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The Obama Watch
Obama’s Corporate Tax Hike
The cynical madness continues.
Q: When can you be sure President Barack Obama is proposing a
tax increase?
A: When you hear him propose a tax cut.
On Wednesday, the president announced his plans to modify the U.S. tax code by cutting the corporate income tax rate from 35 percent to 28 percent. Our current rate is the second-highest in the OECD, and about to be the highest with Japan cutting its rate in April. Currently, our corporations’ average total income tax rate, including the typical state tax rate of just over 4 percent, gives us the highest corporate taxes in the industrialized world, above 39 percent.
If cutting the corporate income tax rate were all the president was trying to do, one might call it a good start, but only a start since the average total corporate tax rate of over 32 percent for American corporations will still be far above the OECD average of 25 percent.
As the American Enterprise Institute’s James Pethokoukis reminds us, the OECD says that of all major types of taxes, “corporate taxes are found to be most harmful for growth.”
High corporate tax rates lead to reductions in capital formation and foreign direct investment, particularly in more profitable companies and industries. High taxes are associated with “re-allocation of resources towards possibly less productive sectors.” And high taxes favor companies that use debt over companies that raise money through equity (stock) offerings — the latter group including most startups and technology companies where a majority of America’s employment growth is to be found.
Unfortunately, but not surprisingly for a man who is unable to propose serious spending cuts other than at the Department of Defense, reducing a tax rate is not all Obama is proposing.
The administration’s plan also includes eliminating a wide (but as yet unspecified) range of loopholes and deductions. Eliminating loopholes and deductions to make reducing rates a revenue-neutral but less economy-distorting endeavor is a good, indeed indispensable, part of sane tax policy.
When we see the details, however, expect the closed loopholes to target oil and other non-“green” energy companies with particular aggressiveness, meaning higher gasoline and home heating oil prices for all Americans. After all, Obama needs to pay for his increasing the subsidy for the Chevy Volt from $7,500 to $10,000 per vehicle — for a car whose average buyer has an annual income of $170,000. Now that’s income redistribution!
Obama’s new tax plan is not aiming to be revenue-neutral; instead it is intended to help reduce the deficit, which is to say it is intended to be a net tax increase of the most economically-damaging sort. And that brings us to the heart of the Obama proposal: a shiny new tax on American companies’ foreign-earned (and not repatriated) profits.
This “minimum tax on foreign earnings” is the core of Obama’s tax hike disguised as a tax cut. This is economic cretinism, or more accurately economic masochism, writ large. The administration suggests that taxing foreign earnings will stop “giving companies an incentive to locate production overseas or engage in accounting games to shift profits abroad.” But, typical of those who live in a Keynesian statically-modeled world, Obama and Treasury Secretary Geithner forget that corporations, like people, respond to incentives, and perhaps even more so.
For example, Tyco International reincorporated in Bermuda in 1997, as did Ingersoll-Rand and Foster Wheeler four years later. Cooper Industries and Nabors Industries joined them in shorts and long socks in 2002.
In 2004, a proposal was brought to Tyco shareholders arguing that they should reincorporate in the U.S. because lesser shareholder protection in Bermuda was a negative for the stock price. Shareholders rejected the measure emphatically, with 93 percent voting against moving back to the tax-hungry United States. In 2009, Tyco moved its headquarters from Bermuda to Switzerland where it will pay a 16 percent total corporate tax rate – scheduled to decline to just under 14.5 percent next year. Foster Wheeler also reincorporated in Switzerland in 2009.
A 2005 report of the Joint Economic Committee of Congress suggests that “the shifting of profits out of the United States has been estimated to total about $75 billion a year and to cost the U.S. Treasury $10 billion or more per year.”
Politicians of all stripes have demonized “corporate inversions,” whereby a company’s official address is offshore but most of its management team and company operations remain in the U.S. Such companies are called “tax dodgers,” “ex-patriots,” and worse. Expect similar divide-and-conquer rhetoric from Obama and Geithner as they market their destructive, ill-conceived plan.
A company’s fiduciary responsibility is not to the U.S. Treasury; it is to shareholders who, it should be noted, pay taxes on capital gains and dividends earned through investment in the company’s shares. Since, all else being equal, lower corporate taxes should lead to higher stock prices and higher dividend payouts, much of the corporate tax revenue lost to the Treasury is recovered through individual income tax payments. This impact is magnified by lower corporate taxes also being associated with higher wages, about which more in a moment.
About the Author
Ross Kaminsky is a self-employed trader and investor and is a senior fellow of the Heartland Institute. He is the host of The Ross Kaminsky Show on Denver’s NewsRadio 850 KOA at 11 AM on most Sundays. You can reach Ross by e-mail at rossputin(at)rossputin(dot)com.
Letter to the Editor View all comments (124) | Leave a comment
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benny havens| 2.23.12 @ 6:46AM
Lies, deception, conniving, backroom deals, favorites and endless vacations are what this president is all about.
antidote| 2.23.12 @ 2:06PM
@benny - W hasn't been president for 3 years.
Teaghan| 2.23.12 @ 3:23PM
Bush was NONE of these things. You just can't admit that Barry is the most criminal president to come down the pike ever.
Dirty criminals from Chi-town.
Jon B| 2.24.12 @ 3:07PM
George W BU$H is the man who actually threw out military votes in Florida, in Gore counties, just before he sued America to throw out 180,000 unexamined ballots by having his dad's buddies violate the equal protection clause of 14th amendment of the Constitution. (and you though he wasn't a criminal) Never mind that BU$H set up the Pentagon office that created the lies to invade Iraq by bypassing all the rest of our intelligence agencies, and lied about that too.
Jon b| 2.23.12 @ 3:03PM
America's ACTUAL EFFECTIVE CORPORATE TAX RATE (What US corporations REALLY pay in taxes) is one of the LOWEST in the WORLD. So you're correct if you mean that the author of this article is lying and deceiving by omitting the truth.
Trinacria| 2.23.12 @ 4:17PM
Jon, you ignorant slut. Do your homework, sport - it makes for a far better argument when the position you're advocating can be supported by facts. And by the way, if the effective tax rate were among the lowest in the world, why the rush by companies like Tyco and IR to incorporate elsewhere - surely you aren't suggesting that they were eager to pay MORE?
Finally, accusing Mr. Kaminsky of lying is a rather serious accusation - perhaps you could cite a single sentence in the article that is not factually correct.
skip| 2.23.12 @ 6:55PM
For the record, I second what Trinacria said (whoa - deja vu - did I already say that?)...
Trinacria| 2.23.12 @ 7:24PM
I know you are but what am I?
Jon B| 2.24.12 @ 2:32PM
Thanks Tri, I appreciate your brain dead reply. Corporations move over seas because Reagan deregulated monopoly laws that allowed multi-National corporations to buy up smaller US businesses and ship jobs where the wages are the lowest. Thanks for reminding me of that very important fact. I also meant to say the lowest corporate tax rates in the industrialized world, by the way.
skip| 2.23.12 @ 5:13PM
Jon, you pompous ass. Do some due diligence, slugger - it makes for a far superior contention when the viewpoint you're presenting can be based on a shred of truth and reality. And by the way, if the nominal tax rate no matter where it ranks globally is ultimately paid by consumers, why the pretense that companies pay corporate taxes at all - certainly you aren't implying corporations do not pass along their tax burden into the product price meaning the the consumer ends up paying MORE?
Lastly, accusing the author of the article of lying is a somewhat grave allegation - perhaps you could cite a single sentence in the article that is not factually correct.
Trinacria| 2.23.12 @ 6:41PM
Yeah, what skip said (is there an echo in here?)...
skip| 2.23.12 @ 8:04PM
What am I but incredibly intellectually honest devastatingly handsome superhumanly strong but mostly meekly humble that you know I am that I now suspect you are as you know and I know I am that deja vu you know and I know I am as I know and you know we deja vu both are again?
DRed| 2.23.12 @ 9:36PM
If you look at the data here it looks like our effective corporate tax rate is basically middle of the pack
http://stats.oecd.org/Index.aspx?DataSetCode=REV
skip| 2.23.12 @ 11:34PM
~
1)
Good grief.
~
2)
The U.S. effective corporate tax rate has nothing to do with my statement.
non sequitur:
a reply that no relevance to to what preceded it
" . . . if the nominal tax rate no matter where it ranks globally is ultimately paid by consumers . . . "
~
3)
Your link has nothing to do with the U.S. corporate tax rate.
Your link does not show the corporate tax rates of OECD nations.
~
4)
The U.S. corporate tax rate is second highest among OECD nations.
www.taxfoundation.org/publications/show/24973.html
See Table 1 of this link.
~
5)
Effective April 1 the U.S. corporate tax rate will be the highest among OECD nations.
www.taxfoundation.org/blog/show/27989.html
~
6)
The archives of American Spectator now includes these posts.
~
7)
Good grief.
~
DRed| 2.24.12 @ 12:22AM
Well, no, it doesn't show the rates, it shows how much corporations actually pay in taxes as a percentage of gdp. It's a way of comparing effective tax rates by country. It's pointless to just look at our statutory tax rate because it's so riddled with loopholes and exemptions.
skip| 2.24.12 @ 2:58AM
~
1)
Good grief.
~
2)
Your link does not show the corporate tax rate of the U.S.
Your link does not show the corporate tax rates of OECD nations.
~
3)
Your link does not show the corporate taxes paid of the U.S.
Your link does not show the corporate taxes paid of OECD nations.
~
4)
It's pointless to have a discussion with a person who continually makes statements that have no relevance in response to preceding statements made.
~
5)
It's pointless to have a discussion of basic economic principles with a person who demonstrates no comprehension of basic economic principles.
~
6)
The archives of American Spectator now includes these posts.
~
7) Good grief.
~
skip| 2.24.12 @ 3:04PM
1)
Hope for change has resulted in this post, likely to be a pointless exercise. Good grief.
2)
The link above, 'stats.oecd.org', shows total tax revenue as a percentage of gross domestic product.
In other words, the link shows total federal revenue as a percentage of total economic output.
3)
The George W. Bush tax cuts occurred in 2001 and in 2002 and in 2003.
Per 'whitehouse.gov/omb/':
total federal revenue in 2003 was $1.782314 trillion
total federal revenue in 2007 was $2.567985 trillion
After tax cuts in 2001 and 2002 and 2003 total federal revenue increased more than 44% from 2003 to 2007.
4)
Consider the effect a 44% increase in total federal revenue after taxes are decreased would have on the percentage of total federal revenue as a percentage of total economic output per the 'stats.oecd.org' link.
5)
The U.S. corporate tax rate is the 2nd highest of OECD nations.
The U.S. corporate tax rate will be the highest of OECD nations effective April 1.
6)
Consider the effect a reduction of U.S. corporate tax rates would have on the overall amount of total federal revenue.
Consider the effect a reduction of U.S. corporate tax rates would have on the overall amount of total economic output.
Consider the effect a reduction of U.S. corporate tax rates would have on the total federal tax revenue as a percentage of overall economic output per the 'stats.oecd.org' link.
7)
Consider the difference between what is effectively pointless emotional prattle and what is effectively meaningful reason and experience.
DRed| 2.24.12 @ 5:51PM
Well, if you look at what American corporations pay, as a percentage of gdp, compared to similar countries with lower tax rates you see our corporations pay, on aggregate, about the same amount of money. The problem, as I see it, Skip, is that our corporate tax rate manages to be both too high and too low. For companies with no political pull it's crushingly high. For companies willing to spend money to lobby the government, it's often much, much lower. That (broadly) is going to punish smaller, newer corporations more than already established ones. That's why I think we should lower corporate taxes and eliminate loopholes.
skip| 2.24.12 @ 6:49PM
Good Grief.
Instead of more unintelligent and dishonest emotional prattle devoid of reason and experience, you could instead provide the following in order to intelligently and honestly determine the effects of U.S. corporate tax policy based on reason and experience devoid of emotional prattle:
1)
amount of tax paid by U.S. corporations
2)
amount of tax paid by U.S. corporations as a percentage of U.S. gross domestic product
3)
amount of taxes paid by corporations of each OECD nation
4)
amount of tax paid by corporations of each OECD nation as a percentage of each OECD nation's gross domestic product
5)
U.S. corporate tax rates by industry
jan| 2.27.12 @ 7:45PM
Corporation do not pay tax, where do you think they get the money to pay " corporate taxes"???
Jon B| 2.24.12 @ 2:35PM
Why do Republicans turn so quickly to insults and lies to back up their beliefs, whether true or not? Because even they don't believe in the shit they spew forth. A mature person knows, but people who are like to be treated like babies respond with anger and insults.
skip| 2.24.12 @ 3:18PM
Ahem.
Don't look up.
One might not help but notice your post does not cite a single sentence in the article that is not factually correct.
Why do all liberals without exception unintelligently and dishonestly emotionally prattle devoid of reason and experience?
Idiot.
Jon B| 2.24.12 @ 4:10PM
The entire article is based on the absolutely false premise that American corporations pay high tax rates. Please try a comprehension class before commenting again... with a lie. So you can divert from the fact that you believe in the Big Lie presented in the article.
skip| 2.24.12 @ 4:45PM
~
reason and experience:
intellectually honest wisdom of reality derived with logical, rational, analytical justification, based on the awareness of accumulated knowledge understood through observations of life and the world, used to make persuasive judgments with good cause
emotional prattle:
intellectually dishonest meaningless nonsense lacking reality derived with illogical, irrational, unanalytical explanation, based on the ignorance of arbitrary feelings understood through observations of life and the world, used to make foolish misjudgments with poor effect
~
The political, social, and economic debate between conservatives and liberals in this country is not a debate between more or less equal sides with honest differences in opinion disagreeing over details; liberals only offer unintelligent and dishonest emotional prattle devoid of reason and experience not only politically, socially and economically but religiously and scientifically as well.
~
One cannot help but notice your post does not cite a single fact to intelligently and honestly support your position with reason and experience devoid of emotional prattle; and that your post does not cite a single sentence in the article that is not factually correct.
Why are you, like every other liberal without exception, only offering unintelligent and dishonest emotional prattle devoid of reason and experience?
One might intelligently and honestly conclude, based on reason and experience devoid of emotional prattle, that you are just another pathetic and despicable unintelligent and dishonest liberal idiot.
Fredrick Ward| 2.24.12 @ 3:47PM
Why do liberals never use facts to back up their claims? Maybe because there are no real facts to backup their claims.
Jon B| 2.24.12 @ 4:16PM
Why do you ignore the main points of an issue to lie about Liberals? Because you have nothing behind your false belief system per chance?
Speedypete| 2.23.12 @ 6:43PM
Sorry Jon b. We have factories in 5 countries and we do the books for 3 out of 5. Maybe you are thinking Kenya? We have the year end audit team here and they have the tax recording information for 43 countries. From what I heard a year ago Japan was higher in 2009 but have been way under us since. Are you an accounting or finance degree?
Jon B| 2.24.12 @ 2:37PM
Actual effective tax rate, what corporations really pay, is completely different than what they're supposed to pay. America leads when it comes to tax loopholes for the top corporations. Study effective tax rates and see what you come up. No reason to apologize for you're inaccurate figures.
jan| 2.24.12 @ 3:15PM
Ask your self a REAL SIMPLE QUESTION,
where do corporations get all the money they pay in taxes????
Jon B| 2.24.12 @ 4:12PM
When does the economy work best? When low income people have more money because they buy things because they actually need them. Why does the top have all the money and are doing so well while everyone else is worse off or stagnated? Because they use the money they steal by underpaying their labor force to buy politicians to keep wages an benefits low for their employees. Why do CEOs now make 400 times more than the average worker when it was 28 times more in the late 60s? And why did you just ignore all these facts?
rickg| 2.27.12 @ 4:45AM
You've got Obamanomics down pat now!
In order to have a better economy we simply need more low income people. And, don't worry, he is providing them so we are testing yours and his theory.
markenoff| 2.26.12 @ 12:06AM
Jon b is lying and deceiving by omitting the truth. By his own standards I need not provide any factual support for these accusations, I can just make them and you must accept them as true.
oldfart| 2.23.12 @ 6:52AM
My better half was a small business owner for 12 years. Oops - did I just admit that we are one of the evil people in the world who actually create new jobs, pay taxes and promote the economic well being of our local community. It was not just the corporate taxes she had to pay to Federal and State but the fees and mandated 'insurance'. A typical example was a fee from the county the went up 822% in twelve years!!! Even though she had NO claims on unemployment insurance, managed by the state, that went up every year AND when she closed was informed that IF she ever opened another business in this state that she would have pay back ALL the unemployment the state had to pay to her former employees. Let me tell you HELL will freeze over before we ever open another business in this Peoples Republic. What the hell did they do with the money she paid in for 12 years, high salaries for administrators, trips to the Bahamas for planning meetings? Yes – all of that happened.
Yes, she kept raising prices to cover all of these things but her business base was gone because over 50% of her sales were to other businesses, the other 50% retail. He business customers disappeared as they moved out to another business friendly states, or to Mexico and China. The last year she was open she received no compensation for the long hours. She was working for nothing. Yes she had a good gross income, but had nothing to show for it after taxes, fees, insurance, rising utility rates and cost of goods sold.
So what does this state do – they raise taxes on businesses again to make up the short fall. It is not just the lost revenue from lost business taxes but payroll taxes, increased unemployment payments, lost sales tax revenue et. al. And the common solution – raise taxes even more. Federal, State and Local governments are run by a bunch of educated IDIOTS!
Pecos Pete| 2.23.12 @ 7:36AM
oldfart: Exactly. Excellent post.
But, I disagree that government is run by "educated IDIOTS!" Instead, I'd contend that government is run by UNeducated IDIOTS.
Bureaucrats and most politicians simply don't understand basic economics, and certainly they don't understand that businesses don't pay taxes, businesses collect taxes. Taxes are a cost of doing business, just like electricity (etc.) is a cost of doing business.
All costs are passed on to consumers. Simple.
And, if costs can 't be recovered, then a business will go out of business ... or move to a more tax friendly government entity. The examples are too numerous to list, but Michigan and California readily come to mind.
oldfart| 2.23.12 @ 7:54AM
Anyone remember the definition of insanity?
Try a solution. If that fails, do the same thing again and again and again, expecting different results.
Or – a patient has a headache. The physicians solution is cut the patient's head off. The patient no longer has a headache, it does not matter that the patient is dead, the disease was cured.
Alan| 2.23.12 @ 12:38PM
An example of insanity, perhaps, but not the definition of it.
Jacobite| 2.23.12 @ 9:30PM
Uh, remember the old saw: don't listen to what he says; watch what he does? Leftists/socialists want public/government control of the major factors of production. So, you believe they're making mistakes when they pass programs forcing private-sector entrepeneurs out of business? It's not unforeseen consequences; it's successful execution of another Leftist plan.
Von Mises Jr.| 2.23.12 @ 8:19AM
oldfart, myself and a few friends were doing self-employed recruiter work for fees. Same as your wife's situation, we earned our revenue from other companies. Now, several of us are all out of work.
I am not complaining for myself, since like you with a name like oldfart, I am no young buck. The problem is that we were finding yong guys and gals great jobs with typically $100K salaries plus commissins and bonuses. They will not make it to the stage we enjoy currently under progressive government, nor live the life we had. That's the shame.
Pecos Pete, you are correct that many politicians don't understand Von Mises, Hayek and Laffer. They understand politics and the law. And their primary goal is power and money for themselves. Enslaving the people increases their power and influence.
USSAlabama| 2.23.12 @ 10:37AM
So funny how they run for office in the same class as most of the rest of us then turn up richer and richer as the years go by.
Thomas More's Utopia was a tyrannical hell! From Pluto's Republic all the way through history of all the 'Utopia's' that have tried and failed, one of the things they had in common was the need to isolate the citizenry.
Why in the hell can we not get these Utopians to isolate themselves somewhere else?
More's Utopians were made to make their peninsula into an island. Can we not just give them a damn island? A state?
Von Mises Jr.| 2.23.12 @ 12:04PM
Every island that they take over they ruin, and then the socialist in capitalist countries don't want to go there. The other reason is that Cuba already has their Castro regime, N. Korea their Kims and Venezuela their Chavez; so they don't want Barry and Hillary. Point is our Utopians want us to be their subjects since we still have wealth to be stolen.
USSAlabama| 2.23.12 @ 12:52PM
Sure! Problem with Cuba and NK is they don't let out the ones that want out.
It's why Utopia never 'works' and never will. Taking the ruling class Utopians and segregating them with the voting class Utopians - the voting class always end up wanting out. Eventually.
How long would it take for the current crop of voting class Utopians to 'get it'?
JR| 2.23.12 @ 1:00PM
Young people who earn $100,000 a year will not make it to the ... "stage" ?? I think they'll be just fine under progressive government, it's the people who earn less that need tax relief. At once, I'm glad you're not a teacher, but I wish you'd been a teacher.
BackToBasics| 2.23.12 @ 10:54PM
VM Jr. from your post - "many politicians don't understand Von Mises, Hayek and Laffer. They understand politics and the law"
I remember past articles and threads a few times at AmSpec that dealt with the limitations in too many of our top leaders who only rely on or understand law and political processes. Many commented, myself included, that they wished that more doctors, engineers, businessmen and economists would also run for higher offices, including the presidency. Herman Cain's experience both as a business CEO and as an engineer were a couple of the many reasons why I supported him. I do not think he would ahve ever gotten 9-9-9 through, mostly because of the third sales-tax 9, but I think he would have been more open to new and positively transformative solutions to our nations problems.
I think many conservatives and Tea party activists want to see someone run for the presidency who is enough of an outsider to shake things up and yet retain the ability to be a truthful and believable encouragement through the rough patches, thus bringin about a peaceful "transition" back to more conservative roots. Lawyerspeak and politicalspeak will not do.
numbatdog| 2.23.12 @ 8:55AM
It's interesting to note that even though 50% of US earners pay no federal tax, the lowest percentage since WW2, the IRS is expanding at an unprecedented rate. For what purpose? Expect much tougher scrutiny and endless audits as they try to justify their existence.
Von Mises Jr.| 2.23.12 @ 10:02AM
To collect the fines for ObamaCare, and to audit your debit card purchases as authorized into law under Dodd Frank.
You cannot redistribute wealth without first identifying it. You are about to get a fiscal colonoscopy.
Stan Redmond| 2.23.12 @ 1:04PM
You just didn't realize you are there for the good of the tax collectors.
You also didn't realize you were just suppose to fit perfectly in the liberal tax collectors' formula. They raise taxes on you so you are just suppose to stay put expand the business and pay those taxes.
Heaven forbid business owners and tax payers are actually living breathing thinkers reacting to changing taxes and regulations.
obadiah| 2.23.12 @ 7:37AM
Don't worry Ross, Obama is owned by the plutocrats, just like the Republicans. The plutocrats have a constitutional right to bribery and Obama's hand is out. He knows that taxes on plutocrats are contrary to the American Way. When the Chinese refuse to lend any more, he will return to payroll taxes and sales taxes. The plutocrats will not have to pay.
Timothy L. Pennell| 2.23.12 @ 9:10AM
Q: When can you be sure that the Marxist Muslim POS is Lying?
When his lips are moving.
Why is this stupid Tax Rate thing, such a problem? Why do all the Pointy Heads go in to "Conniption Fit Mode", whenever the Tax Code is brought up? And, why does it seem that it's ALWAYS in need of REFORM?
Q: How many times in the last 50 Years, has the Tax Code been reformed?
They talk about "Simplification". They stress the need to Simplify the Tax Code. They're always TALKING about something. That's because Talking is easy. Talk is Cheap.
DOING. Now that's something.
"When confronted with a problem, usually, after sorting through all of the possible solutions there are, one finds that the SIMPLEST Solution, is preferred, over the more Complex." (I'm paraphrasing Occam's Razor) Ergo: If I had to choose between a 2,000 page Gordian Knot from "HIM who Lies when his Lips Move", a 59 Point Plan from "HE who's hair does not blow in wind", and a FLAT TAX?
I don't know why everyone's afraid to go to Flat Side. Think of all those Government Union Jobs, with all of their Taxpayer funded Benefits that you don't have, that would go away. The IRS could fit in Michelle's pants. You could fill out your Taxes, on a Post Card. Even a Lying, Thieving, you wanna punch him in the head every time you see him PUNK*SS, like Geithner, could do it. Flat Rate, and EVERYBODY PAYS.
Where is it written that half of the People in the Country don't have to pay INCOME Taxes? (I know. It's in the Tax Code) That would go away. Everybody pays. People at the lower levels are still gonna get their Benefits. They're still gonna be helped. It just ain't gonna be FREE, anymore. If you make $30,000? You pay 10%, if that's the rate. You will help pay for this with "SKIN IN THE GAME". We cannot afford the Status Quot, any more, let alone the Brave New World that Hama's "DELIVERER" is pushing.
Let's talk Corporate Taxes and the Taxes on Dividends and Capital Gains.
If I'm thinking about Starting a Company, or I'm about to expand an existing one, where do you think I would rather Build it? In a Country, or a State, that has HIGH Corporate Taxes, HIGH Personal Income Taxes, HIGH Property Taxes, and HIGH Sales Takes? Or someplace that has LOW all of those things? Do I go to a Right To Work State, where I'm not THREATENED on a daily basis by an Organized Crime Family (UNIONS)? Or, do I go where I AM Extorted by Trumpka, and the rest, and where I am NOT ALLOWED to expand someplace else, unless I get permission from the MUSLIM'S Union Controlled NLRB?
If I'm thinking about INVESTING? Do I invest when Taxes on Dividends are HIGH? Or, do I hold on to my money until I can get a better deal?
Am I going too fast for you, PURP?
Of course I am.
The MUSLIM'S Dog and Pony Shows, recently, are just more of the same. I understand his New Communist 5 Year Plan (Budget) is another coupla thousand pages. I guess "we'll have to Pass it, so we can find out what's in it". And, everybody knows that this piece of Ass-Wipe Paper, will never be allowed to come to a Vote in Cowboy Poetry Land.
Our Government is Broken. Washington is like a CANCER, that eats away at the body, as it Feeds itself. It's like a Black Hole (No, Alan.) where nothing can escape its' pull. Not even light (bulbs).
GOD, himself, could instruct us on how to do things better, and it wouldn't matter. As long as Term Limits are just a young man's fancy, NOTHING will change. It's the Ultimate Rigged Game. (Insider Trading) The best Health Care. The best Retirement Plan. The best Pension. The best K Street Jobs, later on.
Perhaps God HAS forsaken us. Perhaps the steady March to Sodom and Gomorrah, has finally taken its' toll? After all, look who sits on the Throne. A Muslim Boy, with no Past. None that he wishes us to see. A Guy who's entire life has been immersed in EVIL. Communism/Marxism/Maoism/Fabian Socialism. Born to a Religion of DEATH, he now seeks to Govern by the Philosophies of DEATH. Lenin. Stalin. Hitler. Mao. Pol Pot. Mugabe. Castro. Guevara.
Is the Mayan Calender correct? Is 2012 destined to be the End of the World?
I don't know about the end of the world, but I do know this: If the MUSLIM wins in November?
2012 will mark THE END of the United States of America, as we know it.Q: When can you be sure that the Marxist Muslim POS is Lying?
When his lips are moving.
Why is this stupid Tax Rate thing, such a problem? Why do all the Pointy Heads go in to "Conniption Fit Mode", whenever the Tax Code is brought up? And, why does it seem that it's ALWAYS in need of REFORM?
Q: How many times in the last 50 Years, has the Tax Code been reformed?
They talk about "Simplification". They stress the need to Simplify the Tax Code. They're always TALKING about something. That's because Talking is easy. Talk is Cheap.
DOING. Now that's something.
"When confronted with a problem, usually, after sorting through all of the possible solutions there are, one finds that the SIMPLEST Solution, is preferred, over the more Complex." (I'm paraphrasing Occam's Razor) Ergo: If I had to choose between a 2,000 page Gordian Knot from "HIM who Lies when his Lips Move", a 59 Point Plan from "HE who's hair does not blow in wind", and a FLAT TAX?
I don't know why everyone's afraid to go to Flat Side. Think of all those Government Union Jobs, with all of their Taxpayer funded Benefits that you don't have, that would go away. The IRS could fit in Michelle's pants. You could fill out your Taxes, on a Post Card. Even a Lying, Thieving, you wanna punch him in the head every time you see him PUNK*SS, like Geithner, could do it. Flat Rate, and EVERYBODY PAYS.
Where is it written that half of the People in the Country don't have to pay INCOME Taxes? (I know. It's in the Tax Code) That would go away. Everybody pays. People at the lower levels are still gonna get their Benefits. They're still gonna be helped. It just ain't gonna be FREE, anymore. If you make $30,000? You pay 10%, if that's the rate. You will help pay for this with "SKIN IN THE GAME". We cannot afford the Status Quot, any more, let alone the Brave New World that Hama's "DELIVERER" is pushing.
Let's talk Corporate Taxes and the Taxes on Dividends and Capital Gains.
If I'm thinking about Starting a Company, or I'm about to expand an existing one, where do you think I would rather Build it? In a Country, or a State, that has HIGH Corporate Taxes, HIGH Personal Income Taxes, HIGH Property Taxes, and HIGH Sales Takes? Or someplace that has LOW all of those things? Do I go to a Right To Work State, where I'm not THREATENED on a daily basis by an Organized Crime Family (UNIONS)? Or, do I go where I AM Extorted by Trumpka, and the rest, and where I am NOT ALLOWED to expand someplace else, unless I get permission from the MUSLIM'S Union Controlled NLRB?
If I'm thinking about INVESTING? Do I invest when Taxes on Dividends are HIGH? Or, do I hold on to my money until I can get a better deal?
Am I going too fast for you, PURP?
Of course I am.
The MUSLIM'S Dog and Pony Shows, recently, are just more of the same. I understand his New Communist 5 Year Plan (Budget) is another coupla thousand pages. I guess "we'll have to Pass it, so we can find out what's in it". And, everybody knows that this piece of Ass-Wipe Paper, will never be allowed to come to a Vote in Cowboy Poetry Land.
Our Government is Broken. Washington is like a CANCER, that eats away at the body, as it Feeds itself. It's like a Black Hole (No, Alan.) where nothing can escape its' pull. Not even light (bulbs).
GOD, himself, could instruct us on how to do things better, and it wouldn't matter. As long as Term Limits are just a young man's fancy, NOTHING will change. It's the Ultimate Rigged Game. (Insider Trading) The best Health Care. The best Retirement Plan. The best Pension. The best K Street Jobs, later on.
Perhaps God HAS forsaken us. Perhaps the steady March to Sodom and Gomorrah, has finally taken its' toll? After all, look who sits on the Throne. A Muslim Boy, with no Past. None that he wishes us to see. A Guy who's entire life has been immersed in EVIL. Communism/Marxism/Maoism/Fabian Socialism. Born to a Religion of DEATH, he now seeks to Govern by the Philosophies of DEATH. Lenin. Stalin. Hitler. Mao. Pol Pot. Mugabe. Castro. Guevara.
Is the Mayan Calender correct? Is 2012 destined to be the End of the World?
I don't know about the end of the world, but I do know this: If the MUSLIM wins in November?
2012 will mark THE END of the United States of America, as we know it.
Timothy L. Pennell| 2.23.12 @ 9:37AM
Wow. Even I think that's too long.
Al Adab| 2.23.12 @ 10:33AM
It was long. This central planning administration errs almost daily in its proposals. The 41% capital gains tax hidden in the budget for example.
All of this stems from the collectivist thinking that believes the national wealth belongs to the government except for what they graciously allow us to keep. The reverse is more true. Wealth belongs to those who create it except for what they, through their elected represenstatives, agree to provide for the very limited purposes of the national government.
SUBVET| 2.23.12 @ 10:55AM
As usual TLP..........that MK48 is running hot straight and normal.
Fairbanks99| 2.23.12 @ 3:40PM
Hopefully that fish is an ADCAP!
SUBVET| 2.23.12 @ 7:31PM
MK 48 ADCAP MOD 7 (CBASS)......you can't hide form this one.
Rmm| 2.23.12 @ 10:55AM
TLP
I would much rather be entertained by your insights, than listening to our Commander in Creep for one second. Keep it up.
Cynicon Implant| 2.23.12 @ 5:15PM
"IRS could fit in Michelle's pants" -- Classic!
Timothy L. Pennell| 2.23.12 @ 5:53PM
Oops.
Indy| 2.23.12 @ 7:54AM
The global minimum tax is a show stopper, this tax plan is nothing but an election ploy. I've had enough of the "green giveaways" as a way to pick winners and losers, America loses, we cannot run the country on solar and wind. When I see the President travel in a solar powered limo, then come back and talk to taxpayers but he burns more fuel in one day than us commoners burn in a year.
Teaghan| 2.23.12 @ 8:03AM
Don't forget how much fuel moochelle uses for her trips in her private plane.
But she has a garden at the white house. That's her carbon credit :=)
Indy| 2.23.12 @ 8:28AM
It would have to be a huge garden to generate enough carbon credits (who does the work to maintain it while she is off on her jaunts). I don't want to think how much her trips have cost taxpayers. Let them eat cake!
Phil Sukalewski| 2.23.12 @ 8:18AM
It should also be pointed out that the lower taxes that Cooper, Tyco, et al are paying ARE ONLY ON THE INCOME EARNED OVERSEAS; they still pay the 35% for their U.S. sales.
Here's a nice article explaining why U.S. companies have over $2 TRILLION overseas that they do not dare bring back into the U.S. as they would have to pay 35% ON TOP of the taxes already paid to the country where the sale was made.
http://www.bloomberg.com/news/.....pozen.html
Kade| 2.23.12 @ 8:40AM
So What. What good does the tax money from U. S. corporations paid to communist China do us? No good -- in fact it hurts America by enriching a dictatorship and enables them to build up their ominous military.
Phil Sukalewski| 2.23.12 @ 9:27AM
May I say politely that I believe that you are missing the point. In short, the profits are staying, a.k.a. being re-invested, in these foreign countries and not coming back into the U.S. because we try to tax it a second time. Other countries do not.
e.g. Honda pays U.S. taxes on it's U.S. profits, but does not then pay additional taxes on any of the profits that it transfers back to invest in its Japanese operations.
This is why so many U.S. firms are setting up operations outside of the U.S. If the profits made overseas were not subject to double taxes, more products would be made here in the U.S. and exported, rather than second factories set up in China.
Kade| 2.23.12 @ 10:08AM
Yes their profits would be taxed twice – but only once here. So what – it is their choice to set up in foreign countries instead of America, in many case only for cheap labor. How has giving them this giant tax loophole subsidy benefited America and its workers?
It is country club Republicans and limousine liberals that embrace economic globaism –- not Middle Class American patriots.
Neanderthal| 2.23.12 @ 12:48PM
Kade- we're not asking your sympathy for the corporation, just making the point that our current system of taking a 35% cut of nothing (because they don't bring their profits home), doesn't do ANYONE any good, except our foreign competitors. No tax, or even a more reasonable rate would result in more investment here, more employment, and, viola, more tax revenue.
Stan Redmond| 2.23.12 @ 1:21PM
Being in the manufacturing business myself the cost benefit of low wages is not that big of a difference in foreign countries. Having a small shop myself overseas does not save me a lot of money on the labor. Where it does save is the amount of extra baggage that comes with employees in the USA. For a $10 an hour person here you pay $15 extra in nonsense. There is always a threat of unionization. There is a constant threat here of some government asshat coming in and shutting me down because I'm suddenly violating some new labor law or worse, a new environmental regulation. Overseas politicians and governments are actually HAPPY to have you there and work WITH you. You are constantly under attack here from all sides here. Just look at the OWS idiots running around with pure hatred for everything I've worked for and accomplished.
So to repeat labor cost is not such a big deal. Besides if you were Mattell do you think you could get those lice ridden filthy OWS clowns to assemble barbie dolls 8 hours a day?
Kade| 2.23.12 @ 8:22AM
Since when were American companies permitted to outsource their manufacturing overseas in the first place? Was it Clinton’s / Gore NAFTA that started this raping of our industrial might? And why are U. S. corporations not paying any U. S. taxes at all whereas those in America are? What good are these globalist policies to enrich multi-national corporations and foreign powers while leaving America’s economy and its workers in shambles?
The part of Obama’s proposal to tax U. S. corporations overseas is but a small start to end this suicidal gutting of our manufacturing base and will resonate with Main Street America this election. The GOP presidential hopefuls better not fight this (global tax), otherwise plan on 4 more years of Obama and maybe a Dem control of both houses. Santorum is the only candidate that might agree with the global tax since he is pushing for companies to manufacture in the U. S.
That being said I will never vote for Obama for a host of reasons, but on this one issue ONLY he is shrewdly outflanking the GOP from the America-First patriotic right (even though I realize it is an election driven policy). And I do agree on the other points that Ross said in his article, especially regarding green giveaways.
Ryan| 2.23.12 @ 8:35AM
It's called the free market. You're proposing to punish American corporations rather than give them good reasons to bring everything back.
Lower government spending, lower overall taxes without loopholes, and stop propping up losing companies.
Kade| 2.23.12 @ 9:10AM
Ryan, I agree completely with your last sentence.
However, I am for free markets to generate healthy competition Within Our Borders. There are no global free markets, especially in totalitarian and lawless regimes like China.
And giving our vital industry to China or socialist Europe through rigged free trade agreements is why we are becoming an economic paper tiger -- a country that makes little is worthless.
Withdrawing from NAFTA and the rest of free trade sellouts, including the recent Obama Korean one, is the best solution.
Lowly Greece sneezes and America now get pneumonia because of economic globalism.
Stan Redmond| 2.23.12 @ 1:21PM
BINGO
Ted Seeber| 2.23.12 @ 1:35PM
Foreign trade is not now, nor ever has been, anything resembling a "free market". A free market needs *protective* boundaries to survive, solid and defended.
All American companies are losers on the globalist market, because we pay our executives way too much and have a standard of living twice any other nation.
Ross Kaminsky | 2.23.12 @ 8:45AM
Kade,
Where do you get the idea that a company needs to be "permitted" to decide where to make something?
By the way, data shows pretty clearly that a company's expanding overseas also causes them to add more -- higher paying -- jobs back in the US.
I would also point out that the US level of manufacturing employment has dropped, but not our level of output. Furthermore, our mfg employment drop is on a relative basis very much in line with drops across the "industrialized" world. It's primarily a function of productivity gains, not "outsourcing."
Kade| 2.23.12 @ 9:27AM
Ross
Don’t we have trade laws? I do not recall us giving the Soviet Union our manufacturing capability, technology and engineering during the Cold War. I am asking you then when and how did we start giving the store to China?
And the high paying U. S. export jobs are small compared to the jobs lost through uprooting American companies and jobs and sending them to China and other foreign powers.
We make very few finished good here even prescription drugs -- go to Wal-Mart.
Fred Farkel| 2.23.12 @ 11:20AM
The Soviets got all the info they needed by espionage, something they were good at. They didn't need for us to give it to them.
BackToBasics| 2.23.12 @ 11:29PM
Much of their proficiency in espionage was due to our being so lax in securing our secrets. We still are moreso than ever. Sometimes we don't even sell our secrets and expertise to other countries we give it to them outright, for almost nothing; not just the Rosenbergs after WWII or Wen Ho Lee (Los Alamos) or John Walker (submarine secrets), etc, but worst of all, Bill Clinton signing an executive order in 1996 to allow sensitive missile guidance systems to be sold to China.
http://archive.newsmax.com/arc.....3211.shtml
Also, Obam I believe happily reinstated the Chinese nuclear scientist exchange for the Los Alamos labs just in December 2011.
http://investmentwatchblog.com.....ts-in-90s/
The list could go on and on.
Al Adab| 2.23.12 @ 12:19PM
Apparently Mr. K, our federal government thinks it is the arbiter of where a company, ie Boeing, can and cannot build a plant. If that is not tyranny, what is?
I would also be interested in your take on the effects of a 41% capital gains tax. Would that not drive investors out of the market?
Ted Seeber| 2.23.12 @ 1:32PM
A company does not need to be permitted where to make something. But if we still have a navy capable of sinking container ships, we damn well are capable of telling them where they can SELL their goods. And we can say "The American Consumer is off limits to any foreign-owned corporation".
Trinacria| 2.23.12 @ 7:40PM
Yeah, we don't take kindly to those money grubbin' for'ners. If it ain't made in Amurca, we don't want to see it in these here parts, cause we support Amurcans, Goddamnit!
Our products might be over-priced, low quality shit, but at least it's OUR over-priced, low quality shit. And if I can save jes one Amurcan job by buyin' over-priced, low quality shit, why by golly I consider it my ever-lovin' patriotic duty!
Git 'er done!
BackToBasics| 2.24.12 @ 12:02AM
Ross,
Where did you get this information about more manufacturing by US companies overseas increases the number of high-paying jobs here?
There may be some truth to this in selected companies but it does not translate into higher paying jobs/salaries across the US. According to the 2010 census data, the peak year for median household income in the us peaked in 1998 and has been mostly trending downwars since then. It's a large .pdf file but the data is there in charts and in graphs.
http://www.census.gov/prod/2011pubs/p60-239.pdf
BackToBasics| 2.24.12 @ 7:12PM
The median household income using constant dollars on page 50 of this pdf file shows the trend I was speaking of. The graph is on page 8. I know that median and average are not the same, yet for a very large statistical base such as the entire country the trend lines between the two will move in the same direction over many years and the trend is down.
I've seen articles about the assertion that companies expanding overseas created better paying jobs in the US does not cover enough of the country;s workforce to show the real trend lines. It is only true in some companies and besides that, there are other factors that come into play in such scenarios such as the type of companies, the type of expansion they were involved in and the total numbers of jobs involved in the company. For an example, did they move 100,000 jobs overseas but hired 5,000 tech and salesforce and CEO's here that are involved in the multinational business's support and these 5000 earned higher salaries however, there was a still net loss of 95,000 in the US labor force? The trend lines in earnings are down and there's no getting around this fact. Outsourcing, too many legal work visas and illegal immigration are all factors in this earnings decline.
al222| 2.23.12 @ 8:47AM
Like too many liberals, you make the fundamental mistake of believing incentive and coercion are interchangeable terms. They're not. Not by a long shot.
Von Mises Jr.| 2.23.12 @ 8:37AM
Great article Ross. Just two observations:
First, GM (Government Motors) pays no federal taxes for ten years estimated at something like $50B bailout. GE earned $14.2B last year and paid no taxes. George Kaiser at Solyndra and other green energy cronies make quarter billion dollar no-lose bets at taxpayer expense. These exemptions and deductions will not go away under Obama. It is how fascism is designed to work, setting up crony business who get a de facto monopoly advantage by rent seeking.
Second, is that corporations do not pay taxes. Customers, employees and stake holders pay taxes. If they raise capital gains and dividend taxes from 15% to perhaps 43.4 (39.6 top marginal plus 3.8 ObamaCare) federal combined, then people do things like sell their stocks, and buy gold coins. Then the market crashes along with our economy.
The reason investing is so attractive is that you only pay 15% cap gains plus state tax on your realized and taxable gains. But when it increases from some 20% range to 30 to 50%; the deal is that if you lose $1K, you lose $1K. But if you gain $1K, you only get $500 to $700 (disregarding long-term capital gains write-offs). Would you go to a casino where you only won $5 on a ten dollar bet, but lost $10 every time you lose???
We cannot easily relocate outside the US as did Tyco, IG and cooper and Nabors Industries. We get less jobs and higher taxes.
DRed| 2.23.12 @ 10:47AM
You're partly right, I suppose. We need to eliminate all exemptions and deductions. They have nothing to do with fascism, but you're right that they're terrible for our government. Obama's plan seems to be a step in the right direction (I say seems because I don't know how many loopholes it's actually going to eliminate), but it has about the same chance of passing as I do of getting a date with Kate Upton.
jay hoenemeyer| 2.23.12 @ 9:05AM
You're all missing the bigger point . Global taxation is the first step in capital controls . All failing economies, Greece Argentina even sad little Afghanistan, sooner or later shut the door on citizens trying to hold onto their wealth by moving it offshore and away from the taxman . The next step will be a wealth tax . How much fairer can that be . And France and Italy have one and it works so well for them . And lastly comes the ' coralito' , confiscation of IRA's and 401ks , which is even more fair . Coming soon to these United of States ? Where else is the money gonna come from ?? Not next year , but by the end of the decade , you betcha by golly, gonna be .
Indiana Alex| 2.23.12 @ 9:48AM
I agree on the confiscation of 401ks and IRAs, and pensions (ex-union and gov't of course).
The wealth tax is a non-starter. The Aristoctracy of the left (Buffett et. al.) would never go for that. Their benevolence in matters of taxation is reserved for a class recognized by the elite as "others".
Neanderthal| 2.23.12 @ 12:57PM
Sadly, both of the threats you mention have already been proposed. Not acted on... yet. But I wouldn't rule them out during a second Obama term.
Indiana Alex| 2.23.12 @ 9:29AM
For many businesses to survive in the global economy, they must be global businesses. Coca-Cola derives 75% of its income from outside the US. Should they be making all product in the US to be shipped half way around the world?
Most big companies have offices in other countries, and employees that are "outsourced", but staffed by natives to serve that country or region.
What is a company like Coca-Cola, or even Oracle for that matter, to do if they have further disincentives to repatriate profits derived overseas?
If the choice is to forgo international business or even higher US tax rates the choice is obvious to those who actually understand how business works, rather than how they think business "should" work.
This proposal would basically act as a tarrif for domestic companies which derive profits abroad. They will almost certainly react as any non-domestic company would to such a tariff.
The President is most often compared to Carter, but for being consistently clueless in trying to outsmart the market it appears as though he's attempting to challenge Hoover.
Ted Seeber| 2.23.12 @ 1:28PM
Domestic companies that derive profits from abroad are not DOMESTIC companies. They are treasonous corporate imperialists that should be disbanded
Indiana Alex| 2.23.12 @ 2:02PM
I hope the local Quickie Mart provides enough diversity of product to serve your needs.
Trinacria| 2.23.12 @ 7:47PM
Just checked my company's mission statement. Oddly, it seems to be totally lacking in any reference to domestic patriotism. It's all filled with references to crazy notions like optimizing shareholder value and generating returns on investment. What the hell were they thinking - don't they know their reason for existing is to serve the mother land? Shit!
Kade| 2.23.12 @ 9:49AM
Alex
Make the coke here like they used to and ship it overseas; otherwise face tariifs.
Both corporations and Main Street did very well under this pro-American model -- now we have a hollow America and a real unemployement of 16%.
Indiana Alex| 2.23.12 @ 11:04AM
Given your suggested ultimatum, Coca-Cola and many other highly successful American companies would simply move completely out of the US.
The responsibility of the company is to increase its value for its owners (shareholders).
The responsibility of the government is to create an environment which encourages businesses and individuals to invest domestically. Clearly the government is failing in its reponsibility in this regard.
Your solution is similar to the Obama Administration, and liberals in general, and historically, results from attempts at manipulating markets by punishing well justified behaviors have been catastrophic to say the least.
Kade| 2.23.12 @ 12:30PM
Right – these corporate elites will move to China.
No Alex, it is liberals like Clinton. Gore. W. Kerry, and Obama that are all free traders. There are no free global markets -- China for example is a master at manipulating markets and currecy as they grow stronger and we grow weaker.
There would only be free global markets on a level playing if all countries had our laws and constitution and dictatorships are the furthest removed from that. Giving lawless and socialist regimes our national treasure under the guise of free markets is suicidal and a race to the bottom. And the proof will be the next crash, which surely is coming.
Stan Redmond| 2.23.12 @ 1:26PM
You know very little of logistics.
fwb| 2.23.12 @ 11:12AM
There are not and never have been ANY corporate taxes. These are indirect taxes on the ignorant people who believe the BS the government feeds us about taxing the evil corporations. No product is ever unaffected by these "corporate" taxes. Adam Smith covered this topic 230+ years ago. They knew it then. We, but for our ignorance, should know it now.
High "corporate" taxes simply make the cost of goods or services increase and in fact cost the consumer more than the simple amount of the tax. Say the government taxes something at 10% and the producer adds 10% to his costs for gross profit. The consumer pays an effective 11% tax on the actual cost and the producer makes 1% more.
Of course, the government NEVER lies to us about anything. And Anna Nicole married for love and artificial sweeteners are safe.
ER| 2.23.12 @ 12:54PM
By your lack of logic, there are no taxes period.
Taxes paid by companies are in fact paid by consumers, taxes paid by consumers are in fact paid by companies, who must pay higher wages, taxes paid by everyone is in fact paid by someone else. On and on.
Stop the lies. This whole article is one giant lie. The average tax rate paid by companies is not 35%.
Mitt Romney has never held a job, that is why he pays a tax rate of 15%. If he actually worked for his income he would be paying income tax, not capital gains tax.
Stan Redmond| 2.23.12 @ 1:30PM
You are just wrong. Corporations just become tax collectors. The final cost of the good or service is priced so the corporation will be profitable. At least in a pure system and not this crony system we have now.
Brian Mc| 2.23.12 @ 4:33PM
Excellent
Russel| 2.23.12 @ 11:59AM
Related to this article or not , I read today the cost of AF 1 has risen to $ 179, 500 per hour . If I get angered much more , I'll have a heart attack . What I'd give for a Rep congress that would give as good as it gets . Tahe that plane away from him ! . The three Stooges have gotten away with murder and we stand idly by .
Brian Mc| 2.23.12 @ 4:35PM
Yes, AF1 remains grounded. The alien must fly coach until nuclear attack is occuring and then, and only then, is he allowed aboard to fly an intercept course.
Richard H. Davis| 2.23.12 @ 1:10PM
The effective tax rate paid by corporations in the US is 13.4%. That's because while strictly national corporations may have to pay 35% on their profits, international corporations may pay little or nothing because of the loopholes they have inserted for their benefit, and because they offshore their profits to low tax countries, like Ireland. Lowering the maximum rate, closing the loopholes, and adding a minimum tax would make the corporate tax much fairer.
PULLING NUMBERS OUT OF MY ASS| 2.23.12 @ 7:57PM
Actually, I think it was 13.3%.
SELF-EVIDENT TRUTHS| 2.24.12 @ 5:59PM
Nice blistering use of sarcasm.
Bill| 2.23.12 @ 1:24PM
The Chicago Fuehrer is an "economic illiterate socialist Mafia boss."
Mafia Boss| 2.23.12 @ 8:06PM
AYY OHHH! He ain't one of us, paesan!
Ted Seeber| 2.23.12 @ 1:25PM
Why are foreign incorporated companies, of any sort, allowed to import to the United States at all?
Free trade is only free trade if both partners in the trade are equal. Otherwise, it's just the game of absolute advantage and corporate imperialism, no different than sending an army to decimate a foreign nation.
I see no reason why we should allow such foreign invasions into the United States, creating competition for our smaller businesses at home.
We have the most powerful Navy in the world, and they can't stop this invasion of foreign goods?
Kade| 2.23.12 @ 3:52PM
Exactly. It is not only foreign companies importing tariff free goods but our own multi-national Judas corporations now operating from China and other foreign powers selling us back the goods once made in America. It is quite unbelievable that conservatives now advocate this sellout of America, which is bankrupting our once thriving industrial base and clearly sending us to Third World status.
Trinacria| 2.23.12 @ 4:38PM
Show me an American company that can make a Ferrari or design a quality men's suit or grow a coffee bean that produces drinkable esspresso or produce edible prosciutto or fine cheese or anything that isn't a mediocre piece of shit and I'll agree with your suggestion...
Al Adab| 2.23.12 @ 5:53PM
Ahhh, my Sicilian friend, we've missed you.
Kade| 2.23.12 @ 6:05PM
I remember when most quality goods were Made in America and we were the envy of the world -- that is until Bill Clinton and Al Gore passed NAFTA. Worthless Public schools and eliminating most trade schools also helped fuel our decline.
Our country was designed by our Founders to prosper with a thriving middle class -- economic globalism along with socialistic polices put a dagger in the heart of the American dream.
Trinacria| 2.23.12 @ 7:13PM
Quick - look up, K...that thing zooming by over your head is the point.
I shant for a moment quibble with your characterization of the public school system; it's a national disgrace that has become nothing more than an indoctrination camp for future panty wearing, bleeding heart, tree hugging, social justice types. But that has almost nothing to do with the issue of global trade and protectionism.
By and large, we import goods for one of the following reasons:
1) We don't have the necessary natural resources
2) Products can be made cheaper elsewhere
3) Products can be made with higher quality elsewhere
Even if our public education system were the envy of the world it wouldn't have a meaningful impact on either (1) or (2) above. Even the best education can't make the geography and climate of Oklahoma conducive to growing coffee beans, and it certainly won't LOWER the cost of production (better education = higher wages = higher cost of production).
Let's face it, we don't suck at building cars because the workers aren't educated enough; we suck at building cars because the unions have driven up the cost of producing the cars and made it impossible to get rid of worthless and unproductive employees (we also haven't had anyone in an American auto company over the last 40 years that could design a car that anyone wants to look at - but that's beside the point). In short, they've been such prodigious parasites that the host can no longer thrive. All the education in the world won't fix that...
Trinacria| 2.23.12 @ 7:55PM
By the way, why the infatuation with "a thriving middle class"? When did it become so Goddamn laudable to worship mediocrity? Wouldn't it be better to strive for a shrinking middle class and a growing and thriving upper class?
Really - do you tell your kids "I want you to grow up to be the most mediocre person you can be" or "I want you to achieve marginal success"?
Bill Stanley | 2.23.12 @ 1:31PM
Czar Obama "proposed a lower corporate tax rate and an end to dozens of loopholes". In the same breath, he proposed more loopholes: manufacturers would “receive incentives so that their effective tax rate could be even lower". He wants to pick which corporations (manufacturers) are winners. www.newsandopinions.net
Naturalborn Texicanette| 2.23.12 @ 1:57PM
Great post as usual TLP.
Have you considered that maybe WE have forsaken God?????????
Fiscal| 2.23.12 @ 2:04PM
Richard is right. Most bloggers here compare the statutory corporate tax rate with other countries. However, other countries don't have all of the tax loopholes we do. So it is an outright lie to say we have a huge problem here. The facts are that with only U.S. income, our corporations pay an effective rate of about 25%. On total income, they pay an effective rate of about 14%. 55% of U.S. corporations pay no taxes 1 out of 7 years. Other countries don't have all of the tax lawyers or loopholes that we do. In other developed countries, they have an in country effective tax of about 23% on average. So, we are only 2% higher in fact. Those of you who believe the rhetoric about corporate taxes are just not curious about the facts.
Now, I'd like to abolish corporate taxes completely in favor of a consumption tax so we can capture not only our corporations profits, but also companies that import goods. Imagine the small business owner who no longer has to pay federal taxes. There is a job problem with that however, we'll have an overabundance of tax lawyers....
DRed| 2.23.12 @ 2:20PM
The loopholes are the big problem. While many exemptions have the best intentions behind them, a system like ours encourages companies to essentially buy preferentially treatment from Congress. It's endemic to both parties. Do you think Congress really wants to change this system? Who is going to give congresspeople money if there's one simple corporate tax rate?
wolflen| 2.23.12 @ 3:40PM
and in the end...so to speak...the working person still paying taxes..is taxed and re-taxed and then taxed again..
literally i would be a multi-millionair if taxed just once..
Retired Geek | 2.23.12 @ 3:43PM
How can anything Barack Obama says he will do be trusted?
I won't believe any tax cuts from this administration until I file my taxes and see the reduction with my own eyes.
Ken| 2.23.12 @ 4:06PM
The trouble with the Romney tax plan is that it comes with Romney. Given a choice this November between Romney and Obama I'll pick neither.
Brian Mc| 2.23.12 @ 4:39PM
So, no-one votes...now what?
Trinacria| 2.23.12 @ 7:56PM
That'll show 'em.
porno | 2.23.12 @ 7:09PM
The loopholes are the big problem. While many exemptions have the best intentions behind them, a system like ours encourages companies to essentially buy preferentially treatment from Congress.
POST American| 2.23.12 @ 9:51PM
---Great piece!
NOW, as the GE reactor
FUKISHIMA is nearing
its first anniversary of Globalist media
cover up -even as radiation
levels in Tokyo are 4X those
of Chernobyl--while a reported 8 in 10
reactors here are experiencing 'leaks'
-------------------UH----------------------
could we have that FIRST expose of
GE's Jeff 'I-Meltdown's' TAX FREE status
as he builds dirty plants ACROSS Red China
---at US taxpayer expense?
And BTW ---DON'T let th kiddies play
with the glaciers of radioactive debris
washing up on the west coast
(ALSO not covered by Rockefeller media).
Joe Marty| 2.24.12 @ 6:09PM
Wow - a lot of the conversation here seems to be quite emotional, uncivil, and riddled with personal attacks and passive-aggressive comments. How do you expect to convince each other of anything or come to any agreement at all by attacking each other thereby provoking further animosity toward yourself?
Instead of attempting to "cheat" and/or "win" the conversation (which is not what communication is about), why don't you address the issue honestly an in a civil way and see what kind of a response you get?
These are obviously serious issues and deserve serious thought, not emotional attacks without any thought behind them, which only hurts all of us. The notice below the comments box says this forum will be monitored, but there's no option to flag inappropriate posts... fortunately, there's a way we can all stop sounding foolish - by controlling ourselves! :)
Thanks Joe!| 2.24.12 @ 8:45PM
You've really been helpful. Too bad you haven't addressed the issues the article addressed in an honest and serious way, and we are all still faced with an intentionally crippled economy that is harming every single citizen, to the point every single citizen's liberty is in jeopardy. I'm sure if the inevitable happens before it's too late everyone will civilly deal with the impending chaos.