Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If you look at an SEC form 10-Q for publicly traded companies, corporate taxes are fully deducted from income attributed to shareholders.
Shareholders pay the tax. Consumers pay nothing.
Elliott_CA, you claim that every share holder of GM or Ford gets a form from the corporation informing them that they personally have just paid their share of the company's corporate taxes?
I don't believe that. Point out which line of the form you're referring to. I never received such information from Ford. Refer to https://www.sec.gov/files/form10-q.pdf
The corporate taxes are not levied upon the share holders of a publicly held corporation. What about taxes other than income taxes? Do you believe the companies real-estate taxes are also levied directly on to the shareholders? that's nonsense.
It’s not effectively a sales tax no matter how many times you repeat it
LowExpectations, would it please you more if I added the word “acts as”? Corporate taxes are generally embedded within the prices of their products and generally passed on to the customers. Corporate taxes effectively behave or act as sales taxes. Do you contend that corporations do not pass on their taxes as they pass on all other normal commercial expenses?
LowExpectations, would it please you more if I added the word “acts as”? Corporate taxes are generally embedded within the prices of their products and generally passed on to the customers. Corporate taxes effectively behave or act as sales taxes. Do you contend that corporations do not pass on their taxes as they pass on all other normal commercial expenses?
Sales taxes are "on the top", not "off the top". Also they are calculated based on the price of a product being sold, not on the net profit of the company. Furthermore, sales taxes have to be paid multiple times if a product is resold. In all these ways sales tax is not like corporate income tax.
LowExpectations, would it please you more if I added the word “acts as”? Corporate taxes are generally embedded within the prices of their products and generally passed on to the customers. Corporate taxes effectively behave or act as sales taxes. Do you contend that corporations do not pass on their taxes as they pass on all other normal commercial expenses?
I don’t care if you add a phrase as it would be wrong still. I don’t think businesses pass on all their expenses so I wouldn’t agree with you there either. Sales tax and Corp tax aren’t close to the same thing other than the tax part
Not that I agree that corporate income tax is anything like a national sales tax but the old corporate tax brackets were so small, they effectively were flat at 35%. The top bracket started at something like 18.3 million of TI. To any corporation of consequence, their marginal tax rate was always 35%. Effectively 99.9% of their income was earned in the top bracket because they blew through the tiny brackets so quickly that were actually a lower marginal rate. The reduction to their effective tax rate because of those lower tax brackets was near meaningless.
Sales taxes are "on the top", not "off the top". Also they are calculated based on the price of a product being sold, not on the net profit of the company. Furthermore, sales taxes have to be paid multiple times if a product is resold. In all these ways sales tax is not like corporate income tax.
NCole1, the issue is not sales tax but rather the effective consequences of corporate taxes.
There is a general relationship between corporate taxes embedded within the price, and the gross price of of the product.
The embedded corporate taxes continue to remain embedded within the prices of products as the product passes through the links that compose chains of transactions, in this manner corporate taxes embedded within the prices of products behave extremely similar to the behavior of sales tax.
It is not an exaggeration to state corporate taxes embedded within your total annual purchases effectively act very similarly to a flat rate sales tax.
Elliott_CA, you claim that every share holder of GM or Ford gets a form from the corporation informing them that they personally have just paid their share of the company's corporate taxes?
I don't believe that. Point out which line of the form you're referring to. I never received such information from Ford. Refer to https://www.sec.gov/files/form10-q.pdf
The corporate taxes are not levied upon the share holders of a publicly held corporation. What about taxes other than income taxes? Do you believe the companies real-estate taxes are also levied directly on to the shareholders? that's nonsense.
I didn't claim every shareholder personally gets a form from the corporation they invest in.
Every investor knows the standard accounting practice. The SEC 10-Q quarterly report is a the most closely watched statement of financials, with income statements and balance sheets. From Bank of America's 10-Q
Income before income taxes ...................... 8,994
Income tax expense .............................. 1,827
Net income ...................................... 7,167
Preferred stock dividends ......................... 466
Net income applicable to common shareholders ... $6,701
The value of a stock is directly related to earnings. The dividends paid out are also dependent on income available after taxes.
The fact is shareholders bear most of the burden of corporate taxes. You might think it's "nonsense" but the investing world doesn't.
Political conservatives are more likely believe those whose incomes are insufficient to be subject to federal income tax
It is a question of fact, not belief. People who add little to the economy, or who primarily add to the underground economy, have no federal income tax obligation.
Period.
Quote:
Originally Posted by Supposn
They're also likely to be opposed to corporate taxes and point out that customers, not businesses pay businesses taxes.
No, that isn't true: All economists -- regardless of where they fall on the salt-water to fresh-water spectrum, know that corporations (and all businesses for that matter) merely collect and forward taxes to taxing authorities. The incidence of the tax depends on the price-elasticity of demand, the price-elasticity of supply, and the cross-elasticity of complementary goods and substitute goods.
As articulated by others elsewhere,
Quote:
One of the fundamental lessons of economics is that the entity that bears the statutory burden of a tax has nothing to do with where the burden of that tax ultimately falls. "Statutory burden" means the entity that must fill out a tax form & send it off to the IRS.
Any statutory burden of a tax on a corporation is allocated as follows:
X% is borne by customers in the form of prices higher than they otherwise would be
Y% is borne by employees in the form of total compensation (including hours worked!) lower than they otherwise would be
Z% is borne by business owners (shareholders) in the form of profits lower than they otherwise would be
...where X+Y+Z=1.0 (that is, X%+Y%+Z%=100.0%)
Sooo... corporations merely collect & forward tax revenue to the IRS. The burden of that statutory tax is always allocated to a combination of customers, employees, and business owners (shareholders). To the extent a corporation is able to minimize a tax burden, that just means customers didn't have to pay a higher price, employees get paid more (and work more), and business owners (shareholders) make more profit.
That is, PEOPLE always bear the burden of any and every tax.
There quite literally is no place else for the tax to flow: it must go to a combination of the three.
I may not of done the clearest job explaining this concept. If you didn't understand me, here are a few hyperlinks that you can follow to get more detail or perhaps a better explanation.
The problem with all business taxes and all corporate taxes is they are not an efficient way to raise revenue to run the government. Because everyone agrees that PEOPLE always bear the burden of any and every tax, it is much more efficient to tax PEOPLE directly.
IThe problem with all business taxes and all corporate taxes is they are not an efficient way to raise revenue to run the government. Because everyone agrees that PEOPLE always bear the burden of any and every tax, it is much more efficient to tax PEOPLE directly.
What does efficiency have to do with it? Some tasks are inherently difficult and complex.
And so explain, in as few words as you can, how taxing people directly accounts for the economic value of corporate revenue and profit. I think it's false to claim that all corporate taxation somehow rests directly on the shoulders of their customers and thus could be passed downward - for "better efficiency" or otherwise.
How is, say, taxing me directly getting, say, Breckenridge Brewery to pay its corporate share of civic cost?
Anyone who works in this field at a high level knows that corporate taxes must be higher than individidual (net) otherwise you're going to see a lot of corporations created for tax evasion.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
