Fox’s Own On-Screen Graphic Debunks Cavuto’s Theory That Low Corporate Tax Rates Are Good For Market

[kpete]

Source: Think Progress

Fox’s Own On-Screen Graphic Debunks Cavuto’s Theory That Low Corporate Tax Rates Are Good For Markets

Yesterday on his Fox Business show, host Neil Cavuto was overjoyed at the news that the stock market had gained on 2011′s first day of trading. Of course, Cavuto linked the bull market to the tax cut extension Congress passed last month. “As we start off a new year, it’s time to recognize a familiar historic fact,” Cavuto boasted with glee. “When you cut taxes, good things happen.”

During the ensuing segment, two on-screen graphics appeared showing countries’ corporate tax rates and corresponding stock performance in 2010. One graphic illustrated that the stock markets in countries with lower corporate tax rates than the U.S. — Canada, Russia, Turkey, and South Korea — all improved in 2010. Cavuto then explained:

CAVUTO: Alright, I should just explain to our viewers what we’re showing, top corporate rates across the globe here. Some of that may be a little bit of a misnomer for a lot of folks watching at home. In Russia for example, some of these other countries, they’ve been drastically cutting those top rates so it isn’t all it appears to be. The trend is what decides things, so the trend for you, when (the corporate tax rate) is down means markets and economies go up.

The other graphic appeared again, with the chyron reading “taxes down, stocks are up,” but the accompanying information clearly doesn’t support that claim nor does it Cavuto’s corporate tax rate theory:


Read more: http://thinkprogress.org/2011/01/04/cavuto-corporate-taxes-markets/

[Jackpine Radical]

1. The joke is that nominal tax rates

have almost nothing to do with the amount of taxes US corps pay. There are so many dodges, like offshoring as one big example, that many of them pay nothing.

[Roland99]

2. Neil "Am I biased? You're goddamn right I'm biased!" Cavuto

:eyes:

[TomClash]

3. The correlation between cuts in any kind of marginal tax rate

and increases in GDP is . . . zero.

The primary economic problem today in the capitalist world is too little aggregate demand and too much financial capital accumulation.

[xxqqqzme]

4. ...“As we start off a new year,

it’s time to recognize a familiar historic fact,” Cavuto boasted with glee. “When you cut taxes, good things happen.”

He forgot to add - except for the last ten years in the US.

And as another DUer pointed out, on paper that corporate rate might be 35%, but tell me how many corporations actually pay that. I bet cavuto is incorporated - most people in entertainment are - but I wonder what his actual tax rate is.

[thetonka]

5. Realistic and resonable taxes that are stable

Would have a much stronger positive effect on markets and the economy than the games DC is playing with taxes. Up, then Down, Up then Down, Up then Down, occasionally new ones and elimination of some. How can a business, or even an individual, effectively plan for the future with so much uncertainty.

Stop playing games with things that are so critical, until you do the changes in the market are only reactions to changes to changes to changes to changes to changes from DC.

[unblock]

6. marginal tax rates have their biggest influence through taxing DISPARITIES

be it from form to form or time to time or jurisdiction to jurisdiction, it's the DIFFERENCE in tax rates and tax treatment that influences corporate behavior.

tell corporations that getting money to shareholders via dividends is at a lower tax rate than capital gains, well, then, guess what? they're more likely to dividend out money.

tell corporations that tax rates will be higher in the future, well, guess what? they're more likely to realize their tax gains now.

tell corporations that they can pay lower taxes if they funnel it through a subsidiary in the caymans, well, guess what? they're more likely to do just that.


if there were agreement among nations to treat all corporate profits as equal, to ignore the games of shifting profit from one country to another, and to keep rates stable over time, then corporations would stop playing these silly games and focus more on actually building a business with actual economic, rather than simply financial, value.

[SoapBox]

7. Way to go Neil "Sold My Soul to Satan" Cavuto...

...these evil doers are SO stupid that they don't even
see stuff like this. The mouth just keeps...on...moving.

[GeorgeGist]

8. In America the Markets are now fixed ...

by the Federal Reserve.