Meta-Blog

SEARCH QandO

Email:
Jon Henke
Bruce "McQ" McQuain
Dale Franks
Bryan Pick
Billy Hollis
Lance Paddock
MichaelW

BLOGROLL QandO

 
 
Recent Posts
The Ayers Resurrection Tour
Special Friends Get Special Breaks
One Hour
The Hope and Change Express - stalled in the slow lane
Michael Steele New RNC Chairman
Things that make you go "hmmmm"...
Oh yeah, that "rule of law" thing ...
Putting Dollar Signs in Front Of The AGW Hoax
Moving toward a 60 vote majority?
Do As I Say ....
 
 
QandO Newsroom

Newsroom Home Page

US News

US National News
Politics
Business
Science
Technology
Health
Entertainment
Sports
Opinion/Editorial

International News

Top World New
Iraq News
Mideast Conflict

Blogging

Blogpulse Daily Highlights
Daypop Top 40 Links

Regional

Regional News

Publications

News Publications

 
Here - you figure it out ...
Posted by: McQ on Friday, November 21, 2008

We're heading into at least a recession, this it the current picture, and we have a promise of an increase by the incoming administration:

You'll notice what all the other entities listed have done in the intervening years. So, tell me again why US companies facing that future would want to stay here (and yes you're right - the so-called "Republican Congress" could have cut them during this time and didn't)?

[HT: High Plains Blogger]
 
TrackBacks
Return to Main Blog Page
 
 

Previous Comments to this Post 

Comments
But, but, but, this can’t be true! Many liberals have assured me that the federal government is virtually owned by corporations!

Seriously, every time some leftist claims corporations are worse than government and the corporations control the government anyway, I can’t help being slack-jawed at their idiocy. On the first point, corporations don’t have agents with guns to make you do what they want, and on the second, if they really owned the government, the tax on corporate profits would be somewhere close to zero.
 
Written By: Billy Hollis
URL: http://qando.net
Oh, please! Those tax rates are mere facts. You obviously are buying into the ridiculous argument that lower corporate taxes are good for business. That somehow lower taxes attract businesses to certain countries or states and this leads to increased employment, which leads to increased consumption, which leads to increased tax revenue. Oh, wait....
 
Written By: jjmurphy
URL: http://www.allthatisnecessary.com
So, you’re saying that all those other countries / regions are engaging in corporate welfare? And that they aren’t making rich corporations pay their fair share of taxes? What are they thinking???

/ sarc

And why aren’t libs all on board to cut our corporate rates just like the geniuses in Europe that they always point to as examples for everything else?

Billy Hollis - ...every time some leftist claims corporations are worse than government and the corporations control the government anyway, I can’t help being slack-jawed at their idiocy.

That’s better...
 
Written By: docjim505
URL: http://
By the way, you realize that just looking at the top rates you don’t get into deductions, other breaks, and the complexities that ultimately effect how much tax is really paid. That’s why I warn students against simplistic arguments that look at just one fact and are silent about the rest. The result is a wrong and misleading argument — which is what your post presents.

Check out this site for an explanation: http://www.cbpp.org/10-27-08tax.htm

Here’s a quote from it:
The U.S. corporate tax burden is smaller than average for developed countries.[1] Corporations in 19 of the member states of the Organization for Economic Co-operation and Development paid 16.1 percent of their profits in taxes between 2000 and 2005, on average, while corporations in the United States paid 13.4 percent.
Reality.

http://scotterb.wordpress.com
 
Written By: Scott Erb
URL: http://faculty.umf.maine.edu/~erb/blog.htm
Quoting marginal rates to make an argument?

Why don’t you put up the actual rates corporations pay, and then try to make this argument, and it’s interesting that this graph excludes Japan and Norway just to make the US seem like the worst taxer in the wooooooorld.

A couple of things that bring down the actual rates in this country, that are not necessarily equivelant in other countries, deductions, loopholes, state tax avoidance (Delaware), stock options, Sub-Chapter S corporations are taxed at a lower rate (personal income tax rate).

So if you want to lower marginal rates, fine, let’s do it. A flat 20% on all profits for all corporations, no deductions.

Then we’d get to be on the bottom of your graph, and increase revenues, woohoo!





 
Written By: CaptinSarcastic
URL: http://
I agree with Scott about simplistic arguments.

TI think we should agree to add in the "expense" to the company that it takes to receive all of those tax credits and manage taxes in general.

If the top rates weren’t so high they could move the money from the accountants that are only hired to save money on taxes to employees that might actually produce something valuable.


 
Written By: OdysseusInRTP
URL: http://
If the top rates weren’t so high they could move the money from the accountants that are only hired to save money on taxes to employees that might actually produce something valuable.
I agree with this, but also have to comment on how it got to be this way. We all know that industry influences legislation, heck, they write legislation. So how do we end up with a tax system like this?

I suggest it is an element of regulatory capture, where industries and companies use their legislative influence to advantage themselves whiel disadvantaging others. The cost of the accounting division of a major corporation is tiny, so the benefits FAR outweigh the costs. But for smaller companies, that accounting cost can be significant, creating a virtual trade-off between the accouting expense and the tax savings, making them less competitive with their larger rivals.

This is what big money influence does to legislation.

Do you really think it’s liberals that make the rules prohibitively difficult for small businesses to compete in some industries? Or do you think it’s the people who stand to lose the most if new competitors enter their industry and are willing to pay for legislation to protect them from competition?

So yes, I agree that the code should be simplified, but it’s disengenous too suggest that corporations pay more here than other countries. Moreover, on tax policy, at least the very small corporations have their own loophole, allowing them to pay taxes as individuals and removing the corporate tax minefield from the mix. But the transition from a S Corporation to a C Corporation is exceedingly painful.

Regulatory Capture, my phrase of the day. (really the last decade, but who’s counting)


 
Written By: CaptinSarcastic
URL: http://
Uhoh the Three Sarcastic Amigos from the top of the thread have gone MIA.
 
Written By: TomD
URL: http://
Not MIA, just out working. Sure, using only marginal rates is not a totally accurate picture of how much a company pays in taxes in a country. But it does give a good snapshot of how various countries deal with corporate taxes. It would be better if someone could take Company A, keep income and non-tax expenses the same and run its taxes in various countries around the world. It would also have to take into account environmental mandate costs, regulatory costs, tax compliance costs, etc. Then see where we stack up.

And my sarcastic statement above stands. Or don’t you believe lower tax rates are good for business and attract more businesses ?
 
Written By: jjmurphy
URL: http://www.allthatisnecessary.com
"Moreover, on tax policy, at least the very small corporations have their own loophole, allowing them to pay taxes as individuals and removing the corporate tax minefield from the mix."
There are, of course, tradeoffs when going this route, so it’s not necessarily ideal either. There are limits on shareholders, retained earnings, etc. depending on being an S-corp or LLC. If you want to stay small, this may be of no consequence, but if you intend to grow, it certainly is not.

 
Written By: Grimshaw
URL: http://
Well, and then there is the fact that companies don’t really pay taxes . . . only people pay taxes.

Companies collect taxes from customers, employees, and inverstors. But they don’t actually pay taxes . . .
 
Written By: Don
URL: http://
And my sarcastic statement above stands. Or don’t you believe lower tax rates are good for business and attract more businesses ?
A business that locates their corporation in a country based in the marginal rates without looking at what the effective rate is a business too stupid to succeed, and I would prefer to see them bring their failure to some other country. If they come here, we’d probably have to spend taxpayer dollars to bail their dumb asses out.
There are, of course, tradeoffs when going this route, so it’s not necessarily ideal either. There are limits on shareholders, retained earnings, etc. depending on being an S-corp or LLC. If you want to stay small, this may be of no consequence, but if you intend to grow, it certainly is not.


I agree completely.
Well, and then there is the fact that companies don’t really pay taxes . . . only people pay taxes.
There’s people in those countries that have corporate taxes as well, what’s your point?

I agree that our corporate tax system is crappy, but not because it’s too high, which was the point of this post, since the effective rate in the US is lower than most industrialized countries. It’s crappy because it favors big over small, complexiities over simplicity, and accounting over production.

So why don’t we agree that a marginal rate increase or reduction is not a real solution, but that a systemic change in how we tax corporations is a solution?

As I said...
So if you want to lower marginal rates, fine, let’s do it. A flat 20% on all profits for all corporations, no deductions.

Then we’d get to be on the bottom of your graph, and increase revenues, woohoo!
 
Written By: CaptinSarcastic
URL: http://
A business that locates their corporation in a country based in the marginal rates without looking at what the effective rate is a business too stupid to succeed,
I think we are arguing semantics here. A company has to take into account all the costs of doing business in a country. Marginal rates are a easy quick glance, and do make a point. Of course you have to dig deeper.
It’s crappy because it favors big over small, complexiities over simplicity, and accounting over production.
Agreed. Government has made it way too complicated. That is because they use the tax code for social purposes, favors, and to punish certain industries, not to generate revenue.
 
Written By: jjmurphy
URL: http://www.allthatisnecessary.com
That is because they use the tax code for social purposes, favors, and to punish certain industries, not to generate revenue.
I disagree. Social activists don’t bother much with the systemic elements of the corporate tax system. They might favor higher rates in general, but I think that the complexities were legislated with the fingerprints of industry and coporate lobbyists all over them.
Politicians fight to get on the House Ways and Means and Senate Finance committees not because they are intrigued by the complexity of the tax code but because the committees are the best fundraising platforms in Congress. And why shouldn’t they be? It would be irrational for a businessman not to try to get tax subsidies by making campaign contributions or hiring lobbyists who will contribute. The return on such an investment almost always far outweighs any return he could get by investing in the market. Politicians vote for these tax subsidies not because they are corrupt (although some are) but because lobbyists, who bought access with campaign contributions, made a persuasive and usually unchallenged case for their tax subsidy.


I know it’s natural to blame every little thing on them long haired commie pinko’s, but seriously, look at the graph on this page...

You don’t see "Streisand Ticket Holding Friends of Dorothy" listed among those firms lobbying the committees that legislate corporate tax code.
 
Written By: CaptinSarcastic
URL: http://
That is because they use the tax code for social purposes, favors, and to punish certain industries, not to generate revenue.
You may disagree, but the federal government does use the corporate tax system for social engineering. e.g. the tobacco industry, the auto industry, insurance industry. It punishes some businesses and rewards other business/special interests. If their sole purpose was to raise revenue there would be a flat tax on every business and the lobbying companies would be out of business.
 
Written By: jjmurphy
URL: http://www.allthatisnecessary.com
the federal government does use the corporate tax system for social engineering
The tobacco industry pays the same corporate taxes as anyone, the social engineering is in the excise taxes.

Other than corporate tax subsidies, which I argue are not the working of social justice advocates, but rather industry lobbyists, I would like to see an example of social engineering in the corporate tax code.

The new issue of Economists’ Voice (Volume 3, Issue 1) features several excellent articles on the current tax reform debate, including a lead essay from Edward Lazear and James Poterba of the President’s Advisory Panel on Federal Tax Reform. One conclusion was that given the political process that determines the tax code, special provisions are likely to depend more on an interest group’s lobbying efforts than on careful estimates of social externalities or other considerations.

I don’t disagree that taxes in general can be used for social engineering, I am just arguing that the complexities of the corporate tax code are not, they are generally legislated by industry request and rarely have much opposition, often because they are so flipping complex themselves, people wouldn’t know what to oppose.

We may be talking past each other here, I sense general agreement. But either way, our corporate taxes are not very high in comparison to the industrialized world, they are just terribly complex, and we agree that has it’s own costs.



 
Written By: CaptinSarcastic
URL: http://
We may be talking past each other here, I sense general agreement.
I agree
 
Written By: jjmurphy
URL: http://www.allthatisnecessary.com
I have reluctantly come to the conclusion that, given the choice between presenting a misleading and deceptive statistic that makes a false impression in order to further his rhetorical point, vs. honestly exploring both empirical sides of a statement of economic fact, Q. goes with the second one 9 times out of 10. The obvious counterfacts provided by Cap & Erb are yet another demonstration of the M.O. It’s not just that it wasn’t in the original post - it wasn’t updated, either.

The fact that US corps actually pay less in taxes on average than OECD countries despite the higher nominal rates means that reality is the literal opposite of the point he was making. And he doesn’t appear to care.

I guess he’s no worse than "the liberals" about that, right?
 
Written By: glasnost
URL: http://
’Nost, explain to me why the assumption that corporations here are the only ones with exemptions, is the only valid assumption and the chart is therefore invalid, will you?

Re: OECD tax rates, hit the link.

If the US is at number 4 (newer studies now say number 2) among the 30 OECD countries, it can’t be paying about the "average tax rate of the OECD" can it? You can’t make that claim unless you believe that only US corporations receive exemptions (which explains why none of them are leaving the US for nations with lower tax rates, doesn’t it?). But that’s not true, is it? You don’t seem to know that, and apparently you don’t care.

As to your argument that "second sides" to arguments are ignored here that’s simply nonsense. That’s why we have a comment section. That’s why you and others have access to it. I have absolutely no requirement whatsoever to present any side of an argument but that which I choose to present.

You then have the opportunity to present your rebuttal or comment on it.

I’m not the press, I don’t make any claim about objectivity, I have and always will have an agenda and I write OPINION pieces. Get over it and quit your ill-informed whining will you?
 
Written By: McQ
URL: http://www.QandO.net

 
Add Your Comment
  NOTICE: While we don't wish to censor your thoughts, we do blacklist certain terms of profanity or obscenity. This is not to muzzle you, but to ensure that the blog remains work-safe for our readers. If you wish to use profanity, simply insert asterisks (*) where the vowels usually go. Your meaning will still be clear, but our readers will be able to view the blog without worrying that content monitoring will get them in trouble when reading it.
Comments for this entry are closed.
Name:
Email:
URL:
HTML Tools:
Bold Italic Blockquote Hyperlink
Comment:
   
 
Vicious Capitalism

Divider

Buy Dale's Book!
Slackernomics by Dale Franks

Divider

Divider