Ron Paul: "The U.S. Government Must Admit It Is Bankrupt"

[LeeD]

Quote from failed_trad3r:

shut up. we re-thug-licans don't like statistics, just hyperbole. TAXES on hardworking rich people is communist!

I was replying to RobtF and he was talking of the corporate tax rate. The charts show it indeed "was over 50% under Eisenhower". I posted charts with personal income tax rate just for comparison (and because annotation on some of them is easier to read).

Thanks for quoting my post in full with all the charts

2 more things:

1) Paying the top marginal tax rate is no definition of "rich". In fact, most of the people who qualify for it don't even save nearly enough for middle class retirement.

2) We all know that actual rich people pay very little personal tax compared to their wealth. In the table below pay attention to tax as a "Share of Income".

 

[Ed Breen]

Problem with the personal income and corporate income tax charts is that the basic metrics are confused and conflated so that they don't measure change in either corporate income tax or personal income tax accurately.

Most U.S. corporations, now 85% of all U.S. corporations, up from around 60% in the 1960's, elect S-Corp Status. In addition in the past 20 years more and more enterprises that would have incorporated have instead elected to organize as LLC's and LLP's. All these Corps, the S's, LLC's and LLP's pay tax personally that is accounted as personal income tax under the AGI, when it is actually corporate tax (Adjusted Gross Income actually includes more than what we think of as 'income'; cap gains, K-1 corporate income, 1099 income, dividends, interest, gifts and debt forgiveness; yet we talk about the top 20% income earners as if this was all wages).

At the same time, what are accounted as corporate tax are really almost exclusively C-Corp Public companies which are only a small and shrinking part of actual corporate tax payers. Of course the Public C-Corps are the largest multinational companies that often have more than half of their business overseas. These charts of effective tax of these C-Corps uniformly fail to include the foreign taxes that the foreign subsidiaries pay, but they do include the consolidated income from foreign subsidiaries so they misrepresent effective tax rate by including only domestic taxes paid against worldwide income. This is a gross misrepresentation of the real taxes paid for U.S. income. So, the metrics being used don't really describe what is going on in corporate tax. If you parse through it all you will find that the corporations that actually pay the highest marginal taxes tend to be domestic S-Corps of moderate size that are actually the ones that create the most jobs.

We charge the highest taxes to the job creating businesses, and we encourage our largest companies to seek crony favors through rent seeking behavior and then penalize them if they want to upstream foreign after tax retained earnings from their subsidiaries back to the domestic holding company for investment in the U.S. If the face of this destructive policy confused ideological talking heads, politicians and bloggers argue pointlessly about false metrics that don't really describe who pays what tax or why...fools arguing over false data.

The whole structure is too stupid for words, it reduces revenue collected while, suppressing job formation and driving capital investment off shore...way to go Washington

 

[RobtF]

The whole structure is too stupid for words, it reduces revenue collected while, suppressing job formation and driving capital investment off shore...way to go Washington [/QUOTE]

I fear Congress will end up doing EXACTLY the wrong thing - killing a nascent recovery we might have had in 2nd half - Obama will agree to it. The majority of our congressmen know nothing about economics -it's difficult enough for economists. The bigger problem is that they do not know that they do not know and won't admit it. They might as well be discussing Chinese Cooking or something. It's sad.

 

[Ed Breen]

This is why I often say that you should not be too critical of the ignorant; they are really quite high up the human consciousness tone scale. I am quite ignorant in many areas and I accept that realization as a positive thing.

An ignorant person is a person who knows that they don't know. You describe a tone level above where policy makers don't know that they don't know....that is the tone below ignorance...it is called 'blindness.'

 

[gastropod]

Quote from Ed Breen:

This is why I often say that you should not be too critical of the ignorant; they are really quite high up the human consciousness tone scale. I am quite ignorant in many areas and I accept that realization as a positive thing.

An ignorant person is a person who knows that they don't know. You describe a tone level above where policy makers don't know that they don't know....that is the tone below ignorance...it is called 'blindness.'

Ed,

Do you feel justified in your earlier point in this thread...the part where you said the "IOU's" were not gov't promises?
http://market-ticker.org/cgi-ticker/akcs-www?post=189249

Thanks,
gastropod

 

[Random.Capital]

Quote from gastropod:

...the part where you said the "IOU's" were not gov't promises?
http://market-ticker.org/cgi-ticker/akcs-www?post=189249

Sure they're a promise.

Just like marriage is a "till death do us part" promise.

Until it's not.

 

[piezoe]

Quote from trefoil:

The big red line is when it was announced. Down going in, up since then.
I don't trade the dollar, so I don't keep track of who or what it's going up against. You'll have to ask someone who does. I only track it as background info for the stuff I do trade.

Bond futures:

The opposite: up going in, down since then.
Notice the curl at the end. I'm thinking it might be time for this to reverse. Given that 80% of you think it's all over, that looks more like the correct stance.

If you look at a /DX 3-year weekly chart, I think you can get a better picture of what is going on with the dollar. The dollar has actually been in a slide since June, 2010. It did rise briefly in the Fall of 2010 starting on the week of Nov. 15th, close to the date you noticed, in conjunction with a weakening Euro, and then climbed to kiss the underside of the trendline in January 2011, from where it resumed its downward path until just recently. That brief rise, though not enough to take it out of its downward channel, from mid Nov 2010 to early January 2011 probably had more to do with events in Europe than it did with the Fed's announcement of QE2, which would be expected to push the dollar down, not up. The dollar actually fell through the majority of the QE2 period. Recently it has been consolidating near the 2011 lows, but it did seem to at least stop falling in anticipation of the end of QE2. Probably the real result of QE2 will not be felt for some months as it will take time for the money "borrowed" (or created, if you prefer) to filter down into the economy.

 

[piezoe]

Quote from Ed Breen:

Problem with the personal income and corporate income tax charts is that the basic metrics are confused and conflated so that they don't measure change in either corporate income tax or personal income tax accurately.

Most U.S. corporations, now 85% of all U.S. corporations, up from around 60% in the 1960's, elect S-Corp Status. In addition in the past 20 years more and more enterprises that would have incorporated have instead elected to organize as LLC's and LLP's. All these Corps, the S's, LLC's and LLP's pay tax personally that is accounted as personal income tax under the AGI, when it is actually corporate tax (Adjusted Gross Income actually includes more than what we think of as 'income'; cap gains, K-1 corporate income, 1099 income, dividends, interest, gifts and debt forgiveness; yet we talk about the top 20% income earners as if this was all wages).

At the same time, what are accounted as corporate tax are really almost exclusively C-Corp Public companies which are only a small and shrinking part of actual corporate tax payers. Of course the Public C-Corps are the largest multinational companies that often have more than half of their business overseas. These charts of effective tax of these C-Corps uniformly fail to include the foreign taxes that the foreign subsidiaries pay, but they do include the consolidated income from foreign subsidiaries so they misrepresent effective tax rate by including only domestic taxes paid against worldwide income. This is a gross misrepresentation of the real taxes paid for U.S. income. So, the metrics being used don't really describe what is going on in corporate tax. If you parse through it all you will find that the corporations that actually pay the highest marginal taxes tend to be domestic S-Corps of moderate size that are actually the ones that create the most jobs.

We charge the highest taxes to the job creating businesses, and we encourage our largest companies to seek crony favors through rent seeking behavior and then penalize them if they want to upstream foreign after tax retained earnings from their subsidiaries back to the domestic holding company for investment in the U.S. If the face of this destructive policy confused ideological talking heads, politicians and bloggers argue pointlessly about false metrics that don't really describe who pays what tax or why...fools arguing over false data.

The whole structure is too stupid for words, it reduces revenue collected while, suppressing job formation and driving capital investment off shore...way to go Washington

So given that that's the case, and I assume you know what you're talking about, why isn't something being done to correct this nonsensical data and regressive way of taxing our corporations?

By the way, you explained this quite clearly, thank you. So it should be easy for congressmen to understand these problems in reporting and tax structure. So, I just don't understand why this isn't being corrected. Does this have anything to do with what Kerry was proposing when he was campaigning. I remember that he was proposing a change in corporate tax structure to give large corporations an incentive not to move operations off shore, and to make it favorable for them to repatriate earnings.

 

[piezoe]

Quote from LeeD:

Facts have a Liberal Bias!

 

[the1]

The US should do something like what Ireland did a while back. Lower the corporate tax rate to something like 10% and watch the country get flooded with corporations doing business in the US. That would also solve the unemployment problem and generate tax revenue from the newly employed. Economic activity will pick up and tax revenues will pick up.

Quote from piezoe:

So given that that's the case, and I assume you know what you're talking about, why isn't something being done to correct this nonsensical data and regressive way of taxing our corporations?

By the way, you explained this quite clearly, thank you. So it should be easy for congressmen to understand these problems in reporting and tax structure. So, I just don't understand why this isn't being corrected. Does this have anything to do with what Kerry was proposing when he was campaigning. I remember that he was proposing a change in corporate tax structure to give large corporations an incentive not to move operations off shore, and to make it favorable for them to repatriate earnings.