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Corporate Tax
Old 12-12-2007, 12:47 PM   #1
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Corporate Tax

I have always been of the opinion that Corporate Income Tax was a way by which politicians hide taxes from the people and that only people pay taxes.

It seems to me that every business has some sort of return on investment they are striving for, and that a corporate income tax is just another expense that must be collected and passed on like sales tax. It seems strange to me that the public can see they pay sales tax but support politicians that say they are going to increase the tax on 'big business'.

So what do others think? The Republican debate ask a question like 'Which section of society pay an unfair burden of income tax The Rich, The Middle Class, The Poor, Corporations'. No one even mentioned Corporations don't pay tax, people do.

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Old 12-12-2007, 04:02 PM   #2
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I listened to most of the Republican debate this afternoon and did hear at least one candidate mention it. Corporate taxation has always been a "pass through" tax which the purchaser of the product pays. Just another hidden tax -- and, of course, there are a lot more people do not see and the media just ignores. Some proponents of the "Fair Tax" also never mention that corporate taxation is one that would go away under the "Fair Tax". Personally I would like to see something like the "Fair Tax" to become law, but I fear it will never happen because of all of the "hidden taxes". Frankly, I do not think it will happen and I doubt any one can even identify all of the hidden taxes much less end them. Some "taxes" are now even know by other names like "user fees", "adjustment fee", or some other convoluted term.

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Old 12-12-2007, 09:26 PM   #3
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I was very surprised about some actual debate on this recently, at our state level. In Illinois, our Governor proposed increasing corporate taxes. You know, make 'them' pay their 'fair share'.

The surprise to me was - almost everyone saw through this. He got attacked on all sides, with comments that the corporations will just pass the tax on to the citizens, business will flee the state, we will lose jobs, etc, etc, etc. Man, he was hot on this plan for a while, but dropped it like a rock after a month of backlash.

So, why not drop federal corporate taxes also? I think a NST ('fairtax') is very unlikely to get enough support, but dropping corp tax seems like a great first step at simplifying the tax code. Why not just do it?

When I've mentioned this before, some people claim that the businesses will not pass the savings on to the customer. I'm sorry, but markets just don't work that way. And if there are some non-free markets, well we are getting screwed anyway, I don't think this will make matters worse.

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Old 12-13-2007, 05:02 AM   #4
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Dropping the corporate tax will also have the favorable outcome of having more foreign corporations invest in the USA. It's one less barrier for them to be profitable and it will create a huge surge in jobs here. It turn, that will drive up revenue to the government in the form of payroll and income taxes, so everyone wins.
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Old 12-13-2007, 06:05 AM   #5
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Gotta admit, as liberal a dem as I am, I have always though corporate income taxes to be strange. They seem designed to handicap the source of our economic well being. But then, hijacking the thread, employer based health insurance does the same thing and is just as strange.
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Old 12-13-2007, 06:53 AM   #6
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Originally Posted by donheff View Post
Gotta admit, as liberal a dem as I am, I have always though corporate income taxes to be strange.
And as a liberal dem - you should be outraged at corporate taxes!

Corporate taxes are part of (hidden as the OP mentioned) the cost of all products. When a poor person buys a pound of potatoes, they pay the exact same hidden corporate taxes (with no 'pre-bates') that the rich person pays. Nothing progressive about it.

And it is even worse. I know I mentioned this on an earlier thread, but the corporation not only pays people to comply with tax laws, but they pay people to (legally) avoid taxes. So we pay for them to avoid taxes, and then we need to make it up somewhere else in our taxes - a double whammy!

Plus, the increase in our competitiveness in the world market that was mentioned - what more could we ask for?

I think the most realistic approach at tax reform would be to eliminate corporate taxes - I can't see a single argument in support of corporate taxes, since they are just passed on to the consumer (but I'm willing to listen).

But I won't listen to vague claims that the savings won't be passed on to the consumer without some realistic examples - that is just ignorance of how free markets work.


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