Matt Wuerker for February 03, 2015

Ya! We have the highest corporate taxes in the world so even higher taxes should help the economy……

Our patriotic multinational corporations in action.

“Office found that profitable U.S. firms filing a Schedule M-3 paid federal taxes of 13% of pretax worldwide income. That’s well below the top 35% statutory rate” How many middle class families pay 13%? I bet most are paying much more that that. Now they want to cut corporate taxes even more? Clearly the Republicans are out to make sure the 1% grabs all of the money.

Wow, so much vitriol for corporations. They are in business to MAKE money. We shouldn’t be surprised that they use every tool (including the tax code) to do that. Individuals use the code to their advantage all the time (mortgage tax deduction, IRAs, the list goes on). This url

http://www.savingforcollege.com/tutorial101/federal_tax_incentives_to_education.php

describes 9 programs that let individuals reduce taxes based on college costs. Several give tax free status to account earnings. Others are a tax credit, just like the big boy corporations get! Drive a Prius? There’s a $7500 tax credit for each one. Where’s that $7500 you got come from. Me and all the other folks who pay taxes.Rad-ish shows signs of getting it when he says every tax dollar corporations has to be made up either in taxes paid by others or in reduced spending. Well consider this: every tax dollar paid by a corporation is a dollar of cost. If a company is to make a profit and stay in business income must exceed cost and income comes from the price of the product to the consumer. So eventually every cost is passed on to you and me. EVERY tax dollar collected by government comes from us whether we pay it directly or through an intermediary (corporations).

Knowing how our system works, I’m guessing it is the Mom and Pops that pay the 35 percent. The one percenters of the business community pay nothing at all.

Cute characterization, but its not like they’re shipping American profits offshore, what they’re doing is not bring their cash BACK to a nation with the most onerous corporate tax burden in the world by a factor of three.

Simple, for any other nation if you do business overseas you pay the corporate income tax rate (about 15% top in the world) and then to repatriate it to the US you pay again as if the entire thing were income and you paid no taxes.

In every OTHER nation in the world the amount you paid in foreign income taxes is deducted from the income taxes you owe in your home country (sometimes to a minimum of 5%), so if you paid 5% and your nations tax rate is 10% you pay 5% where you did the business and 5% where your HQ is, of if its 10% where you did business and 10% locally you pay the 10% local tax and the rest comes home tax free . . . .

As you can see there is TREMENDOUS tax incentive for companies to move their headquarters overseas to places that have sane tax codes and away from a nation where the majority of their rewards of their productivity are taken by one state or another that did NOTHING to justify it as compared to changing ONE little line in the company charter and paying a FRACTION of the tax.

I don’t think its our business people who are cheating as much as our government, for everyone knows that corporations are owned by people who must ALSO pay taxes on what few earnings trickle down to them. Further one of those companies, Apple, was in net the ENTIRE expansion of our economy in the last quarter of last year . . . And you don’t understand why they don’t want to run their money through more greedy government fingers and thus use stock buybacks to enhance shareholder value instead of triple taxed dividends.

How many millions of middle class taxpayers paid a higher percentage than Mitt Romney did in the one tax return he (finally) made public? I know I did. Marginal rates are pretty meaningless unless you know what the actual rate was after all the tax dodges (built into the tax code by, let’s face it, bribery).

Two objections to the cartoon seem to be surfacing here: one is that corporate taxes are too high. As many posters point out correctly, the fact that published rates are high does not mean anyone is paying those rates.

All Congress members seem to be willing to close “tax loopholes” that they never specify. There’s a bunch of them to look at in terms of corporate taxes.

The other is that if corporations have to pay taxes, they will have to raise prices. And I have two answers to that: both equally valid in my opinion.

The first is that they don’t have to raise prices, for the most part. I have a friend who started the chain “Everything’s $1”. I asked him how he could make a profit selling earrings at $1 per pair. He told me that if he could buy them for 2 cents a pair, he could make a profit. And if he had to pay 3 cents? Chances are he could still make a profit even if he didn’t raise his prices to $1.01.

Second is that we had a reasonable corporate tax rate, with far fewer loopholes, through the 1970s, and we managed to keep US corporations in the US somehow. Starting in the 1980s, the tax law was continually larded with more and more tax breaks for corporations. One might call them “loopholes”. And now there is hardly anyone who is “middle class” anymore. Coincidence? I am not an economist, but when tax law is changed and one group benefits greatly while another suffers greatly, I recommend reviewing those tax law changes. Not that that is likely to ever happen.