Taxes by component as % of GDP

Comsumers pay all taxes

Stop the nonsense of corporate taxes. Corporations pass the cost of taxes, like all other expenses, on the the consumer. The consumer pays these taxes on higher cost of the products. Taxes are like every other expense and tax deductible.
 
Agreed

Corporations really shouldn't pay any taxes. If they didn't pay taxes they would have a much less corrupting influence on government.
 
And what level of VAT...

would it take to support even the diminished government that is longed for by the right? Has anyone actually worked that out? Starting with how big that government would be acoss the whole Federal,state, local spectrum?
 
I don't know

I suppose you could go back to, say the 1850s, and adjust for population and inflation.
 
Seems like some pretty basic....

issues that need to be understood if any major tax overhaul is mooted. This goes for Huntsman and all the other candidates when they propose these sweeping sounding changes(which I happen to agree with in concept).
At the risk of repetition, it isn't a matter of 'small' government just smaller. So until how much smaller is pegged the tax issue is sort of difficult to address except on totally ideological grounds. A case can be pretty easily made that in an economy where 70% of GDP is supposedly household spending, applying a regressive tax of some significant amount on purchasing stuff won't do the companies involved a lot of good.
 
It being a problem is....

irrelevant to it being the case, and one that is not soluble in quite the same way tax policy is. Taxation can be modified overnight by legislation in principle, but the shift from a consumption to a production economy cannot. I can't even conceive what the process would be for doing that :hmm::hmm: Can you?:hmm:
 
toddr124 said:
Stop the nonsense of corporate taxes. Corporations pass the cost of taxes, like all other expenses, on the the consumer. The consumer pays these taxes on higher cost of the products. Taxes are like every other expense and tax deductible.
Click to expand...

Only if their competition does to. But more seriously isn't it just a shell game? Lowering taxes on corporations will just shift the tax burden somewhere else.

I am in favor of corporate taxes for the simple reason that they receive a benefit from the services the government spends tax revenue on. Makes sense to me it should be a part of corporate expenses just like anything else that makes up product cost.

What bothers me is that people talk of taxes in terms of reward and punishment, I think it should be more in relation to benefit derived. If not the people or entities receiving a disproportionate benefit are being subsidized by those who are not.

So taking corporations as an example if they pay zero taxes then the cost is born by the general populace, if they pay a proportionate share then it is part of their product cost that is paid by the people who consume their products, if they pay a disproportionate share then the people who consume their products are subsidizing the general populace.

Not sure what you mean by "Taxes are like every other expense and tax deductible" unless you are talking about state taxes reducing the federal corporate taxable income amount.
 
all expensive for a business are tax debutable (except entertainment)

spiggs said:
Only if their competition does to. But more seriously isn't it just a shell game? Lowering taxes on corporations will just shift the tax burden somewhere else.

Not sure what you mean by "Taxes are like every other expense and tax deductible" unless you are talking about state taxes reducing the federal corporate taxable income amount.
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You are correct that only the consumer of the product pays taxes for for that company. All companies make money or go out of business normally. Therefore all companies pay taxes eventually.

As a business owner I pay taxes only on net profit after taxes. I take the gross revenue I receive and reduce it by all the expensive I incur doing business; payroll, rent, utilities, ect. plus taxes paid. If the revenue exceeds all expenses including taxes, the company owes taxes. This expense is figured in like all expenses in the cost of my product and passed onto the consumer of the product.
Since every company in the US faces the same tax burden, we all must pass the taxes onto the consumer to stay in business. Therefore the more efficient a company you are, the more taxes you own.

Companies do not pay taxes, consumers pay all taxes in the end.
 
toddr124 said:
As a business owner I pay taxes only on net profit after taxes.
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In Philadelphia, we small business people get to pay a Gross Receipts Tax, too. That way the City makes a profit even if we don't.:wall::mad4::cry::shock2::fart:

And...surprise...those damned shameless politcians want MORE money.
 
spiggs said:
I am in favor of corporate taxes for the simple reason that they receive a benefit from the services the government spends tax revenue on...

What bothers me is that people talk of taxes in terms of reward and punishment, I think it should be more in relation to benefit derived. If not the people or entities receiving a disproportionate benefit are being subsidized by those who are not...
Click to expand...

What benefits, and how would those be quantified? If you are going to charge (levy taxes) for the benefits, then there has to be a way to determine how much.
 
There is the line of reasoning....

put forth by the SCOTUS that corporations are to be accorded rights just like people-if so, they should pay taxes just like people:laugh::laugh:


Keeping the tax question from becoming like the rhyme,

Don't tax you
Don't tax me
Tax the guy behind the tree

is difficult. Any tax payer can assert and probably show cause why they should not be taxed. Some name another someone to get the bill and some demur on that issue but still insist that 'they' shouldn't.
Nevertheless taxes will be paid, so what is the most economically efficient way to do it? There must be better and worse ways-or maybe not; maybe every way is equally bad or good. In any event the current opaque system of rewarding and punishing via the tax code is simply bad on principle and ought to be changed. VAT would certainly be the easiest to keep relatively free of jury tampering by the politicians and corporate taxes are probably the hardest because of lobbying pressure. So on only those grounds the VAT looks superior. The personal income tax suffers a fair degree of carrot and stick syndrome but not quite to the extent as business taxation; so maybe it could be cleaned up by going to a 'lower rate with no deductions' scheme. Maybe the notion of a corporation being an individual isn't so nuts, just tax them as like they are people making income:hmm: In any event money has to come from somewhere.
There is also the issue with corporate taxes that they really only need to be low enough to be competitive with other countries. Despite what Huntsman says US corporations do not actually pay the second highest 'effective' taxes in the OECD, in fact it is difficult to know exactly how much effective tax is paid in the OECD countries.The nominal rates are the advertising but the 'effective rate' after all the incentives have been realized and all the loopholes jumped through is problematic. The best guess I have seen puts the US just above the median.
 
Comsumers pay all taxes

usta in Portland said:
put forth by the SCOTUS that corporations are to be accorded rights just like people-if so, they should pay taxes just like people:laugh::laugh:
Click to expand...

There are 3 main types of corporations;

C
S
LLC

We are only discussing C corporations right now. S corps and LLC(LLP) are not taxed. Any income or loss is passed directly to the stockholders and paid as individual taxes.

Corporations get to deduct all (except entertainment) expenses from revenue to determine income. Individuals get to deduct very few expenses from their income to determine taxes.

I am not against paying my fair share of taxes. I just want everyone to understand that consumers pay all taxes directly or indirectly. Companies pass all expenses on to their consumers including taxes, payroll, rent, ect. Corporate tax loop holes usually are industry wide and help your competitors as well as your self.This allows the company to sell at a lower price to the consumer initially. The consumer will need to make up the tax shortfall somewhere else.

Ask any accountant and he/she will tell you.
 
There was a fairly well-fleshed out National Retail Sales Tax being talked about in the mid to late 90s that I thought was a pretty good way to eliminate income taxes and replace them with a consumption tax.

It allowed a universal rebate that effectively exempted the poor from paying any of the tax.

The feature of the NRST that I liked best was that it was an in-your-face tax.....every time you bought something, there it was right on the receipt.
 
I don't think issue is....

whether the loopholes are uniform here in the US but how they effect the tax competition abroad. Also, it may be true that the loopholes are spread evenly within an industry but they are not spread evenly across the whole of corporations-some Fortune 500 companies pay almost 100% of the 35% tax rate(P&G I believe) and some pay nothing(GE); this being the result of loopholes and incentives specific to a business sector. Wouldn't be more fair and less intrusive if as a start the real tax burden were to be spread evenly across all corporations irrespective of there sector? Otherwise there is just an invisible industrial policy being pursued behind the tax system. The same could be said of deductions and credits in the individual income tax-borrowers in real estate are rewarded for paying high prices with heavy leverage; or children are deductions or property taxes or,or,or. Why? That's just a soft form of social engineering. Eliminate the deductions and credits completely and spread the savings through lower marginal rates. If there is some killer good reason for transfering cash from one segment of taxpayers to another(and there may well be) just do it out in the open. I'm sure I'm not alone in resenting the unequal treatment that homebuyers (not homeowners) get on both the interest deduction and the capital gains front (a moot point now but not in the past) How much revenue has been forfeit over the last 30 years in order to subsidise the real estate industry and the mortgage industry at the expense of someone else? And it led not to more ownership of equity in homes overall but less! The equity stake that American 'homeowners' now has is 36%. That amount has decreased steadily for 30 years.
 
Yes, the transparency...

is a big feature of its appeal. " Taxes should hurt" someone once said. I don't see the objection so long as nobody is actually taxed into poverty and the rebate, or some such thing, could be progressive so as to keep this from happening.

Still it does seem to run counter to the interests of a consumption economy-I can't get past that basic objection just on practical grounds. It doesn't follow that supressing consumption will necessarily lead to more production-it may in fact lead to less, or not, but the logical necessity is absent. All of that being said in ignorance of just how big the tax would be (20%? 30%?)
 
Dan Sarandrea (Phila) said:
What benefits, and how would those be quantified? If you are going to charge (levy taxes) for the benefits, then there has to be a way to determine how much.
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Yeah that's the trick isn't it. The benefits I am thinking of are things like stability, an educated workforce and consumers, legislative and judicial system, law enforcement and military, access to foreign markets, infrastructure etc... I think the current method of assessing a percent of net income is fine and let everyone debate what the right % is, as long as the goal is to make it fair, not punish the "greedy" corporations or reward the "job creators."
 
toddr124 said:
There are 3 main types of corporations;

C
S
LLC

We are only discussing C corporations right now. S corps and LLC(LLP) are not taxed. Any income or loss is passed directly to the stockholders and paid as individual taxes.

Corporations get to deduct all (except entertainment) expenses from revenue to determine income. Individuals get to deduct very few expenses from their income to determine taxes.

I am not against paying my fair share of taxes. I just want everyone to understand that consumers pay all taxes directly or indirectly. Companies pass all expenses on to their consumers including taxes, payroll, rent, ect. Corporate tax loop holes usually are industry wide and help your competitors as well as your self.This allows the company to sell at a lower price to the consumer initially. The consumer will need to make up the tax shortfall somewhere else.

Ask any accountant and he/she will tell you.
Click to expand...

Yep a corporation is just a fictitious legal entity. I think people forget the difference between that and other forms of business and individuals when talking taxes. On the other side I think people also forget that the government is just us coming together and collectively funding some activities for mutual benefit. Income tax is one of the means we use to gather those funds.
 
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