35% rate, and thus can offer really lower prices.
So you form an S-Corporation, and pay at the individual income tax rate, which in this case is 35%.
But Obama is increasing it to (DRUM ROLL!!) 39.6% as it was under Clinton!
SO IT SEEMS A LOAD OF SMALL BUSINESSES WILL NOW END UP PAYING AT A HIGHER TAX RATE THAN THE BIG BUSINESSES, under an Obama administration, unless Sen. Obama increases the corporate rate for those big business C-Corps up to 39.6% as well; that'll keep businesses from fleeing America for those lower rates elsewhere!
And to top it off, he is increasing the minimum wage to $9.50 and indexing it to inflation. Wal-Mart supports a higher minimum wage because it will hurt small businesses. Watch for unemployment to go up (I wonder if the Congress's vote to increase the minimum wage recently is one reason why unemployment is up). If inflation goes up, and the minimum wage has no "shut-off" measure, and remains indexed to it, this could be really disastrous for small businesses in America.
Oh, and Cappy, shareholders are taxed three times, not double. There's the corporate income tax, then there's the tax on the corporation's investment income (as corps invest). And THEN there's the dividend tax. Because this amounts essentially to a triple tax, the tax on a corporation's investment income is 30% of the corporate tax rate, so for example if the corporation is taxed at the 35% corporate tax rate, it's investment income is taxed at an 11% tax rate.
So essentially shareholders of big corporations are taxed three times.
35% corp rate + 11% investment income rate + 15% dividend tax rate = 61% tax rate for shareholders.
If the capital gains or dividend rate go up to something over 25% with a fully Democratic government, the stock market will probably end up like it was at the end of the 1970s. No capital to start businesses because folks, in particular the wealthy, had their wealth in trusts and commodities and other tax-safe entities, and we already aren't seeing any new IPOs because of Sarbannes-Oxley alone (Reagan's capital gains tax cut caused a lot of money to flow out of commodities, and into the stock market, helping America and hurting the Soviet Union a lot).
What I wonder is, could a higher capital gains or dividend rate do the reverse today, i.e. weaken America and strengthen the Russians by causing capital to flow to commodities, and thus Russia...? I mean I know it would weaken our economy, but I wonder if it would create more wealth for the Russians, and other commodities-dependent nations.
Liberals:
- Almost always wrong
- Never in doubt
- Don't let facts get in the way of a persuasive argument
Hey, for the asinine liberal argument that "we need more government" for every situation means you have to constantly assume we're living in a hedonistic, selfish, laissez-faire "paradise." These people are on a constant emotional high. Facts to them are like interventions to a heroin addict.
Yesterday I was arguing with some random dumbass lefty and he cited The Onion as a source to prove that Bush made fast food jobs count as "manufacturing" to make employment numbers look better.
The Onion is a wonderful site, reporting on the state of the economy with articles like "Swaggering Down 87%" and "Dollar Bill on Floor Sends Wall Street Into Frenzy" to name a few on their current front page, but a real news source it ain't, and this guy was dead serious. The idiot thought it was real.
I've had this argument with liberals as well (thanks for the visual backup). The reponse I most often hear is, that while the tax rate may indeed be 40%, few if any US corporations actually pay it (usually a rate much lower).
Thoughts?
This entire election has shown that people are putting "HOPE" and "CHANGE" ahead of everything else. The media is doing a disservice by their bias. Of course, this is really getting to a point where it is downright dangerous. With the media acting as a de facto propaganda arm of a campaign and liberal legislators looking to shut down conservative radio and take over our 401(k)s we are headed toward a full on dictatorship. I went in to more detail on my blog Oxygen Rich Environment
Goldwater's Ghost said:
I've had this argument with liberals as well (thanks for the visual backup). The reponse I most often hear is, that while the tax rate may indeed be 40%, few if any US corporations actually pay it (usually a rate much lower).
Thoughts?
Wow, looks like capitalist pig nailed it. Nicely done.
Corporations earning between $100K and $333K pay at a (DRUM ROLL!!) 39% (yup, 39%) corporate tax rate.
But the BIG corporations, those making more than $18 million, pay at the 35% rate (and the Democrats argue that it is "unfair" to cut the corporate tax rate to a flat rate).
You misunderstand how the corporate income tax works. The $100k-335k 39% bubble exists in order to eliminate the benefit of the earlier 15% and 25% brackets, making the federal corporate tax a flat 34% from the first dollar. The second 38% bubble from $15-18.3 million makes it a flat 35%.
http://www.worldmapper.org/index.html
Check this out!
Yup, he nailed it. Let's get out tax rate down to 28% so we can have an economy as good as Mexico's!
A quick story about a 'discussion' I had with a particularly liberal roommate a few years ago.
Right after the last election in 2006 I came home and talked about the different questions up for ballot with my roommate. We discovered that we had voted completely opposite... and started to talk about why we voted the way we did.
I only voted for one proposal, which was the expansion of a building at the local university. The remainder were for things like low income housing projects or other very liberal spending agendas which didn't make sense to me because our state is running in a massive deficit.
After trying to talk some sense into him, I was at a loss for words as he started to shout out 'facts' that I had failed to consider.
"You are trying to help college kids in this state? Did you know that University only has 10% of it's student body from this state!?"
"Why didn't you vote for the programs that help the poor people? Don't you know that 30% of this state's population is on welfare!?" Needless to say I was confused and retired to my bedroom to think about what he said. After all... I hadn't considered these 'facts' and never thought a friend of mine would be untruthful in order to win an argument.
Turns out I was wrong.
After getting a funny feeling about his 'facts' I went to some agency websites and looked up the real numbers. 6.8% of our state is on welfare and 67% of that University's student body comes from our state.
My wife asked me not to make a scene or throw the real facts in his face and I didn't... but we moved out within a few months and I never trusted anything he described as factual again.
My father's response is much what Goldwater's Ghost said: he said that the rates are one thing, and what they actually pay because of loopholes and accounting gimmicks is much lower, and in some cases is pretty much zero.
My response is to say that ok, how about we lower the tax rate and close the loopholes?
Ah, the infamous "loop holes"
There are two main reasons why your "stated" tax rate may differ from your "effective" tax rate;
Loss carry forwards (losses in previous years corporations can carry forward to offset future income).
and
Various tax credits the government gives corporations for various things.
This can result in a lower effective tax than the stated tax.
But one doesn't have to listen to me. As Dtrum suggested, just pull the annual report of those "evil" oil corporations or any corporation you want and look at their Earnings Before Taxes vs. Earnings After taxes and you'll see their effective tax rate.
Heh.
Corporations do not pay any tax, either they:
A. Move to another jurisdiction or
B. They pass the tax on to their clients. That is, YOU the consumer.
IF B, they can get wiped out by A.
I'd be willing to set corporate income tax to ZERO ( hence no deductions, corporate welfare, etc... either) simply the economic saving of wiping out all the tax lawyers and tax accountants ( nevermind all the time wasted by normal accountants and finance people on studying different scenarios and alll the tax machinations ) and all the very nighly renumerated people who basically do NOTHING productive but game the system would be worth something.
That's my clincher for a flat % tax on consumption. It's inescapcable , it's intrisically fair, and it doesn't penalize investing, and if you are concerned about low income people you can send them a "sorry we screwed you" checque for Christmas/or every month.
AND you save all the FARGING paper work and tax dodges and government intrusive BS that distorts the economy.
See here for how much (or rather, little) Fortune 500 companies actually pay in corporate taxes (any surprise that it's less than the standard 35-39%?): multinationalmonitor.org/mm2004/112004/mcintyre.html
Since, as an economist and/or conservative, you care only about fact, do ignore the source and address only the data presented.
Thanks!
For another, confirmatory dose of sorely lacking objective reality for those libtards, see ...
http://www.aei.org/events/filter.all,eventID.1348/event_detail.asp
"Multinationalmonitor.org?"
Yeah, THERE'S an unbiased source.
My apologies to the Captain and everyone else on this blog. I have seen now that I did make an error. The effective Income Tax rate for US Corporations is indeed approximately 40 %. Which leads me to wonder what the hell the Republican congress and the Whitehouse were doing for the six years they were in complete control on the legislative and executive branch of the government. I thought they were cutting taxes. But I admit I made a mistake. So I guess that makes me a stupid, ignorant, tree hugging , welfare check cashing, gay marriage supporting, atheist socialist liberal dirt bag. My mother would be so ashamed.
However, the premise of my post was that many of the supposed claims made in the barakonomics post were half truths and hyperbole. I’m not backing down form that. In the interest of time, here is one example:
In the portion about Dividends, CC states that currently “you get to pay taxes on Dividends, typically between 5 and 15 percent. This is called “double taxation.” This is a fact, and it sucks. CC goes on to add in the next section “you will get to pay an even higher dividend tax!” This is also true, and it sucks even more. This argument in of itself is a good one. However, what comes next is hyperbole. The next slide in crayon shows “w Barokonomucs Post Tax Profit “New” Dividend tax of 75%”. I have researched Baraks tax proposals, and in the two separate sources I found it states the proposal is to increase taxes on capital gains and dividends to 20%. (http://www.taxpolicycenter.org/UploadedPDF/411749_updated_candidates.pdf or http://www.taxpolicycenter.org/taxtopics/election_issues_matrix.cfm) There’s a slight disparity there. Unless I am missing something, CC is over exaggerating (by more that 300%) what Baraks tax policy proposal states. This is where I have a problem.
So that in a nutshell, is my point. If you have a good argument, make it honestly. Finally Captain, I don’t recall calling you a racist.
Truthseeker
Just realized I made a copy and paste error in my previous comment. The two “separate sources” for the Obama / McCain tax proposals were the same source. Truthseeker is a bad proof reader. The two links should have been http://www.taxpolicycenter.org/taxtopics/election_issues_matrix.cfm and http://www.grantthornton.com/staticfiles/GTCom/files/services/Tax%20services/Tax%20policy%20comparison%20of%20presidential%20candidates.pdf . Hopefully this minor error wont arouse the passions for the villagers to have me burned in the town square.
Truthseeker
Yeah, they're probably biased. It'd be nice if they provided real statistics instead of selectively pulling out numbers. In order to gauge a corporations effective tax rate, it's meaningless to single out one year and post those numbers. Unfortunately, that's all that their article really does. Some graphs of profit/loss vs tax rate over a period of 10 years or so, for each corporation, would easily settle the matter.
"You misunderstand how the corporate income tax works. The $100k-335k 39% bubble exists in order to eliminate the benefit of the earlier 15% and 25% brackets, making the federal corporate tax a flat 34% from the first dollar. The second 38% bubble from $15-18.3 million makes it a flat 35%."
Well I stand corrected if I was mistaken, however I'm not sure what you mean here. For example, when you say the 39% bracket exists to eliminate the benefit of the earlier 15% and 25% brackets, making the Federal corporate tax rate a flat 34% from the first dollar, I'm not sure what you mean...?
As for loopholes, I would believe most corporations do not get enough loopholes to avoid paying taxes, or else we wouldn't see so many businesses going to countries like Ireland and Switzerland with their lower corporate tax rates.
For example, when you say the 39% bracket exists to eliminate the benefit of the earlier 15% and 25% brackets, making the Federal corporate tax rate a flat 34% from the first dollar, I'm not sure what you mean...?
Corporate income tax brackets look like this:
$0 - $50,000 15%
$50,000 - $75,000 25%
$75,000 - $100,000 34%
$100,000 - $335,000 39%
$335,000 - $10 mil 34%
Btw, another way we screw small corporations is we don't index corporate tax brackets; those brackets are now over 30 years old.
Anyway, what the 39% bracket does is make the the brackets look like this:
$0 - $10 mil 34%
Basically, a flat 34% income tax. The later 38% bracket does the same, producing a flat 35% income tax. Don't forget to include state corporate income taxes, that's why the US's corporate tax is considered to be more than 40%.
The problem is we are competing with countries like Ireland, whose corporate income tax is less than 20%. The EU hates Ireland's tax rates and is constantly pressuring Ireland and parts of Eastern Europe to implement "tax harmonization" in order to "stamp out harmful tax competition". We all know that tax competition is one of the most powerful ways that governments can have their appetite for taxes restrained. Governments cannot afford to tax so onerously that taxpayers are motivated to leave. That's why you see world leaders agitating for worldwide tax policy under the UN.
There are so many anonymi (plural of anonymous) that I don't even know how to direct this comment to the appropriate target.
If firms are profit maximizers, then corporate profit taxes CANNOT be passed along to consumers. The profit maximizing level of production is the same with and without the tax. Shareholders bear 100% of the burden of the tax.
If the firm is instead a revenue maximizer, then its possible to shift the burden of the tax partially to consumers and partially to owners of the factors of production (including workers). The firm can do this only by reducing output to a level which will NOT maximize its profits.
In this case, the amount of the burden the firm can shift depends on the supply and demand for the good and the supply/demand for the production factors. The firm cannot choose the amount of the tax burden to shift - it's determined by the market.
The total short-run incidence of a corporate tax is on the shareholders. In the intermediate to long term, the incidence of the tax can be shifted to others by input substitution, changes in corporate finance, or international flight.
Otherwise, I agree with the poster's suggestion of a flat tax (technically, a fixed marginal tax rate), except there should be a fixed income exemption (to keep low income people eating and living indoors) and exemptions to provide incentives for savings, insurance, and charity.
ARGH, I'm still a bit confused; so Randian, do you mean when averaged, the corporate tax rates average at about 35%...?
ARGH, I'm still a bit confused; so Randian, do you mean when averaged, the corporate tax rates average at about 35%...?
Yes, the effect of the 39% and 38% brackets is to produce an average tax rate of 34% and 35%, respectively. Or as I said, they have the effect of turning a graduated tax system into a flax tax system.
No Randian. In no respects is our corporate tax rate 'flat'. It is progressive. The ability to calculate an average tax rate per dollar of income doesn't make the tax flat.
There are serious implications on incentives and subsequent redistribution by varying marginal tax rates within those bands of profit.
Let me illustrate this with an absurd example. Suppose we tax the first million in profit at 15 percent and the next 9 million at 100 percent. The average tax rate on 10 million in profit is 91.5 percent. But no company would choose to earn a penny more than 1 million.
A flat tax has a constant marginal tax rate on every dollar of income above a certain exclusion. A special case of this is when the exclusion is $0 in which case it's called a proportional tax.
Any group of numbers can be averaged. Just because our basketball team averages 100 points per game doesn't mean we scored 100 points in all (or any) of our games. If our opponents averaged 95 points per game, it doesn't mean we won all our games.
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