Corporate Tax Behavior So Bad Even Fortune Magazine Can’t Stomach It

[Engineer]

I think you just proved what I was saying. I was just throwing out numbers to make an analogy. So in reading this article corporations and rich folks pay very little in taxes. 12% is not that much.

By the way have you seen what is happening in Kansas right now?

The Governor there gave huge tax cuts to the corporations and companies and now they are in a real pickle. http://online.wsj.com/articles/sam-brownbacks-tax-cut-push-puts-kansas-out-on-its-own-1402448126

Giving these Big Corporations huge tax cuts, and huge subsidies are effectively killing our US economy. Tax cuts are actually causing people to become poorer.

We have reached the downside of the Laffer curve to the point of negative returns. I know that you cannot convince many of that as they believe that you can keep cutting and the cuts will lead to larger revenues (why I said that many believe as the limit of taxes approaches ZERO, the resulting increase in revenue goes to INFINITY).

Give them what they want...flat 18% (cut in half of current rate) and remove ALL the deductions/loopholes/etc. I'm sure, since they constantly quote the 35.X % rate, they will be delighted with a FLAT 18%, no?

 

[Oldgamer]

We have reached the downside of the Laffer curve to the point of negative returns. I know that you cannot convince many of that as they believe that you can keep cutting and the cuts will lead to larger revenues (why I said that many believe as the limit of taxes approaches ZERO, the resulting increase in revenue goes to INFINITY).

Give them what they want...flat 18% (cut in half of current rate) and remove ALL the deductions/loopholes/etc. I'm sure, since they constantly quote the 35.X % rate, they will be delighted with a FLAT 18%, no?

I have never agreed with a flat tax rate. I think just closing loop holes and stopping the absurd amount of corporate subsidies would be a good start. But with this Congress, nothing productive is really going to get done I am afraid. Hell, I honestly think that things have become so broken in Congress that we will never have what we had say 20-30 years ago in the way of a more compromising and workable bi-partisan system.

 

[Matt1970]

Lol! Another anti government type telling me how government works. Fact: subsidies come in many forms, some direct, some indirect, some via money, some have nothing to do with money.

I'll stop calling people fucking morons when they stop acting like fucking morons, you included.

Well, you think the subsides in question take money out of your pocket. You don't get much bigger of a "fucking moron" than that.

 

[alkemyst]

What's your point?

Let's say I form a partnership with a Canadian. We do 50% of our business in the U.S. and 50% in Canada. The U.S. taxes me on 100% of the profits (with a deduction for Canadian taxes paid), and taxes my partner on only 50%. That's stupid. Let Canada tax me on Canadian profits and the U.S. should tax me on U.S. profits.

Now let's say my Canadian partner thinks there is enough demand in Canada for our services that we should close up shop in the U.S. and focus there. I get permanent residency in Canada, sell my house, and move up there. The U.S. still taxes me on 100% of the profits, which are 100% in Canada, and my partner pays 0% in U.S. taxes. That's just stupid. Why is the U.S. so concerned with money earned outside the U.S.?

It's even worse when states get involved. That's why a bunch of athletes move to Florida. Live in Florida and they won't try to tax you on earnings from a golf tournament in California, but if you live in California they will try to tax you on earnings from a golf tournament in Florida.

My point is you don't know WTF you are talking about.

One we don't set the policies of foreign nations. At a certain threshold whether you are a citizen or corporation, you must pay taxes on foreign earnings including interest.

The California vs Florida thing is because states can set their own state tax policies. Florida doesn't have State Income Taxes.

Your point is absurd and irrelevant.

In regard to subsidies and loopholes, so often kickbacks are fed to the powers that be. Whether it be election contributions, free labor adding on a new additional to one's mansion, etc.

Tons of ways to take money from one hand and put it into another's under the radar for profit.

There is a huge reason people spend millions on running for a seat that makes them only around $100k a year.

 

[Engineer]

Since I've not read this, what kind of subsidies are we talking about here?

 

[alkemyst]

Since I've not read this, what kind of subsidies are we talking about here?

You shouldn't need to read it here....

This is a good start to research off of: http://en.wikipedia.org/wiki/Corporate_welfare

 

[Cozarkian]

My point is you don't know WTF you are talking about.

Feel free to point out a single statement I made that was demonstrably false (in other words, one of the statements based on facts, rather than purely my stated opinion on those facts.

Alternatively, feel free to admit you felt the need to sling an unsupported accusation to cover up the fact that you have no idea WTF I'm talking about because you don't understand economic analysis. Don't feel bad, lots of people don't.

Or, if you do actually understand it, feel free to apologize and start engaging in rational discussion based on actual analysis.

One we don't set the policies of foreign nations.

I never said we do.

At a certain threshold whether you are a citizen or corporation, you must pay taxes on foreign earnings including interest.

Why? Why do we need to tax a citizen or corporation on wages or business income earned in a foreign country? Why not just let that income be taxed at whatever rate the foreign country decides and leave it at that? My idea would remove the incentive for U.S. corporations to go to other countries by treating them on par with how we treat foreign corporations.

The California vs Florida thing is because states can set their own state tax policies. Florida doesn't have State Income Taxes.

Yes, and the U.S. v. Cayman Islands thing is because countries can set their own tax policies. The Cayman Islands don't have Income Tax.

Your point is absurd and irrelevant.

I can't stop you from thinking it is absurd, although you have yet to put together a single coherent statement of analysis to support that opinion. It is however, completely relevant as it goes to the heart of why companies choose to "renounce their U.S. citizenship" - because we have tax policies that discriminate against them for being U.S. corporations.

In regard to subsidies and loopholes, so often kickbacks are fed to the powers that be. Whether it be election contributions, free labor adding on a new additional to one's mansion, etc.

Then why not implement my change and remove the incentive for the loophole? It ought to be easier to adjust the income tax rate to reach the desired revenues than to leave in place a system that treats companies differently depending upon their willingness to take advantage of the ability to become a foreign corporation to eliminate tax on foreign income.

Tons of ways to take money from one hand and put it into another's under the radar for profit.

There is a huge reason people spend millions on running for a seat that makes them only around $100k a year.

Neither the status quo nor my proposed changes will stop that, but at least my proposed change would result in a simpler system with fewer loopholes.

 

[Zorba]

What's your point?

Let's say I form a partnership with a Canadian. We do 50% of our business in the U.S. and 50% in Canada. The U.S. taxes me on 100% of the profits (with a deduction for Canadian taxes paid), and taxes my partner on only 50%. That's stupid. Let Canada tax me on Canadian profits and the U.S. should tax me on U.S. profits.

Now let's say my Canadian partner thinks there is enough demand in Canada for our services that we should close up shop in the U.S. and focus there. I get permanent residency in Canada, sell my house, and move up there. The U.S. still taxes me on 100% of the profits, which are 100% in Canada, and my partner pays 0% in U.S. taxes. That's just stupid. Why is the U.S. so concerned with money earned outside the U.S.?

It's even worse when states get involved. That's why a bunch of athletes move to Florida. Live in Florida and they won't try to tax you on earnings from a golf tournament in California, but if you live in California they will try to tax you on earnings from a golf tournament in Florida.

You pay taxes to were you did the work first, then you pay taxes to where you live if where you live was higher than where you worked. In some states, like Ohio, that have city income taxes this can become very annoying.

So in your example, the athlete that lived in Florida, but played in Cal, would pay the full Cal tax at a rate that was based on his full annual income and Fl wouldn't get anything. If the athlete lived in Cal and played in MO, he would pay MO the full amount of taxes based with a rate based on his full annual earnings, then he would pay subject that amount from what he owed Cal.

Why are 42 states so concerned about money made outside of their state?

 

[alkemyst]

Feel free to point out a single statement I made that was demonstrably false (in other words, one of the statements based on facts, rather than purely my stated opinion on those facts.

Alternatively, feel free to admit you felt the need to sling an unsupported accusation to cover up the fact that you have no idea WTF I'm talking about because you don't understand economic analysis. Don't feel bad, lots of people don't.

Or, if you do actually understand it, feel free to apologize and start engaging in rational discussion based on actual analysis.



I never said we do.



Why? Why do we need to tax a citizen or corporation on wages or business income earned in a foreign country? Why not just let that income be taxed at whatever rate the foreign country decides and leave it at that? My idea would remove the incentive for U.S. corporations to go to other countries by treating them on par with how we treat foreign corporations.



Yes, and the U.S. v. Cayman Islands thing is because countries can set their own tax policies. The Cayman Islands don't have Income Tax.



I can't stop you from thinking it is absurd, although you have yet to put together a single coherent statement of analysis to support that opinion. It is however, completely relevant as it goes to the heart of why companies choose to "renounce their U.S. citizenship" - because we have tax policies that discriminate against them for being U.S. corporations.



Then why not implement my change and remove the incentive for the loophole? It ought to be easier to adjust the income tax rate to reach the desired revenues than to leave in place a system that treats companies differently depending upon their willingness to take advantage of the ability to become a foreign corporation to eliminate tax on foreign income.



Neither the status quo nor my proposed changes will stop that, but at least my proposed change would result in a simpler system with fewer loopholes.

If a corporation denounces their 'citizenship' they lose a lot of the benefits.

I don't think you understand what you are arguing.

 

[Cozarkian]

You pay taxes to were you did the work first, then you pay taxes to where you live if where you live was higher than where you worked. ...

Which is why I put that little part in brackets about the foreign tax deduction. I understand the mechanism. The result is that it is better to be a citizen of the country/state with a lower tax rate (assuming you have income earned in both countries/states).

Why are 42 states so concerned about money made outside of their state?

Bad legislators.

 

[Cozarkian]

If a corporation denounces their 'citizenship' they lose a lot of the benefits.

I don't think you understand what you are arguing.

One thing is for sure, I don't understand what you are arguing.

Are you suggesting the tax loophole complained about is okay, because despite the assertion in the bolded statement in the first post, the companies that desert our country do in fact lose a lot of benefits in exchange for the tax reduction?

 

[Anarchist420]

We have reached the downside of the Laffer curve to the point of negative returns. I know that you cannot convince many of that as they believe that you can keep cutting and the cuts will lead to larger revenues (why I said that many believe as the limit of taxes approaches ZERO, the resulting increase in revenue goes to INFINITY). Give them what they want...flat 18% (cut in half of current rate) and remove ALL the deductions/loopholes/etc. I'm sure, since they constantly quote the 35.X % rate, they will be delighted with a FLAT 18%, no?

18% is more than half of 35%. and deductions wont be used as much if the marginal rates are lower because they dont save as much at 18% as they do at >18%.

 

[WackyDan]

Is it possible to simply tariff all products sold in the use only on those countries in which US companies "reside in" for the sole purpose of evading taxes?

For example, it appears Ireland is one place these corporations are "moving" to. So why not impose a tariff on goods/services sold in the US by companies located in Ireland?

Do these tax havens exist in countries where a tariff would result in the other country counter tariffing US goods? Like china? I mean if these countries that are providing these tax havens don't or won't have a big impact on our exports, like china would, then why not make it not beneficial for US companies to "relocate" to a tax friendly country?

Pretty sure that would be in violation of various existing trade agreements.

 

[alkemyst]

One thing is for sure, I don't understand what you are arguing.

Are you suggesting the tax loophole complained about is okay, because despite the assertion in the bolded statement in the first post, the companies that desert our country do in fact lose a lot of benefits in exchange for the tax reduction?

If a company says it's no longer American, they should be at a much higher tax bracket and not get any benefits from our government unless there is a real proof they are giving much more back.

That's the shell game though.

 

[alkemyst]

Pretty sure that would be in violation of various existing trade agreements.

QFT...Americans want cheap stuff and that's the problem.

At first, there would be a resorting of shit and some to many would be affected.

In the end though things may get back to at least the 1950's.

This is a multi-level thing though. College should be harder, life should be harder.

We have to stop letting everyone win.

When that stops the masses will focus on our problems.

Until then they are just happy as a clam can will be non-reactive.

 

[shira]

Should we apply the same standards to the Clintons?

So you agree that we should close tax loopholes for both corporations and for the rich.

Glad to see you're with the liberals on this one.

 

[ivwshane]

Well, you think the subsides in question take money out of your pocket. You don't get much bigger of a "fucking moron" than that.

Really? You know where my tax dollars go? Are you aware of every government contract and the thousands of companies that benefit from them? Are you aware of all the policies the government makes that help businesses out? Are you aware of how many people are paid so low that they take advantage of the many social safety net programs the government provides?

Apparently you aren't aware of any of that otherwise you wouldn't double down on such a stupid statement. Next time you decide to say something stupid, read the article the OP posted, then read it again to make sure you understand what it's saying and then read the OP's comment, reread it to ensure understanding and if you still want to say something stupid, say it in the form of a question.

 

[ivwshane]

Pretty sure that would be in violation of various existing trade agreements.

I addressed that already.

Probably true but trade agreements can be changed and in these "tax haven" type countries we hold the advantage.

I'm just proposing a solution, I'm not saying I have one.

 

[Engineer]

18% is more than half of 35%. and deductions wont be used as much if the marginal rates are lower because they dont save as much at 18% as they do at >18%.

I should have said 'essentially half' for the more strict of the ATPN crowd. Sorry, I'll set it to 17.49999999999999999999%. Now, it's less than half. And just so you know, the articles I read stated something about 35.9% (not sure where that came from) so 18% is essentially half of that number. Notice I had 35.X% in the post that you quoted?

No deal unless deductions/loopholes are cut out. Otherwise, the effective rate of 12.6% (large corporations) drops even further.

 

[Matt1970]

Really? You know where my tax dollars go? Are you aware of every government contract and the thousands of companies that benefit from them? Are you aware of all the policies the government makes that help businesses out? Are you aware of how many people are paid so low that they take advantage of the many social safety net programs the government provides?

Apparently you aren't aware of any of that otherwise you wouldn't double down on such a stupid statement. Next time you decide to say something stupid, read the article the OP posted, then read it again to make sure you understand what it's saying and then read the OP's comment, reread it to ensure understanding and if you still want to say something stupid, say it in the form of a question.

Well thanks for once again confirming what I suspected.

 

[glenn1]

So you agree that we should close tax loopholes for both corporations and for the rich.

Glad to see you're with the liberals on this one.

Of course. But I doubt your side would go for it because you'd lose your own preferred subsidies, like for solar power, urban public transportation, unions, and many others.

 

[chucky2]

I'm not sure what the problem is OP. It has been decreed to us that people individually doing what is best for them, whether that be related to taxes or pollution, doesn't matter unless All are made to do it.

Should it not be the same for Corp? If they're doing what's best for them, doesn't that mean everything is OK with their approach?

 

[ivwshane]

Well thanks for once again confirming what I suspected.

That you are an idiot? Yes, that's been confirmed many times already.

 

[nehalem256]

I'm not sure what the problem is OP. It has been decreed to us that people individually doing what is best for them, whether that be related to taxes or pollution, doesn't matter unless All are made to do it.

Should it not be the same for Corp? If they're doing what's best for them, doesn't that mean everything is OK with their approach?

Even better. In the hobby lobby thread liberals were all upset about the idea of corporations having moral values, and claimed they should only do whatever maximizes shareholder value.

And here they are crying about them doing just that.:hmm:

 

[ivwshane]

I'm not sure what the problem is OP. It has been decreed to us that people individually doing what is best for them, whether that be related to taxes or pollution, doesn't matter unless All are made to do it.

Should it not be the same for Corp? If they're doing what's best for them, doesn't that mean everything is OK with their approach?

I think you missed the OP's point. I'll post it for you:

It's amazing how we all complain about the lady with the paid off mercedes benz whose family is jobless and trying to get food benefits to get by, and judge her, yet here we have these giant corporations taking billions in subsidies and corporate welfare, then doing all they can to hide their money from this country and not pay back into the country that helped their businesses grow.

Wow how our priorities are mixed up huh?