Flipper/Rehabber · Seminole, FL · Member since 2010 · 859 posts · 316 votes
I was listening to talk radio today and they discussed corporate tax rates. I was surprised to learn that our country pays some of the highest in Corporate taxes in the World. Of course they were talking about how everyone is trying not to show a profit to avoid paying 35% of them at the end of the year.
Even more surprising to is when you compare our taxes to that of a "socialist" nation, their taxes are lower than ours!
Canada looks mighty nice if you look at this chart:
Investor · Westminster, CO · Member since 2009 · 1k+ posts · 1k+ votes
15y
Lots of banter here, but let's cut to the chase, down to the marrow. Corporations have to spend millions on accountants and lawyers to keep from paying millions in taxes (finding loopholes, keeping multiple books, etc...). Why not just ELIMINATE corporate tax, make the corporations pay dividends to individual investors and tax it then? The US Tax Law is a #*)(%#)# JOKE!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
15y
Originally posted by Jimmy C.:
What are the loopholes they are using then? That's the billion dollar question I guess Eric. i know they spend the last quarter burying profits into write offs.
First, Bryan mentioned two sets of books...actually, there are generally three sets of books -- one internal, one for the IRS and one for the auditors...
Additionally, there are lots of things that big companies can do that smaller companies can't...
For example, companies can issue lots of non-qualified stock options to employees. When options are exercised, the employee pay the taxes, and the company receives a tax benefit (essentially, the employees are paying the taxes in lieu of the company, but are doing so on essentially free gains, so they don't seem to mind).
Microsoft used to make more money in tax rebates doing this than they made selling products, and which would essentially offset all of their taxable profit. It doesn't work as well when stock prices aren't rising, but there are ways around that...for example...
The biggest way around it when the stock price is depressed is stock buyback programs. Companies spend lots of the profits to buy back depressed shares serves two purposes -- eliminate taxable profit and un-dilute the stock for existing investors.
Some companies (like Microsoft, again) would even reduce the cost of stock buybacks by issuing put warrants instead of actually purchasing back the shares -- this served a dual purpose of keeping the shares off the balance sheet for a while longer as well.
Additionally, there is what is commonly called corporate inversion, which is essentially companies seeking tax shelters by moving their operations abroad. A great example is Halliburton moving their corporate headquarters to the UAE in 2007. And I've heard lots of companies have moved to Ireland over the past 10 years, where the corporate tax rate is closer to 10%.
Then there are local and Federal tax credits for setting up your business and operating it in ways that benefit local and Federal jurisdictions. Generally, the paperwork involved in getting the credit is ridiculous, which is why small businesses don't often get these credits.
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
15y
J has some great bullets above...many of which are educational for me.
Taxing dividends twice is the definition of stupidity and you end up getting elaborate buyback schemes and wild swings in the market as a result. Companies retain earnings instead of distributing them to shareholders using this stupid system and you get all sorts of heuristic crapola to value shares instead of using true finance techniques.
When you go to business school they teach you to value companies by discounting cash flows. This is really tough to do when they don't distribute dividends and instead execute elaborate schemes to avoid double taxation. It is hard to have shock absorbers for shares absent current yield so you end up getting completely nonsensical movement from people playing games instead of trades based on differences of opinion of value using fundamentals.
I have absolutely no confidence in picking individual securities that are publicly traded primarily because of the lack of dividends. I could go on and on about corporations setting up shop to reward executives, a race to the bottom for reporting, etc., but it is a bit out of scope.
Real Estate Investor · Alpharetta, GA · Member since 2010 · 415 posts · 484 votes
15y
While it's true that big corporations use subsidies and loopholes to lower their US income taxes, that doesn't mean they're not paying *any* federal income taxes -- they're just not paying them to the US. Multi-nationals spend billions of dollars each year shuffling income out of the US and into lower-tax countries.
Out of $2.2 billion in federal revenue, less than 10% (about $200 billion) comes from corporate income tax. That tells you how good these companies are at shifting their income out of the US.
As Bryan said earlier, corporations don't pay income taxes anyway; their customers do, in the form of higher prices.
As a result, I'd like to see the corporate income tax rate slashed to zero. Just think how many of the world's leading multi-nationals would set up HQ right here in the US. And the money that consumers presumably saved through lower prices could then be spent elsewhere or saved.
Thing is, lowering corporate tax rates to zero (or near zero) would be very unpopular politically. I can just see the "against" commercials now.
"John Doe wants to give corporations the biggest tax break in American history so they won't pay a penny in taxes, while YOU continue to pay your share. Whose side is John Doe on?" (Insert visual of cigar-chomping CEO teeing off at a country club here...)
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
15y
It's probably taboo to point this out in this country, but until the older generations stop sucking from the teat of the younger generations (and learn to be self sufficient), and as long as life expectancy continues to rise, taxes are only going to go up...and/or our debt will continue to rise...
Remember that those who represent us mostly have one thing in common -- most are over 50 and the plurality of their voting constituency tends to be baby boomers getting ready to retire.
So, they will -- of course -- support anything that supports themselves and their constituency...and of course that includes entitlements for older people...
Consider just how much of our taxes are going to support entitlement programs for old people. Between Medicare, Medicaid, Social Security, VA benefits for those over 65, welfare for those over 65, etc, we're spending more than half of our total national budget on supporting the older people in this country -- those that have had decades to save to support themselves!
You can argue that Social Security was paid by those receiving it, but that's certainly not the case. That money was spent a long time ago. Now the younger generation is feeding 12% of their income (and businesses feeding even more than that) into this ridiculous ponzi scheme that is sure to dry up before our generation gets close to getting our money back.
We already know about the excesses of Defense spending, but most people don't consider that the entitlement programs for older people are almost as expensive, and between the two, eat up a ridiculous portion of this country's total budget...
Flipper/Rehabber · Seminole, FL · Member since 2010 · 859 posts · 316 votes
15y
Perhaps thats why the death panels are popular J?
And Tom I like a LOT of what Glen Beck has said that I have seen. But IMO he is a shill. Because he takes the problems and gets you VERY close to the truth. Then at the last second he blames it all on Progressives and turns it into partisan bickering.
I have seen and heard a alot of inconsistencies from all of the people you mentioned actually. These people are entertainers, and they are being paid to spread "info"tainment. Similar to Bill Maher, Colbert, Odonnel, they are delivering a message while making people laugh. Its hypnotic and very effective.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
15y
Originally posted by Jimmy C.:
Perhaps thats why the death panels are popular J?
I'm not sure if that's a joke or if that's serious...
Just in case it's serious, the only "death panels" I currently know about are the panels of people that private insurance companies have who determine what treatments will be approved and which treatments will not be approved, independent (and often in contradiction) to what the doctors recommend.
This is why health care reform is so important -- those who have a conflict of interest when it comes to life/death decisions shouldn't be involved in the decisions in the first place. These "death panels" will not go away without major health care reform.
Now, if you're referring to "death panels" as Sarah Palin used the term, consider that when she was asked to support her claim about death panels in the new health care bill, she couldn't do it. And even some very prominent Conservatives bashed her for making up these lies.
Of course, if people disagree, the health care bill is publicly available for reading, so they can feel free to check for themselves.
So, if the Sarah Palin quote is what you're referring to, I'd suggest not believing everything you read/hear...
And, of course, if that was just a joke that I didn't get, I apologize for taking it seriously...
The point of my post was just that we spend an inordinate amount of money on the equivalent of welfare for those over 65 in this country...it's time we got those people off welfare as well...
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
15y
Originally posted by Tom Cullen:
A good way to tell a liberal from a RADICAL is to bring up Rush Limbaugh, Glenn Beck, or others like them. If you get a knee jerk "they are idiots" response, they are probably not RADICAL. RADICALSs who actually listen or watch them, don't think they are idiots.
FIFY above Tom....BTW...welcome some new to the political discussions with reasoned discourse. It is nice to have more of these folks and fewer trolls that thread hijack with nonsense at every possible instant. Please try to ignore this and stay on track.
J's post about entitlements is fantastic. It always pisses me off when people 20 years my elder lecture me about how screwed up my generation is while they pull in copious entitlements funded on my dime. Talk about the height of hypocrisy!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
15y
Originally posted by Bryan Hancock:
J's post about entitlements is fantastic. It always pisses me off when people 20 years my elder lecture me about how screwed up my generation is while they pull in copious entitlements funded on my dime. Talk about the height of hypocrisy!
Seriously...if I had to guess, a lot more of my tax dollars go to entitlements for an average guy over 65 than to a poor inner city family. Add military vet status to the equation, and I'm practically supporting him with my tax dollars.
Remember, "entitlements" is just another word for "welfare"...
Real Estate Investor · Alpharetta, GA · Member since 2010 · 415 posts · 484 votes
15y
Originally posted by Bryan Hancock:
J's post about entitlements is fantastic. It always pisses me off when people 20 years my elder lecture me about how screwed up my generation is while they pull in copious entitlements funded on my dime. Talk about the height of hypocrisy!
Well, they're not ALL hypocrites, as I know you know. I think the truth is that, as a whole, the previous generation or two were (again, as a whole) in possession of a stronger work ethic while lacking the need for immediate gratification compared to today's 20-through-40-somethings. (See "Layaway vs. 12-months-same-as-cash" for more details!)
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
15y
Maybe so...but I have observed that they are also demand a greater amount of entitlements from the gov-mint too. My generation has been conditioned on defined contribution plans and fiscal independence instead of reliance on someone else to do their investing for them.
I think a lot of the "laziness" that people attribute to 20 and 30 somethings MAY be attributable to them wanting to spend the money before my parent's generation destroys our fiscal situation with their entitlements using their political clout in numbers.
The bottom line is that entitlements need to be reformed pronto...not just for those under 50. They need to apply TO ALL immediately. Life sucks sometimes and we can't afford the current fiscal course anymore.
Investor · Westminster, CO · Member since 2009 · 1k+ posts · 1k+ votes
15y
Lots of banter here, but let's cut to the chase, down to the marrow. Corporations have to spend millions on accountants and lawyers to keep from paying millions in taxes (finding loopholes, keeping multiple books, etc...). Why not just ELIMINATE corporate tax, make the corporations pay dividends to individual investors and tax it then? The US Tax Law is a #*)(%#)# JOKE!
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
15y
Originally posted by Jimmy C.:
And Tom I like a LOT of what Glen Beck has said that I have seen. But IMO he is a shill. Because he takes the problems and gets you VERY close to the truth. Then at the last second he blames it all on Progressives and turns it into partisan bickering.
Except for a few good historical lesson such as the history of black conservatives prior to the rise of the progressive movement under the Jim Crow laws (democrats used to kill blacks for being conservative republicans - bet you didn't hear that in school) skip Beck and start listening to Conservative commentators like Mark Levin, Mark Steyn, Walter E Williams and Rush. Mix in a little Jason Lewis to hear a contrarian conservative view.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
15y
When 12.3% of your income is essentially being stolen and handed over to the 65+ crowd to support a ponzi scheme that will soon crash down, it's a bit easier to understand why there is less motivation for some to work.
Add $400B worth of Medicare to that (socialist healthcare for old people) and $125B in VA benefits, and you can understand why my generation doesn't like to hear previous generations hitching about how "entitled" we are.