Corporate Tax Rate

[1Perry]

Do you know why capital gains income is taxed at a lower rate? Because the money you invested was already taxed as income. Capital Gains Taxes directly lower return on investment.

I open a side business. I build this business off of money I made and was taxed on from my main job. I start to make money at this new business. I am taxed on that income even though I built it using money that was already taxed.

Even the government knows this, which is why long-term capital gains taxes rates are 50% lower than short-term. Lower rates encourage investments.

If the taxes on my income was lower I would have more to invest.

 

[1Perry]

Yes. The economy has more than doubled in size.

No, not really. Much of the gain has been in bubbles that the government is now straining mightly to keep inflated.

 

[KevinKohler]

Do you know why capital gains income is taxed at a lower rate? Because the money you invested was already taxed as income. Capital Gains Taxes directly lower return on investment.

Even the government knows this, which is why long-term capital gains taxes rates are 50% lower than short-term. Lower rates encourage investments.

By this model, people who make their income via tips should also not have to pay any taxes on that income.

 

[Samhain]

By this model, people who make their income via tips should also not have to pay any taxes on that income.

I don't think tips should be taxed.

 

[KevinKohler]

I don't think tips should be taxed.

But they are, and so long as they are, so too should capital gains.

 

[Samhain]

But they are, and so long as they are, so too should capital gains.

I don't think they should be taxed, but the rationale as to why they are taxed is not in any way, shape, or form equivalent to an investment. The person receiving the tip didn't invest their already taxed income in anything to receive the tip.

While we are on that point, shouldn't I be able to deduct any tip I provide, since that essentially a wage that I've offered? Aren't we all a small business when we offer tips? Or does that fall under the gift category, and if so, then how can a tip be taxed as a wage?

 

[iliveonramen]

Correct. And the break on the taxable gains is because you are getting a cookie for investing your money into the economy as opposed to sleeping on it, or swimming in it

The return is the incentive to invest. Just like interests is the incentive to put it in the bank. Apparently for hundreds of years return has been a good enough of incentive to invest but for some reason now it has to be tax free as well.

Yes. The economy has more than doubled in size.

GDP Growth by year
United States GDP Growth Rate

Real Growth rate over time
Long-term real growth in US GDP per capita 1871-2009
As you can see....the numbers after 1980 are not above the trend line.

 

[KevinKohler]

I don't think they should be taxed, but the rationale as to why they are taxed is not in any way, shape, or form equivalent to an investment. The person receiving the tip didn't invest their already taxed income in anything to receive the tip.

While we are on that point, shouldn't I be able to deduct any tip I provide, since that essentially a wage that I've offered? Aren't we all a small business when we offer tips? Or does that fall under the gift category, and if so, then how can a tip be taxed as a wage?

It is one hell of a gray area, I'll tell you that. I mean, on one hand, I SHOULD be allowed to claim tips as a gift every time I go to the strip club and blow through 100 bucks or so. But I doubt I could...I could be wrong, though. If we consider it a wage offered, and you wanted to deduct it, I think you'd have to require every person you GIVE a tip to to fill out tax forms, and you would have to fill some out as well.

Also, the person receiving the tip DID invest income to receive that tip. Unless they walked to work naked.

 

[apdst]

It's a tangled, convoluted mess, isn't it, folks? I'll say this till I die...get rid of the legal term "corporation".

Corporations get tax breaks for numerous reasons, but the main one, is because they employ a LOT more people, to do the same basic amount of work, as small businesses do. Seriously, walk into a Bi-Lo/Windixie/Stop and Shop/etc, and count the number of people, then walk into a mom and pop grocery store, count the people, multiply it by 4 (to account for the difference in area, and sales), and it STILL won't even come close. Corporations can AFFORD to have these bloated payrolls because they get tax cuts on them.

Here's a few of my problems...

First, profits SHOULD be taxed, because corporations can use that money in the form of protected "free speech" as if they WERE a person. Sorry, but you want that, you gotta pay taxes for it, like everyone else. So long as AIG can lay unrestricted amounts of money on one campaign or another, those profits should be taxed. Period. Better solution? Get rid of corporate personhood. Or corporate all together...

Second. Due to the protections available to corporations that are NOT available to small business, they have an unfair market advantage. It's the REASON WHY we have such great gaps between incomes in this country. Behind every UBER rich man in this country, you'll find a large corporation of one form or another, and they GOT that way because they were bot held liable for as much crap as a small business is, and their risk was less, in day to day operations. And since they pay less in taxes, etc, they can afford to better wage price battles, to drive their would be competition out of business, or out of the area.

Why? Why have we done this? What reason do we have to allow for ONE business to operate in a totally different fashion, than others? Why should a company all of a sudden be held less liable for...well, ANYTHING, after it's reached a certain size, filed certain forms, etc? Government intervention into the market in this way is what is CREATING these monsters that are at our gates, who's hands are in our pockets, who words are passed on to our elected officials, along with cash to make the deal sweeter. All in the name if reducing unemployment.

What tax, "cuts", do they get for having bloated payrolls?

Second. Due to the protections available to corporations that are NOT available to small business, they have an unfair market advantage. It's the REASON WHY we have such great gaps between incomes in this country. Behind every UBER rich man in this country, you'll find a large corporation of one form or another, and they GOT that way because they were bot held liable for as much crap as a small business is, and their risk was less, in day to day operations. And since they pay less in taxes, etc, they can afford to better wage price battles, to drive their would be competition out of business, or out of the area.

What protections would those be?

 

[Centinel]

Interesting article on finding for corporate tax rates.
America's corporate tax obscenity - Taxes - Salon.com

A corporation does not exist. A corporation is a concept. It describes a group of people who have entered into a relationship, much like a marriage describes two people who have entered into a relationship. A marriage is not a thing, and does not spring into existence when people marry. Nor does a corporation spring into existence when people incorporate.

Marriages don't pay taxes. Individuals who happen to have entered into marriage relationships pay taxes. (Yes, I am aware that they may file jointly.)

And my opinion is that corporations should not pay taxes, but rather people who happen to be in corporate relationships should pay taxes.

Ultimately, only individual people should be responsible for paying income taxes. It should not matter what sorts of business relationships they establish among themselves. Ultimately all income is earned by individual people, and at that point it should be taxed as income.

 

[KevinKohler]

What tax, "cuts", do they get for having bloated payrolls?



What protections would those be?

They don't get tax cuts FOR having bloated payrolls, they get tax cuts so they DO have bloated payrolls. The idea is, cut their taxes, so they'll employ more people.

They are shielded from risk by the set up having shareholders (owners) who are NOT harmed by the way the business operates. You can't sue the shareholder (OWNER) of a corporation. The shareholders (OWNERS) don't lose everything in the event of bankruptcy, because they can do what you and I can't, file chapter 11, instead of 8.