Should Corporate Taxes be increased?

[fintstone]

Why is it so hard for US companies to compete? The article below describes the high coprorate tax rate for US companies...while liberal clamor to raise the rates on US companies. the recent Airbus win (over Boeing) of one of DoD's biggest aircraft contracts (tanker/refueling) should be the wake-up call. If you are concerned about jobs in this country...higher tax rates are certainly not the answer.

http://www.taxfoundation.org/publications/show/23015.html

WASHINGTON, Mar 18, 2008 - A new study from the Tax Foundation, a nonpartisan tax research group in Washington, shows that most American states tax job providers at a higher rate than any other country in the developed world.

"This is startling news for America's businesses and workers," said Tax Foundation president Scott Hodge, the study's author. "Tax competition for jobs and investment is fierce, and the U.S. continues to fall further and further behind. Our states should be the world's leaders in many things, but high taxation should not be one of them. The high federal corporate tax rate is literally crushing states' competitive abilities. That means fewer jobs for American workers."

Counting the federal rate alone, the U.S. has the world's highest corporate tax rate, but including average sub-national rates (federal plus state in the U.S.), Japan edges out the U.S. for the highest-tax location (see table).

This new study breaks the tax down state-by-state, adding each state's corporate tax rate to the federal corporate tax rate. The results show that 24 states impose, when combined with the federal rate, a higher business tax rate than in any other nation. In fact:

24 states have a combined corporate tax rate higher than top-ranked Japan.
32 states have a combined corporate tax rate higher than third-ranked Germany.
46 states have a combined corporate tax rate higher than fourth-ranked Canada.
All 50 states have a combined corporate tax rate higher than fifth-ranked France.
"If federal lawmakers are serious about making the U.S. corporate tax system more competitive globally, they will have to partner with state officials to lower the nation's overall corporate tax burden," Hodge added. "Likewise, state officials should have a vested interest in cutting the federal corporate tax rate because there is only so much they can do to improve their own competitiveness. After all, even corporations in the three states that do not impose a major state-level corporate tax—Nevada, South Dakota, and Wyoming—still shoulder a higher corporate tax rate than France, and 25 other major countries, because of the 35 percent federal corporate rate."

The table below lists each state's combined corporate tax rate, and then compares them (bolded) with the rates of our major trading partners and competitors...
(See link for entire article including state-by-state corp tax rates)http://www.taxfoundation.org/publications/show/23015.html

[widgeon13]

I suppose this will be considered blasphemy, especially on Easter but I think it's about time we started taxing all religious organizations before we increase corporate taxes.

Just some food for thought.

[Sapporo Guy]

We probably would have had lower taxes if people weren't so trigger happy and try to get rich people to pay for them. Because of those forefathers companies just got smarter and learned how to beat the system thereby the government got the cool idea to nail people who weren't as business savy and guilible enough to pay their taxes from their pre-earnings rather than post-earnings.

So, don't forget to thank those goody, goody, robin hoods who thought it was a good idea to try to tax the rich, back when


Dublin started to get flooded by companies because they offered special tax incentives to companies willing to relocate to their island.

What is the US thinking?

[fintstone]

Ultimately the high corporate taxes are passed on to consumers...but in a way that the ignorant liberal voters do not recognise...so to "punish" the "greedy corporations"...they push for even higher corporate taxes which cost them at the marketplace and sometimes evn their very jobs.

[red-beard]

The personal income tax and corporate tax rates in Romania are less than 1/2 of what we pay. 16%

As I showed in another thread, A company has a lot more incentive to move to a low tax country than a low labor country, depending on how much profit yo make and how much labor is in your product.

[Wickd89]

Cancel any credits for having overseas subsidiaries.

Provide some type of tax incentive to keep jobs here (even a reward)...

For example, Nortel is hurting and they are hoping to move jobs to Mexico and pay them less. Yes American being told to move to Mexico city at 1/2 the rate. trust me, it is part of the master plan: NAFTA!!

[fintstone]

Originally Posted by Wickd89

Cancel any credits for having overseas subsidiaries.

Provide some type of tax incentive to keep jobs here (even a reward)...

For example, Nortel is hurting and they are hoping to move jobs to Mexico and pay them less. Yes American being told to move to Mexico city at 1/2 the rate. trust me, it is part of the master plan: NAFTA!!

Tax incentives? Why not just cut the corporate tax...both federal and state? Companies just cannot be competitive in the US with such oppressive taxes. It is almost to the point where many have to go overseas or go bankrupt.

[RoninLB]

class warfare liberal politics say businesses are evil.

[red-beard]

Originally Posted by Wickd89

Cancel any credits for having overseas subsidiaries.

Provide some type of tax incentive to keep jobs here (even a reward)...

For example, Nortel is hurting and they are hoping to move jobs to Mexico and pay them less. Yes American being told to move to Mexico city at 1/2 the rate. trust me, it is part of the master plan: NAFTA!!

Actually, that is precisely the problem. Our tax code is being used to socially engineer instead of to raise revenue. We need to eliminate all deductions and go to a flat tax. And my personal opinion is to eliminate all corporate taxes. TANSTAAFL (There ain't no such thing as a free lunch!). Corporations do not pay taxes. Taxes are merely a part of doing business. The cost of taxes, like materials and labor, is passed onto the consumer.

Until the people and our elected offcials understand this, our country will continue to struggle.

What would be the effect of a National Sales tax, along with elimination of all corporate taxes, payroll deductions, etc? Goods produced in the USA would cost less. In the marketplace, the goods would compete with all other worldwide goods on an even basis.

Second, if people understood exactly and directly how much taxes they are really paying, there will be a tax revolt. No one will want to pay a 22-27% sales tax. But what they don't understand is they are paying it right now in the higher price of goods.

[onewhippedpuppy]

Ironic that Obama wants to raise taxes on the rich and corporations to support social programs, but encourage businesses to stay in the USA and employ Americans.

[berettafan]

Spending should be cut.

I do/have done tax returns for 100's of corps. Maybe 3 or 4 pay tax directly. The rest pass through to the shareholders.

Want to raise hundreds of millions in capital then yes, you get to be a C corp and pay tax directly (due to #'s of shareholders). But for anyone that feels small bsns is the backbone of America the argument of corp. taxes is invalid. ------------I realize nobody as of yet is saying this but wanted to point it out because it seems many people feel that small bsns is what makes the US what it is--------------------

The only argument i've heard for nat'l sales tax that makes some sense is that even the illegals will be contributing $$ to uncle sam and maybe this will help reduce the burden on citizens. However i think the black market that would likely rise up would cancel at least a decent portion of the benefits (mexicans are pros at obtaining/selling counterfiet goods) and i don't believe for a second that corps would all of a sudden decide to pass any possible savings on to consumers.

But maybe someone can take a company like GM or Dell or Gap or Nabisco and divide the income tax they pay by the # of items sold in a year.

[berettafan]

Originally Posted by red-beard

The personal income tax and corporate tax rates in Romania are less than 1/2 of what we pay. 16%

And the mass exodus of former US citizens to Romania for the better standard of living is proof that they have it right over there.

[berettafan]

[QUOTE=red-beard;3845881]

Corporations do not pay taxes. Taxes are merely a part of doing business. The cost of taxes, like materials and labor, is passed onto the consumer.

So what's the point in reorganizing the tax system then? It all gets passed through to the consumer so what's the difference?

What would be the effect of a National Sales tax, along with elimination of all corporate taxes, payroll deductions, etc? Goods produced in the USA would cost less. In the marketplace, the goods would compete with all other worldwide goods on an even basis.

A reach IMO. You should be working for the Fed if you can prove that statement.

Second, if people understood exactly and directly how much taxes they are really paying, there will be a tax revolt. No one will want to pay a 22-27% sales tax. But what they don't understand is they are paying it right now in the higher price of goods

Again, what's the difference? And btw the # tossed around was 34% IIRC. NOT 22-27%. BIG difference.

[berettafan]

One last point-

As i mentioned earlier the problem is SPENDING. It is my feeling that massive overhauls like this will only serve to distract voters from the fact that SPENDING is the problem and we need to take control of gov't spending. I believe we will end up in the same position we are already in (uncle sam spends away and nobody puts a check on it) and will have lost valuable time in making a real change.

Term limits, social security and std. health insurance for all congressmen will change this country like nothing ever has before. For the good. Promises of lower taxes with no clear cuts in spending to go with them ring hollow to me.

If US corps are cripled by our tax system then i suggest we reevaluate our gov'ts spending habits.

[Joeaksa]

Originally Posted by onewhippedpuppy

Ironic that Obama wants to raise taxes on the rich and corporations to support social programs, but encourage businesses to stay in the USA and employ Americans.

And of course he is not "out of touch with reality and what our country needs" but then sorry to say that this can be said about every one of the candidates for the White House this time around.

[hardflex]

Both Percentages could be right 22-27 or 33%, depending on the revenue you are trying to replace.


Tax Freedom day (the day of the year when we make enough to pay our tax burden for the year, Fed State and Local) was April 30. That's about 33% of the calendar year.

If you only want to replace the Fed revenues, it would be the lower % and state/local taxation would stay the same.

As I see it, two products sitting on a store shelf, one, made in the USA, carries the burden of paying
Fed Fica taxes
Fed Medicare Taxes
Fed Unemployment Taxes
State Unemployment Taxes
Local Property Taxes
Local Inventory Taxes.
and a bunch more if you start thinking about it.

The other one, made in another Country, does not pay these and has a price advantage to the consumer. You can't allow this to continue, IMHO, penalizing American Companies, and expect them to remain competitive.

Many Countries, such as Canada, Western Europe, etc., have a similar standard of living/wage laws. We can have free trade with them to our mutual benefit. Other Countries, such as Mexico, China, etc. have much lower wage rates, so we place a tariff on goods coming in from those countries in an attempt to equalize the "taxes paid" of the items on the shelf. The tariffs would be small, like an 8% sales tax or something like that.

Revenues from tariffs would reduce the flat tax rates needed to generate the revenues, thereby minimizing black market trading.

Thats my solution, flame on......

[berettafan]

Originally Posted by hardflex

As I see it, two products sitting on a store shelf, one, made in the USA, carries the burden of paying
Fed Fica taxes
Fed Medicare Taxes
Fed Unemployment Taxes
State Unemployment Taxes
Local Property Taxes
Local Inventory Taxes.
and a bunch more if you start thinking about it.

The other one, made in another Country, does not pay these and has a price advantage to the consumer. You can't allow this to continue, IMHO, penalizing American Companies, and expect them to remain competitive.

So this price advantage is due to our standard of living...right?

It is ever so popular to wave the flag and proclaim the US to be the greatest country in the world but to do so while at the same time undermining the taxation that has helped to make it that way is dishonest and simple.

If the US is so great then what makes it so? Schools, roads, postal system, what? And how is that stuff paid for?

Subsidizing corporate income tax with consumer dollars is not the answer. We will all be in the same spot. Of course there will be no more middle class because the middle class spends most of what it earns.


Oh I forgot, the for-profit corps in the US are going to be kind to us and lower their prices by the amount of their income tax.

The same for-profit corps that allow worker pension funds to go bad and pay their execs 10's of millions of dollars to lose record amounts of $$. Right.

[hardflex]

That's not what I was trying to say. I just offer my suggestion for a better taxing system to raise revenues without penalizing American made products. Corporations would pay a tax on purchases just like individuals with a sales tax system, but no income tax.

Sorry if I wasn't clear on that.

[berettafan]

So instead of passing on the income tax they'd be passing on the sales tax.

[red-beard]

Originally Posted by berettafan

So instead of passing on the income tax they'd be passing on the sales tax.

That would be stupid. The sales tax should be at the final point only. Any taxes paid by the corporation will get passed along. VAT, corporate taxes, etc, all find their way into the final price.

Better to have an open final point sales tax. Our good would then compete in this country on a pure even footing, or probably at an advantage.