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Why do wage earners, with no college degrees, little understanding of Corp. accounting practices such as write offs,support tax policies that give huge tax breaks to Corporations? They never ever pay the tax rate that they are supposed to be in. GE, for instance, pays 0 taxes. How is that possible?
Do they truly believe these tax breaks will create jobs for them? Unemployment is the lowest right now.
Corporations have huge cash reserves and can invest them in expansion right now if they want to.
I am not trying to politicize this, merely want a discussion on how this happens where voters are induced to vote against their own interests.
And the reason ge reduced its tax bill.....for one year....was because the ge financing arm got hosed in the financial crisis. They had losses to carry forward. When you don't have federal income....you dont pay federal income tax. You say the corporations don't "pay the rate they should"....but they paid their legal share. Apparently, you want them to just randomly pay entra. Do you do the same? Or do you legally minimize the amount you pay?
But of course, you and the other sheep think ge pays no taxes. Of course you'll ignore all the payroll, property, sales and use, international taxes, and state taxes they paid...because that doesn't fit the sound byte of a pandering buffet.
Write offs? Which ones do you disagree with? Why?
As for the dreaded overseas cash horde...The companies won't bring the cash home because congress thinks it's reasonable to tax money a second time that was already taxed internationally. They have an idiotic worldwide tax system instead of territorial. What sane corporation is going to bring money back to be taxed at a 35 percent marginal rate...that they already paid tax on? None. No, they can just borrow money domestically cheaper if needed.
Last edited by Thatsright19; 10-21-2017 at 02:17 PM..
Corporate taxes can only come from customers, employees, or shareholders. The burden will vary from place to place and time to time, but there is no where else to get the funds. Taxing corporations is just taxing people so why would it be preferable to any other tax?
Taxing corporations is just taxing people so why would it be preferable to any other tax?
Not only that, but you end up taxing them twice. Once as part of the corporation, and then again when the profits are realized by the people who own them.
It hurts the middle class more than anyone else. Corporations are owned by hardworking individuals who put money into their 401k for retirement.
I don't know why low wage, uneducated people support corporate tax breaks, but it's equally hard to understand why anyone with an education would support corporate taxes except for the purpose of their personal or political gain.
Back to the actual question...yes people vote against their own interest a lot.
It's not surprising...guess who pumps money into ad campaigns and candidates? And who pays for Russia-style troll farms, who populate internet forums? (Ok, American-style since the same thing has been happening for generations, from the false-information campaigns paid for by the tobacco industry to similar efforts still underway on climate change, healthcare reform, and every other major issue where a major industry could lose profits.)
I'm a centrist on this stuff. Companies should try to make money, and that's how many necessary and awesome things happen, like most new buildings and much of our technology. Like most people beyond a certain age, I count on my retirement accounts which are mostly stocks.
But companies can be very profitable with very little public good -- middle class payrolls, donations (generally miniscule), etc. Even the grand total of all payrolls can be pretty small, including supply chains which might be largely outside the country. A decent corporate tax rate helps ensure public benefit. And it reduces reliance on individual taxes.
Why do wage earners, with no college degrees, little understanding of Corp. accounting practices such as write offs,support tax policies that give huge tax breaks to Corporations?
They never ever pay the tax rate that they are supposed to be in. GE, for instance, pays 0 taxes. How is that possible?
Do they truly believe these tax breaks will create jobs for them? Unemployment is the lowest right now.
Corporations have huge cash reserves and can invest them in expansion right now if they want to.
I am not trying to politicize this, merely want a discussion on how this happens where voters are induced to vote against their own interests.[/quote]
Because they are rational.
They learned in elementary school that "business" does not have 4 letters. They learned that "corporation" does not have 4 letters.
They learned that sales taxes are paid by retailers, but the actual burden falls on the customer; it is right there on the cash register receipt.
They learned that non-retail businesses are just like retail businesses in that every penny of tax they pay is actually borne by actual people: customers in the form of higher prices, employees in the form of lower wages, and owners in the form of lower profits.
They learned that when businesses have more money to expand, they tend to do so.
They learned that when businesses expand, they tend to hire more employees.
Quote:
Originally Posted by cb2008
GE, for instance, pays 0 taxes. How is that possible?
"GE pays 0 taxes" is a false trope of the rabid left that just won't die. It fits the category of "Lies Told Often Enough Become Truth." You have absolutely no idea what GE pays in taxes. None. Zero, zip, nada. You are 100% wrong.
And you know it.
Even though the lie is told over and over again, it is still a lie. It is FAKE NEWS.
Let's be clear: You do not have any idea of what any corporation pays in income tax unless they disclose it, and they do not.
The Federal Corporate Income Tax Return is a trade secret. The It is not public information.
At every Fortune 500 corporation (indeed, every Large Business), there are maybe a dozen people who know how much federal income tax is paid: The VP of Tax, The CFO, The Treasurer, and a few lieutenants. That's it. The CEO doesn't typically know, although she could if she wanted to, and the Board of Directors could know if they wanted to, although they wouldn't have much interest.
At each Fortune 500 Corporation, IRS Auditors are on-site auditing the corporation continuously. Continuously. Eight hours per day, 5 days per week, 52 weeks per year (excluding holidays) the IRS Auditors continuously examine the books and test all tax positions and assumptions. The Corporation sets aside private locked office space for the IRS, including conference rooms, war rooms, file rooms, telephones, secure private internet access, offices & cubicles, and infrastructure for the IRS to do its job of continuously auditing the corporation. The project managers & team leaders of the IRS Auditors know how much the company pays in taxes.
WHAT IS PUBLIC, of course, are the GAAP Financial Statements including The Income Statement, the Balance Sheet, Statement of Cash Flows, etc.
There is a line item on the Income Statement that is the "Provision for Income Taxes." That line item is a GAAP line item (GAAP = Generally Accepted Accounting Principles), calculated based GAAP rules.
It has NOTHING to do with the actual income taxes paid by the corporation.
"Provision for Income Taxes" has NOTHING TO DO WITH THE ACTUAL INCOME TAXES PAID BY THE CORPORATION. Nothing to do with it. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Nothing. Corporations do not pay federal corporate income taxes based on the GAAP calculation of "provision for income taxes" contained in the financial statements.
Corporations pay federal corporate income taxes based on tax law, tax regulations, and tax accounting. While the Financial Statements of public companies are public, there is a separate and parallel set of financial records called the Tax Books. They are NOT public. They are trade secret. Only in that set of tax books is the explanation of the actual federal income tax obligation for the year.
So let's just kill off this canard that GE pays no federal income tax, because that information is only knowable if the corporation discloses it, and they rarely do so.
Several years ago, Tim Cook, the CEO of Apple, testified before the US Senate and asserted to the best of its knowledge Apple paid more in federal income taxes than any corporation in the world. He listed the number (I'm too lazy to google it for you). Later that day & the next, 4 or 5 other corporations issued public press announcements saying "Wait-- we pay more in income tax than did Apple" although none of them stated the number; it was just asserted.
Count the letters in the word "corporation." Please note it is not a 4 letter word.
But they do plenty of four-letter things to people and communities. More and more frequently it seems, ever since they got this status as quasi-people.
They learned in elementary school that "business" does not have 4 letters. They learned that "corporation" does not have 4 letters.
They learned that sales taxes are paid by retailers, but the actual burden falls on the customer; it is right there on the cash register receipt.
They learned that non-retail businesses are just like retail businesses in that every penny of tax they pay is actually borne by actual people: customers in the form of higher prices, employees in the form of lower wages, and owners in the form of lower profits.
They learned that when businesses have more money to expand, they tend to do so.
They learned that when businesses expand, they tend to hire more employees.
Again, there is no guarantee that companies will use those tax savings to invest in labor. They could just as well use that money to line the pockets of their investors.
There is an assumption here that taxes are the main factor in a company's ability to expand. The past three years has shown this is not the case.
Quote:
At each Fortune 500 Corporation, IRS Auditors are on-site auditing the corporation continuously. Continuously. Eight hours per day, 5 days per week, 52 weeks per year (excluding holidays) the IRS Auditors continuously examine the books and test all tax positions and assumptions. The Corporation sets aside private locked office space for the IRS, including conference rooms, war rooms, file rooms, telephones, secure private internet access, offices & cubicles, and infrastructure for the IRS to do its job of continuously auditing the corporation. The project managers & team leaders of the IRS Auditors know how much the company pays in taxes.
Their you go. These taxes are putting some people to work.
The realities of the Federal tax system is that massive numbers of corporations pay no or few taxes in any given year. As a result, the effective rate corporations pay now is already close to that 15% level that Trump wants. A major cut in top rates without eliminating huge numbers of tax loopholes would create a disastrous loss of income and result in even more burden on individual.
Are U.S. corporate taxes really that high?
What the U.S. Government Accountability Office found in a 2016 study is that the effective tax rate — the amount paid in taxes relative to taxable income — is far lower than the 35% rate companies supposedly pay. The study examined the tax years of 2006 through 2012. (Remember that this included the worst of the Great Recession, so total revenues were down, though that shouldn't necessarily affect tax percentages.)
In any one of these years, at least two-thirds (between 67% and 72%) of all active corporations had zero tax liability after credits. The peak came at the end of the recession, but in 2012, it was still 70.1%. Moreover, the low of 67% happened in 2006, before the financial meltdown set in.
The power of tax credits
In 2012, among large corporations that met that $10 million in assets threshold, 42.3% paid no federal income taxes after tax credits. Among profitable large companies, 19.5% paid no federal income taxes. The average effective tax rate among the profitable large corporations was 16.1%, under federal tax treatment. Compared to the pretax net income these corporations showed in their annual reports the rate was 14%.
As the GAO notes, one reason is that in the years from 2008 through 2012, about half of the corporations in any year had negative net tax income, based on federal accounting rules. But the number of companies paying no taxes didn't change significantly. That raises the question of how unusual the economic circumstances ultimately were. For all active corporations in each of those years, only about one percentage point of the companies not paying taxes were attributable to federal tax credits. This was probably business as usual.
In other words, taking everything into account, corporations on the whole weren't anywhere near a 35% rate. Looking at only federal effective tax rates, the U.S. appears to be on par with global peers, if not below.
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