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How would this be for a tax plan?

JasperL said:
Well, if they can just decide to raise prices and make another $5 million, they'd do it without regard to taxes. And some competitors will be paying no tax on their profits in that industry because (among other reasons) some other line of business is losing money, or they are a startup, or got hit by a hurricane and have big losses, etc, so if your company raises prices to cover income taxes, competitors gain share, AND make a higher after tax rate of return on that product. So they can sustain lower prices, gain share, have higher returns, for a long time.

I suppose some of that might happen, but prices are basically established by costs and what the market will bear, not income taxes on the profits.

True enough, but the losses GE sustained in its financial divisions were HUGE and real. So they're entitled to take them over time - that is legitimate. GE has other tax issues, but the point of using them was as a generic example. Big huge company, zero income tax. Competitors cannot lower prices to pay off their income tax when someone like GE is always or nearly always in that competitive market.
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If companies paid no income taxes, they would all be on the same footing. Then they could be focusing on lowering the cost of the goods and being price competitive in the market. Of course, they could be a value-added company and want to charge more.
 
jaeger19 said:
Yep but the wealthy are not sending jobs to China and mexico and Canada (?) because of the us tax structure.

I suppose if you want to lower the wages of americans to say 1-2 dollars an hour.. you might get the jobs back from china and Mexico..... just sayin.
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Canada has roughly the same regulation and wages as the US which is why some of the car manufacturing plants moved from Detroit up into Canada. Basically 10% more income for moving just across the border. If you were starting a business and lived near the border why would you start one on the US side when Canada takes 10% less money from you.
 
JasperL said:
Don't forget the nearly non-existent environmental regs and workplace safety regs, etc.
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Or the child labor in some areas of asia.
 
countryboy said:
Same old tired nonsense.

Oh and, heaven forbid that YOU might actually have to pay more taxes. :roll:
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Yes, it's tiring having to point out "math" to you conservatives for whom math appears optional... Trickle down! Growth! JERBS! MORE REVENUE!
 
OlNate said:
Just food for thought...Canada might not be the best tax rate to base off of, as our income tax levels and sales tax levels are a lot higher. In effect, we invest in our own job market by paying a higher income tax to cover the tax requirements not covered by businesses paying less taxes. This attracts the companies, and we get more jobs as a result. Well, that and "free" health care... ;) hehe
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Which is common sense to me. In the US we have people screaming "tax the evil corporations" not realizing that those evil corporations bring jobs and pay salaries. If you were to propose something like Canada's tax code here Democrats would go nuts. Personally, I would rather cut spending and cut taxes across the board and eliminate federal income taxes. Have a national sales tax or some other tax to fund the military and cut out the majority of federal programs and allow the states to make their own. This would allow states to decide how capitalist - socialist they want to be and people can decide where they want to live and the type of government they like rather than trying to make a 1 size fits all style federal government that everyone hates.
 
countryboy said:
Are you ****ing crazy! It has nothing to do with jobs, or standards of living, or helping the little guy. THE RICH MUST BE PUNISHED!!!!!!!
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Or we have to pay the bills, and to do that we go to where the money is, which is just reality and, again, math.
 
Nap said:
Which is common sense to me. In the US we have people screaming "tax the evil corporations" not realizing that those evil corporations bring jobs and pay salaries. If you were to propose something like Canada's tax code here Democrats would go nuts.
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Some would perhaps, but stereotyping isn't helpful. Canada has about a 15% federal rate and state rates average about 11%. The equivalent here is about a 20% corporate tax rate, and 6% average or so state rate. I'm good with that.

Personally, I would rather cut spending and cut taxes across the board and eliminate federal income taxes. Have a national sales tax or some other tax to fund the military and cut out the majority of federal programs and allow the states to make their own. This would allow states to decide how capitalist - socialist they want to be and people can decide where they want to live and the type of government they like rather than trying to make a 1 size fits all style federal government that everyone hates.
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OK, then Congress can do that - eliminate Medicare, SS, VA, Medicaid, and it's easy to cut taxes substantially. In reality, that's not politically possible, so..... ??

And what people actually 'hate' is the idea of big government, but try to pry Medicare from the seniors in the GOP and you'll have to do it from their cold dead hands. Same with SS. Disaster? FEDS HELP!! Please put this massive military base in my district!! Just about every red state is a giant net teat sucker from the feds, paying in far less than they receive in benefit.
 
Nap said:
Canada has roughly the same regulation and wages as the US which is why some of the car manufacturing plants moved from Detroit up into Canada. Basically 10% more income for moving just across the border. If you were starting a business and lived near the border why would you start one on the US side when Canada takes 10% less money from you.
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But that assumes 'all else equal' and they never are. With automakers, just about every, if not ever, relocation has come with at least $100s of millions in various incentives that have nothing to do with the corporate income tax rate. Here's a recent article on Canada specifically:

'Vulnerable and exposed' Canada running out of ways to lure auto investment

At the core, [Canada's] job has shifted from growing the industry to merely maintaining what exists.”All levels of government in Canada are doing that with tax dollars, usually in the form of grants.

Things have become so bleak that governments are now “in a practice of subsidizing automakers just to stay” in Canada. Cash incentive “has become so ingrained that even Honda, a company that long eschewed direct government support, sought -- and accepted -- cash incentives from Ontario in 2014,” the report says.

“These companies don’t need the money. They can find the money. They can pay for their investments,” Mordue said. “But the incentives represent a message to the potential investor that, ‘We value you, we value this work and we’re going to be here with you and support you. Consider us partners in this investment you’re considering making.’”
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Nap said:
Canada has roughly the same regulation and wages as the US which is why some of the car manufacturing plants moved from Detroit up into Canada. Basically 10% more income for moving just across the border. If you were starting a business and lived near the border why would you start one on the US side when Canada takes 10% less money from you.
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The reason to move to Canada has less to do with taxes and mostly to do with less regulatory issues (except for some industries). A highly trained workforce. Good incentives for business like infrastructure support and subsidies
 
JasperL said:
Some would perhaps, but stereotyping isn't helpful. Canada has about a 15% federal rate and state rates average about 11%. The equivalent here is about a 20% corporate tax rate, and 6% average or so state rate. I'm good with that.



OK, then Congress can do that - eliminate Medicare, SS, VA, Medicaid, and it's easy to cut taxes substantially. In reality, that's not politically possible, so..... ??

And what people actually 'hate' is the idea of big government, but try to pry Medicare from the seniors in the GOP and you'll have to do it from their cold dead hands. Same with SS. Disaster? FEDS HELP!! Please put this massive military base in my district!! Just about every red state is a giant net teat sucker from the feds, paying in far less than they receive in benefit.
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From your link:

Putting the domestic tax factors together, Jack Mintz and Duanjie Chen of the University of Calgary*found*that the U.S. Marginal Effective Tax Rate (METR) on Capital Investment is the highest in the developed world, at 35.3 percent. In contrast, Canada’s METR is about half that, at 18.6 percent. By this measure, Canada has the lowest business tax burden in the G7.

In short, in terms of doing business, the U.S. has the least attractive tax regime of any developed country. That is what is causing the corporate inversions. The solution is tax reform, particularly corporate tax reform.
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So according to your source, the US has the least attractive tax regime of any developed country while sharing a border with the lowest tax burden of the G7 in Canada. This seems like a recipe for disaster imo.
 
JasperL said:
Some would perhaps, but stereotyping isn't helpful. Canada has about a 15% federal rate and state rates average about 11%. The equivalent here is about a 20% corporate tax rate, and 6% average or so state rate. I'm good with that.



OK, then Congress can do that - eliminate Medicare, SS, VA, Medicaid, and it's easy to cut taxes substantially. In reality, that's not politically possible, so..... ??

And what people actually 'hate' is the idea of big government, but try to pry Medicare from the seniors in the GOP and you'll have to do it from their cold dead hands. Same with SS. Disaster? FEDS HELP!! Please put this massive military base in my district!! Just about every red state is a giant net teat sucker from the feds, paying in far less than they receive in benefit.
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Red states receive more in benefit than what they pay due to policies created by Blue states. It seems rather ridiculous to be upset that Red States are getting more benefits from the policies put forth by the Blue states. If Red states really wanted to suck at the Fed's teat they would take advantage of the SALT deduction and redirect some of the money going to federal taxes back to the state.
 
Nap said:
Red states receive more in benefit than what they pay due to policies created by Blue states. It seems rather ridiculous to be upset that Red States are getting more benefits from the policies put forth by the Blue states. If Red states really wanted to suck at the Fed's teat they would take advantage of the SALT deduction and redirect some of the money going to federal taxes back to the state.
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I'm just pointing out the disconnect between suckling at the federal teat and whining about "big government." And also noting that outside a few radicals, the vast majority, Democrats and Republicans, might dislike "big government" but like what big government does and spends the vast majority of its revenues doing - SS, Medicare, military, VA, Medicaid and more.
 
JasperL said:
I'm just pointing out the disconnect between suckling at the federal teat and whining about "big government." And also noting that outside a few radicals, the vast majority, Democrats and Republicans, might dislike "big government" but like what big government does and spends the vast majority of its revenues doing - SS, Medicare, military, VA, Medicaid and more.
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This is why I don't like politicians running on a platform of handouts. It is nothing more than buying votes and anytime those policies are targeted for reform it then becomes an issue for those that have become dependent on it. People need to learn how to depend on themselves rather than the government. There aren't many that are against helping out those that are unable to take care of themselves (disabled or the elderly), the issue is subsidizing stupid decisions by able bodied individuals. This shouldn't be done at the federal level, if California or New York want to do this then they are welcome to do so for their state but don't force me to pay for other's mistakes.
 
Nap said:
Red states receive more in benefit than what they pay due to policies created by Blue states. It seems rather ridiculous to be upset that Red States are getting more benefits from the policies put forth by the Blue states. If Red states really wanted to suck at the Fed's teat they would take advantage of the SALT deduction and redirect some of the money going to federal taxes back to the state.
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If red states didn't want to suck at the teat.. they could simply not sign up for voluntary programs like Medicaid.. or TANF, or accept federal dollars for education etc. Wait.. but they do.. while complaining about federal government. By the way.. I live in one of those red states.
 
Nap said:
From your link:

So according to your source, the US has the least attractive tax regime of any developed country while sharing a border with the lowest tax burden of the G7 in Canada. This seems like a recipe for disaster imo.
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And as I've said, I agree with lowering corporate tax rates - in part because of comparisons like that. There is no reason we should have corporations disadvantaged by locating here.

It is ALSO true that all the research I've seen on corporate locations finds that the corporate income tax is pretty far down the list of reasons a company chooses a location. Not always true - of course - but the big ones are labor costs, quality of labor (sufficiently skilled for the work), energy costs, cost of living, amenities - non-tax factors. But obviously, if all else more or less equal, a company will choose to pay lower tax rates. It's those "all else equal" cases that are the problem.
 
JasperL said:
And as I've said, I agree with lowering corporate tax rates - in part because of comparisons like that. There is no reason we should have corporations disadvantaged by locating here.

It is ALSO true that all the research I've seen on corporate locations finds that the corporate income tax is pretty far down the list of reasons a company chooses a location. Not always true - of course - but the big ones are labor costs, quality of labor (sufficiently skilled for the work), energy costs, cost of living, amenities - non-tax factors. But obviously, if all else more or less equal, a company will choose to pay lower tax rates. It's those "all else equal" cases that are the problem.
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I agree that there are multiple variables, I just think the ones that are possible to control we should. For instance, trying to compete with Mexico is rather pointless due to the cost of labor, however Canada is pretty similar in all other variables that the tax rate likely does make an impact so getting relatively close to their level is needed. Of course we could be 1% or 2% higher because having to ship here would cancel out that savings. Having double the tax burden though is a pretty substantial difference.
 
Nap said:
Wouldn't it be better to flow to the wealthy to create jobs here rather than flow to Canada, China, and Mexico? Having a significantly higher tax rate than Canada and Mexico seems like a bad idea.
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you make the faulty assumption that the wealthy would spend on job creation....the wealthy already benefit from the current structure, where are all the jobs ?
 
randel said:
you make the faulty assumption that the wealthy would spend on job creation....the wealthy already benefit from the current structure, where are all the jobs ?
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Read the post you quoted
 
Nap said:
Read the post you quoted
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i did, you operate under the assumption that the wealthy would spend on job creation...did i miss something?
 
randel said:
i did, you operate under the assumption that the wealthy would spend on job creation...did i miss something?
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The location of the jobs that post implies :p
 
Nap said:
The location of the jobs that post implies :p
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again, you operate under the assumption that the wealthy here would use the extra money to create jobs....while you can make the argument that it is better for the money to stay here, that doesnt guarantee that it would be spent on things that lead to the creation of jobs.
 
Nap said:
I agree that there are multiple variables, I just think the ones that are possible to control we should. For instance, trying to compete with Mexico is rather pointless due to the cost of labor, however Canada is pretty similar in all other variables that the tax rate likely does make an impact so getting relatively close to their level is needed. Of course we could be 1% or 2% higher because having to ship here would cancel out that savings. Having double the tax burden though is a pretty substantial difference.
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I think it was pointed out that Canada is NOT similar in all other variables.
 
Nap said:
Wouldn't it be better to flow to the wealthy to create jobs here rather than flow to Canada, China, and Mexico? Having a significantly higher tax rate than Canada and Mexico seems like a bad idea.
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Is this really what you think? :lamo
 
iguanaman said:
Sometimes the lowest common denominator is not something to shoot for. Whatever benefits are claimed you cannot ignore the fact that federal tax revenue from corporations are in free fall. It is very strange to hear such rosy expectations when tax revenues have already dropped off to historic lows. Methinks cuts will have little economic influence except boosting already record profits a little higher.....oh and making the inevitable crash even more painful when it happens.
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That's because it has been offset by taxes on labor.

fredgraph.png


Now... is this really so out of line?
 
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