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I would suggest actual misconceptions are that: 1. Fungability: companies have similar tax flexibility as individuals and are therefore comparable. 2. Consump

by drucken 14y ago

I would suggest actual misconceptions are that: 1. Fungability: companies have similar tax flexibility as individuals and are therefore comparable. 2. Consumption equivalence: that income from capital gains or "personal tax breaks for these business gains" is actually redistributed back into the general economy in the same way as it would be as general (wage) income. Both are clearly incorrect. I would go a step further to suggest the US has a relatively high corporation tax compared to other developed countries precisely to compensate for other tax code deficiencies and trends. Of course, in a sense, all the current arrangements do is capture the "middle" or "poor" class of corporates. Large or sophisticated corporates, especially financial companies, have very extensive means to ensure minimal or even, in some cases, no tax is ever paid. A preliminary and revealing book on this issue for laymen is Shaxon's "Treasure Islands" (http://www.amazon.com/Treasure-Islands-Uncovering-Offshore-Banking/dp/0230105017/ref=sr_1_1?ie=UTF8&qid=1341068517&sr=8-1&keywords=shaxson http://www.amazon.com/Treasure-Islands-Uncovering-Offshore-B...).

rprasad 14y ago
The US has a relatively low corporate tax rate compared to other developed countries. The U.S. relies significantly more on deductions and credits than any other nation, lowering the effective corporate tax rate below 20%, or even into single digits, for most corporations. Many corporations are able to lower their effective rates to single digits, or even below zero (i.e., GE). Size is not a factor in this; proper planning is. Paying an expert $10,000 to structure your business flows at the beginning can save millions down the line. You would not skip out on hiring a lawyer to properly incorporate your business and draft your shareholders agreements, so why would you skip out on a tax planner?
- drucken 14y ago
  The US has a relatively low corporate tax rate compared to other developed countries. http://en.wikipedia.org/wiki/Tax_rates_around_the_world#List http://en.wikipedia.org/wiki/Tax_rates_around_the_world#List The capacity to bypass taxes or headline rates is not being compared. In addition, if anything, that only further supports my points.

by drucken 14y ago

rprasad 14y ago

The US has a relatively low corporate tax rate compared to other developed countries. The U.S. relies significantly more on deductions and credits than any other nation, lowering the effective corporate tax rate below 20%, or even into single digits, for most corporations. Many corporations are able to lower their effective rates to single digits, or even below zero (i.e., GE). Size is not a factor in this; proper planning is. Paying an expert $10,000 to structure your business flows at the beginning can save millions down the line. You would not skip out on hiring a lawyer to properly incorporate your business and draft your shareholders agreements, so why would you skip out on a tax planner?

drucken 14y ago
The US has a relatively low corporate tax rate compared to other developed countries. http://en.wikipedia.org/wiki/Tax_rates_around_the_world#List http://en.wikipedia.org/wiki/Tax_rates_around_the_world#List The capacity to bypass taxes or headline rates is not being compared. In addition, if anything, that only further supports my points.