General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forumsthe futility of Corporate taxation
Exxon Mobil posts about 10 Billion dollars in earnings per quarter... we have an automatic instinct to tax that pot of gold.
But as we know...a corporation is not A PERSON. A corporation, Exxon Mobil in fact is a publicly owned company that is divided into 408,000,000,000 individual shares. Yes that's 408 BILLION shares. Each of those shares has a book value of $32 and sells on the market for $80+ per share.
So... who OWNS that Exxon Mobil stock? Approximately HALF of Exxon Mobil stocks are held by PENSION funds and 401k's. Exxon Mobil profits contribute to the retirement of 99%'ers, no doubt.
The other HALF of Exxon Mobil stocks are held by "retail investors" which includes individuals or shares owned by the company itself.
So we have this desire to tax corporations because it is seen as a pool of money waiting to be consumed. Problem is... when you reduce Exxon Mobil profits by taxing the income... you are reducing the earnings that people see in their 401k's and Pension funds.
And is anyone gullible enough to believe that Exxon Mobil would give away a large percentage of their earnings to taxation WITHOUT increasing net profit by raising the costs of the services and products they provide?
To simplify... "If we've promised our shareholder a dollar per year and we can only deliver .50 cents per year, we will raise the price of our products and services to STILL pay the shareholder a dollar per year."
So WHO really pays when a corporation, Exxon Mobil in this example is taxed more? Well that would be retired school teachers, police officers, firemen and veterans. In fact it includes people from ALL walks of life and ALL political parties.
But wait, if Exxon Mobil continues to pay it's shareholders with a consistent value... by increasing the price of their products and services, who pays? The answer to that is EVERYONE who uses that product, being gasoline and all the costs in everyday life.
So before you throw something at that monitor... let me share my conclusion.
This nation needs revenue to fund itself. The source of that money is obvious. Instead of taxing the corporation MORE that produces the revenue, tax the person holding the share of stock based on their net worth and/or net income.
Taxing only those above 250k+ per year is also wrong. In my honest opinion I believe that EVERYONE who makes maybe 40% more than the level of poverty in their community should pay SOME KIND of federal income tax. I don't care if it's $32 a year... everyone needs to contribute. The tax scale should be progressive ending in a nice solid 50% marginal rate on top earners.
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RUMMYisFROSTED
(30,749 posts)
kentuck
(111,079 posts)
Fumesucker
(45,851 posts)I hope you enjoy your stay..
NightTemplar
(49 posts)RevStPatrick
(2,208 posts)Probably didn't actually read your post.
I actually think you are on the right track here.
Certainly opens up an interesting discussion...
NightTemplar
(49 posts)Fumesucker
(45,851 posts)So your inference is unwarranted.
NightTemplar
(49 posts)I interpreted it as "Enjoy your stay, as short as it may be"
kentuck
(111,079 posts)that is a point in every right winger in the nation, it seems. If we raise their taxes, they will only raise their prices, suggesting that there is no such thing as supply and demand and they can raise the prices anytime they want with no penalty from the market...?
NightTemplar
(49 posts)Some products are more necessary (like gasoline) and some are less necessary (like GM cars and trucks).
But no matter what... corporate profits, be it FORD or Exxon Mobil or Microsoft are shared and enjoyed by millions of normal people.
Like I said... look at people net worth and income and tax them accordingly. Capital gains are currently undertaxed IMHO... and the top marginal rate is 20 points too low.
kentuck
(111,079 posts)Isn't this an argument against capital gains, in stocks or whatever form they might take? You don't think capital gains should be taxed the same as other profits??
NightTemplar
(49 posts)The maximum current rate is 35% and I feel it should be more like the top marginal (like 50%+ in my fantasy world)
kentuck
(111,079 posts)They are not taxed progressively, as far as I know?
NightTemplar
(49 posts)until it goes to 39.6% in 2013 (Hat tip to President Obama)
kentuck
(111,079 posts)I don't think so?
kentuck
(111,079 posts)I think the short term capital gains is mostly paid by workers and the wealthiest find a way to pay the 15%. Otherwise, why would they be so vehemently against raising the rate?
NightTemplar
(49 posts)but you made a million bucks in capital gains, why would you only pay 15% on those capital gains?? Insane!! Add capital gains to net income and tax based on that tax level.
PETRUS
(3,678 posts)90% of all stocks, bonds, mutual funds, and business equity are owned by less than 10% of the population. So the average person's share is miniscule. In any given year, half of all capital gains go to around 1/10th of 1% of the population.
Also, taxes on corporate profits represent the smallest share of federal revenue of any time since the '50s - and for the same time period, corporate profits are high as a portion of GDP.
Then there's the nature of incentives - for example, higher taxes on profits give businesses an incentive to reinvest rather than declare profits and disgorge the cash.
One could also point out that corporations don't exist in a truly "free" market. Corporations are a creation of government (which derives it's legitimacy from the consent of the governed) and businesses choose to operate under those rules because of certain benefits guaranteed and enforced by the state, particularly limited liability. If a business doesn't want to pay corporate taxes, a business could choose to operate as a partnership. Analyzing the available data suggests that the benefits of operating as a corporation are worth much more than the current tax liability suggests - i.e. corporations are underpaying for the privileges we the people grant them.
banned from Kos
(4,017 posts)(35% for capital gains as well --- or better, simply added to your wages)
NightTemplar
(49 posts)Have capital gains added to your net income... I like it!
kentuck
(111,079 posts)That's how they hide their money. Ask Mitt what he thinks of that idea.
PETRUS
(3,678 posts)The statutory rate is high enough, but the effective rate is quite low - we needn't raise the rates, just reconsider the special loopholes granted to specific (usually large and highly profitable) businesses. In most cases, there is not a substantial enough public benefit to justify the loss of revenue.
banned from Kos
(4,017 posts)Who would pay that $200 billion in lost revenue?
NightTemplar
(49 posts)In the grand scheme of things, that's nothing. I'm not saying abolish corporate taxes... I'm just replying to those that feel corporations (as if they're a single entity) should be taxed MORE.
banned from Kos
(4,017 posts)more progressivity is what we need.
arcane1
(38,613 posts)Then they will lower their prices! 
onethatcares
(16,166 posts)if you add in the price of empire for the taking of natural resourses. But what do I know, I gotta pay more income taxes every year on a dwindling income.
banned from Kos
(4,017 posts)Corporations get a 100% loss carryforward from a prior year.
Lose $5 billion in 2008
Make $5 billion in 2009
= No taxes due.
NightTemplar
(49 posts)KT2000
(20,577 posts)It is good that you used an oil company as an example. For them to do business, they rely heavily upon the taxpayer as it is. Wars in the Middle East and South America have been and are being fought for the control of oil. Disasters on the scale of Valdez and the Gulf of Mexico rely heavily on the taxpayer to clean up and cover up the actual damage that was done. In fact they have so much power that their actual taxes are probably less than what they spend on PR.
Your plan would just codify the US as a corporate state. At the present time we are still allowing ourselves to believe the myth of democracy.
raouldukelives
(5,178 posts)The more people tied into and complicit with the actions of the corporations they are part owners of, the more impetus and power they will have to lobby & buy off politicians and pass even more favorable reforms. In big oils case, they'd love to plunder the last areas of natural wilderness we have left all in the name of energy independence and better retirements for shareholders. Well. Fuck that.
SixthSense
(829 posts)It is probably not commonly known but the US now has the highest corporate tax rate in the world.
This is a major reason why companies choose to relocate elsewhere.
At the same time, the largest corporations pay no taxes at all, and sometimes even get rebates on non-payment of taxes!
Yet regular joe business-in-a-garage guy gets creamed by this highest-in-the-world tax rate. He has no loopholes - GE, NewsCorp, etc., they all have so many loopholes they are effectively untaxed entities.
Result: Internationalist corporatism combined with free trade has defeated sovereign corporate taxes and the entire corporate tax burden rests on smaller domestic companies, which have always been the engine of economic growth not just in the US but everywhere in the world.
My proposal:
- Zero corporate tax
- Zero personal income tax
- Eliminate ALL loopholes, exceptions, deductions for everything including religious groups as well as other charities (which often as not are just fake charities pursuing the objectives of wealthy donors)
- Create a VAT instead, merge it with sales taxes, revenue share between federal, state, local governments
- Make up any shortfall with tariffs designed to defeat the labor and environmental arbitrage tactics which provoke offshoring
- Set rates of the new taxes/tariffs appropriately to minimize the burden on the domestic economy and maximize the revenue generated by foreign entities.
- Payroll, unemployment, Medicare, SS taxes can stay the same (although we should lift cap on SS taxes).
Do anything even close to this and the economy will instantly boom with new industry and bringing back the jobs from foreign lands.
NightTemplar
(49 posts)
JDPriestly
(57,936 posts)taxes, but we probably could not do away with very many of the taxes.
I would exempt food, medicines, children's clothing and certain other necessities that are important to people with low incomes (as well as to people with high incomes) as well.
But we should pay VAT taxes on cars, I-phones, adult clothing and all consumer goods. I would not tax services. When you spend money on a service -- say a back massage or a swimming lesson or something like that, you are directly employing someone. The idea of the VAT is to encourage better use of our resources and give our industry a boost by charging a tax on all manufactured products regardless of where they are manufactured or who manufactures them.
quaker bill
(8,224 posts)Republicans have been promoting this myth, probably for most if not all of your life. The 401K argument is as inventive as it is bogus. The entire accumulated wealth in financial assets for the bottom 80 percent is almost nothing, and a even ten percent gain (which almost never happens) on almost nothing is almost nothing. It is important to remember that 50 percent of all financial assets are owned by the top 1 to 2%. The vast bulk of what remains is owned by the next 8 to 9 percent. By the time you get out of the top 20 percent, only a tiny sliver is left.
True, when you tax a corporation effectively (we don't) it may have smaller profits. Alternately, it may raise prices to make the same profits, results will vary from one sector to the next.
However when you tax individuals they will have reduced disposable incomes. They will therefore spend less on the products made by corporations, decreasing corporate revenue and profits. Money is money, at some level it does not matter where you collect it. Since there are fewer corporations than people and the money is more consolidated, it should be easier to collect it at this point in the economic cycle.
By the way, the 401K was invented by Republicans for the express purpose of causing you to think like this. In short they give you the crumbs that happen to fall off the table in a form that causes you to think you are an "investor", just like the CEO. Therefore whatever is good for them is "good" for you as well. Most 401Ks are mere token investing in which every move you make is very restricted by the state at the insistence of corporate governance. Most have watched their "earnings" evaporate under constant attack by speculators who can more vastly more quickly and service charges by the Wall Street firms paid to manage your money (losses).
These plans were only ever intended to get you to vote republican in the created and mistaken belief that you have common cause with the CEO, and nothing could be much farther from the truth.
JDPriestly
(57,936 posts)Does Exxon Mobil pay dividends into your 401(K)? Not much.
I'd rather see the government get the taxes.
If Exxon Mobil has to pay taxes on its money, not only can the money help us all by helping our government, but Exxon Mobil will try to invest more of its profits in business development and jobs in order to avoid having to pay taxes on the money.
Taxing corporate money will likely stimulate job creation and often does.
Ikonoklast
(23,973 posts)Exxon is the recepient of huge taxpayer subsidies....why?
Warren Stupidity
(48,181 posts)You've hit all the neoliberal talking points. Taxes on the rich and on corporations are ineffective/counter productive. Check. The poor arent paying their fair share. Check. "we are the shareholders" who will be hurt if poor Exxon-Mobil loses their subsidies. Check.
The 1% (really it is more like the .01%) sure have managed to fool about 49% of the population that they are somehow benefitting from the neoliberal world order. Good job!