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Tax

Original post made by Ted Rudow IIII, MA, Palo Alto High School, on Mar 4, 2011

Well, corporate income taxes in this country are one-third lower than they were in 2000—even though corporate profits are up 60 percent and corporations have almost $2 trillion in cash. They're approaching $7,000 of cash for every man, woman and child in the United States. They're not investing this money. They're not creating jobs. They are hoarding this money that they have pulled out of the economy. It's one of the reasons we're in so much trouble.

Now, as to the argument that our tax rate is too high, it is because of all these special favors. The reason the tax code has grown and grown and grown and grown and grown isn't because of people like you and me and the audience; it's because of all these favors being bought from politicians. How we could raise a trillion dollars a year—that would double the revenue we get, it's equal to the revenue we get from the individual income tax—by shutting down loopholes and favors for businesses, particularly the oil and gas and pharmaceutical industries. The fact is, the very largest corporations, the ones who are the vast majority of wealth in America, they pay an effective tax rate of about 15 percent of their profits.

Comments (22)

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Posted by Fair Corporate Taxes
a resident of Woodside
on Mar 4, 2011 at 1:45 pm

Is this fair to working Americans? Or retired Americans? Or American children?

- Revenue from the corporate income tax fell from between 5 and 6 percent of GDP in the early 1950s to 2.1 percent of GDP in 2008. Web Link

- Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes... Web Link

- GE, Exxon Paid No U.S. Income Taxes in '09: "Last year the conglomerate generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam." Web Link

Congress: the best politicians and the best tax code that corporations can buy!

Change it:
- public financing of elections: would you rather buy the politicians, or let corporations continue to own them? I rather they owe us, not Wall Street.
- remove corporate "personhood": corporations are not people, they should not have the same free speech rights as people, especially in the form of donations (bribes)

The above will not change with the current Supreme Court. Do not vote for anyone or a party that supported the Citizen's United decision.

Corporations are not citizens.


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Posted by Walter_E_Wallis
a resident of Midtown
on Mar 4, 2011 at 2:08 pm

Walter_E_Wallis is a registered user.

With public financing of elections, the governments would decide who could and WHO COULD NOT run. Democrats 100%. And after you get rid of all those loopholes then you would get all those gross profits? For maybe a year, then, surprise, no more profit. People do not run corporations for the fun of it, they do it for the money!!! The tax code now is the mess it is because of the income tax, a tax that allows politicians to hand out favors to the corporations they favor.
You want equity? Then ask for a straight 10% across the board, no favors for anyone, rich or poor, and see the money roll in.


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Posted by Fair Corporate Taxes
a resident of Woodside
on Mar 4, 2011 at 2:52 pm

Mr Wallis:

Public Financing does not favor any particular party.

In Arizona, it favors Democratic Party, because it's a red state.

In Maine, it favors Republicans, because it's a blue state.

It disfavors incumbents initially, because they now have such a disproportionate ability to raise money. After that, it helps incumbents govern, freeing them from having to spend so much time raising money.

Usually from corporate lobbyists, and to a lesser extent these days, from unions.

I will let others debate you on a flat tax, perhaps in another forum.


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Posted by Fair Corporate Taxes
a resident of Woodside
on Mar 4, 2011 at 2:57 pm

Mr Wallis:

Allow me to amend: Public Financing should not favor any particular party.

In reality, it arguably, slightly favors the Democratic Party, in that they get significantly smaller contributions from corporations.

In lieu of a flat tax, are you defending the status quo, with corporations not paying taxes and buying politicians to continue to amend the tax code in their favor?


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Posted by Walter_E_Wallis
a resident of Midtown
on Mar 4, 2011 at 4:43 pm

Walter_E_Wallis is a registered user.

Corporations will continue to minimize their tax burden by legal and sometimes questionable methods. I would prefer that the income tax apply only to individual incomes, and that the levy be 10% across the board. I suspect that the total revenue would increase and very definitely the income of tax experts would diminish.


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Posted by Anon.
a resident of Crescent Park
on Mar 4, 2011 at 7:08 pm

The flat tax is no more reasonable than demanding a flat amount from everyone in the country ... whatever that would work out to, the poor, working and middle classes could not afford it.

But the flat tax is close to what we have today ... is essentially what we have today with all the loopholes in the system, it's more jagged and not flat, but it does not work. Instead of paying their taxes the super-rich just shirk their responsibility and spend it on PR slogans. The bottom line is that we cannot pay our bills, and our bills are about as low as we can get them, in fact too low. To low measured by the fact that the US is declining in almost all dimensions of what a country does, while we alone pay to be ready to fight 2-3 wars around the world. If that military empire cannot serve everyone and do right internationally, then it just exists for a small minority ... and they should be paying more taxes.

The current system also does not not demotivate anyone from working harder to make more money. The idea that businesses are going to disappear by any other way than the our corporations sending them to where there are not labor or environmental regulation is poppycock.

Yeah, paying taxes can be painful, and government needs improvement ... we should be doing both of those things rather than bitching and moaning and dragging the whole country down in a game of chicken - on purpose, because there is no way this was not seen and understood by all who had their hands on the political power switches in this country. We have been ripped off and we will not be back to normal until justice is done and we all know it.


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Posted by Walter_E_Wallis
a resident of Midtown
on Mar 5, 2011 at 3:40 am

Walter_E_Wallis is a registered user.

By justice I assume you mean his money in your pocket.


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Posted by Sigh and Yawn
a resident of Meadow Park
on Mar 5, 2011 at 9:05 am

All I can do is sigh and then yawn....

Big evil corporations, tax them more, regulate them more, we aren't really taxing them enough, being the 3rd highest tax rate in the world is not really true..blah blah blah.

Just look at reality....our businesses are leaving this country, and hiring outside this country even if they still have quarters here.

Clearly our policies are working to increase employment options here in the USA ( not). The least numbers if employed young people in a generation...Web Link. Lowering housing costs, increasing oil and food costs, unemployment at the longest, highest since the Depression..

Wow.. more of the same ideology we've had in charge for the last 4 years in Congress and 2 years in the White House...let's tax and regulate those evil corporations more so that they will want to stay in the USA!!

Brilliant


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Posted by Fair Corporate Taxes
a resident of Woodside
on Mar 5, 2011 at 9:35 am

Sigh:

"...being the 3rd highest tax rate in the world is not really true."

You mention a talking point about rates, ignore the real world effectiveness of those rates, and ignore the reality posted above:

- Revenue from the corporate income tax fell from between 5 and 6 percent of GDP in the early 1950s to 2.1 percent of GDP in 2008.

- Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes...

- GE, Exxon Paid No U.S. Income Taxes in '09: "Last year (GE) generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam."

The facts above are not recent events as you suggest: "more of the same ideology we've had in charge for the last 4 years in Congress and 2 years in the White House"

As the first point notes, this has been going on for fifty years.


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Posted by Anon.
a resident of Crescent Park
on Mar 5, 2011 at 12:42 pm

When you go to look at the income/tax breakdown at the IRS the numbers can be deceiving, and I'm thinking this is probably on purpose.

You notice a lot of data for lower incomes, so statistically you can actually have a feel for who is paying what and where money is coming from, but when you get the upper incomes, there is absolutely no breakdown ... the margin is just 250K and above. There is no average, no further breakdown about how uneven that top 1% is or how much taxes they pay or don't pay. This is where there used to a 90% marginal tax rate at one time. So, in order to prevent that they fold it in to the ... what is essentially upper middle class professional incomes so no one can really assail them or single them out. No one that I know suggest that 90% is a good top tax rate or that the top tax rate be applied to people at that level. This is an example of Orwellian engineering of perceptions. I wonder who thinks of these things?

To me anyway, it just seems like the major fact is that this "fiscal crisis" was engineered without public understanding or buy-in, that the debt was deliberately run up to catastrophic proportions with the express purpose of reducing economic and political power of the lower ... now including the middle class. The by-product is that the government being smaller, and more dependent on money would even be more easily controlled by the super-rich.

Since exporting jobs and importing foreign workers who are much more easily exploited than American union members will lead to US workers facing the same situation as real third world workers, we will essentially be the same as the third world. Is that conducive to democracy or innovation? How many democracies do we see in the third world? There is India, so is that what we are aiming for?

If we are going to try to model our country on India, which is after all a democracy, shouldn't the American people know it and have something to say about that?


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Posted by Anon.
a resident of Crescent Park
on Mar 5, 2011 at 12:53 pm

> Big evil corporations, tax them more, regulate them more, we aren't really taxing them enough, being the 3rd highest tax rate in the world is not really true..blah blah blah.

Isn't it obvious and demonstrable that we are not taxing or regulating corporations enough when we see abuses at every point that might be predicted by corporations?

Monsanto is allowed to roll-out and even take over the business of agriculture, replacing most natural alfalfa with "franken-alfalfa" to the point that there is not even enough regular alfalfa now to go back to using it? There was no discussion on this in the media, no vote on the future our of genetic heritage, just money passed out in the halls of power, and baloney passed out in the media on this.

Or, BP allowed to drill without oversight ending up polluting a rather large chunk of the most productive ocean area in the US and the planet?

Or the financial industry being allowed to inject their bad loans and failed speculations into the regular economy where people's savings and lives lie and corrupt that, and then get those very same people to bail them out, while they face no culpability for it, and claim they are upholding the free market and this is what makes America great.

I or anyone else who has read the papers or followed the news could go on and on about these abuses, yet somehow the emotion-rousing slogan against taxes and regulation is supposed to appeal to some twisted sense of patriotism and motivate us to continue with business as usual.


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Posted by Anon.
a resident of Crescent Park
on Mar 6, 2011 at 10:27 pm

> By justice I assume you mean his money in your pocket.

This is part of your problem, you seem unable to discuss issues without resorting the the typical Republican lines ... and I don't notice that Republicans have any less of their hands in my pockets than the Democrats. Not only that, but they put the money in their own monolithic "private sector" where has not even any hope of helping out Americans.


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Posted by Outside Observer
a resident of another community
on Mar 6, 2011 at 11:26 pm

Tax imports until it is no longer profitable to outsource American jobs.

Jail those who employ illegal aliens. They are outsourcing the few things that can't be taken off shore to 3rd world countries.

Do this and here are the results:

Short term:

The budget is balanced by the new tax revenues.

The social costs of supporting the people Latin America doesn't want go away as they self-deport.

Long term:

The economy improves as our jobs come back, and yield a budget surplus.

The crime rate goes down. Prison budgets are cut as there is a surplus of capacity.

Medical costs go down as the number of treated-uninsured decreases.




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Posted by Walter_E_Wallis
a resident of Midtown
on Mar 7, 2011 at 7:57 am

Walter_E_Wallis is a registered user.

anon, I fully agree with you about Republicans - that is why I ain't one. I am a lonesome libertarian.
Outside, I agree with half your prescription. Definitely move against employment of illegals and the continued residence of illegals in the US, but DO NOT tax imports. Free trade is the one good thing to have come from all the UN type negotiations, and if Bangladeshi can make blue jeans cheaper than we can, more power to them. We are better served with higher value products.


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Posted by Anon.
a resident of Crescent Park
on Mar 7, 2011 at 7:21 pm

There is no such thing as Free Trade, all economic interactions between states are political. When you have countries that do not uphold human or environmental rights you cannot have free trade or pretty soon you too will be forced to violate human and environmental rights ... a race to the bottom.

If you export production or manufacturing jobs to Bangladesh or anywhere else, you simple create unemployment and those kind of costs here allowing the people who move the jobs to keep the profits and pass on the costs to the public - yet again.


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Posted by Outside Observer
a resident of another community
on Mar 7, 2011 at 9:43 pm

Lets see.....

Walter agrees with half of my prescription.

Anon seems to agree with the other half.

Maybe there is yet hope for this country ;)


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Posted by Walter_E_Wallis
a resident of Midtown
on Mar 8, 2011 at 6:00 am

Walter_E_Wallis is a registered user.

... but the employment opportunities to the Bangladeshi make a terrific difference in their lives. Do you begrudge them a few crumbs from out table, anon?


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Posted by Anon.
a resident of Crescent Park
on Mar 8, 2011 at 10:58 am

> Do you begrudge them a few crumbs from out table, anon?

Another false argument from you Walter.

First, a lot of this kind of development exploits and then dumps a population when their labor gets too expensive of they get regulated.

Second, moderation in all things. I am very pro-world development, but I think micro-loans and enabling people to own businesses and produce their own sustainable businesses makes more sense than having rapacious corporations exploiting desperate people.

You might benefit from watching the documentary End of Poverty which you can see for free on Hulu.com and is very interesting.

Also, the idea that we do this to help other people is like the idea that we went into Iraq to promote democracy, it is a small marketing point that is not the main reason and other actions undercut that point when you scratch the surface.

Finally, what does it do to our own country, we have gotten to the point where our country is rotting from the inside out, and there is no middle class strong enough or intelligent enough to have a participatory democracy, or republic.


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Posted by wally, wally, wally
a resident of Woodside
on Mar 9, 2011 at 10:51 am

Walter:

Do not confuse free trade with FAIR trade.

Our founders used tariffs to support our country for the first 100+ years, before income taxes.

What? Are ya against the founding fathers now?

Libertarians. The folks who think we're a bunch of Daniel Boone's up in dem dar hills, when in fact, we're a nation of barn builders.


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Posted by Walter_E_Wallis
a resident of Midtown
on Mar 9, 2011 at 7:42 pm

Walter_E_Wallis is a registered user.

I am against the founding fathers where they were wrong. While tariffs may have protected our local industry, they also reduced the availability of the best products. There was perhaps some excuse in the 1700's, but little today. Tariffs work both ways.


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Posted by wally, wally, wally
a resident of Woodside
on Mar 10, 2011 at 10:44 am

Walter:

We agree "Tariffs work both ways."

They also work well for National Security.

Without tariffs, we owe our souls to Communist China. Also a couple trillion bucks. And they fund our debt with it, thus calling shots now, or well into the future.

At some point the commies are just going to say: "move the carriers away from Taiwan, we want it back."

Or they quit funding us. They are also telling us to back off from libya.

Remember when Walmart proudly sold American made goods?

Now full of cheap commie junk, that folks want, just to save a buck.

I would have thought, Walter, that national security meant more to you than saving a buck on a tee shirt.


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Posted by Walter_E_Wallis
a resident of Midtown
on Mar 10, 2011 at 6:59 pm

Walter_E_Wallis is a registered user.

w,w,w, you would add trade wars to all the other wars we are fighting? I remember a few years ago when Harley Davis succeeded in getting a $500 tariff on incoming bikes. Did they recover market share? No, they raised their prices $500.


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