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No one is calling for increased taxes for pete's sake..they are just calling for them to pay the taxes they owe and close the loopholes.
But again if we take GE for example those loopholes are subsidies for green tech, if you cut those tax breaks out you'll also need to get rid of renewable energy mandates otherwise the rate payer will absorb those costs. It's the same thing with ethanol, they cut the tax breaks but those costs will now be reflected with an increased cost for gasoline because they still have to blend it into the fuel.
If we take the tax breaks to petroleum companies you have to look at why their in place. It's so smaller companies can adsorb the costs of bad wells. If Exxon loses that subsidy it's really not much skin off their nose and I wouldn't be surprised if they would like to see it expire because it's their smaller competitors that will be effected the most.
But again if we take GE for example those loopholes are subsidies for green tech, if you cut those tax breaks out you'll also need to get rid of renewable energy mandates otherwise the rate payer will absorb those costs. It's the same thing with ethanol, they cut the tax breaks but those costs will now be reflected with an increased cost for gasoline because they still have to blend it into the fuel.
If we take the tax breaks to petroleum companies you have to look at why their in place. It's so smaller companies can adsorb the costs of bad wells. If Exxon loses that subsidy it's really not much skin off their nose and I wouldn't be surprised if they would like to see it expire because it's their smaller competitors that will be effected the most.
Take another multi-national then because the energy credits throw off the point I was trying to make.
They shift their US profit overseas and then only pay 7% on it.
They can do that by assigning copyrights, patents, transfer pricing and then shifting US profits to foreign subsidiaries.
Where in any of the 2 articles I posted or in my subsequent posts did I ever mention "increased". No one is trying to increase taxes on corporations..just get them to pay the taxes they owe on US profits.
If they pay more in taxes, that's an increase. What you're failing to understand is that any increase in corporate taxes will yield higher costs for the end consumer/user and fewer American jobs.
But what these senators want to do is REDUCE revenue.
This is not the time to reduce revenue.
/sarcasm on
Your crazy. Reduce revenue. We have NO revenue.
Right now tax revenue to GDP is at 16.1% the lowest in 50 years. Under Reagan, Bush and Bush (idiot) it was 18% or higher, and under Clinton it was 19.1%
/sarcasm off
You are correct about the corporate loopholes. GE just made another huge profit this quarter as their business is shifting to finance in the global marketplace.
They shift their US profit overseas and then only pay 7% on it.
They can do that by assigning copyrights, patents, transfer pricing and then shifting US profits to foreign subsidiaries.
That should give you a big clue as to why we're losing American jobs and corporate taxes paid to the US. Tax them only 7% or preferably less here, and there'll be an incentive to pay here.
Our country is deep in debt and we have US Senators thinking about giving corporates a "tax holiday" on their US earnings. As the article states..that's hundreds of billions of potential tax dollars that will be lost.
And these are multi-nationals doing it. These guys will not create jobs or bring them back.
That's about all they have left to entice them to even stay in the U.S.
Let's say the government taxed them even more and spread the wealth through to the people.
The first thing those people are going to do is pay some off on their credit cards sending that money to the already wealthy corporation.
The second thing they're going to do is hit up their local big box store (Wal-Mart, Super K-Mart, Target, Sam's, etc) and buy as many Chinese, S.E. Asian, etc made goods sending that money straight into the coffers of the corporation, who takes their part and then pays their workers and suppliers, in China, S.E. Asia, ect.
There's still a circular effect but the circle has gotten much much larger and it looks more like a whirlpool.
If they pay more in taxes, that's an increase. What you're failing to understand is that any increase in corporate taxes will yield higher costs for the end consumer/user and fewer American jobs.
I love when people speak in generalities.
What if....
Government raises corporate taxes and instead of carrying that cost on to the consumer, businesses figure out new ways to increase the demand for their product. I never understood this, the goal is ALWAYS to increase demand. That's the basis of competition, not to make the largest profit. WHY? Lets say you are in competition with other companies, they all increase their prices and pass that on to the consumer. You keep your price the same you just take less profit, you never go into the red but you make slightly less profit on the short term. Eventually demand for your goods will increase since your price is lower. This is called a price war, airlines do it all the time.
You can have larger profits even if government taxes you more and you keep the price the same if you increase your demand.
I bet you, that today if any company started an ad campaign that said something to the effect of. "We know the economy is horrible. My company made $4 billion in profits last year. Instead of pocketing that money our company is hiring 100,000 or 500,000 more Americans to help the economy, and we are keeping our prices the same, because we have enough saved away to meet the needs of our workers. Please think of that the next time you shop."
I would bet you demand for that company's goods would rise, and even after paying workers and benifits they would still make a larger profit then if they pocketed the money and didn't hire anyone.
The problem with the tax system right now is not the rates, it's the issue of compliance.
GOOG issued corporate bonds to pay for US operations such that they didn't have to transfer cash into the US and pay taxes on it. It's essentially legal tax evasion.
The US corporate tax system is a complete disaster. It should be nearly eliminated/reduced heavliy and a VAT added to replace it imo. The big issue is foreign companies sell tons of goods and esrvices here and aren't subject to taxation...all the taxes are paid at the consumer side. These companies take these profits and invest in Asia/Latin America and create jobs in those countries....NOT IN AMERICA.
The reason our government is such a disaster is they think compliance == tax increases. They also think that subtracting a tax and adding one is == tax increase.
The problem with our tax system is the laws were all written before globalization, foreign tax entities and sophisticated accountants/lawyers were employed for large companies spending massive amounts of time figuring out how to legally avoid/evade taxes. Congress needs to work on a 21st century tax system that taxes people fairly. They can do it a variety of ways but the current system just does not work.
Government raises corporate taxes and instead of carrying that cost on to the consumer, businesses figure out new ways to increase the demand for their product.
Um... they would sell more and have to pay EVEN MORE in taxes on the increased profits.
Quote:
You can have larger profits even if government taxes you more and you keep the price the same if you increase your demand.
Good grief, no. Increased profits = commensurate increase in taxes
The problem with the tax system right now is not the rates, it's the issue of compliance.
GOOG issued corporate bonds to pay for US operations such that they didn't have to transfer cash into the US and pay taxes on it. It's essentially legal tax evasion.
And the incentive for that behavior is... wait for it... corporate taxes in the US are higher than elsewhere.
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