Posted on 11/11/2010 1:47:02 PM PST by sten
I do not understand why the govt insists on taxing corporations, I mean beyond the basic "they just want the money" reason.
Let's say a corporation has $10m in sales... pays the various salaries and expenses necessary.... Then pushes some chunk to distribution (the shareholders)... All of which gets taxed normally... Leaving $2m in the corporate bank account.
At that point, the govt wants 40-50% or more.
I don't understand why. They say because the evil rich need to pay their fair share. But their fair share was paid from the distribution tax. The remaining money actually belongs to no person, but the corporation.
The only benefit of the money sitting in the corporate account would be to the employees... By insuring the company has the financial strength to weather the bad times... And to the people of the local community in which the bank sits, as the bank then has the funds to lend out for various individual loans
But when the govt grabs the money, it makes it more difficult for the company to survive... increasing the risk the company could go out of business ... Pushing the people into unemployment (which might be the point)
The current policies encourage corporations to perform the various gymnastics to avoid these taxes. This results in the money sitting in banks overseas and not in the local banks
I'd love to understand the reasoning
I think it’s stupid too. The whole point of it seems to be to drive corporations and their jobs overseas.
So they can add stealth taxes through higher prices on people who don’t think they’re taxed too much.
Now, of course, I know that it has been proved for hundreds of years that this form of organization makes the best use of capital, by allowing many people to pool capital and therefore accomplish much greater things than any one could as an individual. And that the structure that protects investors from direct risk yields the most wealth for the most people. And that the government doesn't really have any inherent right to tell people how they may or may not associate. Bit it is an interesting question and I do have some difficulty when officers of a corporation can be shielded from consequences of actions that they would be directly liable for if they were individuals.
Personally, I distrust corporations exactly as much as I distrust governmental entities: any time you have power disconnected from responsibility you have abuse; people in large groups are dangerous to individual liberties, be they corporations, unions or governments; the question is only do we derive more benefit than we suffer detriment.
The logic is that the corporation is a separate legal entity from the owners. Under current law if they don’t pay dividends and there is no corporate tax, the corporate income will never be taxed.
Economically the simplest and probably best course would be to treat all corporations as subchapter-S for tax puposes, and pass through all corporate earnings for shareholders to pay income tax on at individual rates, and make all corporate dividends tax free. The government might gain a large amount of tax revenue, because they wouldn’t have to wait until you sell a stock or get a dividend to tax you on the profits of the corpations you own part of.
Because the voting public is STUPID.
Would it be possible for a state to declare that corporations based in that state, banking and offices, would not be subject to a corporate tax?
If the thinking is that the state would be superseding federal authority, then explain how CA pushes it’s drug laws without fear from the fed.
If a state did that, businesses would flock to the state, money would flood the banks, more jobs would be produced and home demand would increase.
Better idea would be to only tax the corps. Let the individuals off the hook.
This would remove the ability for the corporation to lower salaries or decrease positions in order to give the company more time on the monies it has
The same reason that employers are required to pay withhold employees’ income taxes and pay half of employees’ social security and medicare taxes and gasoline taxes are included in the price of gasoline, it is easier to hide the amount of taxes that you pay if you don’t realize you are paying it.
Corporations don’t pay taxes. Only people pay taxes, either the shareholders or the customers through higher prices.
That way the gov’t and unions can blame price increases on evil corporations.
When you get right down to it, that’ as intellectually sophisticated as Rats get on economics, a kid's 1960s comic book!
It's the same on other subjects !
The consumers (us) pay all Corporate taxes. Corp. taxes are put into the price of the goods and profit is projected from that. Let’s say we raise taxes on GM 30%. Watch car pricing go up 35%.
That would guarantee that they would all move overseas. We would be a desert overnight. We must have corporate taxes that make our corps competitive with the rest of the world. For example, Microsoft, Google, aaple could relocate in a heartbeat.
Money is power. The government can’t stand the idea of any entity being able to do as they wish and not controlled by the government.
The "distribution to shareholders" (i.e. dividends) is after income taxes on corporate earnings. The dividends, which represent income that has already been taxed, are then taxed again as personal income to the shareholders.
Why did Willy Sutton rob banks? That’s where the money was.
Like Sutton, no higher rationale is required when it comes to governments selecting its victims.
dividends are taxed at 15% top rate right now. I think it would be better if we eliminated the corporate income tax and just taxed dividends the same as work income.
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