Forum Post: The Truth About Corporate Taxes!
Posted 11 years ago on Oct. 9, 2011, 7:27 p.m. EST by mr6xr7
This content is user submitted and not an official statement
If you agree, pass it along to the world!
Many people are suggesting raising taxes on business and closing loop holes, but have they really thought that through?
I ask you to stop and think about this a moment. Businesses are in business to make make money. They have expenses, which they charge against revenue to determine their profit. They take these expenses into consideration on how much to charge for a good or service. Since they are in business to make money, expenses are included as part of the charge for that good or service, plus they add their profit margin.
Guess what happens to Income Tax Expense if taxes are increased? You bet your sweet ass, that cost is added to the price of the good or service. This extra cost is added on at each point of the process of creating a good, whether sold a product or included in the service. That means the income tax on each business keeps adding to the final price. Guess who is really that tax? Yes, the public, not the business.
Secondly, businesses are not people, but people own them. In the case of corporations, many people own the corporation. If you are a stockholder, or have other investments, chances are you in some way own stock.
Think about this scam being perpetrated on all of us since the Income Tax was created. Neither the Democrats nor the Republicans want you to know this dirty little secret. Who wins from this scheme?
How much do you really pay in taxes? If you knew, you would probably be shocked.
The problem is that government uses its power to grant special favors to some companies at the expense of others. Increasing corporate taxes is a bad idea. We now live in a global economy. Its very easy to move a corporation overseas. If we beat up on corporations and make it unprofitable to do business here they will close up and move somewhere else.
So, how do they explain the fact that middle class income is staying flat and CEO's incomes have gone up multiples, not just a percentage, not 10%, 30% 50%,70%? No it's multiples of times more? CEO's commonly get stock options. They don't put any of their money at risk. Sometimes they get backdated options so the cost to them is much much lower on the shares than current prices. They will flip them as soon as the options mature, same day, and this money which involved no risk, will be taxed at a maximum of 15%. Job creators, hogwash! Jobs are created by demand. If they spent the money rather than hiding it in Switzerland, it would create jobs.
You are talking about people versus a business. A business will invest so they can make more money. Jobs are created by demand, but where is the demand when our jobs are going overseas, so who can buy stuff without a job. Service sector jobs only shift money around. We need to manufacture things here in the United States. That means we need to make it feasible to expand the business and/or stay in the United States. Closing loopholes is not the answer and like redgar said, it is not fair from one business to another. Taxing businesses is the wrong way to promote this. More companies will leave. The answer is to remove taxes on businesses. This is not changing the burden on anyway, because we already pay the taxes anyway when we buy a good or service. Can anyone deny this?
We collect taxes as a Federal sales tax instead. That just shifts all the tax to the retail level instead. That is what I mean by seeing how much we really pay in taxes. We just need to figure out what that percentage is, but the burden on the people buying the good or service would not change, or actually the prices of the good or service should go down, as the cost of doing business would be less. Yes, some businesses may not pass along all the savings. Competition from the honest businesses would control some of that. Everyone would know to expect the price to go down, so it is not like the business can get away with not lowering their prices.
Poor businesses, holding $1.4 trillion in cash overseas, untaxed, and now they want to repatriate at 5%, give me a fucking break.
They send capital where labor can be exploited, avoid US taxes on that income, and THEN have the fucking gall to want to bring that back to the US at a 5% tax rate? It's like a fucking Kafka short story.
Close the loopholes and leave tax rates alone, the only thing that needs to be done is make these parasites actually pay taxes they are supposed to be paying the first place.
So, did you even think about what I am saying, or are you just not getting it?
Yes, that doing so will cause price of goods to increase. Well maybe prices should go up and we should buy less lead-laden trinkets made by the nimble hands of Chinese wage slaves, 72 inch plasma 4-D televisions, and high fructose corn syrup fizzy drinks?
In this economic environment, businesses are unable to pass down cost increases to consumers anyway. Instead, they use deceptive techniques like reducing packaging size.
I actually wouldn't oppose eliminating taxes on corporations provided that the difference was made up by taxes on the top 1% of income earners or on shareholders. I would also like to see the payroll tax reduced and the difference made up by taxes on the top 1%.
Seperate issues and has nothing to do with what I am proposing.
They aren't separate issues at all. The revenue lost from corporate taxes has to be made up somewhere.
Oh yes, we collect it as a Federal sales tax instead. That just shifts all the tax to the retail level instead. We just need to figure out what that percentage is, but the burden on the people buying the good or service would not change, or actually the prices of the good or service should go down, as the cost of doing business would be less. Yes, some businesses may not pass along all the savings. Competition from the honest businesses would control some of that. Everyone would know to expect the price to go down, so it is not like the business can get away with not lowering their prices.
Sales tax is regressive, and our tax code is already too regressive. I would prefer to make up the lost revenue by increasing the progressivity of the income tax code (or other taxes that hit the wealthy like the estate tax).
You are mixed up. Income tax is regressive. It is not good for anyone. It penalizes someone for working more or getting paid more. If you want fair, the rich buy more things and more expensive things, so will pay more taxes. You and people that think like you are only hurting yourselves. Use your brain and quit listening to idiots.
Income tax isn't regressive and it doesn't penalize anybody. All income is taxed the same by the income tax. It's just that some people have more income than others.
Ok, let me put it this way. Taxes are a necessary evil.
I work in an entry level position where I work and I make less than 40K a year.
Obviously, there are certain things that the governement needs to provide for. What those are is debatable and I me not discussing those here.
From the standpoint of the person or entity being taxed, taxes are anti-progress, meaning they stifle growth. Sales tax stifles spending.
Which is worse? Stifling growth(via income tax) hurts everyone, because it lessens the amount of money one can invest in their business, which includes investing less in labor. Less labor means less workers, less pay, or both. Therefore, it lessens spending and starts a cycle. And once again, taxes are passed on to the end user, meaning the people.
You could say the same about a sales tax, but the sales tax is less costly. Income tax adds to the cost, as it is applied to businesses, because it adds to the cost at each level in the product cycle, from raw material to retail. You say sales tax is progressive, because the more you spend, the more you pay. Unless you are borrowing money or spending your savings, you will pay less taxes than someone that makes more money, because they usually spend more.
cargill in holland sells his end product to another cargill plant with loss on purpose , so the first cargill plant has to pay lower taxes , and the second plant has some nice constructions to i have the right to live in a fair world . and stockmarkets and wallstreet aint fair
And if taxes on businesses are elimated, the need for a business to hide income will go away.
Thanks for the economic baby food.
if that is the case
than businesses already control the purse strings of the economy
You don't get it. This hurts the businesses too. This is one of the reasons they go overseas. This is the poiticians on both sides, and they know the people are the ones that actually pay the taxes. Most people do not understand how this works.
corporations go over seas because they do not feel obligated to employ only people in the united states
garbage in- garbage out. what needs to happen is FAIR taxation, instead of using taxes as a part of caste warfare- or - NO taxes for anyone and have the congress print the money like constitution said.
Wall St. shills/trolls are having a field day up in here.
And do you agree or disagree with what I am saying?
And your reasons?
Taxes are way down, profits are way up, and it has resulted in the biggest transfer of wealth in human history - upwards. Second-guessing the need for a return to fairer tax policies plays into the oligarchs' hands. I think Robert Reich covers it well if you have 2 mins: http://robertreich.org/post/11113448478
Ok, I said nothing about changing taxes on rich "people". I am talking about the taxes on businesses, and the fact that the tax is pased on in the price of the good or service. This bad all the way around. It costs the business more money to operate, it costs the goverment more to regulate and monitor tax collection, it costs jobs, and that is what I am talking about. There is nothing good that comes out of taxing businesses, because the people are the ones ending up paying more taxes.
I disagree. Taxes should cut into profit margins, and only add to prices if the market will bear it. Profits are way up and that money goes right into the 1%'s pockets...
Well, if you impose price controls, you could do make it cut into the profit margin. The market will bear the cost if there are no other options. If you expect the company to eat the tax, they will only do this to a point, then they will find ways to cut expenses. That might get them to spend money to automate jobs, buy overseas, or if more feasible, relocate overseas.
they are welcome
Very well said.
This movement will loose the backing of the majority of Americans if they are afraid of their 401Ks tanking. We all own a small piece of these corporations.
I am 56 years old and moved my 401k to cash last week. Nothing wrong with cash in this climate.
Nothing at all. Keep an eye on inflation though.
The bigger point I am trying to make is the hidden taxes we all pay. Imagine what would happen if taxes on businesses were eliminated. Some companies would return to the United States, jobs would be created.
Spread the word.
I agree 100%. It is a shame that no politician would ever advocate elimination of corporate taxes because of the backlash from the majority of the public who don't really understand economics. Jobs would pour back into this country.
Which is why we need to get the word out. We need some new ideas on both sides. I am sick of this do nothing congress and President. You don't hear any real solutions, just a bunch of BS from both sides and them blaming each other. We need to get rid of most of these people on both sides.