Two-thirds of U.S. corporations did not pay federal income tax. GAO Report

[cpwill]

If only that candidate didn't imagine that an over $8 TRILLION tax cut over 10 years was viable. It's easy to have a nice sounding tax plan when you can disregard reality....

I assume you're talking about Cruz.

According to the Tax Foundation, Ted Cruz's plan would cut revenues by $768 Billion over a period of ten years. So.... slightly less than $8 Trillion.

But yes. If you are angry about corporations taking advantage of the law (the same way that you do when you deduct your mortgage interest), then the solution is to dramatically simplify the tax code, not monkey about with the nominal rates.

 

[cpwill]

Businesses shouldn't pay taxes. A business tax is simply a tax on the people who buy their products. If you tax a toilet paper manufacturer, then what you are really doing is taxing people for wiping their butts, since that expense gets pushed down to the consumer. Of course, it's easier to pass a tax on a big multi-million $$ paper products co. then it is to tax people for wiping their butts. Corporate taxes are simply a dishonest way of taxing people without their knowledge.

An excellent point. Businesses do not really pay taxes - they collect them.


That being said, I would be fine with a shifting of taxes paid from income to sales over time. But yes, we should be honest that we are still taxing people.

 

[Moderate Right]

And another poster criticizes the report for doing something it didn't do\

The report didn't include S-corps or other pass through entities

Which makes your comments very misleading



See above

That's not proof. That's just an opinion. Show me the proof that the study did not include S-Corps.

 

[sangha]

If only that candidate didn't imagine that an over $8 TRILLION tax cut over 10 years was viable. It's easy to have a nice sounding tax plan when you can disregard reality....

I assume you're talking about Cruz.

And if only that candidates supporters realized that changing tax rates will do nothing to change the tax liabilities of corporations that have no taxable income due to favorable tax regulations

 

[sangha]

That's not proof. That's just an opinion. Show me the proof that the study did not include S-Corps.

http://www.gao.gov/assets/680/675844.pdf

Footnote 3 on page 2

Data are not included for certain “pass-through” entities, which file on forms 1120-REIT (U.S. Income Tax Return for Real Estate Investment Trusts), 1120-RIC (U.S. Income Tax Return for Regulated Investment Companies), and 1120S (U.S. Income Tax Return for an S Corporation).

 

[JasperL]

According to the Tax Foundation, Ted Cruz's plan would cut revenues by $768 Billion over a period of ten years. So.... slightly less than $8 Trillion.

But yes. If you are angry about corporations taking advantage of the law (the same way that you do when you deduct your mortgage interest), then the solution is to dramatically simplify the tax code, not monkey about with the nominal rates.

LOL, with the magic of trickle down economics it comes close to balancing.... :roll: :lamo

And there is a big difference ($5T) between the Tax Foundation and Tax Policy Center, and I trust the latter far more than the former since Tax Foundation's figures are BS from the start and pretend that there is a Tax Santa Clause.

Even accepting their low ball $3.6T/10 years static estimate (versus $8.6T for TPP), the Tax Foundation "analysis" completely IGNORES both negative economic impact of cutting $3.6T in government spending, and/or the cost to finance an additional $3.6T in debt on top of the already big debt numbers. The "analysis" of the trickle down supply side effects fully counts ALL the upside, but assumes that there is no cost at all to cutting revenues by $3.6 trillion. Doesn't even pass the laugh test....

Here's the key part of the "analysis" tucked in at the end:

Modeling Notes

The Taxes and Growth Model does not take into account the fiscal or economic effects of interest on debt. It also does not require budgets to balance over the long term, nor does it account for the potential macroeconomic effects of any spending cuts that may be required to finance the plan.

It's hard to believe serious people put their name on that nonsense. It would get an F in any college level economics course, or an incomplete with a "try again" at the top.

 

[JasperL]

Businesses shouldn't pay taxes. A business tax is simply a tax on the people who buy their products. If you tax a toilet paper manufacturer, then what you are really doing is taxing people for wiping their butts, since that expense gets pushed down to the consumer. Of course, it's easier to pass a tax on a big multi-million $$ paper products co. then it is to tax people for wiping their butts. Corporate taxes are simply a dishonest way of taxing people without their knowledge.

That's only partially true. Income taxes on businesses fall on some combination of executives or employees, customers and/or owners, so it's inaccurate to conclude that in general all taxes are passed through to consumers. It's just not true and dozens of studies demonstrate it. The short answer on who pays business income taxes is "it depends."

 

[JasperL]

An excellent point. Businesses do not really pay taxes - they collect them.

That being said, I would be fine with a shifting of taxes paid from income to sales over time. But yes, we should be honest that we are still taxing people.

I guess that's true, but the taxes can be ultimately "paid" by owners, employees and/or customers.

 

[cpwill]

LOL, with the magic of trickle down economics it comes close to balancing....

...no. There is no such thing as "trickle down economics".

Once you score the likely effects of policy, however, the impacts change.

For example, if I were to raise the income tax to a flat rate of 1,000,000%, how much money would I raise? Well, zero, because no one would report or pay it. A static scoring, however, would dutifully report that next year I would receive 1,000,000% of the national income in revenues. Scoring the impact of policy changes is important, especially for forecasting.

And there is a big difference ($5T) between the Tax Foundation and Tax Policy Center, and I trust the latter far more than the former since Tax Foundation's figures are BS from the start and pretend that there is a Tax Santa Clause

No, the Tax Foundation scores both the static and the dynamic impacts, so you can compare and contrast apples to apples with other plans and models.

Even accepting their low ball $3.6T/10 years static estimate (versus $8.6T for TPP), the Tax Foundation "analysis" completely IGNORES both negative economic impact of cutting $3.6T in government spending

Largely because - net - it's not negative. Government can only spend wealth that it gets from somewhere - it's not a magic money tree, injecting value into the economy, it's part of a cyclic function where wealth is extracted from the economy, funneled through a few bureaucracies, and then reassigned back into the economy according to political incentives.

and/or the cost to finance an additional $3.6T in debt on top of the already big debt numbers.

.....how much does a 10 year bond that was issued in 2018 cost us to roll over in 2024?

 

[cpwill]

I guess that's true, but the taxes can be ultimately "paid" by owners, employees and/or customers.

Exactly. Ultimately it is individual people who pay taxes, not businesses. Though they can be effective collection agents for us.

 

[JasperL]

...no. There is no such thing as "trickle down economics".

Once you score the likely effects of policy, however, the impacts change.

For example, if I were to raise the income tax to a flat rate of 1,000,000%, how much money would I raise? Well, zero, because no one would report or pay it. A static scoring, however, would dutifully report that next year I would receive 1,000,000% of the national income in revenues. Scoring the impact of policy changes is important, especially for forecasting.

I'm not sure what "static" analysis you're referring to, but not one used by any forecaster in CBO or JCT. The estimates take into account expected macroeconomic effects of a change in policy, but they don't assume the underlying growth rate in the economy changes, and it's because over the fairly small changes in taxes as a share of GDP that are typically associated with modern tax bills, the change in the underlying long term growth rate in the economy won't change much, if any, and it's difficult to weigh the offsetting upside and downside.

No, the Tax Foundation scores both the static and the dynamic impacts, so you can compare and contrast apples to apples with other plans and models.

And their dynamic "analysis" is crap, not worth reading, which is why I ignore it and only look at the static numbers.

Largely because - net - it's not negative. Government can only spend wealth that it gets from somewhere - it's not a magic money tree, injecting value into the economy, it's part of a cyclic function where wealth is extracted from the economy, funneled through a few bureaucracies, and then reassigned back into the economy according to political incentives.

Right, I have a degree in economics and understand Government 101. But there isn't any question that cutting $3.6 trillion in government spending or borrowing $3.6 trillion has a significant cost to it, and Tax Foundation ignores that cost, and presents a "dynamic" analysis that only counts changes in economic activity when the sign is positive and ignores changes with negative signs. It's not defensible. It would be like Bernie Sanders touting the multiplier effects of an additional $8 Trillion in government spending when he wins for POTUS and then pretending that taxes don't have to be raised and/or more borrowed to pay for his big spending programs. You'd CORRECTLY dismiss that kind of "analysis" out of hand. Now you want to defend it.

.....how much does a 10 year bond that was issued in 2018 cost us to roll over in 2024?

It's not 2018 so I have no idea (my crystal ball is broke), nor do I know the point of your question.

 

[Moderate Right]

http://www.gao.gov/assets/680/675844.pdf

Footnote 3 on page 2

OK. That's proof.

 

[dolphinocean]

sure and it should have the right to run for office and vote then?

Yes, it should have the right to run for office and vote. That is, if it could get to the Election Poll before closing time and take the oath of office when elected.

 

[clownboy]

I own a Subchapter S corporation. You could put my company in that two thirds. The company does not pay taxes on the profit it makes. All profit is passed through to my personal tax return and paid at the individual tax rate. The company does, however, pay employer taxes on Unemployment Insurance, Medicare, and Social Security - as does every employer in the US (exception being a 501(c)(3) that has 4 or less employees, and although they do not pay FUTA and in most cases SUTA, they still pay Medicare, and Social Security [FICA] on all their employees).

There we go. There has been a huge movement to personal corporatization over the last few decades as companies outsource their work to contractors.

 

[JasperL]

Yes, it should have the right to run for office and vote. That is, if it could get to the Election Poll before closing time and take the oath of office when elected.

And breath polluted air, drink polluted water, get sick, and die, etc.....

 

[SheWolf]

The taker would be the federal government. You need to understand that the public actually pays corporate taxes. Corporate taxes are cost entry in the profit and loss statement. The company already built them into the price of its products or services. But if soaking the public for more corporate taxes is appealing to you, you should contact your representative and suggest a change in the tax laws. You will be up against some serious corruption, however.

Sales taxes and corporate income taxes are completely different. Pricing is based on supply and demand, not the income tax rate.

 

[KLATTU]

Logic dictates... .

You could have stopped right there for liberals. LOL

 

[ludin]

How about corporations pay their fair share and stop mooching off the little guy???

would you rather them pay tax or give someone a job?
I think most people would rather have the job.

 

[ludin]

I think you are right on this one.

The tax code is seriously messed up. It's all the years of congress writing into loop holes for their patrons. It's resulted in an opaque byzantine mess and it's high time that it's cleaned up. The only thing is I distrust those presently elected to congress to do an honest job of doing that. That which is indeed most needed.

we can easily cut the tax code down by 90%.
you don't need all these complicated calculations lines and everything else.

my corporate tax code would lower it to 10% of gross with deductions for healthcare, non-executive pay, and retirement.
so the more the companies invest in their employee's the bigger their tax break is.

making it 10% of gross gives them huge reasons to invest heavily in their employee's.

 

[fmw]

Sales taxes and corporate income taxes are completely different. Pricing is based on supply and demand, not the income tax rate.

They sure are. I wasn't talking about sales tax at all. Go back and read the post. Pricing is based on supply and demand and profitability. The income tax is one of the expenses involved in the calculation of profitability. I realize you have no business experience and don't understand all of this but income taxes are built into the price of products and services. If there were no business income tax then prices would be lower because of supply and demand and normal competitive pressures.

 

[eohrnberger]

we can easily cut the tax code down by 90%.
you don't need all these complicated calculations lines and everything else.

my corporate tax code would lower it to 10% of gross with deductions for healthcare, non-executive pay, and retirement.
so the more the companies invest in their employee's the bigger their tax break is.

making it 10% of gross gives them huge reasons to invest heavily in their employee's.

I like it.

I'd also add a tax break for employee training, which has been pretty much eliminated in most corporations over the last 10-15 years. That should / needs to come back as well.

 

[ludin]

I like it.

I'd also add a tax break for employee training, which has been pretty much eliminated in most corporations over the last 10-15 years. That should / needs to come back as well.

I am actually in our training group at work. in fact that is part of my job.
we have a whole department about 20-30 people that are dedicated to technical
training and support.

 

[Aunt Spiker]

This Study Shows How Low Corporate America's Taxes Really Are
Two-thirds of U.S. corporations did not pay federal income tax. GAO Report


… “A new government report shows just how easy corporate America has it” …

Every year from 2006 to 2012, some two-thirds of U.S. corporations did not pay federal income tax, according to a Government Accountability Office study released on Wednesday. In 2012 alone, 42.5 percent of businesses that the GAO defines as large did not pay federal taxes, including 19.5 percent of big corporations that posted a profit.

Please what's all the noise about the US not having competitive corporate tax rates………….it is costing us jobs……….

Well I think it’s all a bunch of crap------------- Most of those damn corporations don’t pay a dime in taxes anyway…….and far as those jobs……………. what make’s yall think they give two toots about y’all………

... they took all the good jobs away and I damn sure there’s no plans to bring them jobs back............

... just because the tax rate was lowered from 25% to 15% …..


Are yall starting to get the picture?

So is anyone actually paying income tax these days - other than us self employed people?

 

[ludin]

So is anyone actually paying income tax these days - other than us self employed people?

50% of America and some small businesses and mid-range companies.
and people that have capital gains.

 

[faithful_servant]

That's only partially true. Income taxes on businesses fall on some combination of executives or employees, customers and/or owners, so it's inaccurate to conclude that in general all taxes are passed through to consumers. It's just not true and dozens of studies demonstrate it. The short answer on who pays business income taxes is "it depends."

ALL corporate income taxes are paid for by the consumer. Not one red cent comes from any other source than the consumer. Even when the business gets a gov't subsidy, that money comes from the consumer.