you hear the rich cry about taxes but the truth is they have all there money back from the last crush and the other 90% are worse off. apple pays people pennies an hour to make there products so if they were willing to pay Americans a fair wage i would totally agree with no corporate tax. the idea that you get workers for nothing, don't want to pay tax, let the wealthy who own stock profit more, and enjoy the benefits of America does not sit well with me.
Should corporations pay tax?
- Thread starter nitro
- Start date
The thread title is flawed.
Yet, it's the way most people think about businesses and taxes.
Businesses don't pay taxes; people do.
Short answer: Corporations should pay zero taxes.
You are only hurting your own pocketbook if you think otherwise.
This will help you to understand: www.fairtax.org
Yet, it's the way most people think about businesses and taxes.
Businesses don't pay taxes; people do.
Short answer: Corporations should pay zero taxes.
You are only hurting your own pocketbook if you think otherwise.
This will help you to understand: www.fairtax.org
Obviously, choice #2 is the correct answer
Sorry to single you out MrN; there is a lot of stupidly going on here since I left this thread weeks...months ago...
The distinction between corporations as persons is misunderstood. The original distinction was a legal fiction so that corporations could have standing in courts as persons. The understanding should have been limited to that context, but it has been expanded into much confusion on contexts within which it does not make sense.
Taxes should be paid by people who earn money in ways that optimize tax collection without economic distortion and in ways where the collection of the tax occurs at the same time as the money is present.
Corporations are really not people for the purpose of paying taxes. Properly understood, a corporation is as asset that is owned by persons. Law has evolved so that in most developed countries it is not legal for persons to own persons. So, we need to get beyond the idea that corporations as persons for the purpose of legal standing and that they are not really persons for the purpose of ownership of assets.
The way to tax corporations properly is to tax the owners of corporations on the earnings they derive from those corporations.
Presently in the U.S. public corporations are taxed on their enterprise earnings without regard for any tax that could be levied on the owners of the corporation. After a public corporation is taxed then the owners are taxed again when the corporation distributes any dividend to the owners. This can be understood as double taxation of earnings.
Most countries donât do it this way. Most countries give some credit to the corporate tax paid when the owner tax is levied. Many developed countries do not tax dividends at all because the corporation pays tax. This is highly variable between countries and too complex to deal with properly here. All I want to communicate on this issue here is that the U.S. tax rate is much higher, especially because it is double taxed than any other developed country in the world. Of course effective tax payments by public corporations are generally lower than the rates indicate because of leverage and tax subsidies for crony capitalist payback. This is uneven in industries but generally by leverage alone international public corporations pay less than the published rates. However, the dividends are generally taxed at the published rate...so where domestic corp. Sub S corps that are mature and successful pay the full private rate of 39%, public corps end up paying more like 22% because they have more access to leverage and cronyism...when you put the dividend tax on top of that, public owners end up paying another 23% as dividend and Obama care tax, so 45% of pubic corp. distributed earnings are effectively taxed while 39% of Sub S earnings are taxed whether distributed or not.
This high level of tax has had the effect of driving investment out of domestic U.S. production and pushing investment offshore where the tax can be avoided so long as profits are not repatriated. It also breeds the distortion of borrowing money to pay buy back stock which produces an unrealized gain in stock prices that is not taxed until sold instead of paying dividends. Because leverage is used to fund the stock buy backs the effect is also to reduce reportable earnings and reduce corporate tax at the same time. The downside is that it breeds more leverage and so more risk on balance sheets.
When you understand how all this nonsensical tax code is gamed you can see that revenue would actually go up if public corporations were not taxed on their earnings at all and instead the owners of the corporations were taxed on according to the dividends they receive from their asset ownership. The existing excess profits tax could be enforced to insure that earnings would be paid out as dividends or taxed anyway if they are not paid out. This tax law change would have the added benefit of changing the incentives in BOD behavior and shareholder activism...there would be a demand for dividends and management for income. As no tax would be paid by public corps then there would be less leverage and public corps would evolve stronger balance sheets. The distinction between Sub S enterprise form and C Corp enterprise form would disappear that there would be no difference. The distortion of holding foreign profits outside the U.S. would disappear and those earnings would be repatriated for domestic investment. And best of all, total tax revenue collected by the IRS from owners dividends at regular income tax rates would be significantly higher than what they get today under the current ridiculous corrupt system.
So, don't be a putz, reduce corp. tax to zero and raise dividend tax to regular income rates and enforce law to make corps pay dividends; you will collect more money and obsolete a lot of dysfunctional behavior...but you will have to pass an immigration law to fill all the jobs that will be created by the flood of foreign investment and domestic repatriation that would follow.
The distinction between corporations as persons is misunderstood. The original distinction was a legal fiction so that corporations could have standing in courts as persons. The understanding should have been limited to that context, but it has been expanded into much confusion on contexts within which it does not make sense.
Taxes should be paid by people who earn money in ways that optimize tax collection without economic distortion and in ways where the collection of the tax occurs at the same time as the money is present.
Corporations are really not people for the purpose of paying taxes. Properly understood, a corporation is as asset that is owned by persons. Law has evolved so that in most developed countries it is not legal for persons to own persons. So, we need to get beyond the idea that corporations as persons for the purpose of legal standing and that they are not really persons for the purpose of ownership of assets.
The way to tax corporations properly is to tax the owners of corporations on the earnings they derive from those corporations.
Presently in the U.S. public corporations are taxed on their enterprise earnings without regard for any tax that could be levied on the owners of the corporation. After a public corporation is taxed then the owners are taxed again when the corporation distributes any dividend to the owners. This can be understood as double taxation of earnings.
Most countries donât do it this way. Most countries give some credit to the corporate tax paid when the owner tax is levied. Many developed countries do not tax dividends at all because the corporation pays tax. This is highly variable between countries and too complex to deal with properly here. All I want to communicate on this issue here is that the U.S. tax rate is much higher, especially because it is double taxed than any other developed country in the world. Of course effective tax payments by public corporations are generally lower than the rates indicate because of leverage and tax subsidies for crony capitalist payback. This is uneven in industries but generally by leverage alone international public corporations pay less than the published rates. However, the dividends are generally taxed at the published rate...so where domestic corp. Sub S corps that are mature and successful pay the full private rate of 39%, public corps end up paying more like 22% because they have more access to leverage and cronyism...when you put the dividend tax on top of that, public owners end up paying another 23% as dividend and Obama care tax, so 45% of pubic corp. distributed earnings are effectively taxed while 39% of Sub S earnings are taxed whether distributed or not.
This high level of tax has had the effect of driving investment out of domestic U.S. production and pushing investment offshore where the tax can be avoided so long as profits are not repatriated. It also breeds the distortion of borrowing money to pay buy back stock which produces an unrealized gain in stock prices that is not taxed until sold instead of paying dividends. Because leverage is used to fund the stock buy backs the effect is also to reduce reportable earnings and reduce corporate tax at the same time. The downside is that it breeds more leverage and so more risk on balance sheets.
When you understand how all this nonsensical tax code is gamed you can see that revenue would actually go up if public corporations were not taxed on their earnings at all and instead the owners of the corporations were taxed on according to the dividends they receive from their asset ownership. The existing excess profits tax could be enforced to insure that earnings would be paid out as dividends or taxed anyway if they are not paid out. This tax law change would have the added benefit of changing the incentives in BOD behavior and shareholder activism...there would be a demand for dividends and management for income. As no tax would be paid by public corps then there would be less leverage and public corps would evolve stronger balance sheets. The distinction between Sub S enterprise form and C Corp enterprise form would disappear that there would be no difference. The distortion of holding foreign profits outside the U.S. would disappear and those earnings would be repatriated for domestic investment. And best of all, total tax revenue collected by the IRS from owners dividends at regular income tax rates would be significantly higher than what they get today under the current ridiculous corrupt system.
So, don't be a putz, reduce corp. tax to zero and raise dividend tax to regular income rates and enforce law to make corps pay dividends; you will collect more money and obsolete a lot of dysfunctional behavior...but you will have to pass an immigration law to fill all the jobs that will be created by the flood of foreign investment and domestic repatriation that would follow.
Businesses don't pay taxes; people do.
Guess what would happen to every item you buy if there was no corporate tax.
Hint: You'd like it.
Taxes should be collected at the cash register; not at the courthouse.
www.fairtax.org
Guess what would happen to every item you buy if there was no corporate tax.
Hint: You'd like it.
Taxes should be collected at the cash register; not at the courthouse.
www.fairtax.org
Govt doesn't need our taxes. They just http://en.wikipedia.org/wiki/Quantitative_easing#Printing_money
Great point. But what about the relationship between the corporation and its employees? I would like to see corporate taxes be used as an incentive to enforce Reagan's Trickle-down Economics.
Trickle down economics only works if the people collecting the money allow it to trickle down to the people at the bottom via pay increases or bonuses. I think corporations should be taxed very high, and get subsequent tax breaks down to zero by meeting a series of staggered distribution requirements. 80 years ago (and I don't have the exact numbers so I'll have to make some up) the income gap between CEO's and workers was like 5 to 1. People were paid very well. Butchers could make about $17 per. Before we left the gold standard that was high. Like $100 per hour now. Currently the gap is like 100 to 1 between CEO's and workers. That theme says to me that corporations wouldn't let the money trickle down even if there was no tax at all for them. They'd just give it to the owner, president, VP and CEO's.
The Benefits of Incorporating Abroad in an Age of Globalization
http://dealbook.nytimes.com/2011/12...ating-abroad-in-an-age-of-globalization/?_r=0
U.S. Firms Move Abroad to Cut Taxes
http://online.wsj.com/article/SB10000872396390444230504577615232602107536.html
http://dealbook.nytimes.com/2011/12...ating-abroad-in-an-age-of-globalization/?_r=0
U.S. Firms Move Abroad to Cut Taxes
http://online.wsj.com/article/SB10000872396390444230504577615232602107536.html