Corporate Income Taxes

[MountainDon]

Okay, here's a hornet's nest for you.     (I'm feeling cantankerous tonight.)

Do you believe corporations should pay income taxes? 

I maintain that corporations should not be taxed on income. Always have. This includes everything from the smallest incorporated Mom & Pop store/service to Exxon Mobil.    Taxes on corporate income do nothing except cause the corporation to act as a tax collector for the federal, state and sometimes local levels of government. Any taxes corporations have to pay will be ultimately obtained from the purchaser of their product or services. If taxes on corporations are increased, the prices you and I pay go up. The folks who operate corporations aren't stupid; if revenues go down because of increased taxes they will raise prices. At least I would; I/we do.

OMMV

Related articles:

http://findarticles.com/p/articles/mi_qa5309/is_200511/ai_n21385539

http://www.nytimes.com/2008/06/01/business/01view.html?n=Top/Reference/Times%20Topics/Subjects/F/Federal%20Taxes%20(US)


I also believe the current corporation tax code exacerbates the sending of jobs overseas.

[peternap]

I agree with you Don!

It's stupid to pay taxes two or more times on the same income.

[John_C]

http://www.fairtax.org

[desdawg]

Tell Obama.

[John_C]

Tell Obama.

√ Obama.......       

[ScottA]

I agree Don but they want to try to hide part of the crushing tax burden. Corporate taxes are one way they do this. Inflation is another.

[Squirl]

I disagree.  Corporations get every single benefit and protection afforded under the law that a person does.  Corporations receive the benefits of infrastructure, bailouts, incentive cash and many other programs that even people don't receive.  If they receive the benefits, they should also pay the tax.  Mom and pop corporations do not pay double tax.  If the corporation has less than 30 share holders and all are domestic and they make less than 500 million dollars, they can file as a sub chapter S and do not pay any taxes what so ever.  It is the double edged sword of having all the legal protections of liability to the owners.  This way the owner of the corporation can say, "hey, it wasn't me, it was the corporation," and walk away from what ever destruction the corporation caused with all their money intact.  In this economic environment people keep talking about the moral hazard of bailing out companies.  Because they will keep taking huge risks, knowing they will never fail.  There are a few purposes that the double taxation serves.  One it serves as a deterrent to keep people from pulling all the cash and capital out of a corporation, just in case something bad might happen to it.  Second it serves to have people reinvest the capital and profits to keep the economy growing.  The second reason I do not care about, it is purely academic.  The first reason I do.  
Most professional industries (accounting, medical, law) are not allowed to incorporate.  I have worked in two of those three.  Trust me, they would be happy to incorporate and pay the extra tax for the protection that if they screw somebody (maybe you), you will never see a dime.

[MountainDon]

Squirl, I have to disagree with your approach of mixing corporate income taxes into liability issues and bail outs, Those are different issues and income taxes should have no part of those issues. Being taxed on their income, or not, should have no bearing on a companies liability.

John C. listed a link to FairTax, which I do mainly support.

[glenn kangiser]

If the individuals benefiting from the corporation pay their fair share of tax then I feel no double tax is in order..... but only after we stop policing the world, stop the war machine from using the corporations machines to kill and maim men, women, sons, daughters, babies in the name of oil, greed and  power for the elite.

I have no problem with having the worlds strongest military and maintaining it in great working order here, at home to where no one dare attack us.

This pre-emptive strike in case someone ever thinks of attacking us (but only poor defenseless oil rich arab countries who's inhabitants are lower than dogs to be slaughtered at will like it was a video game-- military thoughts-not mine- I have proof if you ask)

....this pre-emptive strike stuff the Bush Cabal came up with is only to enrich their heartless war mongering oil and military machine corporations and to fill their own pockets with war profits.

These are the lowest of the corporations and maybe we should get back to the simple life prying the corporations out of their bloody fingers. 

Taxing them? I probably agree not the Corporations themselves.  The individuals yes-- CEO's -get rid of them or make it into a position where they have to live in the real world. 

We also need to do something about them taking our jobs offshore and replacing American citizens with an illegal alien workforce.   

[MountainDon]

Re: FairTax. I said I mainly support it.

It does away with all income taxes (personal and corporate) and replaces them with a consumption tax.

Newly earned money would not be taxed until spent on tangible goods/services. Great.

The area I'm in a quandry about revolves about the money I have already saved and paid income taxes on. Under FairTax that money I pull out and spend would have taxes paid at that point. Double taxed in my eye.

Is there something I've missed?

[desdawg]

We have a multiple taxation Proposition on our AZ ballot this year: Arizona Proposition 100, known by its supporters as the Protect Our Homes Act will be on the November 4, 2008 ballot. If enacted, it amends Article IX of the Arizona Constitution.
The sponsor's statement describes the measure this way: "this Initiative prohibits the government from charging any new tax on the sale or transfer of real property in Arizona. Currently, there are no real property sales or transfer taxes in Arizona. However, the government could enact a real property sale or transfer tax at any time. This Initiative would prohibit the enactment of any new real property sales or transfer tax by a constitutional amendment."
Apparently some more government folks would like to charge a "sales tax" on home resales.
http://ballotpedia.org/wiki/index.php/Arizona_Proposition_100_(2008)

[MountainDon]

Transfer Tax.... arrrgh!

Here in Santa Fe, NM, the "city different" they are talking about implementing the same thing. I haven't followed it closely as I would never live there. I believe it has a kick in point someplace in the upper numbers. The tax collected would go to pay for "affordable" housing for the disadvantaged.   More income redistribution.

[glenn kangiser]

You can never give enough to help those who will not help themselves.

[desdawg]

First you pay Federal and State taxes on your earnings. You spend your earnings to get your name on a deed. Then you pay the annual real estate tax for having your name on the deed. Now some would like to tax the proceeds of the sale when you close it out. Isn't that special. This Proposition is pretty forward seeing. It would prevent that scenario from ever becoming law. Better than nipping it in the bud, nipping it before it buds. The ballot will be a bit confusing. If you are opposed to this tax ever becoming reality you have to vote yes. I imagine some will get confused.

[MountainDon]

The ballot will be a bit confusing. If you are opposed to this tax ever becoming reality you have to vote yes. I imagine some will get confused.

I hate it when they write resolutions that way. Say yes if you mean no. 

[Squirl]

I am not a fan of the consumption tax.  It is a regressive tax in practice.  The tax burden for the U.S. would be on the poorest members of it.  If you make mininum wage you have to spend everything you make to get by.  This will end up having all people making less money paying taxes on almost all of their income.   Say you make $15,000 a year, and now you have to pay a 15% tax on everything (food, clothing, shelter).  Now say you make $100,000 a year.  It may only cost you the same amount of money to get live (food, clothing, shelter),  so in a sense you are paying a far lower tax rate on income than the person making minum wage.  So if it costs $12,500 a year to live.  The person making $15,000 a year would be paying 15% tax on their income, while the person making $100,000 would be paying 2%. 
Also, taxes can serve as the carrot or the stick in a capitalist society.  Taxes generally serve as a deterant towards a certain action.  Many people attack a progressive tax structure as being against people working harder to make more money.  But the problem with a consumption tax is it discourages spending.  In all forms of capitalism that is a disaster.  The economic concept that the wealthy spend their money and it "trickles down" to the lower classes by consumption would be destroyed.  The more money you have then, the more you would horde.

[Pox Eclipse]

It's stupid to pay taxes two or more times on the same income.

Can you spot the double taxation?:

.

[MountainDon]

The proposed FairTax gets around the low income problem mentioned by squirl by giving everyone a monthly payment equal to what the basic cost of living is. So the poor ends up paying no tax on those monies spent for food, shelter, etc.

A consumption tax is not going to prevent someone, rich or poor, from buying a lot of things they want. I'd still be buying windows, lumber, wood stove, etc. to build my cabin. The rich guy would still buy his new BMW or Mercedes. The poor guy could buy a used car and there would be no tax. The FairTax proposal only taxes purchases on new goods.

If you have more money (being "rich") you are still likely to spend more money than the poor, and therefore pay more taxes than the poor.

A proposal like the FairTax would also tax those illegally obtained funds, like drug money, when it was spent to purchase goods.

FairTax would also eliminate the paperwork involved under the present tax code.

[desdawg]

The cartoon above fails to mention the sales taxes. The plumber has to charge sales tax and the shop owner who sells the DVD's has to charge sales tax and do all of the bookeeeping for the state to verify they collected the right amount. At least that is the way it is in this state. So the taxes go beyond what is being illustrated.

[glenn kangiser]

Sale tax should be illegal also as should be the tool tax - that taxes your tools every year if you work for a living rather than being a government parasite.

I wonder if getting dipped for ticks would get rid of them.  (Politicians derived from politics - derived from poly (many) Ticks (blood sucking parasites) 

I love that definition.  Thanks to whoever.   

[MountainDon]

....tool tax - that taxes your tools every year if you work for a living rather than being a government parasite.

...called the Business Personal Property Tax here in NM. Anything used in business is subject to it; tools, copier, computer, and so on. The rate goes down as items age. Still, it seems ridiculous to me.

[desdawg]

....tool tax - that taxes your tools every year if you work for a living rather than being a government parasite.

...called the Business Personal Property Tax here in NM. Anything used in business is subject to it; tools, copier, computer, and so on. The rate goes down as items age. Still, it seems ridiculous to me.

This is different Don. Here it is a sales tax and each entity takes their own bite. State, County and City. It gets added to your purchases at the cash register. I have to charge it on the rents I collect in certain areas. It is called a Transaction Privelege Tax. It is a consumption tax. It even gets charged on groceries.  As for the business use tax I am with you Don. They wanted to tax me for using my own backhoes. They also failed to show up when I was making the monthly payments to purchase those machines.

[MountainDon]

NM also has a sales tax, or more accurately a Gross Receipts Tax. Businesses have to collect, or rather submit, the tax as per the rate at their location... state, county, city is all different, or possible to be different. There are some exemptions, like food is not taxed if purchased in a grocery store;  restaurant meals are taxed.

[MountainDon]

They wanted to tax me for using my own backhoes.

Yep, same here, it doesn't matter if the business owns the item, if they use it it's taxable. Except for rented tools, but then you're paying a tax to the renter.

[Squirl]

I am actually a fan of the income tax in PA as far as taxes go.  It is a zero tax bracket up to about 10,000 and the progressive curve goes up pretty steep, pretty fast.  So if you make say 12,000 without kids you pay the full tax.  It is a flat 3% across the board with almost no deductions.  Simple, easy, fair. It is the fairest and easiest of any of the states I have lived in.  I dislike the consumption taxes (sales tax).  It is around 6% to everyone no matter what income level and it is on everything but food and clothes.  I am pretty happy with the services in PA for what I pay.  We've got good schools, roads, police, and fire.