If I hear one more time that the "Corporate Tax Rate" in the US is 35%, I think I might just lose it

[PBS Poll-435]

Seems like that tired-ass lie is back in vogue.

Heard it at least 5 times this week from Hannity, Dave Ramsey, Megyn Kelly, and more.



Simplistic, stupid, and wrong.

[DailyGrind51]

1. Only a third of them ever pay it!

The other two thirds either pay at the individual rate or, not at all!

[DJ13]

2. Over 50% of all US corps paid no income tax in the last 3 years

If we factored the tax rate on actual revenues brought into the government the tax rate would be near the bottom of all industrialized countries.

Theres too many loopholes.

[ck4829]

3. Funny thing is the corporate tax rates are even higher in Japan and India

And let's see here...

Japan: Leading innovator in technology and manufacturing

India: Emerging superpower with one of the highest GDPs in the world

Sounds like "We have a 35% corporate tax rate! Aaaahhhh!" should be an argument to raise it, not lower it.

[Lydia Leftcoast]

16. And many believe that Japan's high corporate tax rate encouraged companies

to pour money back into R&D and employee benefits rather than declaring a profit.

The Republicans can get away with a lot because most Americans do not know that businesses and individuals are taxed differently.

Individuals are taxed on their full income minus some deductions, no matter what their actual living expenses are.

Companies are taxed only on their profits. If they take in $1 billion in sales but have (or can make a case for) $1 billion in business expenses, they pay no tax. The reason that some major corporations can pay no income tax is that they have armies of accountants whose job it is to make things LOOK LIKE legitimate business expenses.

[EC]

4. Well, fine tell them then that we'll lower the tax rate

but no deductions...(since they won't believe you when you tell them it's not) sure make it 20% - no deductions for anything...


On edit: Even 10% no deductions - we'd still get more out of them then we do now...

[unblock]

5. and the estate tax next year will revert to 55%.

similarly, so few actually pay the top rate.

[Carni]

6. If they're paying 35%

Then they must be having a farm animal do their accounting and tax preparation...no corp pays that by the time they get through with the assorted loopholes, write offs, shelters etc.

[Make7]

7. The top marginal tax rate for corporations is 35%, so technically it may not be a lie...

... more like a misleading presentation of selected facts.
 

[PBS Poll-435]

8. It is presented as EVERY corporation pays 35%. C-Corps, S-Corps, PSCs nt.

[Gaedel]

13. S-Corp

A Sub-Chapter S corporation is a corporation with twenty-five or less stockholders that chooses to be taxed as a partnership. The corporate net income is "passed through" to the stockholders via a form K-1 and the stockholders pay the tax at their tax bracket. Given the requirement of no more than 25 stockholders, S-corps tend not to be very large.

Most of the large corporations are C-corps and are subject to the corporate tax schedule.

[PBS Poll-435]

15. Yeah. I think I know what an S-Corp is.

:rofl:



Seriously though. S-Corps are Corporations. And they are not taxed at 35%. They are taxed according to each member's individual tax bracket. Therefore, claiming that the corporate tax rate in the US is 35% is incorrect, misleading, or both.

[Gaedel]

17. What percentage of total corporate revenue?

What percentage of total corporate revenue is generated by S-corps? If there is a problem with revenues from corporations, we need to look at C-corps. That is where the money is. S-corps and LLCs are just ways to protect small business owners from personal financial liability.

[PBS Poll-435]

18. Again. This is not a revenue discussion. This is not a liability discussion

The point is that "Corporations have a 35% tax rate in the US" is a talking point and a lie.

[underpants]

14. The *AVERAGE* effective rate is about 11%

after all the loopholes and such.

[econoclast]

9. I had to check

According to the OECD:

japan corporate rates. National=30%. Adjusted total including "state & local" = 39.53%

us corporate rates. National=35%. Adjusted total including "state & local" = 39.21%

Hightst by far, nobody in the OECD is within 5 percentage points.

India isn't in the OECD so I had to look elsewhere.

India corporate taxes. Base 30%. Including surcharges 33.99%


Us in par with japan. "lost decade" anyone?

[Sgent]

10. Ours are higher

because we tax worldwide income, and every other OECD country only taxes income generated in their country.

[PBS Poll-435]

11. Realistically, with carry-backs, carry-forwards, deferred income...

And the very fact that not every corporation in the US is organized in the same way nor reports its income the same way...

You do the math.

[Make7]

12. But as a percentage of GDP, for corporate taxes the U.S. is below average for OECD countries.

Based on an older CBO report. I'll try to find a comparable report done more recently.
 

[econoclast]

19. That is an excellent point, to which Atrhur Laffer would respond

"Yup. I told you so"