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Thread: Obama seeks 28 percent corp. tax rate

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    Re: Obama seeks 28 percent corp. tax rate

    Quote Originally Posted by AdamT View Post
    It's possible. But as someone pointed out, very few small businesses even use the corporate form, so about 95% of small businesses wouldn't be affected by this at all.
    *sigh*...corporations are either c-corps, or s-corps. C-corps file taxes under the corporate scheduale. All small businesses, that file as c-corps, that don't pay the highest rate are going to get screwed by this plan.

    The plan won't bring any relief for s-corps.

    So, at the end of the day, the only thing this plan will do is screw small businesses and maybe help the largest of corporations.

    Let me give you an example.

    A company that grosses $200,000 and expenses off $160,000 will report $40,000 in net profit, which will put that corporation in the 15% tax bracket.

    If you do away with deductions and those lost deductions amount to $10,000, then you've raised that companies taxes, because you just put that company into the 25% tax bracket. So, instead of paying $6,000 it will have to pay $7,500 + 25% of anything over $50,000.

    It's not hard to see how this is going to hurt small businesses, once you learn how the system works.
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    Re: Obama seeks 28 percent corp. tax rate

    Quote Originally Posted by haymarket View Post
    I would have lowered the corporate tax rate from the current 35%.
    Again, would you force corporations to pay taxes on their gross income?
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    Re: Obama seeks 28 percent corp. tax rate

    Quote Originally Posted by apdst View Post
    I just can't ask this question enough: Do you mean actual loopholes, or deductions? They're two different things.

    If you mean deductions of the cost of doing business, then there's no way in hell this is good for any business, large, or small.
    We still don't have enough details to know one way or the other. A couple of things that were mentioned, deductions for interest and longer depreciation schedules, would affect all business but at the same time, if that business is all in America - something that's a big part of Obama's statements, too - then those businesses might also get new deductions to offset or more than offset those other drops. We don't know.

    OP link isn't working for me right now so:
    Obama Administration Proposes Corporate Tax Rate Cut to 28% - Businessweek
    Last edited by MoSurveyor; 02-23-12 at 01:26 PM.
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    Re: Obama seeks 28 percent corp. tax rate

    Quote Originally Posted by ksu_aviator View Post
    Raising taxes on corporations? Well that ought to be the final dagger in the country once called America.
    news flash
    Obama is proposing to reduce the corporate tax rate

    How can he be so stupid?
    reducing the corporate tax rate is stupid?

    Corps are fleeing over seas to escape our ridiculous tax rates and he wants to go higher? If anything we need to reduce or eliminate corporate taxes. That will help regenerate our economy. Raising taxes just hurts the consumer.
    and these are some of the reasons he is proposing changes to the tax law; hence the proposal to reduce the corporate tax rate
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    Re: Obama seeks 28 percent corp. tax rate

    Quote Originally Posted by apdst View Post
    *sigh*...corporations are either c-corps, or s-corps. C-corps file taxes under the corporate scheduale. All small businesses, that file as c-corps, that don't pay the highest rate are going to get screwed by this plan.

    The plan won't bring any relief for s-corps.

    So, at the end of the day, the only thing this plan will do is screw small businesses and maybe help the largest of corporations.

    Let me give you an example.

    A company that grosses $200,000 and expenses off $160,000 will report $40,000 in net profit, which will put that corporation in the 15% tax bracket.

    If you do away with deductions and those lost deductions amount to $10,000, then you've raised that companies taxes, because you just put that company into the 25% tax bracket. So, instead of paying $6,000 it will have to pay $7,500 + 25% of anything over $50,000.

    It's not hard to see how this is going to hurt small businesses, once you learn how the system works.
    Again, only about 5% of small companies will be affected by this change IN ANY WAY. Of course small businesses aren't just C-Corps. or S-Corps. There are also partnerships, limited partnerships, LLCs, sole proprieterships, etc., etc.

    As far as how C-Corps. will be affected, there is no way of knowing until we see the specific proposal and can determine which deductions would be eliminated.

    Generally speaking this is very similar to what Reagan did: lower rates while eliminating loopholes. Simplify the tax code without changing overall revenue a whole lot.

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    Re: Obama seeks 28 percent corp. tax rate

    Apdst, you do know that a lot of small business don't incorporate, right? Unincoroprated businesses would not be subject to corporate tax rates, and the profits they make, since they are completely privately owned, are just taxed as normal income. So no, this won't affect small businesses very much, because they usually don't incorporate. Most of the numbers you've posted in this thread are likely to be the dealings of an unincorporated small business, that will either be simply directly owned by a person or a partnership, or perhaps an LLC. Neither of those are corporations. Small businesses are almost totally unaffected by corporate taxes.
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    Re: Obama seeks 28 percent corp. tax rate

    Quote Originally Posted by apdst View Post
    Again, would you force corporations to pay taxes on their gross income?
    Your getting your panties in a bunch because you fear what you do not understand. NO ONE is talking about changing the corporate income tax so that it is a sales tax (tax on revenue). Income, by definition, is revenue less expenses (deductions). Sorry, but to have an intelligent discussion, one has to have a basic understanding of the issues. If you don't, please step back.

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    Re: Obama seeks 28 percent corp. tax rate

    The plan won't bring any relief for s-corps.
    S-corps generally pay a much lower effective tax rate the c-corps. The purpose is not to touch their rates.

    So, at the end of the day, the only thing this plan will do is screw small businesses and maybe help the largest of corporations.
    That's not true at all and is really the complete opposite. Most small businesses that pay corporate income tax already pay around 28%. Most large multi-national corporations pay closer to 18% due to loopholes. This plan would set the corporate tax rate to 28% for all C-Corps and eliminate loopholes that allows large corporations to pay lower due to those loopholes.

    So...it "hurts" corporations that buy loopholes via lobbyist. It helps small corporations that have to compete with those large corporations that have an advatage based on those loopholes.
    “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes

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    Re: Obama seeks 28 percent corp. tax rate

    Quote Originally Posted by ksu_aviator View Post
    Raising taxes on corporations? Well that ought to be the final dagger in the country once called America.

    How can he be so stupid? Corps are fleeing over seas to escape our ridiculous tax rates and he wants to go higher? If anything we need to reduce or eliminate corporate taxes. That will help regenerate our economy. Raising taxes just hurts the consumer.
    Please show us a cite that supports your assertion that anyone is talking about raising corporate taxes...

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    Re: Obama seeks 28 percent corp. tax rate

    Quote Originally Posted by upsideguy View Post
    Please show us a cite that supports your assertion that anyone is talking about raising corporate taxes...
    Hell, I'll even use a left wing nut job site: Corporate Tax Rates Effectively Already Below Obama's Proposed Level


    Studies indicate that after tax breaks, the effective corporate tax rate is in fact closer to 25 percent, and one analysis found that nearly 300 major companies paid an average rate of just 18.5 percent between 2008 and 2010.

    The Obama administration hopes closing the loopholes will offset revenue lost from lowering the tax rate.
    So, if the average corporation is paying between 18 and 25% and the new rate will be 28% with no breaks (loop holes as Obama calls them) then what is the net? It is a net increase in taxes paid. They even say so, claiming the new tax rates will raise revenue by $250 billion.
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