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Thread: Study finds Corporate America avoided $60B in taxes (2010)

  1. #111
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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by apdst View Post
    The way I slice it, the Left doesn't have the first clue what trickle down economics really is. The idea that it can only start with rich people is naive, at best.
    Well, there is much actual evidence that it really trickles down.

    In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up

    By ROBERT H. FRANK

    If economic theory is unkind to trickle-down proponents, the lessons of experience are downright brutal. If lower real wages induce people to work shorter hours, then the opposite should be true when real wages increase. According to trickle-down theory, then, the cumulative effect of the last century’s sharp rise in real wages should have been a significant increase in hours worked. In fact, however, the workweek is much shorter now than in 1900.

    Trickle-down theory also predicts shorter workweeks in countries with lower real after-tax pay rates. Yet here, too, the numbers tell a different story. For example, even though chief executives in Japan earn less than one-fifth what their American counterparts do and face substantially higher marginal tax rates, Japanese executives do not log shorter hours.

    Trickle-down theory also predicts a positive correlation between inequality and economic growth, the idea being that income disparities strengthen motivation to get ahead. Yet when researchers track the data within individual countries over time, they find a negative correlation. In the decades immediately after World War II, for example, income inequality was low by historical standards, yet growth rates in most industrial countries were extremely high. In contrast, growth rates have been only about half as large in the years since 1973, a period in which inequality has been steadily rising.

    (snip)

    The trickle-down theorist’s view of the world is nicely captured by a Donald Reilly cartoon depicting two well-fed executives nursing cocktails on a summer afternoon as they lounge on flotation devices in a pool. Pointing to himself, one says angrily to the other, “If those soak-the-rich birds get their way, I can tell you here’s one coolie who’ll stop” working so hard.

    (snip)

    The rich are where the money is. Many top earners would willingly pay higher taxes for public services that promise high value. Yet trickle-down theory, which is supported neither by theory nor evidence, continues to stand in the way. This theory is ripe for abandonment.

    In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up - New York Times

    AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.

  2. #112
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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by apdst View Post
    Give us an example. Are you saying that I shouldn't be able to write off my interest payments, or the FET that I pay on tires? How about the rent on my shop?
    Any and all. Is that hard to follow?

    AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.

  3. #113
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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by Boo Radley View Post
    Any and all. Is that hard to follow?
    So, do away with all deductions? Is that what you're saying? And, raise corporate taxes to what level?

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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by Boo Radley View Post
    Well, there is much actual evidence that it really trickles down.

    In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up

    By ROBERT H. FRANK

    If economic theory is unkind to trickle-down proponents, the lessons of experience are downright brutal. If lower real wages induce people to work shorter hours, then the opposite should be true when real wages increase. According to trickle-down theory, then, the cumulative effect of the last century’s sharp rise in real wages should have been a significant increase in hours worked. In fact, however, the workweek is much shorter now than in 1900.

    Trickle-down theory also predicts shorter workweeks in countries with lower real after-tax pay rates. Yet here, too, the numbers tell a different story. For example, even though chief executives in Japan earn less than one-fifth what their American counterparts do and face substantially higher marginal tax rates, Japanese executives do not log shorter hours.

    Trickle-down theory also predicts a positive correlation between inequality and economic growth, the idea being that income disparities strengthen motivation to get ahead. Yet when researchers track the data within individual countries over time, they find a negative correlation. In the decades immediately after World War II, for example, income inequality was low by historical standards, yet growth rates in most industrial countries were extremely high. In contrast, growth rates have been only about half as large in the years since 1973, a period in which inequality has been steadily rising.

    (snip)

    The trickle-down theorist’s view of the world is nicely captured by a Donald Reilly cartoon depicting two well-fed executives nursing cocktails on a summer afternoon as they lounge on flotation devices in a pool. Pointing to himself, one says angrily to the other, “If those soak-the-rich birds get their way, I can tell you here’s one coolie who’ll stop” working so hard.

    (snip)

    The rich are where the money is. Many top earners would willingly pay higher taxes for public services that promise high value. Yet trickle-down theory, which is supported neither by theory nor evidence, continues to stand in the way. This theory is ripe for abandonment.

    In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up - New York Times
    WEll, Robert Frank sounds like an idiot, whose never spent a day in the real world.

    Piece of advice: you might not want to take business advice from a journalist. Just a suggestion.

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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by apdst View Post
    So, do away with all deductions? Is that what you're saying? And, raise corporate taxes to what level?
    Yep. Pre-bush tax cuts would be alright with me. It would even be an improvement if we kept the rate the same. Just pay the tax.

    AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.

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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by Boo Radley View Post
    Yep. Pre-bush tax cuts would be alright with me. It would even be an improvement if we kept the rate the same. Just pay the tax.
    Oh, ok. So you want to do away with all deductions and raise taxes to the pre-Bush tax cut level and force corporations to pay taxes on their gross profit. The national average on corporate profits is about 17%.

    I'm sure you're good enough at math to see how that will never work and you will kill every business in the country.

    After you cause every business--no matter how big, or small--to close down, or move to another country...then what?

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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by apdst View Post
    Oh, ok. So you want to do away with all deductions and raise taxes to the pre-Bush tax cut level and force corporations to pay taxes on their gross profit. The national average on corporate profits is about 17%.

    I'm sure you're good enough at math to see how that will never work and you will kill every business in the country.

    After you cause every business--no matter how big, or small--to close down, or move to another country...then what?
    That's nonsense and more propaganda than anything else. The biggest threat to jobs is cheap labor and healthcare (as long as it is linked to employment). Until you understand the problem, you will always reach the wrong conclusion.

    AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.

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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by apdst View Post
    Such as?

    I keep asking and everyone keeps not answering.
    You really trying to play that naive? Both parties use the term, so you can't say it's a liberal lie or a liberal myth concocted by socialists to make everybody poor.

    As I have said before, companies get tax credits for taxes paid in other countries, but they can also allocate 50% of their inventory sales to foreign countries as part of "foreign revenue" through the “title passage rule." That means they are basically getting double the tax credit, and it also means they can tie up tax credits through inventory management such as LIFO and FIFO reporting.

    I recently read that one company set up a shell company in a foreign country, and was making that shell by inventory just for a tax write off and then reselling the same inventory in America as a company from Bermuda... which wasn't taxed under Bermuda tax laws.

    American tax code also allows multinational companies to defer paying taxes on income earned overseas. The tax code doesn't force them to ever eventually pay taxes on the income, so they just tie their income up overseas and never pay taxes on it.

    The tax code doesn't allow individuals in foreign countries to indefinitely defer paying taxes on their income either, just businesses. I'd definitely consider that a loophole and a hypocrisy in the tax code, because it's considered taxable income by the tax code. The code just don't ever require multinationals to pay taxes on it.

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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by TurtleDude View Post
    the socialists want corporations that make money in say Germany and pay taxes there to also pay taxes on that same income in the USA.
    If they paid German taxes, they'd get a credit for it and not be double taxes. And weather or not they pay taxes on it, depends on German laws as well.

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    Re: Study finds Corporate America avoided $60B in taxes (2010)

    Quote Originally Posted by SheWolf View Post
    You really trying to play that naive? Both parties use the term, so you can't say it's a liberal lie or a liberal myth concocted by socialists to make everybody poor.

    As I have said before, companies get tax credits for taxes paid in other countries, but they can also allocate 50% of their inventory sales to foreign countries as part of "foreign revenue" through the “title passage rule." That means they are basically getting double the tax credit, and it also means they can tie up tax credits through inventory management such as LIFO and FIFO reporting.

    I recently read that one company set up a shell company in a foreign country, and was making that shell by inventory just for a tax write off and then reselling the same inventory in America as a company from Bermuda... which wasn't taxed under Bermuda tax laws.

    American tax code also allows multinational companies to defer paying taxes on income earned overseas. The tax code doesn't force them to ever eventually pay taxes on the income, so they just tie their income up overseas and never pay taxes on it.

    The tax code doesn't allow individuals in foreign countries to indefinitely defer paying taxes on their income either, just businesses. I'd definitely consider that a loophole and a hypocrisy in the tax code, because it's considered taxable income by the tax code. The code just don't ever require multinationals to pay taxes on it.
    Again, something being done as the law is written and intended is never a loophole. You want to believe that it's the corporations at fault for following the tax law as opposed to the politician for writing them that way.

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