If it is SOOO terrible, then let the employee quit. It is NOT slavery. The employee has a choice, and I am sure there are other prospective hires.

Supply and demand, people. Supply and demand.

freeman3 wrote:What other evidence does do you need me to show, RJ? Large US corporations are paying a 12.6% rate and overall corporate tax collection as a percentage of GDP is relatively low compared to other advanced countries. But you want further tax cuts for corporations? perhaps you could provide actual evidence why this would be a good thing, particularly for the country as a whole.

Freeman, you're really being thick on this one. The base corporate rate in the US is really, really high, but the effective rate is not high (let's take 12.6%). Which means that the actual rate paid by all US corporations has a very high standard deviation; if you know what you're doing, can hire expensive accountants and lobby congress for beneficial treatment, you can pay a negative rate (meaning you get credits that exceed your payments) every year. If you don't have resources to spend that money you're paying the top rate, and they're the least sophisticated. It's an incredibly regressive system.

Cut the rate to 20%, but don't allow for any deductions. Much more fair, and according to your numbers raises the corporate returns about 75%. Could you live with that? Flat taxes for corps make a lot of sense.

I understand that George--there is an issue of tax fairness there. But I am extremely skeptical that corporate tax reform will be revenue neutral. That means a higher deficit or higher taxes for the rest of us. How about this--we cut out some of the deductions and put in other reforms and if those are successful in raising revenue then we could rebate money to corporations--if they paid an amount between let's say 25% and 35%. So if closing all these loopholes works, great, no one pays higher than 25%. If it doesn't work, well , then it wasn't really a revenue neutral measure, was it? Given that this has been a pet project of Republicans for years--this was just the next area for taxes to be cut--I am doubtful that they want tax fairness; they want lower taxes, period.So, George , if you figure out how to make things more fair and revenue neutral in corporate tax reform then I'm in. But what we'll likely get is reduction in rates and then some vague talk of cutting loopholes...no thanks.

Here is an interesting article about the issue (btw, I was wrong or I forgot this-- the reason US corporations keep money overseas is that their foreign earnings don't get taxed until sent back to the US--though how a fungible item such as money can be kept track of over time is a mystery to me).

http://www.cbpp.org/research/six-tests- ... tax-reform

bbauska wrote:http://www.huffingtonpost.com/entry/hillary-clinton-death-penalty_56310eb4e4b00aa54a4c48c9

Mrs. Clinton is pro-death penalty. Any changes in peoples perceptions of the front runner?

Nope. I still prefer Bernie.

freeman3 wrote:I am doubtful that they want tax fairness; they want lower taxes, period.

Sure, everyone wants lower taxes and if you're a corp paying 35% or 40%, tax fairness will get you there. You're lumping every corp together and talking about them all like they're the same, but for many tax fairness and lower less tax mean exactly the same thing. What is needed is a flat corp tax without loopholes, because what we have is completely regressive, but there are very powerful interests looking to keep things as they are (I'm looking at you GE).

Also the chart that article shows on corp tax as pct of GDP, ends in 2009, a year when many corps lost money and paid no tax. Pretty misleading as an end point. Put your finger on that last year and shorten the time frame to 30 years, and see what story it tells.

I will also say Freeman, if you'd like to increase corp taxes, start taxing not-for-profit corps that make profit. That sector of our economy has just exploded over the past 30 years, and if you taxed the profit of not-for-profits that would encourage them to spend money to support their mission instead of just hoarding. (I'm looking at you Ivy League.)

geojanes

What is needed is a flat corp tax without loopholes, because what we have is completely regressive, but there are very powerful interests looking to keep things as they are (I'm looking at you GE).

If the large corporations wanted tax code simplicity, they could get it. They don't want it.

Another useful tax approach would be the institution of a Sales tax/ or transaction tax on business to business transactions. Especially on the trade of shares. (This would eliminate the short term trades that computers make and which are in no way "investment". ) At the same time I'd eliminate capital gains tax.

bbauska

If it is SOOO terrible, then let the employee quit. It is NOT slavery. The employee has a choice, and I am sure there are other prospective hires.
Supply and demand, people. Supply and demand.

The notion that labor has bargaining power is a myth. Unless organized into unions, labor has seldom seen consistent wage increases. Only in areas where skills are rare is the labor pool able to use mobility to increase pay
The problem is that employees are tied to other factors beyond just the employment contract. . Their experience, skills and education may limit them to certain employment areas. They may not be mobile enough to uproot their family to move, perhaps because living costs where the jobs are would require resources they don't have to get established, perhaps because their spouse have jobs that they can't readily replace or they have child care to consider and so on...
Since more than half of Americans live and die in only their home state its not like the populace is genuinely mobile, which would be necessary for the kind of wage increasing mobility that you believe exists..
http://www.pewsocialtrends.org/2008/12/ ... eres-home/
.

Pretty funny.

Liberals: "Raise taxes on corporations! Get more money out of corporations! That will help the working class!"

Sure it will. After all, it's not like corporations pass on their costs.

geojanes wrote:

freeman3 wrote:I am doubtful that they want tax fairness; they want lower taxes, period.

Sure, everyone wants lower taxes and if you're a corp paying 35% or 40%, tax fairness will get you there. You're lumping every corp together and talking about them all like they're the same, but for many tax fairness and lower less tax mean exactly the same thing. What is needed is a flat corp tax without loopholes, because what we have is completely regressive, but there are very powerful interests looking to keep things as they are (I'm looking at you GE).

Also the chart that article shows on corp tax as pct of GDP, ends in 2009, a year when many corps lost money and paid no tax. Pretty misleading as an end point. Put your finger on that last year and shorten the time frame to 30 years, and see what story it tells.

Thanks for the reasonableness check. This is one of those issues that is so obvious to me based on my experiences, but others see the world differently. I do believe that hatred of anything, including corporations, can create a huge amount of cognitive dissonance.

We have to acknowledge that there are different types of corporations. If you are an industrial company, a manufacturer or a real estate company it is challenging or sometime impossible to change your corporate domicile. But if you are a pharmaceutical or software company, it is easier to arrange your affairs. (I said easier, not easy. You still often have to hire a lot of expensive people.) This is why GE spends a fortune lobbying whereas other companies figure out a way to leave. From page 1 of this morning's wall street journal. This is what companies do.

http://www.wsj.com/articles/allergan-co ... 1446126062

Pfizer Inc. is pursuing what could be the biggest overseas takeover to lower U.S. corporate tax liability, showing that efforts in Washington to stem such deals have amounted to little.

Company officials confirmed Thursday a Wall Street Journal report that it was in early talks to acquire Ireland’s Allergan PLC, a $100 billion-plus pursuit that thrusts Pfizer, the maker of Advil and Viagra, into the rancorous debate over corporate taxes.

It isn’t clear what terms New York-based Pfizer has in mind, but the deal could be structured as a so-called inversion, in which a U.S. company buys a smaller foreign rival to move its legal home to a lower-tax jurisdiction abroad. American firms have seized on these transactions, drawing a regulatory crackdown last year and widespread political opposition.

Pfizer Chief Executive Ian Read was unapologetic about his desire to reduce Pfizer’s tax rate, saying Thursday that U.S. corporate tax rates have put the company at a disadvantage to its foreign rivals.

“We’re fighting with one hand tied behind our back,” Mr. Read said in an interview.

By the way, companies do not like to explain that they do these things to avoid taxes. It creates animosity among regulators, the media, and some American consumers. It invites scrutiny of the IRS. The fact that they are going public with their motivations speaks volumes to the craziness of our tax policy. It also means that they've lawyered up, or at least I hope so for their sake.

Brad:

We are agreed that corporations are overseas. If the current economic rules are so great for businesses, and the businesses follow the greatest money intake model, explain what can be done to bring them back if that is what is desired.

If it takes tax breaks, make it happen.

Tax breaks means picking winner and losers. It's very nature creates lots of lobbying, complexity, inefficiency, and unfairness. That's part of the reason for the mess. Tax breaks for the well connected mean higher rates for everyone else.

It's much better to reduce the marginal tax rate which impacts more fairly. That means less complexity, less lobbying, less unfairness, and a better result all around.

https://en.wikipedia.org/wiki/Costco#Labor_relations

As of March 2011, non-supervisory hourly wages ranged from $11.00 to $21.00 in the United States, $11.00 to $22.15 in Canada

http://www.payscale.com/research/US/Employer=7-Eleven,_Inc./Hourly_Rate

Sales Associate $7.64 - $9.90
Cashier $7.47 - $9.72

http://www.payscale.com/research/US/Employer=Hobby_Lobby%2c_Inc./Hourly_Rate

Cashier $9.12 - $12.67


Where will the better employee go? Should not the better employee be paid commensurate to their benefit to their employer?

Have you been in these stores? You get what employee you pay for.
A better question is why these "evil" and "greedy" businesses pay more than minimum wage if they only care about bottom line.

I do want an equal tax rate for every person and every business. I don't like tax breaks and subsidies.

If the Big Brother state comes along you would make a good spokesperson, DF. You equate opposition to reducing the corporate taxes as being for raising rates.

You never have actually responded to the evidence that collection of corporate taxes is at historic lows, RJ. You haven't guaranteed that a lowering in the rates will be revenue neutral. In Sweden the rates may be lower but those rates get paid. If we lower the rates we will still have a lot of corporations paying less than the rates. Corporate collection of taxes goes down. Deficits go up.

You don't have cognitive dissonance--you're very cognitively consistent on this--but you do seem to have absorbed the prevailing beliefs of the financial world you work in. That does not mean the rest of us have to subscribe to those beliefs. Oh my gosh corporate taxes are so bad Pfizer has to spend 100 billion dollars to buy a company in Ireland!

As far as I am concerned US corporations are making record profits. The US is a good place to do business and they should pay their fair share of taxes. Their rates do not exceed individual rates except for the first $400K of profits . I am for tax fairness by making sure that US companies don't avoid taxes for money made here by shifting money to foreign subsidiaries or tax havens.

freeman3 wrote:If the Big Brother state comes along you would make a good spokesperson, DF. You equate opposition to reducing the corporate taxes as being for raising rates.

Not what I did at all.

I simply said that corporate taxes are treated by liberals as if they have no effect on cost. That is false. Corporations pass on all their expenses to their consumers. They are not non-profits.

Freeman:

You never have actually responded to the evidence that collection of corporate taxes is at historic lows, RJ. You haven't guaranteed that a lowering in the rates will be revenue neutral.

As in a personal guarantee? I'm not in the1%.

I haven't commented on that point one way or the other. I just mentioned that Sweden has a much lower corporate tax rate than the U.S. and all manners of heck broke loose. Perhaps that assertion hit some sort of trip wire amongst those who loathe corporations.

I do think that lowering corporate income tax rates and getting rid of deductions would be good policy. It's low hanging fruit for better government. I suspect it would be revenue positive in the long run for a couple of reasons (companies would stay in the U.S. and pay taxes; they would hire more people in the U.S. which would create an improvement in the economy), but I cannot prove it.

BTW, the "evidence" that you quoted is an OECD study that looks at corporate income tax payments as a % of GDP. Of course, there are at least 2 flaws in this: 1. it hit the low in 2008 and 2009 during the great recession, but has been increasing every since. 2. As you mentioned, there are alternative formations to corporations that avoid income tax, including S Corps and Partnerships. Not all of these are mom and pops. For example, REITs and other massive limited partnerships do not have to pay US Corporation income tax.