5 ms·

Corporations literally ARE the government? That's why the US has the highest corporate tax rate in the OECD?

by alexeisadeski3 13y ago

afterburner 13y ago
Does that even matter when everyone hides their profits in Ireland?
- alexeisadeski3 13y ago
  1. Only profit earned outside of US borders may be deferred in such a manner. 2. That profit isn't "hidden". It's in plain sight. It's not even a loophole. The money is still taxable - but only once it is repatriated.
  - afterburner 13y ago
    You do realize companies make sure to game it such that they declare no profits in the US, right? And don't even care that much about repatriating it at all? And do so only when there are "tax amnesty holidays" where money can be repatriated "for free" during a short timespan? http://en.wikipedia.org/wiki/Double_Irish_arrangement http://en.wikipedia.org/wiki/Double_Irish_arrangement
    - alexeisadeski3 13y ago
      1. All corporations in all nations game the tax system as much as possible. 2. The US corporations still pay more tax than do corporations in other nations. 3. US corporations with no foreign income tend to pay ~35% after deductions (per "independent" study cited above).
      - afterburner 13y ago
        So basically what you're telling me is it's very hard to properly compare the final effective tax rates on corporations in two different countries. The study above doesn't compare to other countries. So you don't actually know if it's really worse in the US.
        alexeisadeski3 13y ago
        The effective US rates are higher than foreign statutory rates. So yes, its easy to tell that US corp tax rates are higher.
        afterburner 13y ago
        "Over the last 10 years, General Electric’s Effective Tax Rate Was 2.3 Percent" http://thinkprogress.org/economy/2012/02/27/433250/general-electric-tax-rate-decade/ http://thinkprogress.org/economy/2012/02/27/433250/general-e... I could probably find numerous such examples among the richest companies in the US. So something about your claims doesn't work.
        alexeisadeski3 13y ago
        That's just another made up number. "There are more ways to measure effective tax rates than there are to order coffee at Starbucks" http://taxprof.typepad.com/files/140tn0197.pdf http://taxprof.typepad.com/files/140tn0197.pdf
        afterburner 13y ago
        Any number that disagrees with your premise is just wrong? Well, your world view is unassailable then isn't it? So tell me, what do you want? Lower taxes on corporations? They don't seem to be fleeing the US, and are reporting higher profits than ever.
        alexeisadeski3 13y ago
        Numbers are wrong if they're wrong. Read the paper I linked. If you want to argue, argue with the points he makes (and which I've attempted to repeat here). The paper very specifically addresses the sorts of made up numbers which you've cited. All taxes are distortionary. For maximum efficiency, all income taxes (which by definition punish income and saving) should be replaced with progressive VATs (thus encouraging income and saving). The worst distortionary taxes are the capital gains tax (which solely punishes saving) and the corporate income tax (which has no reason to exist at all - all disbursements are taxed as personal income tax anyways, hence the double taxation complaints). And yes, some companies do leave the US: ...Bisaro also extolled the added benefit of lowering his company's effective tax rate, which he forecast would drop from 28% to 17%. Based on Bisaro's strongly-held opinions about U.S. corporate tax policy, that must have been a major selling point for the deal. [1] And hey, guess what I bet you didn't know? It's actually illegal for US companies to leave the country! They have to "merge" with a foreign company to move out. [1] http://features.blogs.fortune.cnn.com/2013/05/21/actavis-the-latest-fortune-500-company-to-leave-the-u-s-for-tax-reasons/ http://features.blogs.fortune.cnn.com/2013/05/21/actavis-the...
rosser 13y ago
Please stop citing that disingenuous, misinformative fact. The US has the highest statutory tax rates on corporate investment in the OECD. The effective tax rates on corporate income are vastly lower than that, and often actually zero — especially for those large and powerful enough to have sway over the government.
- alexeisadeski3 13y ago
  Ummm... no. The GAO study you're citing is infamously incorrect. 1. Corporations (and humans) can carry losses forward: if they lose money in 2008 but make money in 2009, they get to even out the two years. This is only fair. Thus they can appear to pay zero tax in a year in which they made money. 2. The "effective rate" counts the aforementioned foreign retained profits as being taxed at zero. Which they're not. 3. An independent analysis found that effective corporate tax rates are "in the mid to upper 20's", and that corporations which operate solely in the US pay 35% corporate income tax: http://taxprof.typepad.com/files/140tn0197.pdf http://taxprof.typepad.com/files/140tn0197.pdf TL;DR The US really, really, really does have the highest corporate tax rates in the OECD.
pizza234 13y ago
Having such tax rate, conversely, is not a sufficient argument to prove the opposite. Control of the government by corporations is a complex phenomenon, and taxation is only one part of many. Lobbyists take quite commonly part in the administration, and once they do, they certainly don't start to act against their own interest.

Corporations literally ARE the government? That's why the US has the highest corporate tax rate in the OECD?

afterburner 13y ago

Does that even matter when everyone hides their profits in Ireland?

alexeisadeski3 13y ago
1. Only profit earned outside of US borders may be deferred in such a manner. 2. That profit isn't "hidden". It's in plain sight. It's not even a loophole. The money is still taxable - but only once it is repatriated.
- afterburner 13y ago
  You do realize companies make sure to game it such that they declare no profits in the US, right? And don't even care that much about repatriating it at all? And do so only when there are "tax amnesty holidays" where money can be repatriated "for free" during a short timespan? http://en.wikipedia.org/wiki/Double_Irish_arrangement http://en.wikipedia.org/wiki/Double_Irish_arrangement
  - alexeisadeski3 13y ago
    1. All corporations in all nations game the tax system as much as possible. 2. The US corporations still pay more tax than do corporations in other nations. 3. US corporations with no foreign income tend to pay ~35% after deductions (per "independent" study cited above).
    - afterburner 13y ago
      So basically what you're telling me is it's very hard to properly compare the final effective tax rates on corporations in two different countries. The study above doesn't compare to other countries. So you don't actually know if it's really worse in the US.
      - alexeisadeski3 13y ago
        The effective US rates are higher than foreign statutory rates. So yes, its easy to tell that US corp tax rates are higher.
        afterburner 13y ago
        "Over the last 10 years, General Electric’s Effective Tax Rate Was 2.3 Percent" http://thinkprogress.org/economy/2012/02/27/433250/general-electric-tax-rate-decade/ http://thinkprogress.org/economy/2012/02/27/433250/general-e... I could probably find numerous such examples among the richest companies in the US. So something about your claims doesn't work.
        alexeisadeski3 13y ago
        That's just another made up number. "There are more ways to measure effective tax rates than there are to order coffee at Starbucks" http://taxprof.typepad.com/files/140tn0197.pdf http://taxprof.typepad.com/files/140tn0197.pdf
        afterburner 13y ago
        Any number that disagrees with your premise is just wrong? Well, your world view is unassailable then isn't it? So tell me, what do you want? Lower taxes on corporations? They don't seem to be fleeing the US, and are reporting higher profits than ever.
        alexeisadeski3 13y ago
        Numbers are wrong if they're wrong. Read the paper I linked. If you want to argue, argue with the points he makes (and which I've attempted to repeat here). The paper very specifically addresses the sorts of made up numbers which you've cited. All taxes are distortionary. For maximum efficiency, all income taxes (which by definition punish income and saving) should be replaced with progressive VATs (thus encouraging income and saving). The worst distortionary taxes are the capital gains tax (which solely punishes saving) and the corporate income tax (which has no reason to exist at all - all disbursements are taxed as personal income tax anyways, hence the double taxation complaints). And yes, some companies do leave the US: ...Bisaro also extolled the added benefit of lowering his company's effective tax rate, which he forecast would drop from 28% to 17%. Based on Bisaro's strongly-held opinions about U.S. corporate tax policy, that must have been a major selling point for the deal. [1] And hey, guess what I bet you didn't know? It's actually illegal for US companies to leave the country! They have to "merge" with a foreign company to move out. [1] http://features.blogs.fortune.cnn.com/2013/05/21/actavis-the-latest-fortune-500-company-to-leave-the-u-s-for-tax-reasons/ http://features.blogs.fortune.cnn.com/2013/05/21/actavis-the...

rosser 13y ago

Please stop citing that disingenuous, misinformative fact. The US has the highest statutory tax rates on corporate investment in the OECD. The effective tax rates on corporate income are vastly lower than that, and often actually zero — especially for those large and powerful enough to have sway over the government.

alexeisadeski3 13y ago
Ummm... no. The GAO study you're citing is infamously incorrect. 1. Corporations (and humans) can carry losses forward: if they lose money in 2008 but make money in 2009, they get to even out the two years. This is only fair. Thus they can appear to pay zero tax in a year in which they made money. 2. The "effective rate" counts the aforementioned foreign retained profits as being taxed at zero. Which they're not. 3. An independent analysis found that effective corporate tax rates are "in the mid to upper 20's", and that corporations which operate solely in the US pay 35% corporate income tax: http://taxprof.typepad.com/files/140tn0197.pdf http://taxprof.typepad.com/files/140tn0197.pdf TL;DR The US really, really, really does have the highest corporate tax rates in the OECD.

pizza234 13y ago

Having such tax rate, conversely, is not a sufficient argument to prove the opposite. Control of the government by corporations is a complex phenomenon, and taxation is only one part of many. Lobbyists take quite commonly part in the administration, and once they do, they certainly don't start to act against their own interest.