Progressives Unite! to abolish Corporate Taxes!

[HamdenRice]

First, let me put on my flame retardent suit. OK. This is to expand on a post in another thread about Paul O'Neill arguing that corporate taxes should be abolished and whether this means he is RW or liberal.

Yes, O'Neill is correct, though as usual he did not state it very diplomatically. The most left wing tax specialists within the tax wonk community also believe that all corporate taxes should be abolished, and this actually would be better for working class and middle class people. And I agree with them.

The problem is that corporations are not "real" -- they are fronts for the interests of people -- rich investors, corporate executives, pension funds, and middle class investors. When we tax corporations, we are taxing the people who benefit from corporations -- mainly investors, but also executives and employees.

These "stakeholders" are different; but by taxing the corporation, we tax them the same. Some of these stakeholders, like pension fund stockholders, individuals with IRAs and 401Ks, non-profits, etc are supposed to be non-taxed. Instead we tax them the same as rich investors.

The solution is to abolish direct taxes on corporations but at the same time re-establish steep progressive income taxes on individuals. This way the share of corporate taxes of a pension funds that benefits workers would not be taxed at the corporate level. A rich person's share of corporate profits would be taxed at a high rate in the rich person's hands, not at the corporate level.

Most progressive tax policy specialists who promote this idea believe that corporations would still be involved in collecting taxes. Corporations would pay individuals' taxes directly through withholding -- just as your employer pays you taxes on your behalf through withholding. This would help prevent rich people from cheating on their taxes.

This whole idea is called corporate tax integration -- that is, it integrates corporate and individual taxes. The reason liberal tax specialists don't promote it any more is because politically it is unlikely we would get the second and crucial part of the reform -- steep progressive taxation of income of rich individuals.

But to show you how backwards the debate is, back in the mid 1980s, the Reagan administration and Congress came very, very close to abolishing corporate taxes with a corporate tax integration system. Corporations lobbied furiously to keep corporate taxes, because they and their executives are well aware that the system is a scam that benefits rich people and executives above all.

[TomClash]

1. Well, then why have corporations in the first place? nt

They pay taxes in return for the limitation on liability - creditors can't go after a shareholder's assets - which substantially reduces an investor's risk by limiting it to his equity in the corporation. Essentially, this is welfare for investors if no taxes are collected.

[HamdenRice]

2. Limited liability is a separate issue ...

because it existed long before corporate taxes. There is a separate progressive movement in corporate studies to link limited liability to an obligation to act in the public interest that I agree with.

Limited liability is a subsidy, but it has nothing to do with the level at which taxes are levied against stakeholders.

[TomClash]

20. I disagree.

Limited liability is the basis for the corporation's existence as a separate entity. It is the reason you can tax it in the first place. Why retain this fiction if no taxes can be derived from it?

As for your proposal, I would agree with it if there was progressive taxation of individuals, though I think this is impossible in the current environment.

[me b zola]

28. About welfare

The gop only opposes welfare for the poor.They, however, are quite big on corporate welfare & welfare for the wealthy.

[shleonny]

3. sorry no

corporations now have the ability to influence and partially control governments, what we need is a progressive tax structure where corporations are taxed the larger they get, we need real trust busting politicians, and we need to a wage cap on all executives.

[NinetySix]

4. The only problem is...

...once the corporate taxes have been rescinded, they will be very hard to ever reinstate. And even if the new, steeper, more progressive rate on upper tax brackets is instituted initially, there will be a concerted public relations effort on the part of the very wealthy for a "fair" tax, much like the buzz over a "flat tax" in the '96 campaign. This idea is step one on the road to regressive taxation.

[HamdenRice]

10. You are right politically ...

which is why left wing tax wonks have given up on the idea. But they still say that if we ever get a society that does what is best for the economy and fairness, it would be corporate tax integration.

[AP]

13. When did they ever favor the idea?

[leesa]

19. But we don't have that society, do we?

[bpilgrim]

5. how much do corporations pay in taxes today?

what is the formula for 'steep progressive taxation'?

would that make up the difference?

why not start with reinstating 'steep progressive taxation'?

or stop taxation on retirement/pension savings AND enact 'steep progressive taxation'?

got any links to progressives who endorse this idea?

peace

[AP]

7. Effective rate of fed taxation on corp income is about 2-3%

because, unlike individuals, corporations can write off everything they do.

Their effective rate of taxation used to be much higher, and the tax revenue generated from corporate income (as a percent of all income tax revenue generated) used to be the inverse of what it is today.

So, corporations, although they are the richest taxpayers in society, and have done really really well since the 70s are paying less and less of a tax burden.

They do even better with taxes like local property taxes. Most cut property tax deals and don't pay any. In CA, property tax is calculated at the sale of the property, so corporations which haven't sold their properties in 30 years pay 1970s property taxes, while people who work for a living and buy houses when the graduate from college pay 21st century valuations (which we know are much higher).

The biggest problem with abolishing corporate tax, in my opinion, is that if you did it, rich people would form corporations for EVERYTHING! They'd try to conduct as much business as possible as a corporation. For example, today, people buy their homes as individuals because there are tax advantages. But if there were no corporate income tax, people could form a corporation to buy their home and then that corporation would rent the home to the individual. When the house was sold, there'd be no tax liability for the gain. Granted, few people pay tax on their gain from selling their house, but there are limitations, and the exemption is limited to 500k for a married couple. But, with the corporation handling the transaction, the exemption would, effectively, be unlimited.

The other thing you could do is that you could sell your labor as a personal services corporation. The income to the personal services corporation would be tax free. You could have that corporation buy your house and car for you. If you needed to take money out of the corporation, you could pay it as a dividend to yourself, which would be taxed at 15% no matter how much it was. You could totally escape progressive taxation on income.

And who would be able to do this? Not cops and school teachers and janitors, probably.

II think the reason this doesn't happen today is becuase you would not have enough write-offs to avoid high corporate income tax rates. (And the rules for LLCs and LPs are sufficiently rigorouse that they aren't good vehicles for this kind of tax evasion.) But if there were no tax on coporate income, you wouldn't need the write offs. And since it would be harder to tell a C-corp what can't be considered a business or how many people you need to form the corporation, the C-corp would be a great vehicle for evasion.

Oh, and that reminds me of another big danger of this: the need to write of income for corporations is a big incentives for paying income out as salaries. If a corp has some extra money at the end of the year, they pay it out in tax-deductible bonuses rather than hold on to the money and pay the government tax on it.

If they didn't need to reduce their tax burden, they'd have less of an incentive to pay out to the employees big salaries.

[HamdenRice]

8. Forming personal corporations does not dodge taxes ...

if there are effective progressive personal income taxes. In other words, if you form a corporation for yourself, you still have to pay out money as dividends (as owner) or salary (as employee of your own corporation), at which point the money should be highly taxed.

In fact, by paying corporate taxes at a low rate, which are then not taxed to the individual, under our current system, we give the rich more incentive to incorporate.

[AP]

11. But the tax on dividends is 15% -- and that's a flat rate.

So the problem with forming a personal corporation today is that you'd pay double taxes -- corporate income tax, and tax on the pay-out to yourself (which would either be a flat-taxed dividend payment or a progressively taxed salary).

Now, today, if you knew you could write off enough of your corporate income so that your effective rate were zero, there'd be no added tax liability for forming a corporation. But it's hard to guarantee yourself those deductions.

Now, say, you didn't have any corporate income tax. Then there'd be no double taxation problem. You could accumulate a lot of income into the personal services corporation and then only pay taxes on the pay out to yourself as and individual (which you'd only do when you needed to buy something the corporation could not buy for you, but the only thing stopping a corporation from buying a lot of things for its employees and owners today is their value as a tax deduction -- which, again, would no longer be a problem).

So, basically, any time you wanted money out of the corporation to, say, give cash as a gift to someone else, you'd take it as a dividend taxed at 15%.

Meanwhile, all your other income would be accumulationg totally tax free in a corporate account.

[HamdenRice]

18. Part of the corporate tax integration plan is to tax all personal income

at the same rate. You are correct to point out that the low rates on dividend income are simply welfare for the rich.

Proponents of corporate tax integration support taxing dividends at exactly the same rate as wage income. In fact they would even tax retained corporate income (not distributed as dividends) to the individuals, and even tax capital gains on shares whether or not they were sold.

The idea is a uniform, integrated progressive income tax that treats all income the same, but treats people in different income categories differently.

That corporations have loopholes for avoiding tax is a separate issue. If there were no corporate tax, there would be fewer loopholes, and deductions would be limited.

[AP]

23. Now you're advocating the flat tax? Man, this thread is like those

little russian dolls. Open them up and you find another kernal of a right wing idea inside.

So, say you tax all income (progressively!) at the same rates (however unlikely that may be), that may solve your problem of the company passing out income to individuals at unfair rates.

But you still don't solve the problem of having an entity that doesn't pay taxes.

One reason corporations don't do a lot of shit is becuase there's no tax advantage in doing it. They tend to spen their money in ways that allow them to reduce their taxable income, and those activities -- such as paying salaries -- tend to have beneficial social consequences.

But if you don't need those incentives because there's no tax to avoid, then you just have these entities which accumulate more and more wealth without every having to pay taxes on it.

Why even pay anything out at all? Why not just exist as a corporation? Rather than buy a house, buy a mansion, put an office in it, and call it your place of business? Why pay college tuition? Just have your corporation give your children a scholarship? Why buy a boat as an individual? Just have your corporation buy you a yacht and borrow it on the weekends when it isn't being used for, uhm, corporate functions.

If corporations could become fabulously wealthy, why would you need a salary or even dividend income? Just be a corporation.

Incidentally, the dedcutibility of income from corporate income is one of the biggest incentives for corporations to pay salaries. The government actually subsidizes that payout by giving corporations that break.

If there were no corporate income tax to avoid, I bet you'd see salaries plummet.

[bpilgrim]

14. i hear ya... corporations today pay almost nothing in taxes, so why push 0

unless you're in on it, imho.

i think we need to REVERSE the trends of today instead of accelerating them :crazy:

does any one have any nice charts that illustrate the trends you describe with actual numbers, i'd love to add them to my collection :evilgrin:

:hi:

peace

[AP]

16. I found on the IRS website the graph of the effective tax rates...

...of corporations and individuals at various income levels.

For individuals, they break the income levels into quintiles and the highest band starts at something like 300k. The difference in effective rates ranges from something like 10% to 30% (it's always less than the actual rate for that band, but not much).


For corporations they don't need that level of refinement. They use only three bands, they're broken at 50 mil and 100 mil, and the show the massive variation of something like 1.8% to 2.9% (and it isn't even highest in the top third, IIRC).

The inversion of the tax burden -- that one I heard from an accountant. I think I've seen a statistic confirming it, but I can't remember where I saw it.

[HamdenRice]

9. Steep progressive taxation means ...

That you pay a higher tax on the last dollar of higher income than on the first dollar. Funny thing is that even conservative economic theories favor progressive taxation.

For example, how valuable is a ten dollars to someone who makes $10,000 a year and barely gets by? Very valuable.

How valuable is ten dollars to someone who makes 10 million per year? Not valuable at all. So we should tax the last ten dollars of the millionaire more than 10 dollars earned by a working person.

Steep progressive taxation would tax millionaires at at least 60 percent on their last dollars -- maybe higher.

You are absolutely correct that politically and economically, we would have to re-establish progressive taxation before eliminating corporate tax, or else the rich would lobby for eliminating corporate tax but we would never get progressive taxation.

[AP]

12. What conservative economic theory favors progressive taxation?

The conservatives hate progressive taxation. They call it punishing wealth.

Dan Quayle talked about it in those terms at one of his convention speeches.

[baldguy]

6. Abolish corporate taxes? No! Abolish corporations? Yes!

[TWiley]

15. Lets try an experiment first.

Lets make all child support payments voluntary. According to your theory, revenue into the social welfare program for children should increase as the tax load on the responsible parties is decreased.

Conservatives believe that corporations and wealthy individuals should have no "social liability" as their greed is actually a "virtue".

It is the main Republican theory that greed ultimately serves the most important social function. Through greed, wealth is accumulated, and wealth (or economic interests) are society's primary aim.

Democrats correctly understand that "greed" also has negative social consequences, and to allow the "greedy" to make social restitution from the "goodness" of their hearts, is ridiculous.

In your lifetime, Lake Erie, one of the 5 largest reserves of fresh water in the world, was condemned as a fire hazard. Fish still cannot be eaten from areas of that lake.

The only reason that this horrible pollution problem was reduced is directly attributable to the legislation of financial burdens placed upon corporations.

As most corporations are run by a board of directors, it would be nearly impossible to assign the social liability of corporate action to the effort of an individual. Litigation would persist for decades with no relief.

On a global scale, a main component within the origin of terrorism is the social behavior of American Corporations on foreign soil. To lessen their moral obligations would only increase the terror problem worldwide.

It a conservative Republican idea that the best way to govern a populace is through the legislation of "religious morality" upon that populace. And, that a small ruling class should be free from social obligation. (see Plato)

This idea is dead wrong and needs to be turned around.

The best way to govern is to legislate the morality of corporations and the capitalists who direct them. Only then will government truly rest in the hands of a large middle class. Only then will the problem of terrorism be reduced through social justice.

Aristotle was right. Governance through a huge middle class will protect both the rich, and the poor, from the tyranny of either.

[HamdenRice]

17. WTF??? Where did I say that?

This is not a supply side or trickle down argument. I did not say taxes should be voluntary, or that the lower the tax burden the higher the revenue (that's supply side theory).

What the progressive corporate tax theory says is that a corporation is like the wizard of oz -- a shell that represents other interest: rich investors, corporate executives, and some people of modest means, like employees, small investors, non-profit endowments, pension fund beneficiaries. The idea is to NOT treat them all the same.

The tax burden on rich people should be increased without increasing the tax burden on middle class investors. The way to do that is to tax income in people's hands, rather than at the corporate level. Rich investors should pay 60% on their income; non-profit endowments and 401K or IRA investors should pay zero tax on their share of corporate profits, because the intent of those programs is to allow people to accumulate income tax free.

[AP]

25. Do you have a link for these "progressive corporate tax theorists"

who don't want a corporate income tax?

I'm finding it incredibly hard to believe that anyone calling themselves a progressive would say the things you're saying.

[TWiley]

26. I suggested "volunteerism" as an experiment.

I was not quoting your opinion. I feel the result would be the same as liability has been removed from the responsible parties in both examples. The fact is that volunteerism will likely not work.

You are trusting that corporations will do the "right" thing and declare all of their new found cash as "profit" which will "trickle down" into dividends for the investor. We should all know how the "ethics" which govern Corporate America really work by remembering Enron and World Com. Those executives were so concerned about the "little guy" that folks who had a million bucks in their 401K plan recieved a check for $500 bucks after the dust setteled. (true story)

Furthermore, your plan benefits a relatively small group of stock market investors at the expense of the larger group who are not. There will always be a loophole where wealthy folk can hide income which is in their hands, but is not needed for expenses.

Rethink this plan from the standpoint of philosophy. It does fit neatly into the Conservative Ideal. Without accompanying legislation, the result would be to decrease the social liability of corporate America, and to erode the tax base which supports the social welfare system.

Corporate liability and individual liability are not mutually exclusive. Each should carry a portion of the tax burden.

[Blue Wally]

30. In addition to Corporate Income Tax

There is also a Retained Earnings Tax. Essentially, a corporation eithe rhas to pay the money out in terms of increased salaries/bonuses/perqs or by reinventment in the corporation (i.e. expansion) or they have to pay the money out as dividends. If they don't, they are hit with the Retained Earnings Tax. They can't justr sit on a pile of cash.

[TWiley]

31. Ok, There is a Retained Earnings Tax.

<snip>

<<<Essentially, a corporation either has to pay the money out in terms of increased salaries/bonuses/perqs or by reinvestment in the corporation (i.e. expansion) or they have to pay the money out as dividends.>>>

The elimination of Corporate Tax may benefit employees and / or investors. My point is that this tax proposal will benefit a very small group at the expense of a much much larger group, and we both make this same point.

I feel that Corporations should share in the cost of social responsibilities which occur within the communities, and within the countries where they profit. You, on the other hand, may not.

The U.S. military is the most expensive program that our tax money supports. Globally, our military defends "business" interests more often than any other. American lives are sacrificed to indirectly secure corporate profits, and the altruistic goal would be to reduce corporate tax burdens?

I can clearly see how this proposal would support conservative interests, but I cannot fathom why it would appeal to a liberal.

[Blue Wally]

32. It all depends...

on where you want to tax the money. The purpose of taxes is to operate the government and to perform government functions.

Tom Delay had a rather interesting proposal for tax simplification vback in the 90s. Under his proposal, corporations and banks would PAY taxes (not just witholding) on dividends and interest paid out. Individual taxpayers would then not have any 1099 income to report on their own tax returns since the dividends and interest would be tax free to them. He postulated a simple 5" x 8-1/2" tax return for 95% of all individual tapayers, since their only income to be reported would be wages/salaries. He also wanted a higher standard deduction which would eliminate the need for most people keeping track of deductions.

We should keep an open mind on tax proposals and not be knee-jerk.

[TWiley]

34. It also depends on who you want to spend the

extra revenue. Or, which group you wish to empower. A large corporation could easily opt to increase its operating expenses, or maybe donate more money to the Republican party.

At any rate, this extra money would make Corporations more influential; more spending money to act in their best interest with.

Again, this picture is upside down. The top 5% does not need more influence. They are being well represented as things are.

<snip>

<<<He postulated a simple 5" x 8-1/2" tax return for 95% of all individual taxpayers, since their only income to be reported would be wages/salaries.>>>

So, 95% of Americans income comes from wages? And the goal is to reduce Corporate tax liability with the hope that some will eventually trickle down into stock dividends? Take from the poor, and give to the top 5%?

This plan sounds like something Newt would propose. Gut the tax base for the social welfare system while empowering this nations top wage earners.

We also need to be careful of Knee-jerk acceptance of potentially odious plans as well. The administration got lots of mileage out of its "TERROR AGENDA" where folks jumped to extremes.

[Blue Wally]

35. Delay was trying.....

to get rid of the avalanche of paper flying around. Assuming that most people have at least one savings account and one checking account, that is two 1099s which they have to deal with. As people become more affluent, the number of 1099 increases (one per CD, one per mutual fund). Delay's proposal (which was sandwiched into a push for a flat tax) meant that the taxes would be collected at the source and that most taxpayers (unless they had capital gains) would have a very, very simple tax return. The IRS spends a lot of computer crunching time and followup letters to make sure that each and every one of those 1099s gets recorded on the payers tax return and tax paid on it.

[TWiley]

36. I guess that I don't understand

Somehow this discussion has morphed from "eliminating Corporate Taxes" to simplifying an individuals tax return which saves IRS a load of paperwork.

The average peasant has a simple tax return, and I do not understand how eliminating Corporate taxes will improve this. It may simplify the tax returns of the top income bracket somehow, but that is not a result that I find necessary to insure.

Furthermore, I would believe the average minimum-wage earner would gladly fuss with all those 1099 forms that a 7 figure income exec is forced to muddle through.

It must be a bitch to declare the dividends earned on a couple hundred thousand shares of blue chip stocks.

[Blue Wally]

38. I did go off-topic.....

Back in the early seventies, every time I would get $500 together, I would buy a no-load mutual fund. I owned about eight of them at one time (lost half my money in the Ford-Carter depression). Each would give me a 1099 for some ridiculously small amount of dividends and capital gains. I also had two savings accounts (checking didn't pay interest in those days). Every year the IRS would kvetch about one or the other of the 1099s (usually because they would assign it to the wrong year). The correspondence back and forth with the IRS must have burned up more than I paid in total taxes those years if you calcualte what it cost the IRS to figure out there was a problem, write a letter, receive the answer, review the answer, and they agree with me and send out another letter saying no taxes owed. Having the dividends and interest taxed at the source would eliminate a lot of people skating by on dividend and interest income and greatly reduce the admin burden on the IRS allowing them more manpower to go after the more abusive tax shelters.

[TWiley]

40. By having dividend interest tax paid at the source

you mean that the institution offering the investment, would withhold the tax and submit it to the IRS automatically?

It is an interesting idea, but the institution would need your complete financial situation to accurately calculate the payment. Otherwise you would still need to file a return with the IRS.

It probably would reduce the IRS operating costs, and it would not likely have a bad effect on our Nations poorest wage-earners.

As the institution would become a branch of the IRS in a sense, caution would have to be taken to make certain they received no abusive powers.

[Blue Wally]

41. NO NO NO

Not withholding. The institution would pay a flat tax on the monies paid out and it would be tax free to the recipient.

[TWiley]

43. oh, sort of like a sales tax then.

Theoretically, everyone would pay at the same rate, if you considered that this cost would be deducted from the dividend prior to payment.

What would happen at tax time?

[Blue Wally]

44. At tax time

The corporation would report that they paid, say $10 million out in dividends. The corporation would then have to pony up X per cent of the $10 million in taxes for the IRS. They would pay this along with their corporate income tax. The recipient of the dividend would pay nothing and would not be required to report this on his/her income tax. Ditto for interest payments from bonds/banks.

[TWiley]

45. How about the individuals tax statement?

Also, I worked for one company which never paid my taxes. They withheld it, but it did not get paid. I had to pay it again from my after-tax income. What would happen if the institution defaulted?

It is an unnerving fact that we have the bushtapo in power. His brother sucked 40 billion from the S&L scandal.

[Blue Wally]

46. You would have no reporting and no tax liability for it......

This would be a part of the taxes owed by the company/bank and not taxes owed by you and paid on your behalf by the company like withholding.

[Cleita]

21. Haha!

I think we should abolish income taxes on individual wages and salaries under $250,000 per year. Of course, this would lead to corporate executives taking other types of reimbursements, which should be taxed. This is why the corporations need to be taxed also on their gross revenues for the privilege of doing business here, oh, let's say 10% of gross revenues.

Then you could offer to lower the tax for hiring employees and giving those employees benefits. The more employees hired and the higher the salaries and the better the benefits, the lower the percentage on the revenue tax. So you want to bring back good paying jobs to America? Make the corporations pay taxes and give them rewards for doing the right thing by their workers. Any corporation that thinks outsourcing is okay, make they pay the full amount, 10% of their revenues. My two cents.

But I know I am going to be flamed for this.

[HamdenRice]

22. I disagree ...

with a lot on your post -- especially about not taxing income until it reaches the 250 G level.

But you are absolutely correct in one criticism of corporate tax integration -- that without corporate taxes, it is difficult to give corporations economic incentives to do things for employees.

For example, the deduction of health benefits gives some (but not much) incentive to corporations to offer health benefits. Without a deduction for health benefits, the corporation has no incentive.

So one reason for keeping corporate taxes is just to have a hammer over the corporations head to make it do the right thing.

[Cleita]

24. No one ever does agree with me on the quarter of a million

deduction. There is a method in my madness. The only thing that should be deducted from wages and salaries are for programs that directly benefit the worker, like universal health care, social security, unemployment, child care, education, food stamps, etc. etc. You get the idea. Let the corporate taxes pay for highways and wars. These are the things they benefit from more than anyone else.

Also, I like the idea of people running around with extra money in the bank to spend not only on necessities, but maybe a few luxuries as well. This more than anything helps keep an economy going.

[PowerToThePeople]

27. somewhat agree

think that maybe 50k range is better for no tax burden on salary. Also removal of alll sales taxes on individuals, they are a "poor" tax since 100% of low income peoples income gets spent on basic needs.. (off topic a little)

We need to keep corporate taxes for the "hammer over the head" effect. We ALSO need to tax dividends as income, at the same levels. WE also need a much more progressive tax scale. Exponential model would be more like it. Also like the legistlated salary cap idea, but would be tough considering the sale to the public of democracy=capitalism here in the USA.

[Blue Wally]

39. Gross revenues are not exactly a good idea for a tax

I think we should abolish income taxes on individual wages and salaries under $250,000 per year. Of course, this would lead to corporate executives taking other types of reimbursements, which should be taxed. This is why the corporations need to be taxed also on their gross revenues for the privilege of doing business here, oh, let's say 10% of gross revenues.

Some very high traffic industries generate huge gross revenuse, but very little in the way of profit. Safeway Supermarkets in 2003 had gross revenues of $80.04 per share of stock, but had profits of $1.80 per share in that year (on which their effective tax rate was 36.0%). The "wealth" or book value of Safeway was only $8.20 per share. A 10% "gross revenues tax" would end up being a sales tax on folks that bought food from Safeway because they would have to factor it into their prices.

2003 Tax Rates of some large companies:

Anheuser-Busch: 38.7%
General Motors: 24.5%
Starbucks: 38.5%
Exxon-Mobil: 42.7%
Raytheon: 29.8%
AT&T: 30.3%
Home Depot: 37.1%
Intel: 24.2%
Dow Chemical: 21.6%
Caterpillar: 27.0%
Costco: 37.8%
Walt Disney: 34.8%
JP Morgan Chase: 33.0%

Data from Value Line web site.

[quaker bill]

29. Here is the real problem

Our large trade deficit over the last 30+ years has left foriegn investors with a major pile of dollars to invest in US equities.

Dividends paid to foriegn investors are not subject to our income tax.

If corporate profits stayed within our borders and we adopted progressive income taxes, you would end up taxing the same revenue stream at a different point in the cycle. However since over time we continue to own a decreasing share of our own productive capacity, the concept fails.

Under this proposal a very significant and increasing portion of corporate revenues would become basically tax free.

Beyond this, it would give the foriegn investor a massive advantage over his domestic counterpart. The only way to fairly tax this revenue stream is while it is still in the hands of the corporation.

It is an interesting concept but it is not fully thought out. In the current market, this is simply bad policy.

[HamdenRice]

33. Thank you all for your interesting replies!

I realize that the idea that abolishing corporate taxes is progressive is strange, but it does make sense taken in the context of progressive taxation of individuals. I realize that this has a snowball's chance in hell of getting enacted. The main purpose of the exercise of thinking about taxes this way, is to help us keep our eye on the ultimate goal: a simple, progressive tax on individuals, that taxes the wealthy at higher rates than the middle class, that treats all kinds of income the same, rather than giving dividends, capital gains and other passive investment income a break, and allowing non-profit pension funds, and endowments to be truly non-profit.

BTW, since a number of you asked for names, one progressive tax wonk who has worked on this for decades is Michael Graetz. He is a big proponent of returning to progressive taxation. It must be depressing for him to see the 100 years of progressive taxation going down the drain. His latest book is about how the shrub administration managed to get away with abolishing the estate tax, a tax that only burdens the super rich.

[Deja Q]

37. Getting rid of shareholders would help too.

Shareholders only gfive a fuck about those bits of paper with all the theoretical numbers on them. And monkey see, monkey do, so do the corporate execs. That's a big reason why corporations do things to improve their profit margin/bottom line - it helps the stock holder by increasing the stock value by so many pennies...

Unfortunately, the road to increasing profits means cutting corners, laying people off, buyouts, lower quality product.

As the CEO gets far, far, far more than the shareholder does in the end anyway, there's little point. It's like the lottery: Just as crooked.

[Tierra_y_Libertad]

42. I'm all for abolishing Corporate Texas.

And, ejecting coporate Texans from the government.