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Obama seeks 28 percent corp. tax rate

Justice For All said:
So Obama the ultimate crusader against tax cuts now wants to give bigger tax cuts than George W Bush. What a hypocrite, congrats Obama it looked like you were actually going to win this November but who knows now and honestly who cares with a two face canidate like yourself. You can count me out of this election there's no one to vote for between the flip floppers of Obama and Romney to the whackos of the right like Santorum and Gingrich. Even Ron Paul's homeland policies are whack in my opinion. Garbage in Garbage out.

Good luck America your going to need it.
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Not at all. What he is trying to do is move away from penalizing companies who want to do business in the U.S. to taxing profits of individuals. We don't want to discourage doing business in the U.S. Our current corporate tax rate is high. Now the details of where else we get tax revenue is another discussion.
 
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haymarket said:
This is one step in the right direction. I would have lowered it to 34.9% with no loopholes.
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You woulkd force corporations to pay 34.9% of their gross income?
 
apdst said:
No, it's not.

This isn't going to do anything, except force corporations to pay more taxes. Small businesses will take an ass whipping with this plan.
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How so? The rate is coming down and small businesses have far less in loopholes. No way this is bad for small business. Me thinks you are talking from cynicism and emotion, not your head. If not, you must explain.
 
apdst said:
Ok, it's like this:
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no. it's not like this
20% is NOT the average profit realized by the typical American business, large or small

now let's look at your simplistic arithmetic (using your absurd 20% profitability projection)

A business makes $100,000. It makes the average 20% profit. You take away from their 80% of deductions. Hince, you've raised their taxes and cut into their profit margin.
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you failed to address the REDUCTION of tax expense (seven percent for all businesses and more for manufacturers)
if the deductions no longer available to the business exceed that seven (or more) percent savings in tax obligation, then the effective tax rate of the large or small business will be higher under Obama's proposal
however, if the deductions no longer available to the business are less than that seven (or more) percent savings in tax obligation, then the effective tax rate of the large or small business will be lower under Obama's proposal
what is not known is what the change in deductions will be. in contrast, we know what the change in tax obligation will be
and this is why i put you on the spot when you insisted Obama's proposal will result in higher taxes for small businesses. the only way you could establish that as fact is to show us that the deductions lost to the small business community would exceed seven (or more for manufacturers) percent. and as we have seen, you are without the facts to back up your bold statement

It ain't rocket science.
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that's a good thing. after you screwed the pooch so bad on something so simple it would be appalling to see what you would do with a spacial mechanics problem
 
apdst said:
It's a tax increase for small businesses, too.
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Only 7% of small businesses are even affected by this law (paying at the corporate income tax rate) and the ones that do pay at the corporate tax rate paid an average effective rate of 27%.
So if any small businesses see their tax rates increase it will be a very small group. Most importantly, they are going to be on an even playing field with their large multi-national competitors.
 
Good. Cut business taxes.

In fact, I'd go further -- any company that builds a factory or somehow creates jobs in the United States doesn't pay any taxes on income reinvested in the economy. None, zero.
 
upsideguy said:
How so? The rate is coming down and small businesses have far less in loopholes. No way this is bad for small business. Me thinks you are talking from cynicism and emotion, not your head. If not, you must explain.
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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.
 
iliveonramen said:
Only 7% of small businesses are even affected by this law (paying at the corporate income tax rate) and the ones that do pay at the corporate tax rate paid an average effective rate of 27%.
So if any small businesses see their tax rates increase it will be a very small group. Most importantly, they are going to be on an even playing field with their large multi-national competitors.
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All c-corps pay the corporate rate.
 
justabubba said:
no. it's not like this
20% is NOT the average profit realized by the typical American business, large or small

now let's look at your simplistic arithmetic (using your absurd 20% profitability projection)


you failed to address the REDUCTION of tax expense (seven percent for all businesses and more for manufacturers)
if the deductions no longer available to the business exceed that seven (or more) percent savings in tax obligation, then the effective tax rate of the large or small business will be higher under Obama's proposal
however, if the deductions no longer available to the business are less than that seven (or more) percent savings in tax obligation, then the effective tax rate of the large or small business will be lower under Obama's proposal
what is not known is what the change in deductions will be. in contrast, we know what the change in tax obligation will be
and this is why i put you on the spot when you insisted Obama's proposal will result in higher taxes for small businesses. the only way you could establish that as fact is to show us that the deductions lost to the small business community would exceed seven (or more for manufacturers) percent. and as we have seen, you are without the facts to back up your bold statement


that's a good thing. after you screwed the pooch so bad on something so simple it would be appalling to see what you would do with a spacial mechanics problem
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How is it absurd? 17-20% is the national average.
 
justabubba said:
no. it's not like this
20% is NOT the average profit realized by the typical American business, large or small

now let's look at your simplistic arithmetic (using your absurd 20% profitability projection)


you failed to address the REDUCTION of tax expense (seven percent for all businesses and more for manufacturers)
if the deductions no longer available to the business exceed that seven (or more) percent savings in tax obligation, then the effective tax rate of the large or small business will be higher under Obama's proposal
however, if the deductions no longer available to the business are less than that seven (or more) percent savings in tax obligation, then the effective tax rate of the large or small business will be lower under Obama's proposal
what is not known is what the change in deductions will be. in contrast, we know what the change in tax obligation will be
and this is why i put you on the spot when you insisted Obama's proposal will result in higher taxes for small businesses. the only way you could establish that as fact is to show us that the deductions lost to the small business community would exceed seven (or more for manufacturers) percent. and as we have seen, you are without the facts to back up your bold statement


that's a good thing. after you screwed the pooch so bad on something so simple it would be appalling to see what you would do with a spacial mechanics problem
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Not all businesses pay the highest rate. The corporate tax rate is bracketted, just like the tax rate on individuals.

If you remove deductions on a small business that is only paying in the 15% tax bracket, then you've raised that companies taxes.
 
apdst said:
Not all businesses pay the highest rate. The corporate tax rate is bracketted, just like the tax rate on individuals.

If you remove deductions on a small business that is only paying in the 15% tax bracket, then you've raised that companies taxes.
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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.
 
rocket88 said:
Good. Cut business taxes.

In fact, I'd go further -- any company that builds a factory or somehow creates jobs in the United States doesn't pay any taxes on income reinvested in the economy. None, zero.
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Throw in jobs tax credits and investment tax credits (which are in and out of out tax code every 10 years) .... and the accelerated depreciation and liberal write-off of capital investment already in the tax code and you essentially have that.
 
apdst said:
Not all businesses pay the highest rate. The corporate tax rate is bracketted, just like the tax rate on individuals.

If you remove deductions on a small business that is only paying in the 15% tax bracket, then you've raised that companies taxes.
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Deductions are not loopholes. You can't remove deductions otherwise you are not taxing income but rather have a sales tax on steriods. In order to tax income, you have to have deductions as by definition, income is revenue less cost of revenue/expense (deductions).

Loopholes are deductions when companies comply with the letter, rather than the spirit of the law. Things like off-shoring profits through sophisticated cost allocation plans that have foreign subsidiaries selling goods at high profit to the US subsidiary and the US subsidiary selling those goods to the consumer at its contrived cost such that the company shows no US profit and thus pays no US tax.... o
 
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apdst said:
Not all businesses pay the highest rate. The corporate tax rate is bracketted, just like the tax rate on individuals.

If you remove deductions on a small business that is only paying in the 15% tax bracket, then you've raised that companies taxes.
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you are talking about s corps. the 15% tax bracket is for a VERY small C corp.
 
apdst said:
In that case, I'm wasting my time trying to explain it to you. You will never get it.
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I guess not. I have no idea what your point was.

I said only 7% of small corporations are affected by corporate income tax changes (C-Corps) Of those small businesses their average effective tax rate is around 27%. I don't see what your statement added to the converstation or any point it proved.
 
apdst said:
You woulkd force corporations to pay 34.9% of their gross income?
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I would have lowered the corporate tax rate from the current 35%.
 
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.
 
AdamT said:
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.
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*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.
 
apdst said:
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.
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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
 
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ksu_aviator said:
Raising taxes on corporations? Well that ought to be the final dagger in the country once called America.
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news flash
Obama is proposing to reduce the corporate tax rate

How can he be so stupid?
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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.
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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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apdst said:
*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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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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