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Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes

DrunkenAsparagus said:
I'm sure that you'll take any tax break that you can find for yourself. Google is in the business of making money; it would be stupid of them to not look for ways to pay less. I agree 110% that we absolutely must simplify the tax code, but you cannot really blame a business for doing cutting costs like this.



What about the unintended consequences of having them?
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What concequences? People are able to keep more of their money intheir pockets? I'm not bothered by that, a whole lot.
 
zip98053 said:
It seems to me that these companies paying such a low US tax rate is the unintended consequence of allowing this loophole.
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This loopholes doesn't have anything to do with tax rates. That was the point I was making in my original post.
 
apdst said:
What concequences? People are able to keep more of their money intheir pockets? I'm not bothered by that, a whole lot.
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I'm also fine with people keeping more money in their pockets, but through a lower, simpler tax code over a higher, more complex one. With tax breaks, politicians decide who does and doesn't get to keep more of their money. It's government manipulation of the market just like any regulation.
 
DrunkenAsparagus said:
I'm also fine with people keeping more money in their pockets, but through a lower, simpler tax code over a higher, more complex one. With tax breaks, politicians decide who does and doesn't get to keep more of their money. It's government manipulation of the market just like any regulation.
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I agree with a simpler tax code.
 
apdst said:
This loopholes doesn't have anything to do with tax rates. That was the point I was making in my original post.
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but you said:

One has to wonder what unintended conciquences would come along with closing this loophole.
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I was just pointing out that the low effective tax due to shifting income is the unintended consequence.

Random thought. Corporations pay no federal income tax. Instead, we keep the tax rules in place and, instead of taxes, the corporation has to pay a dividend to their shareholders which is equal to the tax they would have paid to the government. Then, individuals pay ordinary income on the dividends. The dividend rate would have to go up a bit to replace the corporate tax, but it shouldn't be hard to get that number right.

Doing it this way changes the whole dynamic. Right now, working for the benefit of the shareholders means minimizing the federal tax that is paid. With this change, working to benefit the shareholders would mean minimizing deductions rather than maximizing them. It would mean that shareholders would benefit by having the companies show profits in the US. Shareholders would want the companies to have a higher "tax" rate because they would get a major cut of the proceeds.

If a company is not publicly traded, it pays the dividend to the government (perhaps at a discounted rate, but not a lot).

The shareholders of large companies would then be looking for ways to reduce the loopholes.

The effective rate the companies pay is about half the statutory rate (~35%), and the effective rate on all tax payers is about 20%. Set the tax on dividends to 45% and the statutory dividend rate at 45% and it ends up being almost revenue neutral. Stockholders would love it.

Just a thought.
 
Seeing as corps now have the rights as people(thanks Supreme s)they should be taxed at the individual rate, including SS and Medicare tax.
 
donc said:
Seeing as corps now have the rights as people(thanks Supreme s)they should be taxed at the individual rate, including SS and Medicare tax.
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Hell, why stop there...We all know profits are evil right? So lets just have Obama take all of them over, how's that sound?


j-mac
 
zip98053 said:
Random thought. Corporations pay no federal income tax.
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Corporations don't pay federal income tax now, they simply collect the taxes from their customers by way of a higher price. The myth that corporations pay (or should pay) taxes is just more sleight of hand from the redistributionists.
 
j-mac said:
Hell, why stop there...We all know profits are evil right? So lets just have Obama take all of them over, how's that sound?


j-mac
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:rock:thumbs:
 
zip98053 said:
but you said:



I was just pointing out that the low effective tax due to shifting income is the unintended consequence.

Random thought. Corporations pay no federal income tax. Instead, we keep the tax rules in place and, instead of taxes, the corporation has to pay a dividend to their shareholders which is equal to the tax they would have paid to the government. Then, individuals pay ordinary income on the dividends. The dividend rate would have to go up a bit to replace the corporate tax, but it shouldn't be hard to get that number right.

Doing it this way changes the whole dynamic. Right now, working for the benefit of the shareholders means minimizing the federal tax that is paid. With this change, working to benefit the shareholders would mean minimizing deductions rather than maximizing them. It would mean that shareholders would benefit by having the companies show profits in the US. Shareholders would want the companies to have a higher "tax" rate because they would get a major cut of the proceeds.

If a company is not publicly traded, it pays the dividend to the government (perhaps at a discounted rate, but not a lot).

The shareholders of large companies would then be looking for ways to reduce the loopholes.

The effective rate the companies pay is about half the statutory rate (~35%), and the effective rate on all tax payers is about 20%. Set the tax on dividends to 45% and the statutory dividend rate at 45% and it ends up being almost revenue neutral. Stockholders would love it.

Just a thought.
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How do you figger that coporations don't pay Federal taxes?
 
donc said:
Seeing as corps now have the rights as people(thanks Supreme s)they should be taxed at the individual rate, including SS and Medicare tax.
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Coporations already match SS and Medicare. What the hell more do you want from them?

Your attitude will kill private business. Why would anyone want that?
 
Diogenes said:
Corporations don't pay federal income tax now, they simply collect the taxes from their customers by way of a higher price. The myth that corporations pay (or should pay) taxes is just more sleight of hand from the redistributionists.
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I don't think that I quite follow. Taxes are not an ordinary businsess expense that is passed on the customer because it has to be in order for the company to make a profit. Companies charge all the market will bear, without regard to the taxes paid on the profits. If they didn't charge all they could, their shareholders would throw them out and get someone who would. So, if the taxes go down, the company will keep more of their profits. They don't lower their prices.

If this were a VAT, it would be different but a tax on profits is not a component of price.
 
Hoplite said:
Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes - Bloomberg

This is why I have a very hard time taking cries that corporations are over-taxed very seriously.
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google is huge and can afford to make these kinds of moves; it costs money to hide money, and tax compliance is a huge drag on the American economy. what corporate taxes do is generally hurt smaller and less-flexible businesses; as well as increasing the cost of doing business to the company in general.
 
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