Archive for April 25th, 2013
Posted in corruption, Economics, Economics, recession, income redistribution, Politics, Recessions, the Rigged Game, Uncategorized, wealth redistribution, tagged Accounting, Apple, Corporate tax, Corporation, income tax, tax, tax rate, United States on Jam4000000amThu, 25 Apr 2013 11:44:06 +000013 10, 2010| Leave a Comment »
A man wrote and said that if tax rates were raised on corporations, they would pass on the cost of that to consumers. I disagreed. His position was not logical. Because I so easily refuted him, I made him mad and now he’s not reading this blog. However, I would like to point out what another reader wrote with respect to the man’s comment, and he is wonderfully logical.
“If your correspondent were at all cued in he would recognize that as corporate tax revenues have declined for the last fity years, his expectation would be that the prices of everything would be cheaper. If prices are linked to corporate taxes, that is. I don’t think the data support that.
Statistics I have seen, which I cannot corroborate, was that in 1950, $3 in corporate tax revenues were collected for every $1 of personal income taxes. Currently, for every $1 collected in individual taxes, corporations pay $0.11. So, while the corporate tax rate remains fairly high, the tax codes are such that almost no corporations pay anything near that effectively. In effect, the owners of the economy have transfered the federal tax burden off of corporations and onto individuals.”
I thought he was spot on, but I also thought he could’ve said a little more about this issue. So my comments are below.
“How dare you use your mind and make sense! However, one other point needs to be made. Many corporations pay no federal taxes at all, and in fact, many get federal tax rebates on taxes they’ve never had to pay. That means they pay a negative tax rate. Statistically, if memory serves me correctly, while on paper US corporations appear to have high tax rates, US corporations actually pay among the lowest in the developed world. Geez, what do you expect when they’re writing the tax laws?” (more…)