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Three biggest lies why corporation taxes should be lowered

Discussion in 'BBS Hangout: Debate & Discussion' started by glynch, Aug 11, 2013.

  1. glynch

    glynch Contributing Member

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    It is a "given" fact of "libertarians", Fox News viewers and devotees of the WSJ and business press, but sadly not true. They've been had again by corporate spin.

    By Robert Reich, Robert Reich's Blog | Op-Ed


    Instead of spending August on the beach, corporate lobbyists are readying arguments for when Congress returns in September about why corporate taxes should be lowered. But they’re lies. You need to know why so you can spread the truth.


    Lie #1: U.S. corporate tax rates are higher than the tax rates of other big economies. Wrong. After deductions and tax credits, the average corporate tax rate in the U.S. is lower. According to the Congressional Research Service, the United States has an effective corporate tax rate of 27.1%, compared to an average of 27.7% in the other large economies of the world.

    Lie #2: U.S. corporations need lower taxes in order to make investments in new jobs. Wrong again. Corporations are sitting on almost $2 trillion of cash they don’t know what to do with. The 1000 largest U.S. corporations alone are hoarding almost $1 trillion.
    Rather than investing in expansion, they’re buying back their own stocks or raising dividends. They have no economic incentive to expand unless or until consumers want to buy more, but consumer spending is pinched because the middle class keeps shrinking and the median wage, adjusted for inflation, keeps dropping.

    Lie #3: U.S. corporations need a tax break in order to be globally competitive. Baloney. The “competitiveness” of American corporations is becoming a meaningless term because most big U.S. corporations are no longer American companies at all. The biggest have been creating way more jobs abroad than in the U.S.
    A growing percent of their customers are outside the U.S. Their investors are global. They do their R&D all over the world. And they park their profits wherever taxes are lowest — another reason they pay so little in taxes.

    (Don’t be fooled that a “tax amnesty” that will bring all that money back to America and generate lots of new investments and jobs here — see item #2 above).
    Corporations want corporate tax reduction to be the centerpiece of “tax reform” come the fall. The President has already signaled a willingness to sign on in return for more infrastructure investment. But the arguments for corporate tax reduction are specious.
    http://www.truth-out.org/opinion/it...s-about-why-corporate-taxes-should-be-lowered
     
  2. otis thorpe

    otis thorpe Member

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    That was informative. i was on lower or simplify the code train. The first point i think is a reason to simplify the code because you can use the current model to say anything.
     
    1 person likes this.
  3. thumbs

    thumbs Contributing Member

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    Glynch -- Although I respect both of you, BobMarley and you use the same strategy -- post an article and then leave without any real commentary of your own.

    Robert Reich is a very liberal but very dynamic thinker. I have actually met him. He's ... uh, diminutive ... but with a quiet, commanding presence. For once, you have chosen someone whose credentials and rationale have earned respect.

    Now, Otis thorpe got his big hands :) on my first thoughts with the basketball skills of his namesake moniker.

    The net result of our current tax code may be the same, but the costs of accountants, tax attorneys, etc., can be staggering. Smaller businesses cannot afford these "luxuries" and thereby are less competitive. G.E. paid no taxes on their billions in profits while smaller companies doing business in America paid the freight.

    If you go to a graduated flat tax, everybody, individuals and corporations alike, get to play by the same rules. The added bonus to simplification is that we gut the IRS because the majority of this out of control department would be unnecessary.

    Regarding his second point, corporations are sitting on those trillions because of the uncertainty precipitated by the Obama administration, particularly on the Obamacare issue.

    I agree with Reich on the third point. If we want to reinvigorate the economy, we must have fair but punitive taxation for sending jobs out of the country. We would have to watch the incentives lest we slowly return to our "exceptions and subsidies for all" tax codes.
     
    #3 thumbs, Aug 11, 2013
    Last edited: Aug 11, 2013
  4. bobmarley

    bobmarley Contributing Member

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    Sometimes an article does the commenting for me. ;)
     
  5. Commodore

    Commodore Contributing Member

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    noted job and wealth creator Robert Reich
     
  6. bucket

    bucket Member

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    But if you have nothing to add, why bring it to the D&D?
     
  7. thumbs

    thumbs Contributing Member

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    Like say, Karl Rove, Reich is not a "job and wealth creator," he is a thinker. I often don't agree with him, but you must respect his analyses.
     
  8. Northside Storm

    Northside Storm Contributing Member

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    presided as Secretary of Labor on one of the greatest periods of job and wealth creation in American history (93-97).

    Scoreboard.

    [​IMG]
     
  9. bobmarley

    bobmarley Contributing Member

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    How many people did he hire?
     
  10. bobmarley

    bobmarley Contributing Member

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    Because often the article adds to the discussion what often is lacking here in the D&D, logic and insight.
     
  11. Northside Storm

    Northside Storm Contributing Member

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    probably more, as Secretary of Labor, then all of us combined, unless one of you guys runs the Googleplex or something.

    so I'm thinking his voice has some merit even in internet forum gaga land.

    ("that model with pointy knees, she ain't ever gonna be beautiful")
     
  12. thumbs

    thumbs Contributing Member

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    Despite my respect for Reich, he was not as much of an influence in your statistics as a number of other Democrats and Republicans. You are correct that he was in the right place at the right time and his writings were influential, but he was not the political architect of those economic policies.
     
  13. bobmarley

    bobmarley Contributing Member

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    Stop evading the question. How many people did he hire during his tenure as Labor Secretary?
     
  14. Northside Storm

    Northside Storm Contributing Member

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    If you want to have an idea, look it up yourself. The Labor Department after all, is a large and complex federal cabinet-level department.

    http://www.dol.gov/oasam/doljobs/apply/apply-overview.htm#1

    ...

    this is getting so tangential though, it's verging on the ridiculous. I think I've underscored my point that by score-boarding based on "job and wealth creation", you get some people really holding onto the margins, rather than addressing the points.

    [​IMG]

    you guys who are focusing on credentials are all at level orange, and look to stay there. (try to frame yourselves so you go up many more steps).
     
  15. thumbs

    thumbs Contributing Member

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    Hey, glynch. You're shirking your thread. Your thoughts, insights and rebuttals are needed.
     
  16. glynch

    glynch Contributing Member

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    I pointed out the most important thing that the oft repeated "fact" that corporate taxes are higher in this county than other countries is just another case of corporate spin that has fooled lots of people. I too have heard it repeated to the point where I thought it was true also.

    Of course we all know that the personal income tax for the corporate elite is much lower than in other advanced countries and much lower than it has been in recent modern American history leading to growing inequality.

    As far as simplifying the tax code, Reich and I would have no problems with this as long as it is not an argument for the "flat" tax that wealthy folks and the folks, who have fallen for this additional example of clever spin argue for. "Graduated flat tax" is fine as long as you put the emphasis on the graduated.

    As an aside I read and quote from Reich frequently.
     
  17. Refman

    Refman Contributing Member

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    The disturbing thing about corporate taxes in this country isn't the rate, it is the number of corporations that actually pay no taxes under the system. GE, IIRC, paid no income taxes last year and Facebook got a $400 million refund.

    I would be for a lower corporate tax rate if we can shore up the accounting rules and loopholes to ensure that companies are actually paying. I would rather have 20% of something as opposed to 35% of nothing.
     
  18. NewRoxFan

    NewRoxFan Contributing Member

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    The problem is... the very same corporations (and others) will still work around the lowered tax rate.

    Its like a conversation I had with my mother in-law. She was arguing that there were too many taxes and regulations and thus corporations were moving overseas. When I asked her for ideas on how to solve this, she suggested lower taxes for companies that hire people and increased regulations placing hire taxes or penalties on companies moving overseas.
     
  19. rocketsjudoka

    rocketsjudoka Contributing Member
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    This is a symptom of a basic problem with our tax code, both corporate and personal. It is so complex with so many deductions and loopholes that it can be easily exploited. In that regard I support lowering the marginal tax rate in exchange for simplifying the tax code and closing loopholes to keep the effective tax rate up.
     
  20. rocketsjudoka

    rocketsjudoka Contributing Member
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    No doubt lowering rates and simplifying the code won't put accountants and lawyers out of business and corporations will seek to maximize every advantage they get. That said a simpler code will reduce the likelihood of such excesses as we've seen with GE and Apple where even with massive profits they get tax credits instead of paying taxes. Also while some corporations might still try to game the system a lot of corporations, especially smaller and medium sized ones, might see more value regarding time to pay more in taxes rather than spending that money on accountants if filing is much simpler.
     

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