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Old 07-22-2013, 03:47 PM   #41
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That would be one, but all breaks for energy production should be deleted, including tax credits for one of my former employers, oil. Farm subsidies would be another area to stop preferential tax treatment There are lots more examples, and a lot of specific little loopholes for specific little industries. Sen. Coburn had a nice list a couple of years ago.
You failed to mention the biggest tax expenditure of all - tax-free employer provided health insurance and healthcare.
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Old 07-22-2013, 04:45 PM   #42
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We do? Care to provide some evidence to support your claims?

In May, the NYT reported an average of 29.1% overall for S&P 500 corporations from 2007-2012, with a lot of supporting detail... http://www.nytimes.com/interactive/2...axes.html?_r=0, including 16% for GE.

Don't get me wrong, I think we need simplification of our individual and corporate tax codes, though I am not holding my breath. But I'm very wary (and weary) of numbers reported seemingly from out of thin air...
Thanks for the links, though CTJ may have an agenda (CTJ’s funding comes from donations by individuals, labor unions, and other organizations).

However, though you didn't draw the comparison yourself, the 29.1% after federal, state & local taxes is more likely comparable to corporate taxes in other (competing) countries since few if any other countries have state & local taxation as I understand it.

And it's interesting that GE reports paying more in taxes than the media, even while admitting their tax rates are legally very low. Interesting which source(s) we choose to quote/believe.
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Old 07-22-2013, 05:44 PM   #43
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Thanks for the links, though CTJ may have an agenda (CTJ’s funding comes from donations by individuals, labor unions, and other organizations).

However, though you didn't draw the comparison yourself, the 29.1% after federal, state & local taxes is more likely comparable to corporate taxes in other (competing) countries since few if any other countries have state & local taxation as I understand it.

And it's interesting that GE reports paying more in taxes than the media, even while admitting their tax rates are legally very low. Interesting which source(s) we choose to quote/believe.
FWIW, here's a link to a NY Times article from 2011 which cites the same GE numbers for 2010 as the CTJ article cites for that year:

http://www.nytimes.com/2011/03/25/bu...anted=all&_r=0

I agree that it would be great if there were simplification (as well as more fairness) of both corporate and individual tax laws, but like yourself, I'm not holding my breath waiting for it to happen.

It's slightly encouraging that there are now international talks in an attempt to control the tax avoidance which many multinational companies engage in.
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Old 07-22-2013, 05:47 PM   #44
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While the headline suits your fancy, you need to dig deeper.

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.....According to the Wall Street Journal’s recent study of Congressional Budget Office numbers, corporations are paying an effective rate of 12.1%, the lowest in at least 40 years. So why are some of the biggest and most powerful entities in our society getting away with paying so little? The story is complicated, but the biggest factor in the recent collapse in corporate tax receipts appears to be a set of tax breaks built into recent stimulus efforts.

In 2010 and 2011, companies were allowed to deduct the full cost of the purchases of new equipment, while normally these costs would be expensed over several years. In 2012, this deduction will go down to 50% and be eliminated altogether thereafter, causing the effective tax rate to return to roughly the 25.6% average effective tax rate corporations paid since the late 1980s, according to CBO forecasts.

Of course that 25.6% number is still quite a bit lower than the nominal tax rate of 35%, the highest in the world behind only Japan....
Also, IIRC US corporate taxes are among the highest in the world and many believe adversely affect our competitiveness in the new global economy.

So if the average corp pays 25% and the remaining 75% is dividended to shareholders and the shareholders pay 15% then more than 1/3 of corporate profits are ultimately paid to the feds. I think that is plenty. If there were no preferential tax rate then the rate woudl be almost half [46% = 25% + 28%*(1-25%)]
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Old 07-22-2013, 05:52 PM   #45
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T.... For that matter, another way of handling the same things would be to tax doing a bad thing, but again, people object more to being punished by government for doing something instead of being rewarded by government for doing the opposite.
You mean, like penalizing taxing people who don't buy health insurance?
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Old 07-22-2013, 06:16 PM   #46
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While the headline suits your fancy, you need to dig deeper.



Also, IIRC US corporate taxes are among the highest in the world and many believe adversely affect our competitiveness in the new global economy.

So if the average corp pays 25% and the remaining 75% is dividended to shareholders and the shareholders pay 15% then more than 1/3 of corporate profits are ultimately paid to the feds. I think that is plenty. If there were no preferential tax rate then the rate woudl be almost half [46% = 25% + 28%*(1-25%)]
You used a lot of "ifs". I would hope that you are aware that few corporations actually pay those high tax rates. Or perhaps that doesn't suit your fancy?

http://www.nytimes.com/2013/07/02/bu...-tax-rate.html

Here's one quote: "The report found that even when foreign, state, and local taxes were included, the tax rate of large companies rose only to 16.9 percent of total income, still well below the official 35 percent."

Here's another: "As a percentage of federal tax revenue, corporate taxes have fallen to 9 percent from more than 30 percent in the 1950s."

The GAO report the NYTimes article cites has the following line:

For tax year 2010 (the most recent information available), profitable U.S. corporations that filed a Schedule M-3 paid U.S. federal income taxes amounting to about 13 percent of the pretax worldwide income that they reported in their financial statements (for those entities included in their tax returns).

Also this line:

However, GAO's 2008 report on corporate tax liabilities (GAO-08-957) found that nearly 55 percent of all large U.S.-controlled corporations reported no federal tax liability in at least one year between 1998 and 2005.
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Old 07-22-2013, 06:50 PM   #47
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You used a lot of "ifs". ....
Perhaps, but only one of the "if"s was really relevant.

Actually, all corporations pay 35% of their taxable income (before applicable credits) - that is just the way it works.

Any comparison of taxes paid to financial statement income is of questionable relevance - sort of like comparing apples and oranges. They are both measured very differently which is why deferred income taxes are accounted for in company financial statements and there is a reconciliation of the 35% statutory rate (in most cases) to the effective rate in the financial statement footnotes. In most cases the effective rates are lower because taxable income is lower than accounting income because of accelerated depreciation incentives, income not subject to tax, and other book/tax differences all of which are disclosed in the financial statement footnotes. Most of these differences will ultimately reverse (which is why they are required to be accounted for) and when they do the taxes will be paid.
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Old 07-23-2013, 01:01 PM   #48
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...I don't see anyone who would benefit from inflation, but perhaps I'm missing something.
I recommend you take the perspective of a borrower. Especially one who has a mortgage with the recent rates.

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...A fourth option is to start vigorously negotiating with those who provide what the government pays for, either directly or indirectly, forcing prices down wherever there are significant profits being earned at the public expense, as Medicare already does.
This is the myth of socialism. If Medicare is already doing this, isn't it obvious that it is failing? Seen the medical prices lately?
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Old 07-23-2013, 01:10 PM   #49
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This is the myth of socialism. If Medicare is already doing this, isn't it obvious that it is failing? Seen the medical prices lately?
Actually medicine decided that the hotel business represents how to go there is a rack rate that few pay, the medicare rate which is a lot lower, medicaid which is lower still, and then the rate insurance pays which is between medicare and the rack rate. The uninsured get the shaft in the system by paying the rack rate. I am suprised some insurnace companies don't introduce a discount card for maybe $50 a year that gets one their rates on all of medicine, after all the more business they do the more their negotiating power.
I recall seeing my late mothers hospital bill there was a total it was zeroed out and then the medicare rate was substituted which was a lot lower. Hospitals claim they don't make any money on this rate, but I would like to hear a discussion on what would happen if everyone got to pay this rate. Physicians who don't like it could leave the business that is all.

Of course perhaps the future of medicine might well be more like the college medical clinic, as it becomes more proceedure oriented and good electronic records come in, the physician in a given appointment may make little difference.
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Old 07-23-2013, 01:13 PM   #50
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If Medicare is already doing this, isn't it obvious that it is failing?
Your implication is a myth.

See how easy putting forward one's own personal opinion is?

Let's just agree to disagree.
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Old 07-23-2013, 01:28 PM   #51
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Seen the medical prices lately?
When we get our Medicare statements, we see two prices. One is the price that the provider puts down (which is without specificity) and the one Medicare pays them, which is a lot lower.

So, what medical prices are you referring to?
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Old 07-23-2013, 02:10 PM   #52
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What I'm referring to is the simple fact (I think we can all agree on this) that medical costs overall have risen faster than inflation.
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Old 07-23-2013, 02:51 PM   #53
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College textbooks also have been increasing in price faster than inflation. What meaning should we to ascribe to that?

The rate of inflation is, of course, an averaging of costs. Not everything that exists increases in price precisely in synch with every other thing: Some things will increase in price faster than inflation and some things will increase in price slower than inflation. That's always going to be the case.

Regarding healthcare: I don't know of another product or service which enjoys such strong demand, with such stringently applied barriers to entry to the marketplace, and suffers from such substantial lawsuit liability, that hasn't also experienced a uptick in prices. It's Economics 101: Supply and demand.

(Unremarkably, those parameters outline the solutions: Decrease demand substantially reducing the population - i.e., not practicable - allow anyone to offer medical services, create pharmaceuticals, etc., - i.e., not even remotely responsible - indemnify medical product and service providers - i.e., open the space up to negligence - etc.)
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Old 07-23-2013, 03:13 PM   #54
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Every product sold on the free market has its own rate of inflation (unless there are imposed price controls).

If I had the only car manufacturing plant in the U.S., and you had to buy from me, you would not get the deal you get at your local Honda dealer, for sure.
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Old 07-23-2013, 05:17 PM   #55
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You used a lot of "ifs". I would hope that you are aware that few corporations actually pay those high tax rates. Or perhaps that doesn't suit your fancy?
What's your fancy? It appears you'd like to see corporations pay more. Of course that just means you'll pay more for the products and services those corporations provide, which they will I turn pay in federal taxes. There are some exceptions/imbalances - that can probably only be addressed with simplification, but and large you/we pay all taxes directly or indirectly.
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Old 07-23-2013, 05:40 PM   #56
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What's your fancy? It appears you'd like to see corporations pay more. Of course that just means you'll pay more for the products and services those corporations provide, which they will I turn pay in federal taxes. There are some exceptions/imbalances - that can probably only be addressed with simplification, but and large you/we pay all taxes directly or indirectly.
Not sure I agree with that, but no sense rehashing old arguments

Corporate taxes as a % of total GDP really hasn't changed all that much over the past 30 years. Here is an excel graph using data from the St Loius Fed.
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File Type: jpg Corporate tax rate % GDP.jpg (66.5 KB, 4 views)
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Old 07-24-2013, 08:38 PM   #57
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What's your fancy? It appears you'd like to see corporations pay more. Of course that just means you'll pay more for the products and services those corporations provide, which they will I turn pay in federal taxes. There are some exceptions/imbalances - that can probably only be addressed with simplification, but and large you/we pay all taxes directly or indirectly.
If you don't want to comment about the articles and the data in the links I provided, that's fine. However, I would appreciate it if you don't presume to tell me what you think I'd like to see, followed by telling me about the ramifications of your misconceptions about me.

There are some issues concerning the US corporate tax code that I haven't formed conclusions about. I have read enough, however, to have concluded that it's a mess at the present time with wide disparities in how different industries as well as individual corporations fare under the current tangle of tax code. Many people have called for an overhaul.
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Old 07-24-2013, 08:54 PM   #58
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Old 07-24-2013, 09:39 PM   #59
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......I have read enough, however, to have concluded that it's a mess at the present time with wide disparities in how different industries as well as individual corporations fare under the current tangle of tax code. Many people have called for an overhaul.
Ah, ha! Something we can finally agree on!
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Old 08-22-2013, 07:23 AM   #60
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I don't think saying it is necessary is going to make the difference. I think those arguments have all been played out, and what we have now is going to be the way things are going to be going forward, until something different is introduced into the discussion.
I fear that the something different will be the slow motion train wreck of several states reneging on their debts. Washington does not come to the rescue. A state can't be declared bankrupt so while this plays out in the courts and in Washington enough state residents head for greener pastures across the state lines that it becomes the major force on many state's economic healths.

Some see a monumental crisis, others an opportunity. Some states break with the past and become individual economic experiments. There's a possibility the losers in this scenario would learn from the winners.
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