3 ms·

Corporate tax rates get slashed almost in half and employees get a few hundred bucks after taxes. Is this that trickle down economics I keep hearing about? I be

by mnm1 9y ago

Corporate tax rates get slashed almost in half and employees get a few hundred bucks after taxes. Is this that trickle down economics I keep hearing about? I believe it is. Someone got fucked. And it wasn't AT&T.

adventured 9y ago
Alternatively you can leave the US corporate income tax rate where it is, which is the second highest effective rate in the OECD, and uncompetitive with dozens of other major economies. You can then watch a lot more massive corporations take their headquarters, R&D, white collar jobs, investment, etc. outside of the US. Particularly small & mid-size US manufacturing is at a severe disadvantage with the high US effective corporate income tax rate. US manufacturing companies pay twice the corporate income tax rate as their peers in China. That means less capital available for investing into expansion, productivity, innovation, et al. Pretending the US doesn't have to compete with the rest of the world, is an ideal recipe for economic disaster. The US should have slashed its corporate income tax rate decades ago. And it should raise the income taxes on the top 1/4 to pay for it (they get a benefit back in rising stock prices, as they're the primary stock owners in the US). You want to lure foreign capital investment and foreign corporations to US shores, you don't do that with high corporate tax rates.
- fzeroracer 9y ago
  This is ignoring the fact that most companies do not actually pay the effective rate. When you take deductions and so forth into account the rate is not that far out from the average. You can't just look at one statistic in a vacuum and not look at everything related to it.
  - pfranz 9y ago
    I've always seen "effective tax rate" to mean after the deductions have been applied. Looking at OECD data, I don't see them publishing effective tax rates--only the statutory rates (the base rate). But you are correct in that the statutory rate appears very high, but the effective rate is in line other OECD countries.
- wvenable 9y ago
  > which is the second highest effective rate in the OECD Yeah that statistic was shocking to me; it was significantly higher than most other nations. But the next the bullet point is that US corporations actually pay significantly less than other countries because of deductions and loopholes. If US corporations actually paid the new lower corporate tax rate they'd spend more on taxes than they do now.
  - rayiner 9y ago
    OP said effective rate, not statutory rate. Effective rate is after deductions, and the U.S. is near the top on that chart too: https://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world https://www.npr.org/2017/08/07/541797699/fact-check-does-the.... The second chart has the U.S. at #3 out of OECD countries (Argentina is not an OECD country), behind Japan and about tied with the U.K. The effective rate in the U.S. is 18.6%. Germany is at 15.5%, France is at 11.2%, and Canada is at 8.5%.
- mempko 9y ago
  increasing corporate taxes incentivices companies to increase wages or capital expenditures. This is why wages were highest and R&D was highest when the taxes were highest.

by mnm1 9y ago

adventured 9y ago

Alternatively you can leave the US corporate income tax rate where it is, which is the second highest effective rate in the OECD, and uncompetitive with dozens of other major economies. You can then watch a lot more massive corporations take their headquarters, R&D, white collar jobs, investment, etc. outside of the US. Particularly small & mid-size US manufacturing is at a severe disadvantage with the high US effective corporate income tax rate. US manufacturing companies pay twice the corporate income tax rate as their peers in China. That means less capital available for investing into expansion, productivity, innovation, et al. Pretending the US doesn't have to compete with the rest of the world, is an ideal recipe for economic disaster. The US should have slashed its corporate income tax rate decades ago. And it should raise the income taxes on the top 1/4 to pay for it (they get a benefit back in rising stock prices, as they're the primary stock owners in the US). You want to lure foreign capital investment and foreign corporations to US shores, you don't do that with high corporate tax rates.

fzeroracer 9y ago
This is ignoring the fact that most companies do not actually pay the effective rate. When you take deductions and so forth into account the rate is not that far out from the average. You can't just look at one statistic in a vacuum and not look at everything related to it.
- pfranz 9y ago
  I've always seen "effective tax rate" to mean after the deductions have been applied. Looking at OECD data, I don't see them publishing effective tax rates--only the statutory rates (the base rate). But you are correct in that the statutory rate appears very high, but the effective rate is in line other OECD countries.
wvenable 9y ago
> which is the second highest effective rate in the OECD Yeah that statistic was shocking to me; it was significantly higher than most other nations. But the next the bullet point is that US corporations actually pay significantly less than other countries because of deductions and loopholes. If US corporations actually paid the new lower corporate tax rate they'd spend more on taxes than they do now.
- rayiner 9y ago
  OP said effective rate, not statutory rate. Effective rate is after deductions, and the U.S. is near the top on that chart too: https://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world https://www.npr.org/2017/08/07/541797699/fact-check-does-the.... The second chart has the U.S. at #3 out of OECD countries (Argentina is not an OECD country), behind Japan and about tied with the U.K. The effective rate in the U.S. is 18.6%. Germany is at 15.5%, France is at 11.2%, and Canada is at 8.5%.
mempko 9y ago
increasing corporate taxes incentivices companies to increase wages or capital expenditures. This is why wages were highest and R&D was highest when the taxes were highest.