U.S. Companies Pay Just One-Third Of The Legal Tax Rate: GAO Study

[apdst]

Payroll taxes are a deductible expense in the calculation of income taxes owed, and I believe the gist of the OP relates to income taxes. I'm just trying to keep you out of the deep end...

Well, not all of them are, but most is, because otherwise it would be double taxation.

I'm just using the same logic that these same Libbos use to claim that poor people pay taxes, too. Bear with me.

 

[AlabamaPaul]

Well, not all of them are, but most is, because otherwise it would be double taxation.

I'm just using the same logic that these same Libbos use to claim that poor people pay taxes, too. Bear with me.

Okie dokie, I'm out of it...

 

[apdst]

That's the same dishonest tactic people were using to argue the poor paid a higher tax rate than the wealthy. Come on, now.

What's good for the goose is that gander.

 

[Republic Now!]

You can't force corporations to pay taxes on losses due to the cost of doing business. It's not fair and it doesn't work

If you have a business and you gross $100,000 this year and it costs you $75,000 to operate, do you think you should be allowed to deduct that $75,000 loss, or should you have to pay a $35,000 tax bill?

People would argue they should pay on profits, not income.

Anyways, I don't think corporations should pay taxes at all, but better for the tax code to be simple with a flat rate than this ridiculous complex mess which we have now.

 

[apdst]

People would argue they should pay on profits, not income.

Anyways, I don't think corporations should pay taxes at all, but better for the tax code to be simple with a flat rate than this ridiculous complex mess which we have now.

The mess we have now is complex for a reason; it helps the government more than the private sector. The complex tax code is what allows the government to recover 9 out of every ten dollars they audit.

 

[Redress]

How many of those businesses are inactive. i.e. don't conduct business, but are set up as dummy corporations. I have two LLC's in my name that haven't paid taxes since I created them. At the same time, neither of them have made a single dime, since I created them, either.

Don't blame the corporations for not paying taxes on positive profits; blame the IRS. Those companies may not have paid those taxes, yet, but they will.

I am not blaming any one for not paying taxes, I am pointing out that your claim that all businesses pay taxes was just something you made up.

 

[apdst]

I am not blaming any one for not paying taxes, I am pointing out that your claim that all businesses pay taxes was just something you made up.

And, those businesses will pay those taxes, eventually; along with the pirate level interest rates and penalties, too.

 

[Redress]

And, those businesses will pay those taxes, eventually; along with the pirate level interest rates and penalties, too.

So we are right back to making **** up again...

 

[apdst]

So we are right back to making **** up again...

What am I making up? Are you now claiming that the IRS doesn't charge interest and penalties?

 

[Redress]

What am I making up? Are you now claiming that the IRS doesn't charge interest and penalties?

No, I am claiming you have not read the sources, don't know the information presented, and as such are saying stupid stuff that is already refuted by those sources. When called on making **** up, best not to double down on that same stupid crap.

 

[Thoreau72]

What deductions do large corporatiobs get that small corporations aren't allowed under the tax code?

I did not mention deductions. I'm no accountant, but I understand the bigger picture.

Political clout, is what I mentioned, and in-house attorneys and accountants. Political clout means they have a very large role in writing the laws that effect them. Subsidies and tax breaks are examples, not deductions.

 

[apdst]

I did not mention deductions. I'm no accountant, but I understand the bigger picture.

Political clout, is what I mentioned, and in-house attorneys and accountants. Political clout means they have a very large role in writing the laws that effect them. Subsidies and tax breaks are examples, not deductions.

A businesses size has nothing to do with getting subsidies and tax breaks.

 

[Thoreau72]

A businesses size has nothing to do with getting subsidies and tax breaks.

Correct. It's political connections have everything to do with its getting subsidies, tax breaks, and other favorably written statutes.

 

[apdst]

Correct. It's political connections have everything to do with its getting subsidies, tax breaks, and other favorably written statutes.

An industry, but not a single business, perhaps.

 

[Thoreau72]

An industry, but not a single business, perhaps.

Corporations, and organizations of corporations. Is that a cabal?

Get David Cay Johnston's book, The Fine Print. It's very well researched and very well documented.

 

[washunut]

Yes, and that was kinda the point. The OP source says this(U.S. Companies Pay Just One-Third Of The Legal Tax Rate: GAO Study):



You said this:



Now, one of you is wrong, and the OP source is about a million times more credible, which is why I asked for some evidence to back up your claim.

First of all no one pays an ETR that is equal to the bracket they are in, due to a progressive tax system. Next, we just came out of the deep recession (some think we are still in it) so companies may have had NOL tax carryforwards into 2010. Also, we ( the administration and congress) put special tax credit on capital spending and R&D to stimulate spending. So unless that was a bad thing it explains another reason for the gap. As to global companies, you need to look at their ETR versus that country's tax bracket, not ours or you compare apples and oranges. Not sure that the article picked up payroll taxes where the company picks up the other half. If people want to look at that and say that the individuals who pay no income taxes in the U.S. but pay payroll taxes, then this should be included in the corporate number.

I also find it humorous that so many OP on this site take a sliver of truth and then try to make a broader argument that they is not really true, but most people are not close enough to the subject to passionately debate. Sort of like how we know if a candidate is good or bad through 30 second commercials.

 

[Redress]

First of all no one pays an ETR that is equal to the bracket they are in, due to a progressive tax system. Next, we just came out of the deep recession (some think we are still in it) so companies may have had NOL tax carryforwards into 2010. Also, we ( the administration and congress) put special tax credit on capital spending and R&D to stimulate spending. So unless that was a bad thing it explains another reason for the gap. As to global companies, you need to look at their ETR versus that country's tax bracket, not ours or you compare apples and oranges. Not sure that the article picked up payroll taxes where the company picks up the other half. If people want to look at that and say that the individuals who pay no income taxes in the U.S. but pay payroll taxes, then this should be included in the corporate number.

I also find it humorous that so many OP on this site take a sliver of truth and then try to make a broader argument that they is not really true, but most people are not close enough to the subject to passionately debate. Sort of like how we know if a candidate is good or bad through 30 second commercials.

Why are you arguing against things I never said, and doing it by saying things I did say?

 

[washunut]

Why are you arguing against things I never said, and doing it by saying things I did say?

Was not arguing just pointing out why using one simplistic number is meaningless and taken out of context. If you agree, great!

 

[Redress]

Was not arguing just pointing out why using one simplistic number is meaningless and taken out of context. If you agree, great!

Good thing I did not do that. I simply proved a poster wrong because he made stuff up. That you failed to follow the conversation and understand what happened is not my fault.

 

[washunut]

Good thing I did not do that. I simply proved a poster wrong because he made stuff up. That you failed to follow the conversation and understand what happened is not my fault.

Relax it is a holiday. Don't be so angry.

 

[iguanaman]

You can't force corporations to pay taxes on losses due to the cost of doing business. It's not fair and it doesn't work

If you have a business and you gross $100,000 this year and it costs you $75,000 to operate, do you think you should be allowed to deduct that $75,000 loss, or should you have to pay a $35,000 tax bill?

Apparently you can't force corporations to pay taxes on profits either. The more profits they make the less they have been paying.

 

[upsideguy]

We have one of the highest corporate tax rates in the world, it's bad for business. The real joke is someone bitching who is totally unaffected one way or the other by this.

Except very, very few companies actually pay tax at the 35% marginal rate. In fact, corporations are paying less and less and less of the total burden, even though profits are at all time highs (see chart)



Multi-nationals hide behind transfer pricing schemes that allow for off-shoring book profits even though the actual profits are created domestically. They also have tons of schemes that allow for tax deferment (book-tax differences), including the ability to write-off capital assets in the year acquired, rather than depreciating them over their useful lives as is required by generally accepted accounting principles.

The real "victims" of high marginal corporate rates are very successful domestic corporations that do not use capital and do not have operations outside of the US.


That all said, I would be in-favor of lowering the marginal rate to 25% with much much tighter rules on transfer pricing and curtailment of Section 170 deductions (writing off of capital assets at date of acquisition).... of course, large companies would never go for such a change, as it might mean that actually have to pay tax.

 

[washunut]

Except very, very few companies actually pay tax at the 35% marginal rate. In fact, corporations are paying less and less and less of the total burden, even though profits are at all time highs (see chart)

View attachment 67149854

Multi-nationals hide behind transfer pricing schemes that allow for off-shoring book profits even though the actual profits are created domestically. They also have tons of schemes that allow for tax deferment, including the ability to write-off capital assets in the year acquired, rather than depreciating them over their useful lives as is required by generally accepted accounting principles.

The real "victims" of high marginal corporate rates are very successful domestic corporations that do not use capital and do not have operations outside of the US.


That all said, I would be in-favor of lowering the marginal rate to 25% with much much tighter rules on transfer pricing and curtailment of Section 170 deductions (writing off of capital assets at date of acquisition).... of course, large companies would never go for such a change, as it might mean that actually have to pay tax.

So corporations are evil because they hide behind the law!!! If you don't like the law elect politicians who will change it.

As Obama has oft stated: Elections have consequences.

 

[upsideguy]

So corporations are evil because they hide behind the law!!!

It often amazes me what kind of conclusions people draw from argument. People should read what is written and not ascribe their own prejudices to what is said.

I, for one, made no statement about "evil corporations" or suggested they are hiding behind a law. I was showing a mega trend (corporations are paying less of the tax bill) AND telling the read why that is so (the current tax code). I made the assertion that the current tax law is needs reformation and the rate needs to be lowered. I said BOTH need to happen, but they will not as the most powerful corporations would rather have high rates and favorable accounting than lower rates.

People have the right to organize their affairs to pay the minimum tax consistent with the law. There is even a SCOTUS decision that supports that notion. What I advocate is changes to the law.

If you don't like the law elect politicians who will change it.

As Obama has oft stated: Elections have consequences.

With all do respect, a rather silly statement on a political discussion board. You could write this as a response to each and every argument on DP.... which would make DP pointless as anyone's opinion could merely be answered with "if you don't like it..."

Would you like to try a less emotional, more productive response?

 

[washunut]

It often amazes me what kind of conclusions people draw from argument. People should read what is written and not ascribe their own prejudices to what is said.

I, for one, made no statement about "evil corporations" or suggested they are hiding behind a law. I was showing a mega trend (corporations are paying less of the tax bill) AND telling the read why that is so (the current tax code). I made the assertion that the current tax law is needs reformation and the rate needs to be lowered. I said BOTH need to happen, but they will not as the most powerful corporations would rather have high rates and favorable accounting than lower rates.

People have the right to organize their affairs to pay the minimum tax consistent with the law. There is even a SCOTUS decision that supports that notion. What I advocate is changes to the law.



With all do respect, a rather silly statement on a political discussion board. You could write this as a response to each and every argument on DP.... which would make DP pointless as anyone's opinion could merely be answered with "if you don't like it..."

Would you like to try a less emotional, more productive response?

Try re-reading what you wrote, for starters. You say that corporations are hiding behind transfer pricing what you call schemes and asset write offs that are legal under the current tax system. I may have enhanced what you wrote using the word evil, but the implication in my view is clearly there.

Many people think we need corporate tax reform. Whatever shape it takes it will help some companies and hurt others.

So rather than complain that corporations are doing what most Americans do, which is to pay as little tax as is legally required, state how you would fix the problem.

As an example what are your complaints in regards to how transfer pricing is calculated, and if so how would you change it. You probably know that if the company is on any size the IRS has gone over how this is calculated.