Posted on 08/09/2007 7:15:44 AM PDT by indcons
President Bush said yesterday that he is considering a fresh plan to cut tax rates for U.S. corporations to make them more competitive around the world, an initiative that could further inflame a battle with the Democratic Congress over spending and taxes and help define the remainder of his tenure.
Advisers presented Bush with a series of ideas to restructure corporate taxes, possibly eliminating narrowly targeted breaks to pay for a broader, across-the-board rate cut. In an interview with a small group of journalists afterward, Bush said he was "inclined" to send a corporate tax package to Congress, although he expressed uncertainty about its political viability.
The president's comments came as he tried to calm volatile stock and mortgage markets and reassure the country that the economy is fundamentally strong. Despite mounting concern over the downturn in the housing market, he dismissed proposals advanced by prominent Democrats to grant government-chartered Fannie Mae and Freddie Mac more freedom to buy mortgages and mortgage-backed securities. And he ruled out any taxpayer bailout of lenders threatened by the subprime home-loan crisis.
In a 48-minute conversation on an array of economic issues, Bush also warned China not to start a trade war, blamed Congress for not doing more to shore up infrastructure such as the bridge that collapsed in Minneapolis last week, and pushed back against Democratic presidential candidates who are promising to renegotiate the North American Free Trade Agreement.
(Excerpt) Read more at washingtonpost.com ...
Imagination is a wonderful thing! Enjoy!
Please forgive me if I mistake the above to be condescending and it is not. It did and still does appear to me to be so.
And one would be hard pressed to pass on cost in an industry segment that is under serious competitive price pressure.
The above may be true, but it does not disprove the statement "corporations do not pay taxes, their customers do". The fact is, as "hard pressed" as one might be, either revenue (money from customers) covers expenses (including taxes) or the company will fail.
Hey, it’s your right to disagree...but that facts are still there and they’re on my side.
What facts are on your side?
These are the facts and they are NOT on your side:
1 - Corporate Income Tax is a portion of profit.
2 - Profit is a portion of revenue.
3 - ERGO: Corporate Income Tax is a portion of revenue.
Bigun's quote bears repeating:
"corporations do not pay taxes, their customers do"
Large Oil Industry Tax Payments Undercut Case for Windfall Profits Tax
Refute that!
Have a nice day.
From your linked article:
“...In other words, who bears the burden of taxes on the domestic oil industry? Every dollar a corporation spends, whether on taxes or anything else, eventually comes out of the pockets of individuals, specifically three groups of individuals: the corporation’s shareholders, in the form of decreased capital gains and dividends; its workers, in the form of lower wages; or its customers, in the form of higher prices.”
I won't because someone beat me to it (see above post #64) and I do believe that YOU provide the source!
LOL!
You don’t seem to understand what a market is.
A market is created by willing sellers and willing buyers, and the market will adjust based on any factor that affects the after-tax profits of the sellers. Sellers will abandon a market if the profit is no longer worth the risk. Likewise, the seller will fail if investors are not rewarded in after-tax terms, so the taxes are always passed along to consumers — not the corporation and not the shareholders.
OHelix is exactly right when he said that taxes become simply another cost. If that cost is not recovered in prices such that the after-tax profit justifies the risk, then the market has not functioned properly. In the longterm, a free market will always pass along all costs including taxes.
All taxes on business are simply a fiction to hide the total tax burden from the consumer.
Papers have been written on this subject by well-respected economists. Perhaps you should read one, rather than speaking from your limited “several years experience” as a “tax professional”. Although at least you were honest enough to admit your bias in preference for a convoluted tax system. No job if corporate and personal income taxes go away, eh ?
One might conclude that the author of that piece agrees with what I have said earlier on this thread. He is correct but suppose that there will always be those who cannot figure out that collecting and remitting is NOT the same thing as actually paying.
Errrr... post #64 clearly says that corporations pay taxes. Perhaps you need reading glasses? Gee imagine that! A corporation gets money from its customers! Who would have thunk'of'dat!
I agree.
And if the public isn’t ready for a 23% Federal FairTax, then you could still go with just an 8% FairTax to replace all Corporate Income Taxes and Employer Payroll Taxes. 3% to general fund and 5% to SS/MC would be revenue neutral.
That would give us all the trade advantages and attract capital and manufacturing jobs to America without the enormity of a complete tax system change all at once.
Perhaps you need some remedial reading classes.
Corporations collect and remit the taxes but they DO NOT pay them. Those two things are NOT the same.
I should also remind you that when one finds himself in a hole the very best thing to do is STOP DIGGING!
The cost of the tax that corporations pay is priced into every good and service that they sell, the same as any other expense. Taxes are paid out of revenues, which come from sales, which come from the consumer.
AND, I might add, it would bring what is currently invisible into the light! A VERY important consideration if we are ever to get control of government spending. Something most conservative favor I think!
Your idea certainly has merit but I think I'll continue to advocate for the whole enchilada!
Awesome quote! I think that very concisely sums up the true topic of this thread.
During 2005, these three companies paid a combined corporate income tax burden of $44.3 billion on their reported gross earnings. Compared to last year’s combined corporate income taxes of $29.7 billion, their burden for 2005 has increased by 49.2 percent and follows the overall trend of escalating corporate tax collections in the United States.
http://www.taxfoundation.org/news/show/1321.html
Have a nice day.
Ignorance is correctable but stupid is forever!
The magnitude of these tax payments made by US corporations raises the question of tax incidence. In other words, who bears the burden of taxes on the domestic oil industry? Every dollar a corporation spends, whether on taxes or anything else, eventually comes out of the pockets of individuals, specifically three groups of individuals: the corporation’s shareholders, in the form of decreased capital gains and dividends; its workers, in the form of lower wages; or its customers, in the form of higher prices.
Please compare the above to the statement you took issue with in post 45:
Well, no! Actually they collected those funds from any combination of their shareholders, their customers, or their employees and forwarded them to the government.
Your article support's Biguns position very, very clearly. Continuing to post links to the same article and saying "have a nice day" will not change that.
The horse is dead. Please have mercy on it's carcass and use the hole you've dug to bury it.
Unless you can show that those higher tax amounts reduced their profits by the same amount, then you haven’t addressed Bigun’s point.
If a business remits more in taxes this year but raised its prices such that it profit by even more, then the business passed along those higher taxes to its customers.
As long as the same taxes hit all competitors in a market, the taxes simply raise the prices. They have no effect on the profits of the businesses. Remove taxes and you lower prices, again having no effect on profits.
Free markets do not determine prices directly. To say that a price is set by what buyers are willing to pay is only true in the short term. In the long term, markets are created by the after-tax profit sellers require to offset the risk associated with participating in that market. That profit is what is left after other direct costs, taxes, risks, and inflation are taken into account. This establishes the minimum price the sellers will accept to stay in the market.
If that minimum price cannot attract buyers, then sellers will abandon the market, even to the point that the good or service completely disappears. If more than the minimum price is readily available from buyers, then more competitors will enter the market, increasing supply and lowering prices back down to the minimum.
The CEO, the directors and all their employees pay taxes too.
Absolutely they do, as individuals, but that is irrelevant to the subject of this thread.
Well, from what you write, I would argue then that you (individual/consumer/whatever) do not pay your taxes...the corporation or the employer that pays your salary does under your logic. Then we’re right back to the corporation, small business, whatever, as the tax payor.
Again, what your write is an “oversimplification” but it’s understandable to see it that way. You write from a budgeting/forecasting revenue projections POV...in essence internal financial modeling but such a POV doesn’t change “who” pays the tax.
Sure, corporations pay taxes from their revenues that’s just a simple cash flow issue but to measue who pays a “tax” in this example...you have to measure if the cost/benefit can be passed on by either a raise or decrease in the price of a good or service due to change in tax rate. In regard to commidities it can’t, services probably, manufacuted goods maybe (unless competitive pricing keeps a company from doing so).
I am simply demonstrating a hypothetical case where the corporation is truly a taxpayer...and not the mythical assumption made by many that corporations never pay taxes, only people do.
Thanks.
We can debate the philosophical aspects of this till the end of time, but I see what I see in reality.
Corporations that have had an increased tax burden with no ability to pass on such cost to the consumer due to governmental and/or market price controls are truly the final (end of the line) tax payor, and that’s the reality.
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