Respectfully submitted by Lawrence Rafferty (rafflaw)-Guest Blogger
While we have discussed the fairness of the taxes paid and not paid by large corporations in the past, the alleged high corporate tax rate is once again in the news. It seems that after contraception the Right’s most consistent accusation is that the corporate tax rate is way too high for corporations to compete in the world market. The facts seem to differ from those claims however.
“Corporations are lobbying for lower corporate rates and an exemption for profits they shift offshore. McIntyre, however, says “Our study provides proof that too many corporations are already being coddled by our tax system.” Findings in the report include:
The average effective tax rate for all 280 companies in the study over the three year period was 18.5 percent; for the period 2009-2010 it was 17.3 percent, less than half the statutory rate of 35 percent.
78 of the companies enjoyed at least one year in which their federal income tax was zero or less.
30 companies enjoyed a negative income tax rate over the entire three year period on their combined pre-tax profits of $160 billion.
Total tax subsidies given to all 280 profitable corporations amounted to $222.7 billion from 2008-2010.
Wells Fargo tops the list of 280 U.S. corporations receiving the most in tax subsidies, getting nearly $18 billion in tax breaks from the U.S. treasury in the last three years.
Pepco Holdings had the lowest effective tax rate of all the companies in the study, at negative 57.6 percent over the three year period.” Citizens for Tax Justice
If I understand those numbers correctly, large corporations are paying about half of the rate that they claim is too high. Another example of how little these corporations are paying was recently discussed in a Crooks and Liars article on General Electric. “General Electric is a prime example of this trend. Despite being highly profitable and subject to a theoretical tax rate of 35 percent, GE paid only a 11.3 percent tax rate in 2011. And that number was the most they paid in more than a decade. In 2010, they actually paid no taxes and got a net tax benefit of $3 billion. For the 10 year period prior to that, their effective average tax rate was 2.3 percent.” Cooks and Liars
Recently, President Obama proposed a reduction in the corporate tax rate to 28 percent for many corporations while claiming to reduce or eliminate many tax loopholes. “President Obama will ask Congress to scrub the corporate tax code of dozens of loopholes and subsidies to reduce the top rate to 28 percent, down from 35 percent, while giving preferences to manufacturers that would set their maximum effective rate at 25 percent, a senior administration official said on Tuesday. Mr. Obama also would establish a minimum tax on multinational corporations’ foreign earnings, the official said, to discourage “accounting games to shift profits abroad” or actual relocation of production overseas.” New York Times
In light of the low actual rates paid already by these corporations, I don’t understand why the rate even needs to be reduced. When General Electric pays an average of only 2.3% over ten years, what will they pay under Obama’s proposal? I think the proposal to set a minimum tax is good in theory, but the devil is in the details. I will believe it when I see it.
When politicians are screaming that corporations are people and should be allowed to deny their employees any insurance coverage for services that they have religious objections to, shouldn’t we make sure that they pay tax rates that Real people pay? How many workers were laid off or terminated while these profitable companies paid very little, if any, taxes? What are your thoughts?
(Disclosure: The author owns a small amount of shares in General Electric stock.)
There is a very good topic on npr that addresses this subject as well….. The reason that it’ll never be equitable is that too many lobbyists would be put out of work….. There is a whole cottage industry of lobbyists that want to preserve their jobs….. So, Imo…..we will never see any real change….
Mr. Turley, Since there seems to be no way to contact you directly I am posting this:
I was appalled at the following headline at Yahoo News:
http://news.yahoo.com/blogs/ticket/obama-rings-limbaugh-slut-georgetown-sandra-fluke-200016515.html
Obama rings up Limbaugh’s ‘slut,’ Georgetown’s Sandra Fluke
By Dylan Stableford | The Ticket – Fri, Mar 2, 2012
Dylan Stableford is as vile & despicable as Rush Limbaugh for labeling Sandra Fluke in such a manner and he should be exposed & fired for his despicable action.
I hope that Sandra Fluke sues Limbaugh, Yahoo & this despicable reporter for the vile they have directed at her. Limbaugh’s slut??! Are these people insane?
Margaret Richards,
Prof. Turley did not write this article that you posted on, I did. Contact Yahoo with any complaints about their article. Thank you.
Now if we can just condense Raff’s piece onto a bumper sticker we may be able to get some conservatives to see it.
I realize that he did not write the article but there’s no way to contact him on this blog and I thought he might want to know about this continued abuse of this young woman. I did contact Yahoo and ABC which are apparently partners or whatever. So far I have the usual form letters which is not unexpected.
rcampbell,
I like your idea.
The tax structure that rafflaw points out indicates that it is one tool in the plutocracy’s bag of plunder tools.
They use those tools to plunder the citizenry, by way of plundering the people’s treasury.
Congress is another one of their tools, if current events is an indicator.
Margaret Richards,
You might want to take a look at the following thread on this blog, which is where it was recently discussed.
http://jonathanturley.org/2012/03/01/racist-or-clueless-chief-judge-of-montana-under-fire-for-obama-joke/
(Read the comments from the bottom up… Sometimes the regulars will take up a topic that’s of interest. I’m just guessing that Professor Turley os probably well-aware of the Sandra Fluke situation. Perhaps Professor Turley or one of the guest-bloggers will do a follow-up story on the topic.
Margaret Richards I agree with you; that Yahoo lead is vile and despicable.
When I see stuff like this I usually contact:
mediamatters.org
thinkprogress.org
Margaret Richards,
I agree with both you and CEJ…
(Excellent comments and suggestions, CEJ.)
I haven’t watched it yet, eniobob, but “Ball of Confusion” hits the nail on the head…
Thanks anon nurse for your assistance.
rafflaw…
My apologies…
Anon nurse,
None needed!
rafflaw,
For a moment I thought that I was you…
Thanks for the posting. I was taught that those who benefit the most should give the most… It’s time to do what we have to do, as a country, to even things out…
Anon nurse,
It sounds like you were taught the same thing that the good Benedictine sisters taught me.
Good Post Rafflaw, this topic needs more attention in the Media.
There are some bumper stickers out that might be apropo:
“The System isn’t Broken it’s FIXED”
“Lower corporate taxes we can’t let them go hungry”
“The Budget Crises is a Hoax”
“Work Harder the Corporations want more tax breaks.”
“End special tax favors for corporations”
“Had enough of doo-doo economics”
“GOP corporate tax cuts are the Axes of Exil”
“Support the Unions they built the middle class”
“Occupy Wall Street”
AY
“There is a whole cottage industry of lobbyists that want to preserve their jobs….. ”
Help with that, please. Are they all working on the fed level or …..?
And are all registered, or under some oversight as to pressure points, clients, etc.?
And does Lieberman’s wife list him as a pressure point, or maybe a client, or both?
Thanks Anon & CJ. Just in case anyone has hearing problems (like me) here are the lyrics to the song eniobob posted above:
Ball Of Confusion lyrics
People moving out,
People moving in,
Why, because of the color of their skin,
Run, run, run, but you just can’t hide.
An eye for an eye,
Tooth for a tooth,
Vote for me and I’ll set you free,
Rap on, brother, rap on.
Well, the only person talking about loving thy brother is the preacher,
And it seems nobody’s interested in learning, but the teacher,
Segregation, demonstration, intergration, determination, aggravation, humiliation,
Obligation to our nation.
Ball of confusion,
That’s what the world is today, hey.
The sale of pills is at an all time high,
Young folks walk with their heads in the sky,
The cities aflame in the summertime,
And oh the beat goes on.
Evolution, revolution, gun control, sound of soul-shooting rockets to the moon,
Kids growing up too soon,
Politicians say, “More taxes will solve everything,”
[From: http://www.elyrics.net/read/t/temptations-lyrics/ball-of-confusion-lyrics.html%5D
The band played on.
So, round and around and around we go,
Where the world’s headed, nobody knows
Oh, Great Googamooga,
Can’t you hear me talking to you,
Just a ball of confusion,
That’s what the world is today, hey.
Fear in the air, tension everywhere,
Unemployment rising fast,
The Beatles new record’s a gas,
And the only safe place to live,
Is on an Indian reservation,
The band played on.
Eve of destruction, tax deduction,
City inspectors, bill collectors, mod clothes in demand,
Population out of hand, suicide, too many bills,
Hippies moving to the hills,
People all over the world are shouting, “End the war!”,
And the band played on.
Great Googamooga,
Can’t you hear me talking to you,
Just a Ball Of Confusion, -ac
Perfect description of our crazy, mixed up world today
I’ll bite i707…. What the he’ll are you talking about…. It’s as plain english as you can get…. Unless you you have another question you want the answer to…unless this is a bait question….
“Perfect description of our crazy, mixed up world today.”
Margaret Mitchell,
Ain’t it the truth…
(Thanks for the lyrics… and great choice, eniobob…)
Standing in for Lawrence Rafferty again… I think that I better go do something else…
Anon nurse,
Great job! It was a great song.
Wasn’t baiting. Was wondering if you could give some info I lack.
Won’t bother you again.
Then I707…..if you’ll look up the number of registered lobbyists in DC or any state you find in DC alone there are 600 or something like that for every elected official…. Most of them corporate focused for what’s in their clients best interest….
I’ve read article after article in recent months showing how very little, if anything, these corporations are paying. Some are receiving government subsidies. All seem to be paying the most brazen, outrageous salaries & bonuses to their CEO’s, etc., that one can imagine. The jobs are & have been leaving this country in huge numbers, all to further enrich these greedy vermin. Other countries are years ahead of us in infrastructure, railroads/trains, manufacturing & in health care. Here we sit with the old war lords in Congress doing the bidding of the corporations which make a fortune off the illegal wars/occupations which have killed, maimed, made hundreds of thousands homeless, while our country is falling apart at the seams.
I am sick of the flag waving characters who call themselves patriots while voting against the best interest of the country as well as themselves. Our Congress is so corrupt that it’s hard to figure how the country will survive unless a lot of them are replaced.
I cannot see giving these corporations any tax breaks. As a matter of fact their rate should be raised to 70% until they make up for all the scheming they have done to avoid taxes in the past & until this country is out of debt. The only thing they should be able to deduct is operating materials, employee salaries & health care for employees. Once the country is showing a surplus the rate could be reduced to 50% and left that way permanently. Now that’s the kind of austerity (corporate) that we should be practicing.
Margaret,
I can live with a rate of 28% as long as they pay 28% and the jobs stay here.
“Our Congress is so corrupt that it’s hard to figure how the country will survive unless a lot of them are replaced.” -Margaret Richards
Margaret, I don’t have an online subscription to The Nation, so I can’t post the article… If you haven’t read it, there’s an article in the March 5/12 issue which is aptly titled, “the Treason of the Senate”…
FYI
http://www.nytimes.com/2012/03/04/world/middleeast/bearing-witness-in-syria-a-war-reporters-last-days.html?pagewanted=1&_r=1&ref=world
Re Anthony Shaddad’s last journey, by his photographer collegue, Tyler Hicks.
ID707,
Interesting link.
Corporations? More like corruporations…
/snark
http://www.senate.gov/artandhistory/history/minute/Treason_of_the_Senate.htm
Rafflaw,
Good post.
How do you think this could become a campaign point or a support for changing the situation?
By this, I mean the situation including the 28percent offered by Obama.
ID,
The loopholes must be removed.
Wow you picked a three year period to base your study on 2008 to 2010 which happens to have been the worst economic conditions since the great depression. Of course the effective tax rates were down nobody was making $ during this period so you have a flawed study that basically is being used as propaganda by those who hate capitalism and free markets. Surprised-NOT!
Tony the corporations noted were profitable companies.
The progressive tax structure that all redistribution advocates love allows for lower tax rates with lower profits. So while these companies might have ended up profitable over the three year period they would not have a high Effective Tax Rate unless they had high profits all three years which none of these did…….Pull the 10K reports for yourself…….
Tony,
The GE rate was a ten year average. The oil companies had record profits during the period you are discussing. Read the linked report. You do not need to pull the 10k’s.
@ rafflaw – You probably already know this but:
Arguing with a Republican is like playing chess with a pigeon.
You could be the greatest player in the world, but the pigeon will still knock over all the pieces, crap on the board and strut around triumphantly.
That same from my posting friend Frank C, NY
Should read….. that CAME from my posting friend………………….
Oil companies have special tax incentives related to depreciation and depletion allowances to offset for the huge risk in capitol expenditures. If you personally invested in an oil or gas well you could experience the same risk vs. benefit that the oil companies experience. You might lose it all or hit it big but if you are to be motivated to take this risk you need to know that if a few of the wells hit you will not need be killed by taxes in the good times because you are limited in your ability to deduct the loses in the wells that come up dry. Otherwise you will not drill!
GE is a joke as an example of a US Private sector company since it is directly supported by the government outside of it’s tax position. TARP for a MFG company?? Special oil deals for its energy business unit???? No more of an example of a capitalist company then the quasi government agencies such as Fannie Mae and Freddie Mac.
Tony, the numbers as stated above were all profitable companies. 280 profitable companies.
Wow attack one personally( Pigeon-really) and ASS ume. First off I have never been a registered republican in my 37 years of voting eligibility. Time to leave this group of rational and fact based Lady’s and Gentlemen. Enjoy talking to yourselves and see how that helps you grow and learn.
Great topic, Rafflaw.
Thanks Mespo!
So why 60 minutes spend the time doing a piece on tax shelters, focusing on Ireland and switzerland that pull high paying jobs away from the US simply due to favorable tax rates? Particularly in a turbulent economy, it is no surprise that here are fewer taxes where companies can rlwrite off losses. On its no surprise that when big government starts picking favorites, subsidies fly. We are better of getting rid of the Solybdra type corruption, and reduce corporate taxes to 0. Because corporations will either spend the money tough wages or dividends, taxes on those monies will always get collected anyway. Might as well crate some jobs in the process.
Ugh. Gotta love the iPhone autocorrect.
“crate some jobs in the process.”
Careful there, Jack. Your Freudian slip is showing.
Corporations should have to pay their taxes. Period. No loopholes. No subsidies. If a company like GE posts a $14 billion dollar profit? They should pay 28% of that in taxes. Not zero, which is what the did. In fact, they got money back in the form of subsidies. Why should corporations have to pay taxes? Because that’s fair. Allowing them to avoid paying taxes? Is the exact same net effect as a subsidy. If I personally made $14 billion dollars, I’d have to pay taxes on it and I’d gladly do so. Why? Because not only is it fair, I’d still have $10.8 billion dollars. Greed is not a valid reason to allow corporations to take a pass on taxes. Excess profit is not a valid reason to allow corporations to take a pass on taxes. History has shown when you do this, they don’t reinvest the money. They don’t create new jobs. Those kinds of expenses are allowed to be written off and they don’t pay taxes on them anyway. They either sit on the corporate profits on it as capital surplus or they take it personal profits by paying it out as bonuses and perks.
Gene,
You beat me to the punch. I agree that corporations should pay a true minimum rate of taxes. End all subsidies.
raff,
I merely cast a blow in passing. You administered the thumping proper with your fine article. Good show.
Thanks again Gene.
As long as the rates are low and can be further lowered by offshore incorporation without a rise in tariffs/surtax for access to the US market the US will continue to run up enormous deficits. The corporate tax rate is a joke.
Current tax breakdown with definitions:
http://www.pgpf.org/Special-Topics/Taxes-primer.aspx
——-
http://www.ritholtz.com/blog/2011/04/corporate-tax-rates-then-and-now/
Corporate Taxes as a Percentage of Federal Revenue
1955 . . . 27.3%
2010 . . . 8.9%
Corporate Taxes as a Percentage of GDP
1955 . . . 4.3%
2010 . . . 1.3%
Individual Income/Payrolls as a Percentage of Federal Revenue
1955 . . . 58.0%
2010 . . . 81.5%
Thanks Lotta. Those are scary numbers.
Excellent posting Raf.
Tony,
“…..so you have a flawed study that basically is being used as propaganda by those who hate capitalism and free markets. Surprised-NOT!”
You complain of personal attacks. Is the above anything other than a personal attack claiming he produces flawed studies for the purpose of providing propaganda to those who hate capitalism, etc.? I think not.
First of all, I haven’t noticed any haters of capitalism and free-markets.
However there are many who don’t like the tyranny associated with them, which is a natural consequence of the solutions they find with competition and vertical structures. Cheap buy, at the cost of “rape and pillage” economic tactics impoverishing the supply land, and market control and dominance through manufactured hegemonies and monopolies.
To go through it all would be a lot ot work; and doubt if the pigeon would not still knock over the pieces. (Thanks Margeret).
Come back when you’ve loosened up and opened your eyes.
Lotta,
Good stuff. Make the corp vs our contributions clear.
What about the one-percenters claim that they pay NN percent of federat taxes (on finance profits ??) and 48 percent of people pay no fed tax?
Not a point. Am really wondering if you can make some figures that take away their argument.
(Of course I would reply to them, your system and your finance wins are based on 48 per cent are held as marginal persons and are at the poverty line—–where is their pursuit of happiness. But have no facts.)
Off topic here but JT blog pertinent.
JT recently took up the matter of RD Shell in Nigeria and the tort case being driven here. I’ve lost the link to that thread.
http://viewfromll2.com/2012/02/29/why-royal-dutch-petroleum-is-wrong-about-the-liability-of-pirates-inc/
Interesting link ID.
lottakatz:
what was the actual tax rate companies were paying in 1955?
Margaret Richards1, March 4, 2012 at 4:29 pm
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you are my new hero!
Tony1, March 4, 2012 at 8:21 pm
——————————————
Tony I’d love to see a study from your perspective….change only the time frame in the study and get back with…..
“Corporations should have to pay their taxes. Period. No loopholes. No subsidies. If a company like GE posts a $14 billion dollar profit? They should pay 28% of that in taxes. Not zero, which is what the did. In fact, they got money back in the form of subsidies. Why should corporations have to pay taxes? Because that’s fair. Allowing them to avoid paying taxes? Is the exact same net effect as a subsidy.”~Gene H.
————————————————————-
And add to that, the effect of paying poverty wages to thier workers who then need medicaid or other public assistance to merely survive. They are getting subsidized at ALL ENDS of the great spaghetti noodler…
The mACRO and the micro of these ‘big dogs’ differ little…
“…..so you have a flawed study that basically is being used as propaganda by those who hate capitalism and free markets. Surprised-NOT!”
——————————————-
please show me just 1 free market…….just 1……!
Bron, a table:
http://www.taxpolicycenter.org/taxfacts/Content/PDF/corporate_historical_bracket.pdf
looks like 52% and the top bracket was 25K
lottakatz:
so if a company made $25,000 in profit they would pay $13,000 in taxes?
So why would you show a profit in 1955?
That is the thing people miss. The tax rate doesnt matter because a company is always going to be able to show a low profit or a loss. If they pay their people more then the people pick up the tab. Even if the amount of money paid by corporations is less than it was in 1955, how much more are people making? Also dont forget that a good number of small businesses are incorporated as S class which is direct pass through to the owners and they pay at whatever their rate is. If you work for a corporation and the corporation is paying your salary, the corporation is providing the money for the taxes.
If they have to pay more in taxes they just pay less salary or less dividends. Corporations do not pay taxes, individuals pay taxes. The cost of a product includes taxes paid by the corporation.
…… The tax rate doesnt matter because a company is always going to be able to show a low profit or a loss. If they pay their people more then the people pick up the tab. Even if the amount of money paid by corporations is less than it was in 1955, how much more are people making? …………….
……… If you work for a corporation and the corporation is paying your salary, the corporation is providing the money for the taxes………..
If they have to pay more in taxes they just pay less salary or less dividends. Corporations do not pay taxes, individuals pay taxes. The cost of a product includes taxes paid by the corporation.
—————————————————–
No, you make it sound like Corporations exist to be gatekeepers of the Almighty dough…..lots of separation from supply and demand these days…..Look closely at salaries and you will see that Corporate profits on paper do not always add up. Ceo greed, the redistribution of wealth….has all been going on for a very very very very very ;long time. Thy don’t allude to these practices as piracy for nothing!
Also, doesn’t there have to be a very real and tangible good or service that a corporation provides….?
If a bank takes a deposit then uses it for thier own gain….why is that considered a good?
As something that needs protection by the Government? It is the depositor that is in need of protection.
“Corporations do not pay taxes, individuals pay taxes.”
yes, that IS the whole point, isn’t it?
Thy don’t allude….
(They….;)
Woosty:
I am a free market guy, but I think that corporations are out of control with their lobbying and their willingness to use the government to help them compete by making rules and regulations which favor their particular company or their industry.
I dont think a CEO should make 100 million per year and pay the secretary like shit and then on top of that to make people pay part of their health care.
But one of the reasons CEO’s make high incomes is because of the stock options. I dont remember exactly but Clinton went after high CEO salary’s and capped them. So business did what business does and went around the caps with stock options. So where you used to have a CEO making 10 million he now has options worth 100 million.
Check it out to make sure I am right but I am pretty sure I am.
I want government out of the economy. With that being said, I do understand that we need to set pollution limits and air quality limits and some other limits concerning food production but we dont need to regulate the color of margarine [honest to god regulation].
I think you will find, especially now with the Internet, that corporations would be held to a higher standard and would pay a heavy price for bad actions. Look at how quickly Rush cried uncle; 3 days. His career has been hurt and he looks like a doofus to boot [I know the left always thinks that, but now some on the right do too].
Get rid of stock options and allow CEO salaries to be set by market forces. Their salaries, if set by the market, would be held in check. Every job has a salary limit set by market forces. And if you didnt have stock options and salary only, maybe they would work for the best interest of the company, the share holders and the employees. Which would be best for everyone since many of us are employees and stock holders.
I think there has been an unholy alliance between big government and big corporations and I would like to see it end. But I dont want to see socialism because that is just more of the same old, same old.
Great article Raff. during my checkered Law School career I took the course in Taxation Law and did well with it. I had a whole bunch of pertinent books from the course. A few years later in the early 70′s, I decided to do give close friends a present by doing their taxes for them for free. When I sat down to do the first return I made sure to have all my books by my side. When I finished the eleventh return the books were still there. I realized that at no time did I need to open any of them. A light bulb lit my dim brain as I realized that all of those books were for the benefit of wealthy people and corporation’s taxes, not needed for the average person’s return.
Bron,
You are right that in the last couple of decades, corporations have not paid their fair share of taxes. The law states that corporations have to pay taxes, but that same law gives corps too many loopholes to screw the country. Do you think it is a coincidence that income from dividends is taxed lower than the normal individual tax rate? The gap between the very rich and the rest of us has grown significantly since Reagan when the corporate taxes were reduced and the highest tax rates for individuals was also slashed.
Thanks Mike!
I want government out of the economy.
————————————————–
your lips say no but your pocketbook says YES YES YES!!!
also, the Government will always be part of the economy…as long as there is taxation …
Effective oversight and enforcement of the laws that protect people and the environment are not a bad thing, those things are beneficial to everyone.
In other words; If Corporations played nice, they’d have more friends….
http://www.reuters.com/article/2012/03/05/us-tepco-lawsuit-idUSTRE8240RY20120305?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Feedfetcher
RAFFLAW:
“Do you think it is a coincidence that income from dividends is taxed lower than the normal individual tax rate?”
I dont know, there has been debate about how to tax passive income for a long time. I dont think it right to tax dividends at the higher rate because taxes have already been paid. If I make $100 bucks and buy $10 worth of stock which pays a $1 dividend, I already paid the taxes on the $10 I bought stock with. Why shouldnt it be taxed at a lower rate? Or why should it be taxed at all?
The $10 I used to purchase that stock is doing an awful lot of work. Shouldnt I get a benefit for helping the economy grow?
And think about the retired people who may rely on dividend income to fund their retirement, is it fair to them to be taxed at the same rate as if they had a job? Especially after they have paid taxes for 30-40 years.
Personally, I think the best idea is to have a flat tax on all income over $40,000. No matter what you make, you pay between 15% & 20%, no deductions, no subsidies, no nothing. You make make $50,000 you stroke a check to Uncle Sam for $2,000 [20% of $10,000].
The government would get rid of the IRS and the money saved on tax preparation would be an instant real stimulus to the economy.
I am talking about funding all government expenditures on the 20%. You make some real budget cuts and I think it would be possible.
Mike S.
Now having awoken from an unusual nap, I find that Woosty’s post was 2 hours ago, and the site is not active for the moment.
I found your post moving (not slicking your ear or anything worse), because of the humanity expressed in helping friends. As you know, that is one of the strange practices done by humans, of which I know little.
But that wasn’t all that prompted me, it was also a signal to recall my first encounter with withholding tax, and the annual W-2 form; an IBM card cleverly fashioned so that there was space to show what they had withheld, and a space for you to sign it and say “I surrender”.
Now don’t know how much difference between there was between 1963 and 1970s, but it must be so that your friends were making lots more than I, or the tax system had grown more complicated—-although it may have been possible to file a return even in ’63 but not worthwhile, as some person had explained to me.
Comparing you and I, I see that you had a purpose with your life which seemed more consciously directed than mine. As for me , just then was trying to keep my nose over the water and sailing on my adventure without either compass, map, or telescope.
I had been shipwrecked and was hopefully afloat again, but as always unsure of my bearings, where the shoals iay, and the meaning of the mainlands distant contours.
I like cryptic references, but often (too much, I know) prefer this long form.
Ahhh, was that the name of the alternate to the W-2 form?
A mystery for Dredd, which part of my brain/mind made that connection.
No acknowledgement needed. I write for myself, although sometimes motivated by wishing to contribute something to the common soup bowl.
Have today renounced for the umpteenth time writing for getting attention or a clap on the head.
Nice that you’re around. Assume many think so too.
Bron,
of course you are in favor of a flat tax because the high income individuals will continue to make out like bandits. The argument that the divident income will be taxed twice does not pass muster.
I have a better idea that is proven to work here in the United States. Tax people who are making over $1,000,000 at a 50% rate and include all income for the payroll taxes, instead of capping it at $106,000. That should include dividend income as well. Why should someone making 200,000 not have all of his/her income subject to Social Security taxes? We don’t need more draconian cuts that actually do more harm. We need corporations keeping jobs here and keeping their money here and paying their fair share of taxes.
its quite amusing reading this post. my $0.02 is that people have already made up their minds. You either think corporations are crooked, or you dont. If you dont pay your “rate” you are unethical and shirking your responsibility, if you do, you are a good corporate citizen.
The only thing I got out of this study is that the tax code is a gigantic mess, subject to political pressures and highly non-transparent.
In our current political environment with seething fanatics ON BOTH sides, none of this will change. Just read through these comments again and you should realize that the world is now bi-polar and no matter the side you are on the other guy is either with us or is reaming us!
nick
a fair summary to me. some may find it oversimplying. but suits me.
Gene H.
LOL. That was actually really funny. I certainly didn’t mean “crate” but create. But the whit does not go unnoticed, nor unappreciated!
On the substance, I don’t understand the crux of your comment, that being that “corporations should have to pay their taxes.” Tax is an obligation as determined by the government. If they have no obligation, they have no tax. And if they have tax and don’t pay it, they get fined. So, I guess I’m having a hard time stomaching your argument when it begs the question in the first instance.
Secondly, the issue of taxes isn’t taxes for taxes sake. It’s all about generating revenue. And, that is why I think corporate taxes should be 0. Remember, that corporations can only do certain things with $$$. One is pay salaries, in more jobs or higher salaries. Considering the top income bracket is above the corporate tax rate, why don’t we want corporations paying top execs more money (for tax purposes)? The treasury would get more money anyway! The other is re-invest (which leads to more jobs and more money) and the last is dividends, which is income to investors – which is also taxed at income rates. Corporate taxation makes NO fiscal sense, and only makes the US less competitive. Again, I’m not suggesting that we not tax profits, but tax them at those people that actually make them. Unless, of course, you are advocating that corporations are, after all, said “people.”
Lastly, what in the world is “excess profits?” That is utter nonsense. Its populist rheotric with no real meaning. But I DO agree in ending subsidies in most instances (except in national security situations to maintaining a minimum food supply, etc.) I don’t think we even need to get there right at once. I think all subsidies should have a trigger placed on them now that decreases the subsidy anytime to where profits exceed GDP over a rolling 5-year average. But that’s just me.
Lottakatz,
Your argument is self-imploding. Every time Congress tries to close corporations using tax shelters, the corporations out-think them. Check out the 60 minutes piece on tax shelters. Its fascinating. For example, they tried to restructure taxes based on where management is located, so the corporations moved their management to Ireland and Switzerland. And, corporations just sit on loads of money off shore so the case doesn’t get taxed, and which the US can’t touch. This is the type of regulation that is mind-numbing. Rather than pushing populist nonsense (i.e. TAX CORPORATIONS!), Congress needs to do what makes sense – drop corporate rates to 0% and then tax income and dividends. You’ll get more money, more jobs, higher wages, more competitiveness, etc. I don’t understand why people just don’t get it. Do it this way, and then you also enjoy the other side-effects, i.e. virtually marginalizing lobbying, increasing R&D, etc.
To all,
Insights come easily, especially when they support your opinions.
Here’s a new one for me:
Someone mentioned in the matter of corporate responsibility for torts initiated against activities occuring outside the US.
They mentioned the case of whether privateers sponsors had limited or full responsibility.
Our corporations remind me of privateers.
They are proven to ignore the limits of their charter, ignore the rights of others to own goods, and will take lives in order to hide their misdeeds, etc, etc. And will use the power of their sponsors to protect their operations.
jack,
“Congress needs to do what makes sense – drop corporate rates to 0% and then tax income and dividends. You’ll get more money, more jobs, higher wages, more competitiveness, etc. ”
OK, given that, why should multi-national corporations not leave all overseas profits, including those generated by payments for immaterial rights use to subsidiary overseas companies, where they are since over ten (?) years back??
No incentive to repatriate the profits. Just wait for Congress to let’em take them home untaxed, or use them to drain America. (populist phrase).
You also did not mention subsidies, tax incentives, etc and lawyering the tax process.
Here abusing the tax laws is not exactly a cottage industry.
And obviously it’s for providing loopholes for corps, not for John Doe.
So your suggestion would put about, shall we guess, five 5 million lawyers, accountants, lobbyists, etc out of work.
Bet you’re not one of them. Or are you tired of the trade and have new ideas to exploit on your “new” tax world you dream of.
I think Mike S bears repeating:
Paraphrased—-Tax laws are for corporations and the rich, not for the rest (99percent) of us.
Get it. Obviously it’s some kind of shell game variant. Now you see the profits and now you don’t.
And even the best minds end up where the most money is, of course.
So chande does the IRS have when the laws were written to favor the corps to begin with. Only the ones with poor attorneys and accountants get burned. And the price of that is not even coffee money to them.
It’ll fall behind the cushions in the sofa.
Only we get screwed.
I’ll ask those who know, ie national economists (go to sleep Chicago school).
How can a nation with our GDP per person be so poor that 48 percent live at or under the poverty line? How can developing countries such as South Korea, Singapore, Sri Lanka, and tired ol socialist countries like Finland have better school results than we do. And don’t come with any homogenous population hogwash. It won’t wash. No, they are simply motivated by the realization that internal development comes before corporate profits.
Any opposed?
I tweeted the article cited to santorum who wants t go to 0 corporate tax rate. (As though he would really care or read anything that might show him he needs to do some thinking)
Jack,
If you’ve got a problem understanding the legality of taxes, see the Constitution.
If you’ve got a problem understanding the concept of fairness, well, that would be your failing as a person and your parents in raising you.
0% corporate taxes is a subsidy no matter how you slice it. The fantasy that it would result in anything other than higher profits is just that: a fantasy. Even with the current tax rates, companies across the board have been posting record profits in many sectors and yet unemployment and lack of reinvestment runs rampant. Capital surpluses and profit taking rise yet the economy as a whole is stagnant and floundering. Those are simply the economic facts. Why is that, Jack? Can you explain that little speed bump about your dream of corporate largess and boosting the economy through no taxation of corporate profits? I mean, can you explain it cogent terms and not simply regurgitating more corporatist propaganda?
Recognize that growl. Go bite his ass. Oh, that’s all he is???? Yep.
Rafflaw,
you outlined the ills. did you make in the course of commenting a final solution, including all income sources and the overseas take-home problem?
point ot time if that suits. tnx.
Everyone ought to own some type of small business, even if it is Amway. You can write off all kinds of things. A small business is gods gift to the middle class.
Quit bitching about corporate taxes and incorporate for some tax savings. You can write off things like:
your car and gas
Internet
vacations [for work of course]
your computers
faxes
printers
50% of meals when doing company business
buy a rental property through a corporation and rent it out, all that is taken off the top and I think you can even use it for a few weeks a year without penalty since you have to do upkeep.
The list is endless and only limited by the tax laws and your imagination
Quit fighting wealth and embrace it. The only way to eliminate poverty is to create wealth.
And what business would you suggest for those below the poverty line?
“even if it is Amway.”
Bron,
I’m aware that for tax purposes a small business can be advantageous. However, despite the purported legitimacy now conferred on it Amway is but a slightly more sophisticated version of a Ponzi scheme.
Idealist707,
I don’t really understand your comment. The fact is if you drop corporate tax rates to 0, corporations will hold on to the money to make more money, or distribute the monies as dividends to investors who then pay income tax. Dropping the corporate tax rate to something higher than 0 will have a similar but limited effect – exactly how much, I don’t know. But for any impact, it will need to be something lower than whatever the marginal rate is for that corporation. Furthermore, my occupation has nothing to do with taxes. My policy is principal based, which is generally premised on making government more efficient. Distributing profits to investors and taxing them is much more efficient. So if efficiency puts lawyers and lobbyists, out of work, I could care less. That way, you don’t need to worry about cheating corporations, because there’s nothing to cheat. And the government gets its money in the end. In any event, I really don’t understand what you’re trying to say.
P.S. While you are comparing our country to Sri Lanka, how many of the impoverished in those countries enjoy healthcare, food subsidies, Xbox and new cars? Frankly, your numbers are wrong. Poverty is at 15.1% – not 48%. I think you’re confusing the number of those that don’t pay taxes, which is distinct. Second, your analysis poses a false dilemma. The real problem is likely the qualification of “poverty,” given the luxuries that real impoverished people don’t enjoy.
Gene H.
“If you’ve got a problem understanding the legality of taxes, see the Constitution. If you’ve got a problem understanding the concept of fairness, well, that would be your failing as a person and your parents in raising you.”
Ummm…first, I don’t have a problem understanding the legality of taxes. Congress has broad taxation powers. Rather, I’m making a policy argument. How you conflate the two is beyond me. Second, I have no idea what you are talking about with “fairness,” except that it (poorly) evades common sense. Corporations can ultimately only do one thing with profits: pay dividends to investors. Taxing investors rather than the corporation increases the business’ competitiveness globally, which help our economy and provides additional jobs. And in the end, the “profits” are taxed through investor’s income tax. So, I have no idea what you’re talking about.
“0% corporate taxes is a subsidy no matter how you slice it. The fantasy that it would result in anything other than higher profits is just that: a fantasy.”
??? There is no fantasy here – you are 100% correct that a 0% corporate tax WOULD result in higher profits. But for who? The corporation can’t do anything with profit. Rather, those profits are distributed to investors who are then (generally) taxed at higher income rates than even at the corporate tax rate. So again, your argument doesn’t make any sense. The “fairness” is taken care of with the progressive tax rates at the personal income level, and the treasury still gets its $$$. How this is a bad solution when it increases efficiency, promotes jobs/competitiveness, and increases revenue for the treasury, is beyond me.
So what’s your point?
If it is simply that marginal tax decreases don’t change behavior, the notion is often correct. Simply reducing tax from 25% to 20%, for example, doesn’t really change much for a company that has a 16% effective tax rate. In order to change the behavior of any given company, the rate has to go below that effective rate. Why that’s a mystery is (again) beyond me.
This is cute:
“Capital surpluses and profit taking rise yet the economy as a whole is stagnant and floundering.”
Well, if you believe Steve Jobs or Jaime Dimon, etc., its because of uncertainty in the market. This administration has created a great deal of uncertainty. Whether that is justifiable or not is another matter entirely, but the fact is that with uncertainty comes risk, and with risk, people hoard their money and keep it close. Now, you can kick and scream all you want, but it won’t change the fact that this is precisely what business owners/leaders are saying. And if that’s what they’re thinking, that’s how they’re acting. But that still has nothing to do with a rebuttal of the 0% corporate tax rate.
And corporatist propaganda? I didn’t know that was the current term for economics and common sense. The truth is, a 0% corporate tax rate HELPS EVERYONE (except our global competitors). Even more, there’s NO downside! The owners of the companies are still taxed, and if they’re given more money, they’re taxed that much more. It’s really that simple. If I’ve missed something, please…illuminate my understanding.
“Rather, I’m making a policy argument.”
One that has no legal basis and is seemingly based on some delusion about what corporations would do with the tax savings when history is showing us that it isn’t job creation and reinvestment but simple profit taking.
“Second, I have no idea what you are talking about with “fairness,” except that it (poorly) evades common sense. Corporations can ultimately only do one thing with profits: pay dividends to investors. Taxing investors rather than the corporation increases the business’ competitiveness globally, which help our economy and provides additional jobs. And in the end, the “profits” are taxed through investor’s income tax. So, I have no idea what you’re talking about.”
Fairness can be defined as part of the concept of equity which is required for justice, the establishment of which is one of the charter roles of our government in society as defined by the Constitution. That you don’t understand what fairness means is simply your failing. Fair isn’t giving corporations the added benefit of 0% taxation on top of limited liability and perpetuity though. They’ve abused both of those benefits to the point that they are a threat to democracy. It is only fair to tax corporations to offset the cost of remedy for the damage they do to the fabric of the country through their limited liability avoidance of costs required to remedy their bad acts which are ultimately borne by society as a whole.
“if you believe Steve Jobs or Jaime Dimon, etc., its because of uncertainty in the market.”
I believe Jamie Dimon should be in prison for his role in the financial crash, so whatever else he has to say doesn’t mean dick to me. Also, the excuse of uncertainty, and that is what it is – an excuse, doesn’t exactly win points with me when the crisis was created by many of the same people reponsible for that very uncertainty. “We screwed it up and now we don’t want to invest because we might risk losing all that money we gamed the system for to gain our capital surpluses in the first place.” Cry me a river.
If you want to subsidize corporations and call it something other than what it is, that’s your prerogative, Jack. As long as you do, I’ll call it what it is: corporatist propaganda. And your idea of tailoring policy to corporate agenda? That’s pure fascism, slick. Italian style.
You apparently don’t know your own name.
Bron,
How do you explain why the gap between the middle class and the very wealthy has exploded in the last decade or two?
That prior post should be addressed to Jack, not Bron.
Gene H.
You’re not making a lick of sense. First, I don’t remember any of this having anything to do with a legal argument. So drop the red herring. Second, corporations can’t “abuse” anything for their own benefit, but only the benefit of investors. I’m not suggesting that there shouldn’t be taxes, but rather that we collect taxes from the investors whom ACTUALLY MAKE MONEY. Thus, whatever crabbed notions of fairness you have are STILL ensured through the progressive income tax.
“Fair isn’t giving corporations the added benefit of 0% taxation on top of limited liability and perpetuity though. They’ve abused both of those benefits to the point that they are a threat to democracy. It is only fair to tax corporations to offset the cost of remedy for the damage they do to the fabric of the country through their limited liability avoidance of costs required to remedy their bad acts which are ultimately borne by society as a whole.”
LOL! You really have no idea what you’re talking about. Limited liability doesn’t help the corporation, but the owners! So that argument just blew up in your face. If that’s what you were really worried about, you should be interested in getting more tax from those that benefit – investors, and leave the corporations alone.
And whether you believe Jamie Dimon should be in prison is irrelevant and another red herring. What matters is what people with money are doing, and why they are doing it. If you want investment or distributions and corporations are doing neither but sitting on the money, you need to ask yourself why. Doing neither is simply bad business, unless there’s another third-reason – that being weighing the costs of risk. Again, I’m not even suggesting we need to get into whether it is a legitimate or rational act. And I’m certainly not painting a sob story. Rather, what’s important is WHY companies aren’t investing and spending the money they are making, and this is the reason why. And if you are trying to affect decision making, you have to have some notions about why people make the decisions that they make. Period.
And on subsidies, when was that part of the conversation? What’s obvious is you don’t understand a lick of economics, and rather than actually address the factual issues, you’ve thrown red-herring after red-herring. The fact is that every concern you really have is still addressed by the 0% corporate tax rate because ALL the profits end up being taxed in the hands of those that ACTUALLY MAKE MONEY – investors! Furthermore, this also increases competitiveness, R&D, higher salaries, etc. If you want to adjust personal income rates, Congress can still do that – so your precious “fairness” is still preserved.
To sum the arguments, you want to tax corporations for the simple reason that 1) you think through your autocratic judgment that its fair, and 2) because of some bass ackwards idea that it’s somehow just good.
To the contrary, I think taxing corporations are bad 1) because you can always get that revenue from the distributions to the shareholders anyway – thus preserving any notions of fairness you want – and 2) because doing so will generally over time (not always) lead to more competitiveness globally, more jobs, higher salaries, and more taxable income in this country.
Comparing the two, it should be obvious that it is really time to let go of your sacred cow. It’s dead, and like your ideology, it stinks.
rafflaw,
Boy, I don’t think you have time for my answer. There’s a lot of reasons. But I think the easiest reason, is that the assumptions required to make the free-market work have increasingly not held – much due to the government’s poor regulation. Let me give you an example (and I’m not suggesting this as having a big economic impact, but rather just an example):
Obama’s super liberal FCC (I think) czar is heavily attacked by Republicans for burdensome regulation. Think credit cards, etc. Repubs think the market should take care of it. The problem with Republicans is that they don’t understand that the free market only works when 5 or 6 assumptions hold, and one of those is information symmetry and another is no transaction costs. Looking at credit cards, we as consumers don’t understand the agreements. I mean, we might as lawyers, but they are so convoluted that we can’t manage our lives according to them in any meaningful way. This means that the information is not symmetrical, and the transaction costs are very high. So, what Obama’s administration is doing is fixing the broken assumptions. And that’s right. They are streamlining the information, and making credit card agreements easier to understand. Within this context, it is good regulation because it’s fixing the assumptions that are not holding, meaning the Administration is trying to insure that the perfect market will actually be able to work because the assumptions will hold better going forward.
Compare that to what Clinton and Bush did with housing (again, I’m not suggesting the impact was particularly material, but it’s an example). By opening housing to lower-income and higher-credit risk individuals, the government is simply getting involved because it thinks it has a good idea. That’s the wrong approach. They need to target the broken assumptions of the perfect market, fix those, then get out of the way and let the market work. What we saw is some buyers that got into trouble, and now will have ruined credit for the next ?? years.
This is a long way of saying that the inherent problems with income disparity can only possibly be explained in 2 general ways: 1) A stupid, more incompetent generation of people have immigrated (or been born) that simply can’t compete effectively, or 2) the assumptions of the perfect market have increasingly gotten out of wack. I believe that the latter is the case. But I also believe that the government needs to stop using bandages on symptoms, and fix the disease witch are the broken assumptions. If they do this, then the perfect market will work.
Thus, I’m a capitalist because I understand that the free market is not perfect, and that smart, targeted, and objective regulation is NEEDED. But in no case should the government subjectively choose winners and losers, nor make irrational judgments based on our inflated concepts of equity. This is why Repubs and Democrats are generally both a bunch of morons.
” First, I don’t remember any of this having anything to do with a legal argument. So drop the red herring.”
You made a policy argument is a legal blog. What did you think was going to happen?
“Second, corporations can’t ‘abuse’ anything for their own benefit, but only the benefit of investors.”
Nonsense. What benefits the investors benefits the corporation by ensuring their continued investment.
“LOL! You really have no idea what you’re talking about. Limited liability doesn’t help the corporation, but the owners!”
LOL! See the above statement, Benito.
“If that’s what you were really worried about, you should be interested in getting more tax from those that benefit – investors, and leave the corporations alone.”
Moving the goal posts. I think both corporations and investment income should be taxed. Because it’s, oh, what’s the word you fail to comprehend? Fair.
“Rather, what’s important is WHY companies aren’t investing and spending the money they are making, and this is the reason why. And if you are trying to affect decision making, you have to have some notions about why people make the decisions that they make. Period.”
You say it is uncertainty because that’s what people like Dimon are saying and I say they – and you by proxy – are full of shit. Risk gets return or failure. The higher the risk, the greater the potential for either. But please keep neglect the fact that the environment of higher risk was created by the bad acts of people like Jamie Dimon and Lloyd Blankfein and the corporations they control. They made the mess and want to complain about the risks of cleaning it up? Again, cry me a river.
‘And on subsidies, when was that part of the conversation?”
The instant you mentioned 0% taxes for corporations. Corporation who avail themselves to governmental services and subsidy. Not taking money from them in the form of taxation is the exact same thing as giving them money – a subsidy.
“And on subsidies, when was that part of the conversation? What’s obvious is you don’t understand a lick of economics, and rather than actually address the factual issues, you’ve thrown red-herring after red-herring. The fact is that every concern you really have is still addressed by the 0% corporate tax rate because ALL the profits end up being taxed in the hands of those that ACTUALLY MAKE MONEY – investors! ”
Apparently you’re the one who doesn’t understand how economics works because you clearly don’t have a clue as to what a capital surplus account is for. None of the concerns I’ve addressed are taken care of by 0% corporate taxes. You also don’t understand that if corporations are going avail themselves of the benefits of government – including protecting their property rights – they need to pay their fair share for the overhead of government. Those payments are called taxes.
“To sum the arguments, you want to tax corporations for the simple reason that 1) you think through your autocratic judgment that its fair,”
No. I think that it is fair because it is equitable and equity is an inherent part of justice and the establishment of justice is a legitimate role of government according to the Constitution in addition to the right to tax and spend
“and 2) because of some bass ackwards idea that it’s somehow just good.”
If you want to think that paying for the maintenance of society and the government that protects it as not good, then that is your choice. However, since taxation is simply how all governments of any form pay for their operations, if you want a country with 0% on corporations simply because what? they aren’t real people – “1) because you can always get that revenue from the distributions to the shareholders anyway”? so they can make more money that they have no obligation to reinvest in the economy – “2) because doing so will generally over time (not always) lead to more competitiveness globally, more jobs, higher salaries, and more taxable income in this country”? then good luck to you finding one.
Your policy idea is not only unfair, it’s ignorant about human nature and stupid. Blatantly corporatist and – in your case – I’m going to go so far as to say fascist. My ideology is democracy, not corporate oligarchy or fascism. The thing about my ideology is that it is enshrined in the Constitution as the form our government is supposed to take.
Yours aren’t. In fact, oligarchy and fascism are dead opposites to the foundational principles of this country and its legal system.
So tell us, Jack. Why do you hate democracy?
Gene H.
So many good ones…you made my night. Thank you.
“You made a policy argument is a legal blog. What did you think was going to happen?”
No, I made a policy argument based on a policy post on a legal blog. LOL!
“Nonsense. What benefits the investors benefits the corporation by ensuring their continued investment.”
That’s like saying that the benefits of a car driver benefits the car by ensuring continued use by the car driver! What nonsense to completely ignore that is the OWNER of a corporation that benefits! LOL!!
And I reiterate – Limited Liability ONLY helps the OWNERS, because without the owners a corporation DOES NOT EXIST! LOL!!!
“Moving the goal posts. I think both corporations and investment income should be taxed. Because it’s, oh, what’s the word you fail to comprehend? Fair.”
I move the goal posts because what I said makes equitable, financial, and common sense! And you want me to replace that with your perverse notions of “fairness?” Who elected you despot?
“You say it is uncertainty because that’s what people like Dimon are saying and I say they – and you by proxy – are full of shit.”
LOL!!!!! That’s right! YOU know why people are doing things better than THEY know! You are NUTS! And remember, that Jamie Dimon is one player. Go check out surveys of small business owners. Oh wait, don’t. Because you know what they think better than they do! LOL!!!!
“Corporation who avail themselves to governmental services and subsidy. Not taking money from them in the form of taxation is the exact same thing as giving them money – a subsidy.”
First, this is populist nonsense. It is untenably moronic. It is NOT true. Second, OWNERS of corporations avail themselves of governments services, because ONLY they can gain from a corporation! What planet are you on? You aren’t even approaching sense!
“Apparently you’re the one who doesn’t understand how economics works because you clearly don’t have a clue as to what a capital surplus account is for. None of the concerns I’ve addressed are taken care of by 0% corporate taxes.”
Which shows how badly you are missing it! Corporations gain nothing – indeed, they lose money for their owners – if they just sit on money. The time value of money will destroy unused capital! Once the environment is less risky, they’ll put the money to use and it will all get taxed…likely multiple times!
“No. I think that it is fair because it is equitable . . . .”
LOL!!! So you think its fair because you think its equitable? WOW! What cock-eyed definition of “equity” are you reading from?
Watch this, I can play your game too: What I says is fair because it IS fair. And because my IS is in CAPS, you can’t do anything about it! Infinity! LOL!
“If you want to think that paying for the maintenance of society and the government that protects it as not good, then that is your choice”
Are you illiterate? Clearly there should be a paying, and the paying should be paid from those that benefit – those being the OWNERS!
“Your policy idea is not only unfair, it’s ignorant about human nature and stupid.”
Oh, so Corporations ARE people?! LOL!
“So tell us, Jack. Why do you hate democracy?”
Oh no…what’s next? Hitler? Nope…Fascist. LOL!! [Enter Goodwin, stage right.] Do you even know what a fascist is? LOL!!!!
You need to grow-up and get educated before talking about things you fundamentally don’t understand. You find me one credible economist that will barf up your junk. Frankly, you are so attention deprived, that you can’t even stay on topic. Democracy has nothing to do with oligarchy! People can democratically vote for oligarchys!!! And you think your ideology is “enshrined” in the Constitution? LOL!!
“No, I made a policy argument based on a policy post on a legal blog. LOL!”
Yeah. You just made a bad one that was simply an appeal to greed with no legal basis.
“That’s like saying that the benefits of a car driver benefits the car by ensuring continued use by the car driver! What nonsense to completely ignore that is the OWNER of a corporation that benefits! LOL!!
And I reiterate – Limited Liability ONLY helps the OWNERS, because without the owners a corporation DOES NOT EXIST! LOL!!!”
Spoken like someone who doesn’t understand the concept of perpetuity and (limited) personality in addition to limited liability. Or like someone acting like an apologist for corporate greed.
“I move the goal posts because what I said makes equitable, financial, and common sense! And you want me to replace that with your perverse notions of “fairness?” Who elected you despot?”
You move the goal posts because you can’t argue for fuck. I don’t care if you think my definition of equity are perverse or not because they have the merit of being the definition used by the law, i.e. having or exhibiting equity: dealing fairly and equally. You call me a despot because you’re desperate. Yeah. Despots are usually so concerned with justice and fairness like I am.
“LOL!!!!! That’s right! YOU know why people are doing things better than THEY know! You are NUTS! And remember, that Jamie Dimon is one player. Go check out surveys of small business owners. Oh wait, don’t. Because you know what they think better than they do! LOL!!!!”
No. I simply know a bullshit excuse when I hear one.
“’Corporation who avail themselves to governmental services and subsidy. Not taking money from them in the form of taxation is the exact same thing as giving them money – a subsidy.’
First, this is populist nonsense. It is untenably moronic. It is NOT true.”
Saying it is not true isn’t the same thing as proving it is not true. Not taking money from them in the form of taxation is the exact same thing as giving them money – a subsidy. Prove it isn’t. That you used the word populist as a pejorative only solidifies that you’re a corporatist boot licking toad.
“Second, OWNERS of corporations avail themselves of governments services, because ONLY they can gain from a corporation! What planet are you on? You aren’t even approaching sense!”
False. Corporations in their limited personality avail themselves directly to governmental services. That corporate agents do the heavy lifting is irrelevant. That they allegedly do so in the interests of shareholders is irrelevant.
“’Apparently you’re the one who doesn’t understand how economics works because you clearly don’t have a clue as to what a capital surplus account is for. None of the concerns I’ve addressed are taken care of by 0% corporate taxes.’
Which shows how badly you are missing it! Corporations gain nothing – indeed, they lose money for their owners – if they just sit on money. The time value of money will destroy unused capital!”
Which shows you really don’t know what you’re talking about. The time value of money doesn’t operate that way. It would only work that way if unused capital was earning negative interest.
“Once the environment is less risky, they’ll put the money to use and it will all get taxed…likely multiple times!”
Again, ignoring the issue that the currently risky environment was created by the bad faith dealings of people like Dimon and Blankfein. They have no obligation to put that money to use when the risk they created goes down. None whatsoever.
“No. I think that it is fair because it is equitable . . . .”
LOL!!! So you think its fair because you think its equitable? WOW! What cock-eyed definition of “equity” are you reading from?”
Equity is dealing fairly and equally. Fairness is characterized by honesty and justice: free from self-interest, deception, injustice, or favoritism. Everything your suggested policy isn’t.
“Watch this, I can play your game too: What I says is fair because it IS fair. And because my IS is in CAPS, you can’t do anything about it! Infinity! LOL!”
Except by definition I can demonstrate that you don’t know what fair means. Pst! It isn’t fair just because “you say it is”. As far as your fetish for all caps? Knock yourself out. Trying to shout me down doesn’t work either.
“’If you want to think that paying for the maintenance of society and the government that protects it as not good, then that is your choice’
Are you illiterate? Clearly there should be a paying, and the paying should be paid from those that benefit – those being the OWNERS!”
I’m not illiterate, but you are intractably stupid if you don’t realize that it is the laws and the courts that protect the property that corporations own and enforces the contracts they sign with others.
“’Your policy idea is not only unfair, it’s ignorant about human nature and stupid.’
Oh, so Corporations ARE people?! LOL!”
On the contrary. Corporations are legal fictions and as such should be and generally are controlled by the very government that empowers their charter and protects their rights and contractual relations in the first place. The human nature I’m referring to is the kind of unbridled greed people in management and owners can exhibit in controlling their legal fictions.
Is a Nobel Prize winner who happens to be Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs at Princeton University and a Centenary Professor at the London School of Economics a credible enough economist for you, Jack? Because Paul Krugman agrees that lowering corporate taxes is a bad idea too. Now come back with some kind of von Mises or Rothbard nonsense. Please. It is all so predictable. We get one or two of you apologists for corporate greed through here every month and inevitably they all go Austrian on us. All that’s going to do is get you laughed at for following an “economist” who eschews the scientific method and the analysis of data before making his “economic” principles that aren’t really economics, but rather political polemic. Much like the policy bullshit you’re trying to pass off here. So if you want to try to appeal to von Mises or his brethren as “credible”? Don’t waste your time.
Also, I know what a fascist is, Jack. Specifically I know what an Italian Fascist is. I know what a Corporatist is. Worse for you, I know them when I see them. Do you? At best, you’re a corporatist. At worst, you’re a fascist. And like most fascists and corporatists, you aren’t very good at math for being so greedy. 99 is much larger than 1. Mussolini, the father of corporatism and Italian fascism, ended up hanging in the street. You do the math and you’ll realize long term the joke is on you.
So laugh it up.
The more I think of Gene, the more I chuckle. According to him, if the government doesn’t tax then its a subsidy. That means that the government owns everything we make and subsidizes us by its grace to benevolently allow us to keep the government money that we made. And I’m the fascist?
Gene,
Even Gordon Gecko knows that greed is not good. It amazes me that the corporatists try to make us believe that corporations are not only people, but they are special people who shouldn’t pay taxes like real persons.
Jack,
“According to him, if the government doesn’t tax then its a subsidy.”
Not exactly what I said. I said not taxing corporate profits is the equivalent of a subsidy. Because it is.
“That means that the government owns everything we make and subsidizes us by its grace to benevolently allow us to keep the government money that we made.”
No. That means you and corporations own what you/they make minus the taxes you owed, but you feel free to conflate some more bullshit however you feel you need to in order to apologize for your corporatist greed.
“And I’m the fascist?”
If you say so. I’m willing to discount that you may just be a corporatist. Equally vile as and a kissing cousin to a fascist, but not precisely the same thing unless you’re an Italian Fascist which combines the worst of both worlds.
**********
raff,
Bad guys very often want their cake and to eat it to.
Rafflaw,
So were you going to respond to my answer to you or just troll? But yes, greed is good if the other assumptions hold. The reason is because for the perfect market to function, people have to act rationally in their best interest. The problem with Gecko is that the other assumptions didn’t hold – namely information symmetry. That’s when corruption happens. Thus, bringing things to light is generally good economic policy.
In other words, every anti capitalist fundamentally misunderstands that greed is not the problem, but greed with high barriers to entry, high transaction costs, information asymmetry, etc., is. The reason is because where the other assumptions hold, the market can weed out cheaters. Meaning, the best regulation for cheaters is to fix the broken assumptions of the perfect market.
That is right Jack. Regulations caused the enormous gap between the very wealthy and the rest of us. Do yo realize how crazy that is? Name the regulation that forced the wealthy to make huge profits while the economy tanked. The market tanked without your regulations that were removed at the end of the Clinton administration so how did this enormous wealth gap get so big?
By the way, this troll does have a life.
Too bad that’s an economic fantasy that – much like communism – only works on paper. It assumes that all actors are both rational and good – a falsity about human nature – and that markets are interested in just outcomes and capable of creating them as needed – they aren’t. Just outcomes are not the driver in market transactions. Profit is. The best regulation for cheaters is better regulation with real and substantive punishments. The problem isn’t going to be solved with deregulation. It’s going to be solved by treated white collar crime as harshly as all other crime. Steal with a gun, steal with a pen, you’re still a thief. And the market may bring you to justice but just as likely the market will reward you for your profits. The business of business is profits. The business of the courts is justice. And that last bit there isn’t just because I say so, but because the Constitution says so.
Gene,
Are you intoxicated or schizophrenic? You are all over the place and fail to make sense in the process. Then you say something dumb and say its not what you said, until you explain it and repeat exactly what I said you said?! And beyond all that, now you say i am greedy because I am advocating that owners of corporations get taxed more? Thats just bizarre. I’m interested in productivity and efficiency. That’s it. And what I’ve articulated is better for our economy as a whole – including for your precious 99% – than this boneheaded liberal and ignorant crap. And except for your pussyfoot feelings, you can’t articulate any sensible explanation of how I’m wrong. Seriously, you are cutting your nose to spite your face! Whatever fiscal or social end game you want is better achieved by 0% corporate taxation!
Rafflaw,
Umm, no. Many of the broken assumptions occur without the government. But to take your challenge, the security’s act of 1933 and security’s exchange act of 1934. How? BEcause one of he unintnded consequences is that they raise barriers to entry. So, you and i cant just go start a bank or issue stocks. And because the barriers to entry are so high, there isn’t competition that reduces compensation through added supply and increases the quality of services. And if there was one way to term the crash, poor servicing would be an understatement.
Thanks for playing!
Gene, you are right. You’re not rational. Which explains why you don’t make sense.
Jack that is a load. I asked about the Huge increase in the wealth gap since 2000 and you bring up acts in 1933 and 1934? I am still waiting for evidence. Have a nice night.
Jack,
You have mentioned the “free market”and the
“perfect market”. Could you give me two examples of times and places where each of these phenomena has existed historically? In discussion terms must be defined for clarity and so I’d like some concrete, rather than theoretical examples.
Here’s an old quote by Upton Sinclair:
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”
For the trolls who visit this blog, substitute sanity or ego, for salary.
Jack,
“Are you intoxicated or schizophrenic? You are all over the place and fail to make sense in the process.”
I make perfect sense. That you can’t or won’t understand it and respond by questioning my mental state only shows your desperation and dishonest methodology of argument.
“Then you say something dumb and say its not what you said, until you explain it and repeat exactly what I said you said?!”
No. I corrected your hyperbolic and incorrect interpretations of what I said. That you still couldn’t understand it is your intellectual failing.
“And beyond all that, now you say i am greedy because I am advocating that owners of corporations get taxed more? Thats just bizarre.”
I think it is clear you are greedy for corporate profits for some reason.
“I’m interested in productivity and efficiency. That’s it.”
No you’re not. You’re interested in corporations getting all the benefits of government and paying none of the costs.
“And what I’ve articulated is better for our economy as a whole – including for your precious 99% – than this boneheaded liberal and ignorant crap. And except for your pussyfoot feelings, you can’t articulate any sensible explanation of how I’m wrong.”
Except I did explain how you are wrong. Your refusal to acknowledge that notwithstanding. Saying I’m wrong and ignorant isn’t the same as proving it.
“Seriously, you are cutting your nose to spite your face! Whatever fiscal or social end game you want is better achieved by 0% corporate taxation!”
That’s your opinion and you’re entitled to be as wrong as you like. I’ll decide my own goals and guess what! They don’t include further subsidizing corporations posting record profits by reducing their taxes to 0%.
CEJ,
Yep.
the argument is not a two sided one….there are others who exist within the dynamic of supply and demand, it is not simply the ‘Corporation’ and the ‘Government’.. …those others are fodder for both at the moment….but the health of the middle class is (something that no-one wants to admit,) a best indicator of the healthiest dynamic between the 2.
Raffila,
You must be tired. To quote,”name the regulation…”. Poor guy -get some sleep.
Mike,
The perfect market is a pipe dream. It is a goal. The reason is that th assumptions needed for it to work simply don’t hold in the real world. Thus, libs hoot and holar and want the government to make everything better. But this is wrong. Rqther, By fixing the broken assumptions, the government can create a mechanism that is more efficient and more nimble at dealing with a multitude of issues. This reduces costs for everyone. In other words, the governments role in efonomics shouldn’t be policy based, bu focused on regulations that help fix he broken assumptions so that the perfect market can work more effectively.
Jack,
So there has never been a “perfect market”, though you used the term repeatedly. Now how about answering my other question which is when in the history of the world has there ever been a “free market”, since that is another term you use repeatedly to illustrate your economic view? To have a coherent discussion one needs to define terms and both those phrases seem inherent to your arguments.
Jack,
I do sleep at times. I am still waiting for the regulation that forced the wealthy to rapidly increase their wealth during the past decade.
Woosty,
that is a good point about the damaged middle class. The gap between the wealthy and the middle class has exploded in the favor of the wealthy.
Mike,
This is beautiful. And I mean that. Despite our differences on other topics, I hope you realize the absolute gem you’re touching on. Oddly, yes. In any significant economy, there is no “perfect” perfect market because the assumptions for it to work simply never all “perfectly” hold. (Whether they hold well-enough is another issue altogether). The role of government intrusion into economics should be LIMITED to fixing those assumptions. Thus, it should pass limited, focused regulation. That said (and here’s the gem) there CANNOT be both a perfect market and a free market, because the first (because the perfect market simply can’t exist naturally) requires lubricating regulation and the second prohibits it. And conservatives just don’t understand that although their principal of the perfect market is right, they don’t know how it works nor the government’s role in making it work. And because liberals don’t see it working, they want to throw it all to the wind without any cogent understanding of what they’re talking about. Both are terribly wrong.
So, that said, in any significant economic environment, the perfect market and free market don’t completely exist. Now, they may when little Jonny sits on the corner selling lemonade (well, at least until recently), but not in any major economy. The goal is to get as close to having the perfect market function as perfectly as possible.
Now, there are 2 other things I have yet mentioned (and you should really like this). (1) If the cost of the government passing “lubricating” regulation to fix the broken assumptions is more costly than the benefit, then the government should arguably just seek the ends and skip the means. And that makes sense. 2) [READ THIS ONE CAREFULLY] If the government creates windfall, then I think it has a right to ask for more $ back. A good example of this is bankers: There are so many barriers to entry caused by the government in investment banking, that I don’t have a problem that bankers get taxed more. In other words, where the government promotes an unnatural windfall, I’m OK with it more heavily taxing that windfall on the back end because the $$ weren’t naturally earned. But such a progressive taxation policy has NOTHING to do with taxing them just because they are rich!
The point I hope you catch is that if liberals actually try and understand economics and accept that conservative economic principles are right, they can actually make a more tenable argument for “fairness” using these economic principles and avoid coming off as flaming populist fascists.
rafflaw,
Almost ANY regulation creates barriers to entry, which help the established rich from pushing out potential competition. That’s my point. But your question is bad anyway.
The more poignant cause of the disparity, is technological efficiencies. How – you ask? Think: who has the internet and computerization helped? The blue collar worker, or the owners of companies that can now hire fewer blue collar workers? That said, realize that an increase in efficiency HAS also helped the so-called poor, because the standard of living is generally up in the U.S. for the middle-class. Not to say things aren’t more expensive, but you get a lot more bang for your buck. Compare the real cost of a car 25 years ago with a car of today and all the bells and whistles they come with.
Point being, wealth discrepancy doesn’t really mean anything except for pom-poming cheerleaders. If 90% of the population is 1 billion times better off then me, who cares if I become 1 million times better off myself? Rather, the focus needs to be on the standard of living, the access to basic necessities, and even to luxury goods (cable, cars, netflix, etc.) If that is dropping, then there is something certainly to worry about. From Wiki:
“The homeownership rate is relatively high compared to other post-industrial nations. In 2005, 69% of Americans resided in their own homes, roughly the same percentage as in the United Kingdom, Belgium, Israel and Canada. Residents of the United States also enjoy a high access to consumer goods. Americans enjoy more cars and radios per capita than any other nation and more televisions and personal computers per capita than any other large nation.”
The question is, are these rates generally increasing, stagnating, or decreasing?
Access is the question – no disparity.
Woosty=^..^ ,
That’s really an excellent comment stunningly illustrated. A brilliant and apt cross reference Woosty.
I love that short, I think of it often when I think of the endless war(s) and the people that start and prosecute them. I now have the opportunity to save the link – until I lose it again
Thanks.
Jack,
I am not buying what you are selling. You are now suggesting that the gap between the wealthy and the middle class Is not important. How many people are now in poverty and how many people have lost their homes since 2007? The gap has increased dramatically and home ownership is plummeting due in part to the middle class being screwed on taxes and the Wall street bailouts, not to mention that corporations are moving billions overseas to avoid taxes and sending jobs there as well. Without reasonable regulations, these problems will get worse.
Jack,
Thank you for answering me. You make some interesting points which I will answer tomorrow. I am on my Kindle Fire now which doesn’t lend itself to the task. However, just as you may have been mis-assumed as merely another doctrinaire libertarian, I think you are projecting a whole bunch of mis-assumptions upon me and other regulars here as doctrinaire anythings, save for a fair society, in the sense of all having the opportunity to reach their potential.
CEOs Of Tax Dodging Corporations Push Congress To Cut Corporate Tax Rates
By Pat Garofalo on Mar 7, 2012
http://thinkprogress.org/economy/2012/03/07/439988/tax-dodgers-want-tax-cuts-corporate/
Excerpt:
Several corporate CEOs representing the Business Roundtable, a lobbying group, were on Capitol Hill today to unveil a set of measures that they claim will boost the economy. Not surprisingly, some of the high-profile items are a cut in the corporate tax rate and shifting to what’s known as a territorial tax system:
Fresh out of a meeting with members of the Blue Dog Coalition, dozens of CEOs in town for a series of Business Roundtable policy and lobbying meetings today unveiled proposals to boost the economy.
The plan, billed as “Taking Action for America,” calls for a balanced federal budget, a reform of federal regulations and a lower corporate tax rate based on a territorial tax system, among others.
Elaine,
I just saw that article. It amazes me that one of the CEO’s pushing to reduce corporate tax rates was the CEO of Boeing which hasn’t paid taxes for nearly a decade! Thanks for the link!
http://www.michaelmoore.com/words/mike-friends-blog/why-no-one-would-listen
someone quick….tell me something good!
rafflaw,
First, I’m not selling anything but common sense. For anyone who has ever taken training in management consulting, the focus of is to find the real problem, and avoid treating symptoms. I didn’t say that wealth disparity is not important, but that is illusory if we actually want to fix anything. Indeed, it makes no sense to make a comparison of the “Joneses” as economic policy if everyone is starving or, on the other hand, eating themselves to death. Now, it very well be that the two approaches will render the same results now, but they don’t necessarily over time. That’s why getting the analysis right in the first instance is important.
Second, I don’t know how many people have lost their homes, although I am certain that they are far fewer than those that got kicked out of the bank’s homes. Really – how many of them actually “owned” them? But what’s even more important is to note that those people that no longer live in the bank’s homes are now doing what they were doing before – renting, which is actually better than owning when the housing bubble is flipped (and mortgages are more expensive than renting, which is what is happening). Why this is relevant, however, is beyond me.
Third, the middle class is not “being screwed on taxes and Wall street bailouts.” That’s balony. The fact that 48% of people don’t pay tax means that a very large chunk of the middle class actually don’t pay tax. Moreover, populist people that cry about the financial bailouts don’t know what they are talking about. First, I don’t like bailouts, but the AIG bailout, Lehman bailout, etc. were necessary. The reason is that middle class pensions/retirements were insured by AIG, etc. If AIG went down, the middle class would have been devastated. And this says nothing about hampering lending, etc. Considering how bad it is now, I can only wonder how bad it would have been. Again, I don’t like that this was the fact, but it was.
Fourth, as I’ve indicated, the way to get $$ back from off-shore shells is to reduce corporate tax rates to 0% and to tax the owners/investors on the income dividend (that’s the only place profits can go). What’s startling is that people think that the government (Congress) will eventually outthink everyone else! They can’t! So shouldn’t they stop trying? You can get every populist progressive economic result you want under my structure, but with none of the down sides; e.g. cheating. And Congress doesn’t need to maintain anything.
Mike,
That well-may be true. As you can tell, my economic policy does not square with the conservative right (because they are wrong). I don’t know that I’m a libertarian, but try to be accept anything that makes sense. And with something does, I change the way I think. That said, please note that when I’m talking about “flaming populist fascist,” I am truly not talking about you. I do, however, question the objectivity and intellectual honesty of some people (Gene) when my proposal can get him better results for what he wants (as economically perverted as it may seem), without the downside, using clear economic theory.
Elaine M,
Of course. Until tax rates are 0% and we shift tax collection to getting a piece of the dividends from the owners/investors, corporations will keep lobbying.
rafflaw.
One illustration on why income disparity falls terribly short of any meaningful analysis:
Imagine I get paid $200,000 as a lawyer and another guy gets $35,000 as a plumber after 40 years of work. Terrible, isn’t it?! If you actually run the numbers (which I did) and include tuition and opportunity costs of me going to law school, and also include the social benefits to the poor guy over his life, my Net Present Value is LESS than 20% greater than the plumbers!!! That’s right: $200,000 is only 20% greater in real money terms than $35,000! That’s it! In fact, the NPVs are $892,248.60 vs. $714,351.51. As such, “wealth discrepancy” is a really, really bad indicator! If we want to focus only on numbers, then wealth discrepancy numbers must be in NPV terms.
Jack,
Your premise is that since corporate profits are distributed to shareholders then taxing the shareholders receipt of the profits actually derives the same revenue. That is incorrect. Corporate profits are not distributed to shareholders on anything like a 1:1 ratio. Corporations hold onto most of their profits either to increase cash on hand, or to reinvest in other means of furthering the profits they’ve made. These means are usually not expansive in the terms of growing the business, but in terms of reinvestment into financial instruments that reap further profits. There is a whole sub-genre of the financial industry dealing with that alone.
“The corporation can’t do anything with profit. Rather, those profits are distributed to investors who are then (generally) taxed at higher income rates than even at the corporate tax rate.”
What percentage of corporate profits are redistributed to investors?
A more complete answer to what you suggest can be found here:
http://hnn.us/articles/144304.html
ANALYSIS: In Almost Every Primary, Romney Wins Big Among The Rich, Loses The Working-Class Vote
By Alex Seitz-Wald on Mar 7, 2012 at 2:20 pm
In February, a CNN poll found that regardless of age, race, sex, or party affiliation, all Americans agreed that Mitt Romney “favors the rich” over the middle class or poor, ThinkProgress noted. And it looks like the rich are returning the favor.
The Washington Post reported this morning that in both Michigan and Ohio, “voters making more than $100,000 per year turn[ed] out in much higher numbers this year than they did in 2008″:
In 2008, 22 percent of GOP primary voters in Michigan made at least $100,000, and that group made up 21 percent of the electorate in Ohio, according to exit polls. This year, 33 percent of voters in Michigan made that much money, while 30 percent of Ohio voters did. In both cases, the number of wealthy voters grew by about 50 percent — a pretty stunning increase in that demographic over just a four-year span.
In both states, Romney won among those making more than $100,000 by 14 points, even though he lost among all other income demographics.
This trend occurs in virtually every state that has voted thus far. A ThinkProgress analysis of exit/entrance polls from the 14 states that have conducted them shows that Romney consistently does best among those earning more than $100,000 or $200,000 a year, while more often than not losing among middle- and working-class voters.
The only states where this wasn’t true were Massachusetts, his home state where he served as governor, and Virginia, where Rick Santorum and Newt Gingrich weren’t even on the ballot.
Jack,
I think we are talking past each other (and trying to say the same thing many times, I may have gotten sloppy). Let me try taking a step back. Corporations can ULTIMATELY only do one thing with profit, and that’s to distribute it to investors. You have Assets + Liabilities = Owners Equity. Within owners equity, the profit either remains in retained earnings or is distributed. Retained earnings can be used for reinvestment purposes, stock buyback, etc. In can also be used to build a cash reserve. But holding onto cash just for the sake of it is terrible business. Any board trying to do that will get the iron boot out the door. This is kind of what happened to Microsoft. For years they didn’t pay out dividends, but the investors finally started getting ill-tempered so management started paying (although the dividend is still small which is typical in tech). But whether the company reinvests, builds a cash reserve, etc., the whole purpose is to make more money for the investors.
There’s one other side of this that you can’t forget. Even where a corporation holds onto money rather than distributing it for whatever reason, the company has more assets meaning it is more valuable. And what happens to companies that become more valuable? Stock prices go up, which lead to capital gains of investors. Now, how capital gains should be taxed is a completely different issue. Frankly, the tax policy needs to be revised with capital gains. But this all goes to shows that be it dividends or capital gains, the government can get 100% of their wanted taxes from investors by skipping corporations completely.
Lastly, if a company is a cash cow that isn’t paying out, they’ll get raided by a private equity group, etc. If a massive amount of the assets aren’t being put to use, there will be a hostile takeover because the group knows it can make more money by managing the company than by allowing current management to continue. And of course, that leads to profits and capital gains, etc. which can be taxed. This is one of the good things of such funds – they scare inefficient managers.
Swarthmore mom,
The reason that article is rather ridiculous is because Romeny is the only GOP candidate for any sort of progressive tax. So why do rich people like it? What I think is more indicative is not wealth, but education. As John King noted, Santorum did well in areas of Ohio which are notorious for “troubled” education systems. [Frankly, I can’t believe he basically said that Santorum voters are dumb, but he did.] Smart people that actually understand the basic principles of management consulting actually see that his business acumen (which has netted him a ridiculous amount of money) grossly outshines anything any of the other candidates have to offer, including Obama. In a macro, global economy, we need to compete, and we need to win.
http://www.jewishworldreview.com/0312/stossel030712.php3?printer_friendly
“Their greed was only matched by their willingness to do anything to make millions in profits.”
Give me a break.
“Greed” means you want more for yourself. Fine. If you obtain it legally, without force or privilege — say, by buying a business and making it more efficient, or shifting resources to where consumers prefer them — that is a good thing. “Creative destruction” makes America richer.”
“The real evil bankers are the government cronies, like those at Fannie Mae and Freddie Mac. They took our money by force, our taxes, then paid themselves fat salaries and promised us that none of our money was at risk. And then they squandered more than $100 billion, betting that housing prices would always rise and few people would default.
I resent them and their backers in government.”
“But in a real free market — no government privileges or barriers to competition — capitalism is great. It’s the only system with a moral core because it’s based on freedom, not force.”
Hehe. I should have addressed my last post to Mike. Not myself. Poor copy/paste.
Apple Announces Dividend, Share Buyback
By Matthew Yglesias
| Posted Monday, March 19, 2012, at 9:14 AM ET
1
The Apple announcement turns out to be pretty straightforward—a modest dividend and a modest share repurchase program. From the press release:
Subject to declaration by the Board of Directors, the Company plans to initiate a quarterly dividend of $2.65 per share sometime in the fourth quarter of its fiscal 2012, which begins on July 1, 2012.
Additionally, the Company’s Board of Directors has authorized a $10 billion share repurchase program commencing in the Company’s fiscal 2013, which begins on September 30, 2012. The repurchase program is expected to be executed over three years, with the primary objective of neutralizing the impact of dilution from future employee equity grants and employee stock purchase programs.
They note that this will lead to about $10 billion per year in dividend payouts which they say will be among the highest in the country. Apple’s aggregate cash balance should still grow under this program, but a lot of that cash will continue to be held abroad. Apple doesn’t want to “repatriate” those foreign profits because in order to do so they would have to pay corporate income tax on the money. Like a lot of firms, they’re hoping that Republicans will someday soon either enact a corporate income tax cut or a temporary “repatriation holiday” which will let them move it to the US cash free.