Do corporations pay taxes?

[Uglyowl]

If anything complain about corporate profits being taxed and then when they distribute these in the form of dividends, it's taxed again.

[Moseley]

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If anything complain about corporate profits being taxed and then when they distribute these in the form of dividends, it's taxed again.

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That's double taxation, which is the same as buying a product from a corporation:

1. employee taxed on gross pay.
2. employee buys goods, which has incorp in the pricetag, enough to pay the corporate taxes and still provide the corp with their desired net profit.

1. employee is taxed.
2. employee buys stock and when corporation pays out dividend, after having been taxed, the purchaser of the stock is taxed again.

It's the same thing.

When you eliminate taxes on dividends, you eliminate the taxation upon taxation of those well off enough to buy stock. The more stock they can afford to buy, the more they avoid double taxation.

It's the same as the social security surplus being used to supplement the general budget. Someone making 150k a year is only taxed for ssi on 75,000 of their income for ssi, thus pays less (as a percentage of their gross income) in ssi that is raped to pay the general budget, than a person only making 75k.

That is just one of many examples of how the govt has been stealing for the lower classes for decades.

[T50_Omaha8]

The result of this tax program will be an increased degree of risk aversion, less research and development, and less investment in new capital. [ QUOTE ]
Those corporations making the biggest profits would pay more taxes, thru the consumers who purchased their goods and services. Those corporations that made the best profits are taxed the most, resulting in them having to charge more for their goods and services.

[/ QUOTE ] So the businesses that keep their costs lowest and provide the best goods and services will be penalized, while businesses that fail to add very much value to their porducts will be rewarded?

[NeBlis]

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Or do they merely act as a go between for double taxation. The government taxes a company and they in turn charge more for the products that they sell.

Is the idea of "corporate taxes" is a laughable sham. Don't they just pass that cost on to the consumer?



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Mos,

Can you please not use posts where I PWN you to then go off on wild tangents ?


My last post on this page


Otherwise brilliant opener. Now just work on making the rest of the follow up after my words suck less

[SheetWise]

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In fact, in 2002, corporations paid 12% of all federal taxes (less social security, which ran a surplus) and the surplus from social security paid 20% of the general. Thus the citizens paid another 10% of the budget from their social security surplus (since corp pay 1/2 of the ssi tax) taxes.

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Let's parse this -- since it makes no sense to me.

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2002, corporations paid 12% of all federal taxes

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Let's stipulate this to be true, so that we have a basis for your other comments.

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(less social security, which ran a surplus)

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Of course Social Security runs a surplus. Any reasonable accounting for a trust would expect that premiums plus revenues always represent a surplus. Revenues to Social Security should be represented in the ledger as premiums + interest - transaction cost. How could that not be a surplus? Social Security accounts are simply prepaid liabilities -- they don't represent any wealth to the trustees.

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... the surplus from social security paid 20% of the general.

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What you're acknowledging here is that the trustees of the Social Security trust fund (Uncle Sam) chose to invest those funds in Treasury bonds -- and the seller of those bonds (Uncle Sam) chose to use the proceeds to pay down the budget deficit.

So, assuming the bonds paid interest -- nothing was paid down. In fact -- liabilities were increased. This is obvious -- since we all know that you can't spend and save the same money.


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Thus the citizens paid another 10% of the budget from their social security surplus (since corp pay 1/2 of the ssi tax)

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Your first fallacy is that the citizens ever had a social security surplus -- that should be obvious. Your second fallacy is that employers pay half of the SSI tax.

If you go work for yourself -- the tax is 15.3% (you get to pay the tax). If you work for an employer, the government allows them to hide 7.65% (half of it).

This is good strategy. If you want to prevent a revolution -- don't ever let people know how much they pay. The government could, of course, increase the employers share to 100% and hide it all.

As an employer I can tell you -- I really don't give a damn where the money goes. If I have $20 an hour to spend on you -- I can send $5 wherever the government tells me to, and give you $15, or send $10 to the government and give you $10. I could also send $15 to the gov't and give you $5.

It doesn't make any difference to me how it's distributed -- I still only have $20 to give. If you believe that I'm paying your bills simply because I distribute the available funds as instructed -- then you're a good slave.

[Copernicus]

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Um except that for the most part the rich get and stay rich because they send time doing stuff like browsing for the best deal. It is the poor and those that stay poor (on the whole) who are the impulse purchasers. Time preference FTW.

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You're right. I have an uncle in law who is a multi-millionaire. He spent considerable time researching his choice of the HDTV flatscreen he purchased for 5k that he put in his sports den in his San Diego home. The 50k mini cooper he bought for his wife was fully loaded and bought on the cheap from a dealer lookin to unload and his 80k mercedes was the end of the year model.

He still pays (incorp in the price) taxes on 135k in toys, while those who make 80k a year, pay taxes on two 25k vehicles and a 1k t.v. at most.

When a successful company, like Microsoft, splurges on all the bells and whistles when they built their new hdq. they got to depreciate all those bells and whistles. Why?

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Because there is a difference between investment and consumption.

[Copernicus]

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It's the same as the social security surplus being used to supplement the general budget. Someone making 150k a year is only taxed for ssi on 75,000 of their income for ssi, thus pays less (as a percentage of their gross income) in ssi that is raped to pay the general budget, than a person only making 75k.



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more misconceptions of yours that have been covered numerous times. Social Security does not "supplement the general budget", and the Social Security benefit formula is front loaded in favor of lower income workers, resulting in a net transfer from high paid to low paid.

You continue to embarass yourself.

[Moseley]

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"2002, corporations paid 12% of all federal taxes"

Let's stipulate this to be true, so that we have a basis for your other comments.

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Go to: http://www.econedlink.org/lessons/in...m?lesson=EM306

Scroll down a little to: NCEE National Budget Simulation and click on that.

Scroll down a little to find the "Total Revenue by Source."

The total is 1867.4B, however, we have to remove SSI from the equation, as it's self supporting. So, subtract 702.9B and you have a General Budget of: 1164.50

Now you will note that "corporate taxes" were 144.8, which is 12% of 1164.50.

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What you're acknowledging here is that the trustees of the Social Security trust fund (Uncle Sam) chose to invest those funds in Treasury bonds -- and the seller of those bonds (Uncle Sam) chose to use the proceeds to pay down the budget deficit.

So, assuming the bonds paid interest -- nothing was paid down. In fact -- liabilities were increased. This is obvious -- since we all know that you can't spend and save the same money

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I believe your understanding is clouded. For one, by using the SSI surplus to pay part of the yearly deficit, the govt. does not have to borrow from outside sources and pay interest the next year on the loan.
By using the SSI surplus, they simply issue more "IOUs" the next year for the interest.
If the govt was not allowed to use the SSI surplus to pay the deficit, they would be paying interest on another 2 trillion dollars every year. At 5%, that is another 50B a year added to the General Budget.

If the consequences of the govt.'s spending habits had to be addressed the next year (instead of just issuing IOUs) they would not be able to get away with the spending and tax cut habits they have.

Secondly, the SSI surplus was not meant to be used to supplement the general budget this way. If it was, they would not have needed Congress to vote in favor of doing so, it would have been done automatically.

The Social Security Trust was intended to be a seperate entity, with its monies for the sole purpose of paying its recepients in the future. NO PRUDENT MANAGER OF THE FUND WOULD HAVE CONTINUED INVESTING IN U.S. BONDS, as it would have been transparent years ago that the U.S. would be unable to pay it back. They would have been better off hiding it in a mattress and letting it decay from inflation.

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It doesn't make any difference to me how it's distributed -- I still only have $20 to give. If you believe that I'm paying your bills simply because I distribute the available funds as instructed -- then you're a good slave.

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I don't believe that. Corporations don't pay taxes. The money they pay in taxes comes from their revenues, which comes from consumers.

If the federal govt. obtained all of their tax revenue from the GROSS REVENUES of businesses, I am willing to bet that they wouldn't need to take more than 1%.

Then, you would have a truly "free market society" where the govt doesn't provide any incentives for businesses at all. Then they would survive on their own accord.

When Bush passed that Small Business Tax break, it allowed someone whom I play poker with and owns a small construction business to go out and buy the huge Hummer, as it weighed over 6T and he could write off up to 100k of it. The Prez of the Co. that my worked for did the same thing.

That is just one of the minor loopholes in the tax code. Take a look at the billions given to oil companies in tax breaks and it becomes ridiculous.

Everyone knows that oil companies will not increase production and refining capability because that would increase availability of the product, thus reducing the price.

A company could prosper quite well, paying a penny in taxes on every dollar they get in revenues. I doubt it would be a penny. And if they can't, they simply increase the cost of their product a penny.

[Moseley]

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The result of this tax program will be an increased degree of risk aversion, less research and development, and less investment in new capital.

[/ QUOTE ]

Why would a Co. not spend on R&D and capital? How else would they remain competitive?

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So the businesses that keep their costs lowest and provide the best goods and services will be penalized, while businesses that fail to add very much value to their porducts will be rewarded?

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The federal taxes should be obtained from businesses, and be on the gross revenue. It would not even need to be 1%.
It is the consumer who really pays the tax anyways. Then EVERYONE IS TAXED ONCE.

If you spend you're taxed and if you save you're taxed when you spend it.

Now, everyone is taxed once: When they spend their dollars.

[Felz]

[ QUOTE ]
Is the idea of "corporate taxes" is a laughable sham. Don't they just pass that cost on to the consumer?


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Not necessarily, in fact only under very specific assumptions this holds true.
There's like a million papers on the incidence of corporate taxation though waiting for you via Google or your nearest Ecomomics library.