What does taxing a guy making minimum wage $10 a month accomplish except increasing the cost of the entire collection system and satisfying the maker/taker crowd. And while we're at it, a large portion of those 40% you cite are children and the elderly who get all their income from SS. Again, what exactly do you accomplish by taxing my 3 year old and making my grandmother pay some of the money she gets from the govt back to the govt again? This is a complex problem, it doesn't yield to simplistic answers like this.
Should corporations pay tax?
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Dallas you are obviously thoughtful but your post is all over the place. Lets stick with Corporate Tax in the context that it is the driver of the desperate act U.S. corps torturing themselves with "Inversions" in order to maintain their enterprise value and competitive standing in global competition.
The revenue from the U.S. Corp tax has been declining for years, in 2015 it was as you say 10.6% of revenue; in 2014 and 2013 it was 9.9% of revenue. You can see the history of Corp Tax receipts at the OMB web site; look in "/budget/historicals."
Looking at a single revenue source as a % of total revenue can be misleading as the Corp Tax % may change because of a change in another source (getting larger, or smaller). So, your change my have nothing to do with, or it may be missing a change, the real dollars collected by that particular source. This will become increasingly true as SS revenue continue to plunge and reverse in the coming years. SS revenue in 2003 peaked at $183B, in 2015 it was $53B; it is projected to become negative in 2017 ($13,208B), and then it will accelerate to the down side. This will by itself increase the percentage of all other revenue sources.
A closer look at U.S. Corp revenue reveals that it has been declining as a percent of GDP for years, and that its growth in nominal dollars has increased at a lower rate than other sources of tax revenue. Much of this decline over time is because Corporations are not as profitable as they were last century...average profit in the 1950's 60's was around 11% of earnings, now that number is around 5%-6%. Corporate gross income has not been increasing at the rate of other sources either. Corp income grew from $762B in 1980 to $1.7T in 2012, more than 100% over 30yrs nominal, not much.
These Corp numbers are further distorted by changes in enterprise form. The numbers and earnings reported by Corps are declining because the C Corp form of enterprise is declining. More and more enterprise has adopted the S-Corp or LLC form of enterprise which reports income and pays taxes through the Individual Tax code, not the Corporate Code. In 1980 non-corp business income was $360B; by 2012 it was $1.6T, a growth rate of 400%. Income from non-corp business reported in the Individual Tax revenues now exceeds the Corp Tax.
The effect of this has been to make the metrics distorted so that "Corp" tax receipts appear to decline while "Individual" tax receipts appear to increase. What is actually happening is that business revenue is running away from the C-Corp form because of double taxation and it is turning to the S-Corp and LLC form that reports those revenues in the Individual Tax receipts.
Properly understood tax receipts from U.S. businesses have increased dramatically and individual tax receipts have actually declined. You wont see this in the Brookings Tax Policy Center numbers as you will not see this explained by the leftist Center on Budget & Policy Priorities, the socialist Economic Policy Institute, or the National Priorities Project. It is hard to get true numbers from the general medial which is invested with ideologically designed and presented numbers.
Go to St. Louis Fed, OMB, or other pure numbers places. See "taxfoundation.org" "The missing business tax revenue in corporate tax data." See also, "fas.org/sgp/crs/misc/R42726.pdf" for a Congressional Research Service report "The corporate income tax system: Overview and options for reform." These are objective sources.
Reasons of basic economic philosopy argue for elimination of the Corporate Tax. In short this form of tax raises the cost of capital and reduces after tax returns in the corporate sector, leading to a migration of capital to other sectors. The impact of such migration of capital bears primarily on workers as the reduced capital stock impairs productivity gains and lowers wages (now you can answer a question that still puzzels Janet Yellen). Another negative effect of Corporate tax is that it misallocates capital by favoring debt over equity in that interest on debt is deductible, where dividends are not. That is why corps borrow money to buy their own stock while they leave foreign earnings languishing in Timbuktu...prop up stocks with debt as income declines and workers wages decline and the capital stock (collateral for the debt) depreciates. Properly understood this is a tax on entrepreneurship as start ups do not have the same access to debt, big guys win.
Make the Corp tax Zero, this destroys the distinction between non-corp and corp business income, it destroys the use of debt to avoid tax; raise the tax on dividends to the full individual rates so that owners of the business pay tax when they receive any dividend or distribution from the business that is not reinvested back into the business to build its capital stock, enforce an "excess profits tax" (has been in the IRS code since the 1950's) so that corps must pay dividends unless they can show a legitimate business purpose for retaining earnings.
The revenue from the U.S. Corp tax has been declining for years, in 2015 it was as you say 10.6% of revenue; in 2014 and 2013 it was 9.9% of revenue. You can see the history of Corp Tax receipts at the OMB web site; look in "/budget/historicals."
Looking at a single revenue source as a % of total revenue can be misleading as the Corp Tax % may change because of a change in another source (getting larger, or smaller). So, your change my have nothing to do with, or it may be missing a change, the real dollars collected by that particular source. This will become increasingly true as SS revenue continue to plunge and reverse in the coming years. SS revenue in 2003 peaked at $183B, in 2015 it was $53B; it is projected to become negative in 2017 ($13,208B), and then it will accelerate to the down side. This will by itself increase the percentage of all other revenue sources.
A closer look at U.S. Corp revenue reveals that it has been declining as a percent of GDP for years, and that its growth in nominal dollars has increased at a lower rate than other sources of tax revenue. Much of this decline over time is because Corporations are not as profitable as they were last century...average profit in the 1950's 60's was around 11% of earnings, now that number is around 5%-6%. Corporate gross income has not been increasing at the rate of other sources either. Corp income grew from $762B in 1980 to $1.7T in 2012, more than 100% over 30yrs nominal, not much.
These Corp numbers are further distorted by changes in enterprise form. The numbers and earnings reported by Corps are declining because the C Corp form of enterprise is declining. More and more enterprise has adopted the S-Corp or LLC form of enterprise which reports income and pays taxes through the Individual Tax code, not the Corporate Code. In 1980 non-corp business income was $360B; by 2012 it was $1.6T, a growth rate of 400%. Income from non-corp business reported in the Individual Tax revenues now exceeds the Corp Tax.
The effect of this has been to make the metrics distorted so that "Corp" tax receipts appear to decline while "Individual" tax receipts appear to increase. What is actually happening is that business revenue is running away from the C-Corp form because of double taxation and it is turning to the S-Corp and LLC form that reports those revenues in the Individual Tax receipts.
Properly understood tax receipts from U.S. businesses have increased dramatically and individual tax receipts have actually declined. You wont see this in the Brookings Tax Policy Center numbers as you will not see this explained by the leftist Center on Budget & Policy Priorities, the socialist Economic Policy Institute, or the National Priorities Project. It is hard to get true numbers from the general medial which is invested with ideologically designed and presented numbers.
Go to St. Louis Fed, OMB, or other pure numbers places. See "taxfoundation.org" "The missing business tax revenue in corporate tax data." See also, "fas.org/sgp/crs/misc/R42726.pdf" for a Congressional Research Service report "The corporate income tax system: Overview and options for reform." These are objective sources.
Reasons of basic economic philosopy argue for elimination of the Corporate Tax. In short this form of tax raises the cost of capital and reduces after tax returns in the corporate sector, leading to a migration of capital to other sectors. The impact of such migration of capital bears primarily on workers as the reduced capital stock impairs productivity gains and lowers wages (now you can answer a question that still puzzels Janet Yellen). Another negative effect of Corporate tax is that it misallocates capital by favoring debt over equity in that interest on debt is deductible, where dividends are not. That is why corps borrow money to buy their own stock while they leave foreign earnings languishing in Timbuktu...prop up stocks with debt as income declines and workers wages decline and the capital stock (collateral for the debt) depreciates. Properly understood this is a tax on entrepreneurship as start ups do not have the same access to debt, big guys win.
Make the Corp tax Zero, this destroys the distinction between non-corp and corp business income, it destroys the use of debt to avoid tax; raise the tax on dividends to the full individual rates so that owners of the business pay tax when they receive any dividend or distribution from the business that is not reinvested back into the business to build its capital stock, enforce an "excess profits tax" (has been in the IRS code since the 1950's) so that corps must pay dividends unless they can show a legitimate business purpose for retaining earnings.
Corporate Tax Inversions Are the Least of It
"One of the most insidious tax loopholes out there" just got a little smaller. But President Barack Obama, who announced the change on Tuesday with much fanfare, didn’t go nearly far enough: The tax code itself, not just its loopholes, is what needs fixing.
Tax Inversions
It's hard to overstate just how bad the U.S. corporate tax code is. Imagine it was designed by foreign saboteurs -- and prepare to be impressed by their ingenuity.
It taxes profits at 35 percent, one of the highest rates in the world. This excessive rate applies to a base riddled with exemptions and exceptions. U.S. companies pay taxes on their non-U.S. earnings, but only when the money is brought home, thus creating an incentive to park profits abroad. In these and other ways, the system manages to combine maximum economic damage with relatively meager revenue collection.
To avoid this tax, some U.S. companies have bought smaller foreign firms and switched their residence for tax purposes overseas. These are the so-called inversions that new Treasury rules are intended to block. They may have already had an effect, with Pfizer's terminationof its $160 billion takeover of Allergan.
A sensible tax system would eliminate the incentives both for inversions and for parking income abroad. Actions like the administration's shouldn’t be confused with reform.
In fact, they make the code even more complicated when it desperately needs to be simpler. By relying on executive discretion rather than legislation, they make the system less predictable. Worst of all, they leave in place the excessive basic rate, from which so many other problems flow.
There are two basic approaches to fixing the system. The less radical option would be to set a lower, internationally competitive tax rate and then apply it to a broader, simpler base. Merely doing that would help a lot. However, where international companies are concerned, efficient taxation also requires much closer cooperation among governments. This would be easier if the U.S., like almost all other governments, were to adopt a territorial system, which taxes profits according to where they're earned, not according to where the company resides..."
http://www.bloombergview.com/articl...-to-stop-tax-inversions-doesn-t-go-far-enough
"One of the most insidious tax loopholes out there" just got a little smaller. But President Barack Obama, who announced the change on Tuesday with much fanfare, didn’t go nearly far enough: The tax code itself, not just its loopholes, is what needs fixing.
Tax Inversions
It's hard to overstate just how bad the U.S. corporate tax code is. Imagine it was designed by foreign saboteurs -- and prepare to be impressed by their ingenuity.
It taxes profits at 35 percent, one of the highest rates in the world. This excessive rate applies to a base riddled with exemptions and exceptions. U.S. companies pay taxes on their non-U.S. earnings, but only when the money is brought home, thus creating an incentive to park profits abroad. In these and other ways, the system manages to combine maximum economic damage with relatively meager revenue collection.
To avoid this tax, some U.S. companies have bought smaller foreign firms and switched their residence for tax purposes overseas. These are the so-called inversions that new Treasury rules are intended to block. They may have already had an effect, with Pfizer's terminationof its $160 billion takeover of Allergan.
A sensible tax system would eliminate the incentives both for inversions and for parking income abroad. Actions like the administration's shouldn’t be confused with reform.
In fact, they make the code even more complicated when it desperately needs to be simpler. By relying on executive discretion rather than legislation, they make the system less predictable. Worst of all, they leave in place the excessive basic rate, from which so many other problems flow.
There are two basic approaches to fixing the system. The less radical option would be to set a lower, internationally competitive tax rate and then apply it to a broader, simpler base. Merely doing that would help a lot. However, where international companies are concerned, efficient taxation also requires much closer cooperation among governments. This would be easier if the U.S., like almost all other governments, were to adopt a territorial system, which taxes profits according to where they're earned, not according to where the company resides..."
http://www.bloombergview.com/articl...-to-stop-tax-inversions-doesn-t-go-far-enough
Most US stock investors don't pay taxes on gains: Report
Robert Frank | @robtfrank
2 Hours AgoCNBC.com
COMMENTSHillary Clinton has called for an increase in the top tax rate for capital gains. Meanwhile, some Republicans have called for lowering the capital gains rate, contending it represents "double taxation" of corporate earnings.
"Understanding the erosion of the taxable shareholder base is critical for determining how best to tax corporate earnings — and capital more generally," according to the report.
The paper, by Steven M. Rosenthal and Lydia S. Austin, found that three-quarters of outstandingU.S. shares last year were owned by tax-exempt accounts (including Roth IRAs), foundations or foreigners. Meanwhile, the number of taxable shareowners has fallen precipitously over the past four decades. Whereas 84 percent of shares were held by taxable investors in 1965, that number was just 24.2 percent in 2015.
"Corporate earnings are largely tax exempt at this level," the report said.
The report found that retirement accounts hold roughly 37 percent of stocks. Foreigners, who generally don't pay U.S. capital gains taxes on their sales of stocks, hold about 26 percent of U.S. stocks.
"This decline in stock ownership by taxable investors has been hard to spot since it is not obvious in data published by the Federal Reserve and others," the report found. Yet it "affects many of the current tax policy debates," the authors said.
http://www.cnbc.com/2016/05/16/most-us-stock-investors-dont-pay-taxes-on-gains-report.html
Robert Frank | @robtfrank
2 Hours AgoCNBC.com
COMMENTSHillary Clinton has called for an increase in the top tax rate for capital gains. Meanwhile, some Republicans have called for lowering the capital gains rate, contending it represents "double taxation" of corporate earnings.
"Understanding the erosion of the taxable shareholder base is critical for determining how best to tax corporate earnings — and capital more generally," according to the report.
The paper, by Steven M. Rosenthal and Lydia S. Austin, found that three-quarters of outstandingU.S. shares last year were owned by tax-exempt accounts (including Roth IRAs), foundations or foreigners. Meanwhile, the number of taxable shareowners has fallen precipitously over the past four decades. Whereas 84 percent of shares were held by taxable investors in 1965, that number was just 24.2 percent in 2015.
"Corporate earnings are largely tax exempt at this level," the report said.
The report found that retirement accounts hold roughly 37 percent of stocks. Foreigners, who generally don't pay U.S. capital gains taxes on their sales of stocks, hold about 26 percent of U.S. stocks.
"This decline in stock ownership by taxable investors has been hard to spot since it is not obvious in data published by the Federal Reserve and others," the report found. Yet it "affects many of the current tax policy debates," the authors said.
http://www.cnbc.com/2016/05/16/most-us-stock-investors-dont-pay-taxes-on-gains-report.html
%%Most US stock investors don't pay taxes on gains: Report
Robert Frank | @robtfrank
2 Hours AgoCNBC.com
COMMENTSHillary Clinton has called for an increase in the top tax rate for capital gains. Meanwhile, some Republicans have called for lowering the capital gains rate, contending it represents "double taxation" of corporate earnings.
"Understanding the erosion of the taxable shareholder base is critical for determining how best to tax corporate earnings — and capital more generally," according to the report.
The paper, by Steven M. Rosenthal and Lydia S. Austin, found that three-quarters of outstandingU.S. shares last year were owned by tax-exempt accounts (including Roth IRAs), foundations or foreigners. Meanwhile, the number of taxable shareowners has fallen precipitously over the past four decades. Whereas 84 percent of shares were held by taxable investors in 1965, that number was just 24.2 percent in 2015.
"Corporate earnings are largely tax exempt at this level," the report said.
The report found that retirement accounts hold roughly 37 percent of stocks. Foreigners, who generally don't pay U.S. capital gains taxes on their sales of stocks, hold about 26 percent of U.S. stocks.
"This decline in stock ownership by taxable investors has been hard to spot since it is not obvious in data published by the Federal Reserve and others," the report found. Yet it "affects many of the current tax policy debates," the authors said.
http://www.cnbc.com/2016/05/16/most-us-stock-investors-dont-pay-taxes-on-gains-report.html
I think that is fine if Bill + Hillary want to pay more tax; but a good way to limit gov is limit taxes, like TN, TX, +Silver State, Wyoming, Washington.....[Bill MSFT home-LOL] .
Most US stock investors don't pay taxes on gains: Report
Robert Frank | @robtfrank
2 Hours AgoCNBC.com
COMMENTSHillary Clinton has called for an increase in the top tax rate for capital gains. Meanwhile, some Republicans have called for lowering the capital gains rate, contending it represents "double taxation" of corporate earnings.
"Understanding the erosion of the taxable shareholder base is critical for determining how best to tax corporate earnings — and capital more generally," according to the report.
The paper, by Steven M. Rosenthal and Lydia S. Austin, found that three-quarters of outstandingU.S. shares last year were owned by tax-exempt accounts (including Roth IRAs), foundations or foreigners. Meanwhile, the number of taxable shareowners has fallen precipitously over the past four decades. Whereas 84 percent of shares were held by taxable investors in 1965, that number was just 24.2 percent in 2015.
"Corporate earnings are largely tax exempt at this level," the report said.
The report found that retirement accounts hold roughly 37 percent of stocks. Foreigners, who generally don't pay U.S. capital gains taxes on their sales of stocks, hold about 26 percent of U.S. stocks.
"This decline in stock ownership by taxable investors has been hard to spot since it is not obvious in data published by the Federal Reserve and others," the report found. Yet it "affects many of the current tax policy debates," the authors said.
http://www.cnbc.com/2016/05/16/most-us-stock-investors-dont-pay-taxes-on-gains-report.html
The study by Rosenthal and Austin is important and it reveals the faulty data that Treasury and the Fed have been using for years to promote dysfunctional policy.
We have a double taxation system that has been avoided by shareholders moving to own shares in forms that are not taxable...so now only about 25% of public shares that are subject to the second tax of dividend or capital gains is actually taxed....that means that the Treasury only receives about 2% to 3% more tax revenue on profit over what it receives from the Corporate Tax. This is nuts....the corporate tax burden has shifted to the Scorps as the individual rate has been raised and the Scorp shareholders pay the highest individual rates at both the State and Fed level and they pay on income that is not actually distributed to them, income they need to reinvest in the business.
This is nuts because these Scorps are almost all entirely domestic enterprises that create the most jobs....The public C corps avoid tax through international structuring and their shareholders avoid tax through owning shares in tax exempt accounts and making estate transfers that avoid capital gains. You might as well just line up the middle class and shoot them.
Corporate tax should be zero, all distributions of profit should be taxed at regular income rates, there should be no accounts where dividends are not taxed, not, pensions, not 401Ks, not charitable foundation holdings, not college endowments....you get the income and you pay the tax, once, and everybody pays no matter what account or purpose the investment is held in.
Here is what was said on Tuesday in Senate Finance Committee hearings about the recommendation to have only one tax on corporate income, both S and C corps, paid just once and then left alone:
Here's Dr. Michael Graetz:
"In the 1990s, principally because of its administrative advantages, the Treasury Department recommended taxing business income once-at the business level. This form of integration was advanced by President George W. Bush in 2003, but Congress instead simply lowered shareholders' income tax rates on dividends. That approach is no longer apt today. Locating the income tax at the shareholder level would be more progressive and, given the mobility of business capital and operations, makes much more sense in today's global economy."
And Prof. Bret Wells:
"From a tax policy perspective, I think this committee needs to say 'we need to preserve one level of efficient tax on active business income.' Having that taxed at the shareholder level assures individual progressivity. That's a wonderful goal. And if we take the distortions out of who the owner is, whether that's a foreign-based multinational, or a pension, or others, that creates the tax symmetry that I think the system needs...Corporate integration absolutely is the vehicle to get us there. Whether it is the dividends-paid deduction regime, or other forms of integration. But I think it is absolutely a wonderful first step."
We have a double taxation system that has been avoided by shareholders moving to own shares in forms that are not taxable...so now only about 25% of public shares that are subject to the second tax of dividend or capital gains is actually taxed....that means that the Treasury only receives about 2% to 3% more tax revenue on profit over what it receives from the Corporate Tax. This is nuts....the corporate tax burden has shifted to the Scorps as the individual rate has been raised and the Scorp shareholders pay the highest individual rates at both the State and Fed level and they pay on income that is not actually distributed to them, income they need to reinvest in the business.
This is nuts because these Scorps are almost all entirely domestic enterprises that create the most jobs....The public C corps avoid tax through international structuring and their shareholders avoid tax through owning shares in tax exempt accounts and making estate transfers that avoid capital gains. You might as well just line up the middle class and shoot them.
Corporate tax should be zero, all distributions of profit should be taxed at regular income rates, there should be no accounts where dividends are not taxed, not, pensions, not 401Ks, not charitable foundation holdings, not college endowments....you get the income and you pay the tax, once, and everybody pays no matter what account or purpose the investment is held in.
Here is what was said on Tuesday in Senate Finance Committee hearings about the recommendation to have only one tax on corporate income, both S and C corps, paid just once and then left alone:
Here's Dr. Michael Graetz:
"In the 1990s, principally because of its administrative advantages, the Treasury Department recommended taxing business income once-at the business level. This form of integration was advanced by President George W. Bush in 2003, but Congress instead simply lowered shareholders' income tax rates on dividends. That approach is no longer apt today. Locating the income tax at the shareholder level would be more progressive and, given the mobility of business capital and operations, makes much more sense in today's global economy."
And Prof. Bret Wells:
"From a tax policy perspective, I think this committee needs to say 'we need to preserve one level of efficient tax on active business income.' Having that taxed at the shareholder level assures individual progressivity. That's a wonderful goal. And if we take the distortions out of who the owner is, whether that's a foreign-based multinational, or a pension, or others, that creates the tax symmetry that I think the system needs...Corporate integration absolutely is the vehicle to get us there. Whether it is the dividends-paid deduction regime, or other forms of integration. But I think it is absolutely a wonderful first step."
All good except for this part. Much too murky.