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Sunday, October 27. 2013
Corporate tax reform
My preference would be a 0% corporate tax rate, but it would put a heck of a lot of tax lawyers and accountants out on the street.
Posted by The Barrister at 13:04 | Comments (23) | Trackbacks (0)
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It amazes me that people don't understand taxes, let alone corporate taxes. They think it punishes the corporation to raise its taxes (why they want to punish a corporation is another subject). What they don't understand is that taxes are the cost of doing business so of course they try to maneuver to pay the least legally possible (even zero). Taxes are another cost just like materials, wages and salaries, rents, loans, etc. All of those are costs that are passed on to the customer so when you raise the taxes of the corporation, you just make the product it sells more expensive. That is bad enough in one country where all the corporations are subject to the same rate but when you compete against foreign companies you have to also compete against their tax rate.
Consider if there was a zero corporate tax rate - products would be cheaper for the consumer. Not only would the company not have to pay the taxes that raise the price of the goods but they wouldn't have to spend money complying and trying to avoid those taxes.
If you run a foreign company and you're paying 20% to taxes, do you think you'd think really hard about moving to a country where you wouldn't have to pay that? Do you think???
The downside... I'm still trying to think of one.
"My preference would be a 0% corporate tax rate, but it would put a heck of a lot of tax lawyers and accountants out on the street."
I'm all for a flat 10% across the board, no exempt's and no accounting flim-flam. That even extends to Joe and Jane Six-pack.
I know it would Pee-off the accountants, the Tax defense firms, and all the prep firms, but 'simple is best', 'skin in the game', and it gets rid of the 60k+ pages of contradiction we currently labor over and gets the power out of beurocracts hands.
Yeah, I know - its all power, how to hold it, and the death-match to keep it....
I'm not in favor of a 10% corporate tax because as I stated above, the corporation doesn't pay that tax, they just act as an agent for the government to tax the purchasers of it's products (though I would much prefer a 10% corporate tax to the situation we have now).
I am not in favor of a flat tax for Joe and Jan tax payer. I don't see any reason (or Constitutional sanction) for the government knowing how much I earn. Though this, too would be a huge improvement over what we have now.
I would prefer a simple national sales tax with everyone getting an automatic refund for the value of the tax that would cover certain necessities. It would probably never happen so in that case, Fred's plan is next best in my view. The fact that it would not be revenue neutral is a plus in my eyes.
I would also favor 0% corporate tax. Imagine what an incentive it would be to expand inside the U.S. and the advantage it would give to American comanies in the world market. As someone else already pointed out taxes are just passed on to the consumer anyway. It would also prevent some of the machinations that companies go to in their effort to reduce their tax burden.
I would favor a two tier flat tax for individuals (or would that be a step tax?) of 10% below a specific income level and 20% on earnings above that level. Eliminate all exemptions, deductions and EITC.
Kill the corporate tax, and impose the federal sales tax. Tax imports like the constitution says. that way I pay based on what I consume, not what I earn.
I also suggest that if Congress does not pass and the President does not sign an annual budget by October 1 each year, federal Taxpayers are given a tax holiday until the budget passes. NO BUDGET, NO TAXES
Gee, the WaPo breathlessly reports what everyone's known for years. Now that this once decent newspaper has been bought by Jeff Bezos, an actual businessman, perhaps he'll make them up their game.
Quote: Sullivan’s solution is fairly simple: Join the rest of the world and embrace a “territorial system” in which profits are taxed solely in the place they are earned.
News flash: this ain't gonna happen. The Democrats want to spend money. That means they need tax money...my money, your money, everybody's money. They want to tax every dollar everyone earns everywhere in the world. A number of states across the country already tax income that's earned in places outside their jurisdiction. Obama has told the Treasury department to go after the money that people earn abroad and do not repatriate.
Perhaps there's an alternative solution that avoids the political gridlock in DC and involves only the agreement of the AICPA, i..e, the accountants: for accounting purposes, whatever profits a company earns abroad and keeps abroad should be excluded from its reported earnings and earnings per share. That way, a the stock of a US company whose market success is based on earning lots of its profits abroad would benefit little (or at least far less) from an undeserved bump in its earnings per share owing to its unrepatriated profits.
As for replacing the federal income tax with a national sales tax, that would seem to require a Constitutional amendment, and that's not going to happen in my lifetime.
Americans are not aware that our corporations have the highest corporate taxation in the world.
In Germany, corporations have a virtually unlimited range of deductions and massive block holdings by Deutsche Bank, et. al.
Hence they have no need to goose earnings. They play a cash flow game.
Consumption taxes/ import tariffs were the Founders way to go.
We need to entirely junk the income tax because it stands against the 4th and 5th Amendments -- and much else.
It also has a staggering paperwork overburden.
America would be better off with no income taxes at all.
Instead, go with land taxes -- not real estate taxes -- just LAND taxes.
This would take back the hyper wealth of the 0.001%, who own an out sized block of raw land that goes fallow.
Then cut out entirely goof ball departments of activism. We can't finance them. EPA, Energy and Education top the list. They are engines of cronyism.
"they just act as an agent for the government to tax the purchasers of it's products"
I've been amazed that here, in the DC Metro area, so many don't get that simple fact.
My small business has never, nor will ever, pay one cent in taxes. My customers, OTOH...
I used to be astounded when independent, conservative, liberty-minded types who thrive on everybody minding their own business and government especially minding its promoted zero corporate taxes. I used to be astounded when these same rock-ribbed, flinty types lectured that, duh, corporate tax passed on to consumers in goods and services.
Of course it does. But that's not the point is it?
The point of zero corporate tax thinking is fallacious. Thousands of corporations, rife with crony capitalism and in bed with the worst of American statism, pay no tax because they can finagle the means not to. The canard about the US having the highest theoretical corporate tax rate is just that, a canard.
And zeroing corporate tax for the Corporate State does what? It does exactly what that State wants: To free itself to tax-oppress the remaining tax base: rock-ribbed, flinty, independent, conservative, liberty-minded types who thrive on everybody minding their own business and government minding its most of all.
Any plea to eliminate corporate tax had better immediately include a far more urgent demand to first release the individual from personal liability. The only fair tax is already so-labeled: It is a national flat consumption Fair Tax.
And sadly, it will never happen. Because that would involve first neutering the Corporate State and outlawing its professional lobby.
There is an often stated and clsely held belief that corporations somehow evade all taxes. Every year there is some big company that pays no taxes. What you don't hear is they paid big taxes in the years before and will pay big taxes in the following years but because of a one time big expense actually had no profit in that one year. If you are a U.S. corporation and you have a profit you pay taxes and you pay them at the rate specified. In fact big corporations typically pay more in taxes then they earn in after tax profits. It is simply not true that corporations can finagle and pay no tax.
Wrong. See GE.
Look, if you don't grasp the crony capitalism at the root of all things far left - the root of statism - you've already lost.
"Of course it does. But that's not the point is it?"
Yes, it is. Nothing more, nothing less. The rest of your nonsense has even less of a point.
And yet the core of your rebuttal is playground-level assertion. Nicely played, Einstein.
"playground-level assertion" followed by name calling, all whilst ignoring reality.
Regardless of your commentary, I still do not pay any corporate taxes out of my pocket. If that concept is too difficult for you, well...
"Ignoring reality" it is then. But oddly, this second time too you offer nothing more than another vague charge. A most intelligent argument for whatever it is you're promoting as "reality".
As for actual reality, if there is to be a fair tax and if it is to be beholden to the voter, aside from the profoundly corrupt monetary system and the federalized economics that flow from it, it's going to have to be one of two things.
In order or preference:
1. A national tax on consumption. In other words, on using the economy voluntarily.
2. A corporate tax.
See, corporations are precisely the agency to intervene as liable parties where free men have the wisdom to not subject themselves personally to such burden under pain of law.
The nature of that reality, Jess1, even has the Framer's and Founder's imprimatur on it, should you wish to actually cite as concrete as it is rooted in the reason and common sense of sovereign individuality.
"But oddly, this second time too you offer nothing more than another vague charge"
What is even odder is your continued confusion over simple terms. I did not, nor will I, address some bizarre conflation of founding fathers and flat taxes...
I stand by what I posted - I, nor do other companies, pay taxes. We do collect taxes for the various governments, and can lower our cogs by adapting to said taxes, just as we do with any other cost. A point that is simple and direct.
What simple terms are these, Jess1? Where I agree with comments preferring a fair tax? Where I correctly identify the core issue being tax-avoiding cronyism, to which you simultaneously take issue while proving the point?
You saw away on some internal rail, finding it more to your liking to, as it turns out, talk about how you pay no corporate tax when I suggest that is the very problem.
As for your baseless assertion that the Founders and Framers never believed in sovereign men, freed from bondage to the liability of personal taxation, that, sir, is perhaps the most bizarre formulation I've come across in months.
I suggest you go back and regroup. You do not know what it is you are saying. Holding my remarks up to inspection by that odd trajectory is even odder than it is itself.
"when I suggest that is the very problem"
Now we come to the nut. You are stating that there must be some form of "corporate tax" (otherwise what "problem" is there) outside of sales/consumption taxes.
My customers know exactly what I mean - thus I no longer am incorporated in Arlington, having moved to rural VA, which allows me to make a profit and sell for a lower price. How that reality eludes you is beyond me...
How that reality eludes you is beyond me...
Right. Because I'm prescient and can - or care to - divine your personal conditions. Einstein.
And, owing to your unique brand of weird, because fair tax somehow [i]isn't]/i], because corporations should pay tax whenever they can avoid it altogether, and because the Framers were totalitarians, promoting tax servitude wherever they went.
Like I said, even you don't know what you're saying.
"divine your personal conditions"
? Divination isn't required - I've listed them.
"because fair tax somehow [i]isn't]/i], because corporations should pay tax whenever they can avoid it altogether"
You keep using the term "fair" as some sort of mantra, which has nothing to do with reality - it's as if you aren't actually reading what I'm writing.
Are you asserting that I should pay the most taxes possible?
You are as obtuse as you are intellectually shifty.
1. One does indeed have to divine your personal conditions in order for you to assert them after the fact and expect them to carry weight. Cause, effect. Sorry.
2. "Fair tax", Einstein, is the term used for a tax on consumption; on purchases; on voluntary use of the economy. It is both the brand - Fair Tax - and, not ironically, the reality - as in fairly - of how this tax, alone, operates.
3. When actually I read what you actually write I naturally find you actually inconclusive, meandering, and liberty-taking with common words and their definitions. "Reality" being one. Tax, fair, Framer, and others also qualifying.
4. I am not asserting you pay the most tax possible nor can any reasonable interpretation of anything I've said construe that. I'm quite certain, if I can repeat myself yet again, that a tax on consumption is quite suitable to inform the voter what economic reality he lives in, thus reducing his burden and shrinking his servitude.
Rock-ribbed Republicans, as I asserted before you went well off topic, tend to assert that liberty, prosperity, property, and the pursuit of happiness are built on freeing corporations - they already with plenty of knives to the nation's throat - in order to place individuals into servitude.
This is, contrary to your reinterpretation of this reality of yours, does not begin to comport with structural constitutionalism, and thus is not actually conservative.
So here we are yet again: You are as obtuse as you are oddly reasoned.