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Should the federal government lower corporate-tax rates?
More big U.S. companies are reincorporating abroad despite a 2004 federal law that sought to curb the practice. One big reason: Taxes. Companies cite various reasons for moving, including expanding their operations and their geographic reach. But tax bills remain a primary concern. A few cite worries that U.S. taxes will rise in the future, especially if Washington revamps the tax code next year to shrink the federal budget deficit. What do you think? Are taxes driving U.S. companies overseas?
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Corporations don’t pay taxes, people do. When corporations are taxes the small shareholders pay a higher tax rate than the rich and big boys. That’s why people should be taxed at their rate rather than corporations.
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Remove all subsidies and loopholes from the tax code, make dividends deductible at the corporate side (still taxed by the recipient), then drop the rate to whatever the current effective rate is now.
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From an efficiency standpoint, if the goal of increasing corporate taxes is to raise revenue through taxing the wealthiest among us, it is not the right way to go about it. Narrowly based taxes such as corporate taxes attack the average shareholders and consumers too. The most efficient method is clearly to more broadly tax via income brackets, focusing taxes at those who can afford it. Of course any discussions on such methods would be unpopular, so even if corporate taxes were eliminated and substituted toward income taxes, the uproar would be phenomenal. Corporations aren't people, they shouldn't be taxed, and they shouldn't be able to vote (i.e. via donations).
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Let me dream a little dream...
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1. The GOP takes over Congress with veto-proof majorities.
2. They then set a flat at 5% and eliminate all other taxes.
3. Balance the budget over 5 years
4. Eliminate the minimum wage
5. Pressure the Fed to adopt a sound money policy
The resulting economic boom would not only catapult our standard of living into the stratosphere but it would generate an unimaginably huge gusher of tax revenue into the Treasury.
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Bwahahaha!
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You are clearly far too sane and intelligent to serve in our Congress.
Those things would eliminate a congressperson's ability to cadge huge donations by being able to give preferential treatment to people and corporations willing to pay for special treatment.
In addition, elimination of the minimum wage would be demagogued as an attempt to starve the poor, minorities, the disabled, etc. etc. The fact that it would help many people now unemployed to get a job would end up completely outside the bounds of the argument.
Forcing the Fed to adopt a "sound money policy" would cut back on Congress's ability to spend well beyond its budgeted amounts. Note that the dollar changed not at all in value for 120 years until the Federal Reserve Act of 1913. Since then it has lost 98% of its value.
However, IF all these things were done, you are correct that it would cause an economic boom. But socialism has never caused an economic boom, so liberals must fight such things at all times. Nixon could go to China, but Obama will never go to low taxes and balanced budgets.
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Curtis, you forgot to add "criminalize unions and all other forms of labor cartels and monopolies". That right there would be a huge spur for the economy.
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Actually Corporations made the middle class, Unions just road on their backs.
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Nice dream. Might not have the effects you want.
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If tax rates are really really low across the board will people invest their money for a little better percent returns capital investments make compared to government securities and bank accounts - when with the latter the invested money is safe and in capital formation all the money is risked?
They might but they never have. So what to do?
Eliminate the Corporate Income Tax and shift the advantages of operating expense deductions to the investors.
People may invest any part of their earnings as capital investment and the income invested is not taxed that year. When the investment ends the amounts move to the taxable income line and the investor gets their share of operating expense to deduct from taxable income.
GDP growth was close to 16% when Eisenhower was President because his taxes encouraged pretax investment decisions. He imposed a two level tax - 20% on incomes up to 400,000 and 96% on anything above. But the person could instead of paying the tax invest the money which was later taxes at 8% capital gains for both the amount earned and the amount invested.
No one took more than 400,000 in wages and took the amounts above in investments.
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Total income = about $10 trillion.
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5% = $500 billion
2013 budget = $2 trillion
Try again
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Chris, But my "little" dream is a win-win. The economy booms making everybody insanely wealthy and the Congress gets a gusher of money to spend on its pet projects.
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Are you trying to tell us that Congress has something else up its sleeve?
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@joseph,
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You are correct. The republicans hate Obama to a degree that is not rational. Continuing to do so will have disastrous affects on the country. I don't agree with everything that Obama wants and surely I don't like the lack of reducing the long term deficit. But the infantile people we have in congress are making the situation worse.
After 8 years of the disaster known as the George Bush administration we need progressive and creative action to get this country back working again. Not a bunch of folks obsessed with abortion, and guns and insuring that our first black president is a failure.
It reminds me of the employee that is so intent on making a fellow employee look bad that during the effort they make themselves look extremely foolish.
A case in point is the recent gun vote when Ayotte could not even explain why she didn't vote for the bill. Well the reason was stated by Sen. Pat Toomey, R-Pa., " They didn't vote for the bill because it would appear like a win for Obama". Can it get any more childish?
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Remove all Corporate Tax Loopholes. And provide a “tax exempt status” to the corporation. Than take corporate profit. Subtract the operating expense and pass the profits down as personal income. Divide the profit among the Board of Directors and the C.E.O.’s. As the generators! And let them pay the taxes upon the profit attributed to the corporation through Personal Income Tax. Hocus Pocus! “A tax free corporation”! And tax them at the same rate the rest of us pay. No extra or special tax write-offs!! LOL
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Taxation is theft, and therefore unacceptable. Any decent man or woman knows to oppose it absolutely. Nevermind the fact that "society" is "better-off" when there are no taxes, which are subjective terms and statements anyway, thus meaningless and junior to the universal scientific validity of the non-aggression principle. The goal of any decent man is not to engineer society in his particular way. It is to maintain the natural rights of man, and what follows follows, because that is the only morally acceptable state of affairs to a clear-thinking mind. You say otherwise, you are a government-conditioned and rudderless sheep. You say otherwise, you enable evil to flourish by means of the State whose existence, in one way or another, you implicitly support. Don't be that guy.
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