To be honest, I really don't see why we have a corporate tax rate.
Corporations don't pay taxes. They're charged a fee by the government which they pass on to consumers through the price tag. All corporate taxes do is raise prices, make us less competitive abroad, and decrease demand. They hurt the consumer, they hurt the worker, and they hurt the business. I would much rather the corporate tax rate be dropped altogether and have revenue made up through some other, more visible, form of taxes.
Pretty simple. The lower the costs incurred through corporate taxes, the more freedom corporations have to lower their prices to make them more competitive. That's less money consumers are spending. This has two main benefits.
First, it allows us to compete with other countries with lower corporate tax rates because it brings down our prices compared to theirs. Let's keep going with the example I've given. Ireland has a pretty low corporate tax rate. I think it's around 15%. So if other costs of production are equal, the corporate tax for the Irish corporation adds only 15 cents per unit while the US corporation incurs an extra 35 cents per unit. There are obviously going to be other costs. The cost to ship from Ireland would be much more. There are differences in wages and currency conversion, etc. But for this example we'll ignore that. Just with the corporate tax rate, Ireland beats us by 20 cents per unit, making their products that more attractive. If we lowered it, even to 20-25%, that's enough to compete more effectively with other countries.
Secondly, it creates more demand for the product. Simple supply and demand going on here. If we make the cost for a corporation less and the price drops a similar amount, then demand will rise. It encourages the corporation to produce more. They hire more people. They make more money. They can invest more. There's a huge economic benefit.
With the corporate tax rate, you're really just seeing the costs passed on to consumers through higher prices. If we lower the corporate tax rate we become more competitive and boost production with higher demand for cheaper products.
Thank you for that.
Companies will only hire if the new employee brings in more money than it costs them.
Thank you for exposing the fraud of tax breaks for business in the hopes they will hire anyone.
There are two novels that can change a bookish fourteen-year old's life: The Lord of the Rings and Atlas Shrugged. One is a childish fantasy that often engenders a lifelong obsession with its unbelievable heroes, leading to an emotionally stunted, socially crippled adulthood, unable to deal with the real world. The other, of course, involves orcs.... John Rogers
Libbo insist that cutting taxes on the working class will boost the economy, because that means more money they have to spend. Corporations are cousmers, too and it's assinine to insist that the opposite is true for them.
Now, which is it going to be?