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

washunut · Jul 29, 2011

Boo Radley said:
How about any and all deductions that allow you to pay less than you owe?

Not very responsive. Would you say corporations taking deductions for paying their employees health insurance should be stopped. Individuals can't take that as a deduction. How about the rules allowing companies to deduct so called depreciation on machinery that it buys. How about the ability to deduct advertising?

apdst · Jul 29, 2011

Boo Radley said:
Federal taxable income is defined in a comprehensive manner in the Internal Revenue Code and regulations issued by the Department of Treasury and the Internal Revenue Service. Right? And gross income includes all income earned or received from whatever source. Again, right?

What are you actually questioning?

I'm questioning what you define as, "what you owe". Going by the government's definition of, "taxable income", what you owe is your net profit, after deductions. But, you want to end all deductions that allow corporations to pay less than they, "owe".

Ready to make a point, yet?

apdst · Jul 29, 2011

Boo Radley said:
We know that. Go back and read the thread. What is being argued, and what I was careful to say, was to do away with those adjustments or reductions. That is what is really being argued.

Which ones, exactly?

apdst · Jul 29, 2011

washunut said:
Not very responsive. Would you say corporations taking deductions for paying their employees health insurance should be stopped. Individuals can't take that as a deduction. How about the rules allowing companies to deduct so called depreciation on machinery that it buys. How about the ability to deduct advertising?

Because they're not spending the money, the company is.

apdst · Jul 29, 2011

haymarket said:
Can you wrap your mind around the reality that the tax code contains loopholes?

Can you identify those loopholes? Or, are they actually legitimate deductions and you just call them loopholes, because you think that corporations are getting hosed hard enough by the government?

washunut · Jul 29, 2011

apdst said:
Because they're not spending the money, the company is.

No I am talking about individuals who have to buy their own insurance.

Boo Radley · Jul 29, 2011

apdst said:
Which ones, exactly?

I think I said any and all. You know of one, cut it.

apdst · Jul 29, 2011

Tettsuo said:
No matter how you slice it, the right are still promoting the failed theory of trickle down economics. The problem is we have 40 or more years of proof that it doesn't work. This push back from actually taxing the rich at the same overall rate as the middle class is simply a reflection of a policy that does not help anyone but the mega rich and certainly doesn't help the country.

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.

apdst · Jul 29, 2011

washunut said:
No I am talking about individuals who have to buy their own insurance.

How much are they not paying because of the earned income credit and the child tax credit? Do they really need to be able to deduct their insurance?

But, since Obamacare mandates health insurance, it's probably a ligitimate deduction, now.

apdst · Jul 29, 2011

Boo Radley said:
I think I said any and all. You know of one, cut it.

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?

Boo Radley · Jul 29, 2011

apdst said:
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

Boo Radley · Jul 29, 2011

apdst said:
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?

apdst · Jul 29, 2011

Boo Radley said:
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?

apdst · Jul 29, 2011

Boo Radley said:
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.

Boo Radley · Jul 29, 2011

apdst said:
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.

apdst · Jul 29, 2011

Boo Radley said:
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?

Boo Radley · Jul 29, 2011

apdst said:
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.

SheWolf · Jul 29, 2011

apdst said:
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.

SheWolf · Jul 29, 2011

TurtleDude said:
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.

1Perry · Jul 30, 2011

SheWolf said:
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.

The Barbarian · Jul 30, 2011

Boo Radley said:
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.

You have got to be joking, you think that you can tax business at a nominal rate of near 40% of their gross profit ??? You are a prime example of why a liberal could never make it in business.

I can't but to wonder if you even know what gross profit is.

cpwill · Jul 30, 2011

well... see... the trick is... if you want the gold... you gotta kill that damn goose.

apdst · Jul 30, 2011

SheWolf said:
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.

And, you know what? That has abosolutely nothing to do with raising taxes on domestic corporations.

I'll ask you--a bean counter--what, "loopholes", do domestic businesses need to do without?

apdst · Jul 30, 2011

The Barbarian said:
You have got to be joking, you think that you can tax business at a nominal rate of near 40% of their gross profit ??? You are a prime example of why a liberal could never make it in business.

I can't but to wonder if you even know what gross profit is.

That's why it's so important that Liberalism targets people who absolutely don't know any better.

SheWolf · Jul 30, 2011

1Perry said:
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.

I'd consider it a loophole, because some companies have matstered finding actual holes in the code to avoid paying taxes. The tax code wasn't designed to encourage shell companies and tax avoidance. The law was not intended to do that. If the law was intended to do that, then I'd agree with you. I wouldn't consider having 3 kids and making just enough money in your business to maximize your Child Tax Credit and Earned Income Credit and tax loophole.