Obama's Latest Speech

[GarMan]

Oh, trust me, they've become experts at tax evasion as well.  I do represent these people, afterall.

Oh come on...  Really?  Corporations have just as much of a self-preservation instinct as individuals.  There's no doubt that there are some shady operations out there, like Enron and others, but most don't evade taxation. 

This study, which includes the graph shown below, indicates that the amount of corporate taxes as a percentage of the GDP is lower than all other nations.  This reflects the amount of taxes actually collected, as opposed to general tax rates which don't take into account deductions.

OK... OK...  We're dancing around each other on this one.  You're using GDP for your relative comparison.  You're not using the effective tax rates or the actual total revenues collected.  Your GDP comparison is simply smoke-and-mirrors.  You've also referenced a pro-tax organization's study.  You've got to be phucking kidding me!!!

While most other nations do have lower corporate tax rates, they've also gotten rid of many deductions and loopholes, whereas the U.S. has increased them.

Agreed... 

Well, yes, but if we're still talking about the top 1% of earners, then it's worth mentioning that they pay only 4.1% of federal payroll taxes.  But if you're referencing this tax merely to point out that it's arbitrarily present for the purpose of collecting more taxes from businesses, then yes, I agree.

You love the games...  We're talking about corporations that typically employ individuals at various levels.  It is approximately 7.5% for individuals earning less than $106,800, and because of the cap for Social Security, they only pay 2.9% on income above that level. 

Yes, the rates themselves are higher.  But these rates are only applied to your taxable income.  When you factor in all of the deductions that are available, your taxable income decreases.  Again, this is why the U.S. actually collects less corporate taxes (and all taxes in general) as a percentage of GDP than other countries. 

Well...  Yes...  But, does that mean we need to tax corporations further?  I mean, if you confiscate more of the corporation's profits through increased taxation, isn't it obvious that they'll have less money to invest in corporate development initiatives and the hiring of additional employees?  And, if you let the corporation hire additional resources with those profits, wouldn't the government also collect more revenues on the personal income paid to those new employees?  I know this is simplified, but you understand my point. 

Aside from that, do we follow suit just because other nations are doing it?  The United States is not like other nations.  While they are collecting higher revenues as a percentage of GDP, we are collecting higher actual revenues because we have encouraged economic growth and prosperity at rates that have historically exceeded all other nations.  We have far more corporations than most other countries.  This is not necessarily a function of our population.  It's a function of our economic freedoms.  I continue to be astonished by the level of taxation in Europe.  Somehow, many believe that we should be judged by those thresholds.  The comparable payroll taxes in many European nations approach 100%.  Why start a company?  Why stay in business?  Why operate in a country like that?  Do you really want to bring that here?  Spain's unemployment rate exceeds 20% now.  In fact, most unemployment rates throughout Europe have far exceeded that of the US over the last several decades.  Is that what you would propose for the United States?

[GarMan]

I think the following best summarizes my position on this...

A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities.

Thomas Jefferson, First Inaugural Address, 1801

[wreckingball]

No wonder Jefferson died penniless in Monticello.

[wreckingball]

"It is a good thing for an uneducated man to read books of quotations." -- Winston Churchill

 

[Vandy Vol]

Oh come on...  Really?  Corporations have just as much of a self-preservation instinct as individuals.  There's no doubt that there are some shady operations out there, like Enron and others, but most don't evade taxation.

I didn't say that most evaded taxation.  What I'm saying is that the complexity of the tax code has created a variety of deductions, many of which can be obtained by utilizing "creative accounting."  Just because something looks correct on paper doesn't mean it's actually so.

You're using GDP for your relative comparison.  You're not using the effective tax rates or the actual total revenues collected.

GDP can be calculated in a few different ways, but generally speaking, it's representative of companies' and individuals' economic profitability.  If you're collecting a lower percentage of GDP, then you're collecting a smaller percentage of their collective incomes.  Smaller percentage of income = lower actual tax rate, regardless of what the base tax rates are.

But, even if this doesn't persuade you, look at it this way:  A Government Accountability Office study  determined that, between 1998 and 2005, a majority of U.S. controlled corporations (meaning they were domestically incorporated and not foreign corporations) reported no tax liability each year.  And by majority, I mean that the statistic consistently hovered around 60% of corporations that reported no tax liability.

Even assuming that the other 40% of corporations paid the absolute maximum of 45% in corporate taxes (which is highly unlikely), this would mean that the average percentage paid in corporate taxes (taking into account the 60% of those corporations who paid 0% due to reducing their taxable income to $0 with deductions) is 18%.  This is slightly more than half of Japan's corporate tax rate, and would put the U.S. somewhere around 30th in comparison to other countries' tax rates.

You've also referenced a pro-tax organization's study.  You've got to be phucking kidding me!!!

Pro-tax?  They were a driving factor in bringing about the 1986 tax reform which cut taxes.  Yes, they're in favor of making sure the rich pay their fair share, but I wouldn't classify this as being "pro-tax," or even "pro-tax for the rich."

If you've ever read any of their publications, then you'll notice a theme that is recurring, and it's a theme that is very similar to what I've stated here:  Many corporations don't pay any tax at all due to deductions and loopholes, and many others pay much less in taxes than the tax rate would indicate.  In comparison to other countries, many companies in America pay less in taxes than they would elsewhere.

All of them?  No, of course not.  There are those companies that may not qualify for many of the deductions, but most do.

But, just in case you still don't trust the CTJ, you can reference others, including government agencies and economic scholars, who have stated the same:

http://www.nytimes.com/2011/05/03/business/economy/03rates.html?_r=1

You love the games...  We're talking about corporations that typically employ individuals at various levels.  It is approximately 7.5% for individuals earning less than $106,800, and because of the cap for Social Security, they only pay 2.9% on income above that level.

There aren't any games here.  I'm merely pointing to a statistic which states that 4.1% of the total payroll taxes are paid by the top 1% of taxpayers.  I was just pointing out the fact that, if we were still referencing the top 1% of earners, then they pay very little into payroll.

Well...  Yes...  But, does that mean we need to tax corporations further?  I mean, if you confiscate more of the corporation's profits through increased taxation, isn't it obvious that they'll have less money to invest in corporate development initiatives and the hiring of additional employees?  And, if you let the corporation hire additional resources with those profits, wouldn't the government also collect more revenues on the personal income paid to those new employees?  I know this is simplified, but you understand my point.

I didn't say they should be taxed further.  I was just pointing out that the comparison of the tax rates here to other countries' tax rates is flawed, because it is not taking into account the variety of deductions which ultimately reduces the final percentage you pay in the form of tax.

Aside from that, do we follow suit just because other nations are doing it?  The United States is not like other nations.  While they are collecting higher revenues as a percentage of GDP, we are collecting higher actual revenues because we have encouraged economic growth and prosperity at rates that have historically exceeded all other nations.  We have far more corporations than most other countries.  This is not necessarily a function of our population.  It's a function of our economic freedoms.  I continue to be astonished by the level of taxation in Europe.  Somehow, many believe that we should be judged by those thresholds.  The comparable payroll taxes in many European nations approach 100%.  Why start a company?  Why stay in business?  Why operate in a country like that?  Do you really want to bring that here?  Spain's unemployment rate exceeds 20% now.  In fact, most unemployment rates throughout Europe have far exceeded that of the US over the last several decades.  Is that what you would propose for the United States?

Again, there was no advocating that we follow other countries' examples.  I was merely pointing out the flaw in comparing base tax rates.

[Vandy Vol]

Youre actually right. The more simple and flat they make the tax code, the less people can and want to evade. The revenues WILL go up.  So why doesn't he do it? When you can get more by requiring less, then why not do it? The guy has some serious issues.

I would assume it's a political thing.  Cutting taxes for the middle and lower class, who make up the majority of your voters, sounds better than raising taxes for them.  The CTJ has pushed over the years for the reduction of taxes in combination with the reduction of tax loopholes.  Reagan somewhat listened to them, but since then a variety of new loopholes and deductions have come about.

Throwing out thousands of statutory provisions related to tax is a scary concept.  I agree that this is what we need to do, but from a legislative and judicial point of view, it's a daunting task.  I think the best case scenario would be for the government to slowly but surely cut back the tax code until we reach an ideal and simple tax code that allows for less evasion/avoiding, and promotes fairness in rates by having all individuals pay the same percentage, all corporations pay the same percentage, etc.

Unfortunately, this would probably take more than a decade to do.  You don't want to freak out the majority of voters by making sudden and drastic changes, even if realistically that is what is needed; people in masses don't think (or, rather, vote) clearly.  So with these gradual changes, you'd have to assume that your successor is going to continue it.  Otherwise, you'd never reach your end goal.

Someone is just going to have to swing their dick out and do it.  But because doing so would likely disenfranchise voters, especially if it wound up having negative effects (temporary or not), I don't foresee any politician choosing to take this route for quite some time.

[GarMan]

GDP can be calculated in a few different ways...

But, even if this doesn't persuade you, look at it this way:  A Government Accountability Office study  determined that, between 1998 and 2005, a majority of U.S. controlled corporations (meaning they were domestically incorporated and not foreign corporations) reported no tax liability each year.  And by majority, I mean that the statistic consistently hovered around 60% of corporations that reported no tax liability.

Do you realize how many corporations exist that do not make a profit?  If there's no profit, there's no tax liability, and that's before we ever get into the deductions and depreciation.  This 60% figure does not phase me, and I'm surprised that it's not significantly higher.  I know of several companies that have been operating at a loss for years...  A certain Detroit based industry comes to mind.  How do you squeeze blood from a turnip?

Even assuming that the other 40% of corporations paid the absolute maximum of 45% in corporate taxes (which is highly unlikely), this would mean that the average percentage paid in corporate taxes (taking into account the 60% of those corporations who paid 0% due to reducing their taxable income to $0 with deductions) is 18%.  This is slightly more than half of Japan's corporate tax rate is, and would put the U.S. somewhere around 30th in comparison to other countries' tax rates.

OK...  We're not following each other.  Let's try this...  The federal corporate tax rate in the US is 35%.  By the time you apply depreciation and other deductions, it's less than that.  You're claiming that we likely end up around 18% with your fuzzy-math above, but PWC claims that it's nearly 10 points higher at 27.7% exceeding that of Europe by 5+%. 



Now, we haven't really touched on this, but here's the fallacy behind many of these "Corporate tax rate - GDP comparisons" to other countries.  Even if you look at corporate tax returns submitted to the IRS and compare them with our nation's GDP to get the "Percentage of GDP", does this adequately represent the level of taxation of America's business community, and would you expect that value to be a statistic to compare with other countries?  What about the advent of "new" pass-through entities?  I know of several former corporations and partnerships that converted to LLCs and LLPs.  No more corporate tax returns...  No more tax revenues collected or necessarily reported as corporate income...  Doesn't this dilute the statistic?  (The CBO believes so...)

Pro-tax?  They were...

If you've ever read any of their publications, then you'll notice a theme that is recurring, and it's a theme that is very similar to what I've stated here:  Many corporations don't pay any tax at all due to deductions and loopholes, and many others pay much less in taxes than the tax rate would indicate.  In comparison to other countries, many companies in America pay less in taxes than they would elsewhere.

It's not a loophole if it's law, but don't take me wrong here.  I agree that we need to simplify the tax code, but I do not believe that we should look to confiscate more profits from the job creators.  That's what I saw in that study. 

All of them?  No, of course not.  There are those companies that may not qualify for many of the deductions, but most do.

But, just in case you still don't trust the CTJ, you can reference others, including government agencies and economic scholars, who have stated the same:

http://www.nytimes.com/2011/05/03/business/economy/03rates.html?_r=1

It's slightly dated, but here's one for you from the Congressional Budget Office...  Look at the "Effective Marginal Tax Rates" and note their similarity to PWC's results.  The term "effective" identifies the physical rate as a percentage of actual income paid as federal tax revenue. 
http://www.cbo.gov/ftpdocs/69xx/doc6902/11-28-CorporateTax.pdf

There aren't any games here.  I'm merely pointing to a statistic which states that 4.1% of the total payroll taxes are paid by the top 1% of taxpayers.  I was just pointing out the fact that, if we were still referencing the top 1% of earners, then they pay very little into payroll. 

It's games with numbers, and it's intentionally misleading.  The 4.1% rate is a blended rate for the top 1% of wage earners.  While their effective percentage may be less as a portion of overall income, they pay the maximum amount of Social Security tax and continue to pay 2.9% across all of their income as their Medicare tax. 

I didn't say they should be taxed further.  I was just pointing out that the comparison of the tax rates here to other countries' tax rates is flawed, because it is not taking into account the variety of deductions which ultimately reduces the final percentage you pay in the form of tax. 

The PWC chart above covers this... 

[Vandy Vol]

Do you realize how many corporations exist that do not make a profit?  If there's no profit, there's no tax liability, and that's before we ever get into the deductions and depreciation.  This 60% figure does not phase me, and I'm surprised that it's not significantly higher.  I know of several companies that have been operating at a loss for years...  A certain Detroit based industry comes to mind.  How do you squeeze blood from a turnip?

If 60% of America's corporations aren't making a profit, then we've got more problems than tax rates.  Do you seriously think that this many corporations aren't paying taxes due to the fact that they are not making a profit?  I run a business that's only two years old, and even I've had to pay taxes on taxable profits for both years that we filed.

But just to show you how absurd corporate taxes in the United States can be,  Exxon Mobil made $19 billion in profits in 2009.  Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.

Bank of America received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.

Over the past five years, General Electric made $26 billion in profits in the United States, yet it received a $4.1 billion refund from the IRS.

Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.

Valero Energy, the 25th largest company in America with $68 billion in sales last year, received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.

Goldman Sachs in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.

Over the past five years, Carnival Cruise Lines made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.

These statistics are from Senator Bernie Sanders, and I honestly haven't taken the time to prove or disprove them, but I personally can believe that they're true.  I've seen enough shenanigans pulled with the tax code to know that zeroing out your income, even as a multi-million dollar corporation, is entirely possible.

If all corporations were being raped by the United States tax system, then I could agree with you.  But in light of what many corporations have been able to get away with, I simply can not sympathize with multi-million and billion dollar industries that are paying no taxes whatsoever.
 

OK...  We're not following each other.  Let's try this...  The federal corporate tax rate in the US is 35%.   By the time you apply depreciation and other deductions, it's less than that.  You're claiming that we likely end up around 18% with your fuzzy-math above, but PWC claims that it's nearly 10 points higher at 27.7% exceeding that of Europe by 5+%.

The PWC study to which you're referring only took into account the 2,000 largest world companies listed by Forbes.

http://businessroundtable.org/uploads/studies-reports/downloads/Effective_Tax_Rate_Study.pdf

When you take into account all corporations within the United States, as the study that I cited did, then you see that the majority of them report no tax liability whatsoever.

Now, we haven't really touched on this, but here's the fallacy behind many of these "Corporate tax rate - GDP comparisons" to other countries.  Even if you look at corporate tax returns submitted to the IRS and compare them with our nation's GDP to get the "Percentage of GDP", does this adequately represent the level of taxation of America's business community, and would you expect that value to be a statistic to compare with other countries?  What about the advent of "new" pass-through entities?  I know of several former corporations and partnerships that converted to LLCs and LLPs.  No more corporate tax returns...  No more tax revenues collected or necessarily reported as corporate income...  Doesn't this dilute the statistic?  (The CBO believes so...)

First, these pass through entities aren't new.  LLCs are treated as partnerships for tax purposes, and partnerships have been around for a loooong time.  But, even if you were to narrow the discussion down to LLCs and similar entities, they've been around since the 1970's.  So, generally speaking, they're not so new.

Second, the graph that I posted addresses your concerns either way.  It not only shows the percentage of GDP that the U.S. collects from corporate taxes, but it shows the percentage of GDP that the U.S. collects from all taxes.  This would include taxes from LLCs and other pass through entities, such as partnerships.

It's not a loophole if it's law, but don't take me wrong here.  I agree that we need to simplify the tax code, but I do not believe that we should look to confiscate more profits from the job creators.  That's what I saw in that study.

If you don't think that there are loopholes in the law, then I don't know what to tell you.

It's slightly dated, but here's one for you from the Congressional Budget Office...  Look at the "Effective Marginal Tax Rates" and note their similarity to PWC's results.  The term "effective" identifies the physical rate as a percentage of actual income paid as federal tax revenue. 
http://www.cbo.gov/ftpdocs/69xx/doc6902/11-28-CorporateTax.pdf

I find it somewhat ironic that the study to which you refer compares the taxes collected to the GDP, and also shows that the United States is inferior to many other countries in that regard.

Additionally, the study to which you refer focuses upon the investment incentives of corporations; it is not focused upon a pure comparison of corporate tax rates amongst various countries.

Why is this important?  Well, because the CBO study didn't take into account all corporations.  Your cited study states the following on page 14:  "CBO has limited the comparisons it presents to the top corporate tax rates in those schedules. An international comparison of, for example, intermediate statutory corporate tax rates would add little information about investment incentives because most corporate investment is undertaken by corporations that face the highest statutory rates."

Therefore, just as with the PWC study, only the largest corporations with the highest tax rates were taken into consideration.  If you want to talk about number games and only examining one piece of the puzzle, then the studies that you've cited exemplify that very well.

It's games with numbers, and it's intentionally misleading.  The 4.1% rate is a blended rate for the top 1% of wage earners.

I don't think you understand what I am saying.  The 4.1% is not the rate that they're paying.  The 4.1% statistic represents a part of what was collected overall.

To simplify it, if the United States government collected a total of $100 in payroll taxes, the top 1% of income earners would have paid $4.10 in payroll taxes.  The remainder ($95.90) is paid by the other 99% of taxpayers.  This comes from companies that aren't in the top 1% of earners, as well as self-employed individuals who pay both the employee and employer's share of payroll taxes.

[GH2001]

Even if you concede the top 1% with the 4.1% number, that's still a progressive tax system by a 4 to 1 margin.

[Vandy Vol]

Even if you concede the top 1% with the 4.1% number, that's still a progressive tax system by a 4 to 1 margin.

If you're looking at it from the perspective that they are only 1% of income earners, yet they're paying 4.1% of a particular tax, then yes, it's a 4 to 1 ratio in regard to payment vs. number of people.

But, you do have to take into consideration that the top 1% earns significantly more, and thus the amount of taxes that they pay is going to be higher.  So it shouldn't be compared with a ratio that represents payment vs. number of people; it should be compared with a ratio that represents payment vs. taxable money.  Afterall, the amount of taxes that you pay is dependent upon the amount of taxable money.  Just because a group of people makes up 1% of taxpayers doesn't mean they'll pay 1% of the total tax collected.

[GH2001]

If you're looking at it from the perspective that they are only 1% of income earners, yet they're payoing 4.1% of a particular tax, then yes, it's a 4 to 1 ratio in regard to payment vs. number of people.

But, you do have to take into consideration that the top 1% earns significantly more, and thus the amount of taxes that they pay is going to be higher.  So it shouldn't be compared with a ratio that represents payment vs. number of people; it should be compared with a ratio that represents payment vs. taxable money.  Afterall, the amount of taxes that you pay is dependent upon the amount of taxable money.  Just because a group of people makes up 1% of taxpayers doesn't mean they'll pay 1% of the total tax collected.

I guess what I'm saying is that it should. That's what a flat tax is all about. You basically have the top 50% earners paying about  80-90% of the tax. That is not apportioned, its progressive. And extremely arbitrary must admit. Some politicians simply have issues with people who make more money, as if they just have it to blow. The tax system should not be ran like Robinhood. At least he admitted to that ideology with Joe the Plumber - "spread the wealth". If those who make the most could keep most of it, the wealth would spread by the natural free market means via investment and job creation. It works and has historically. It's pretty apparent the ONEs way does not. The proof is in the pudding.

[Vandy Vol]

I guess what I'm saying is that it should. That's what a flat tax is all about. You basically have the top 50% earners paying about  80-90% of the tax. That is not apportioned, its progressive. And extremely arbitrary must admit. Some politicians simply have issues with people who make more money, as if they just have it to blow. The tax system should not be ran like Robinhood. At least he admitted to that ideology with Joe the Plumber - "spread the wealth". If those who make the most could keep most of it, the wealth would spread by the natural free market means via investment and job creation. It works and has historically. It's pretty apparent the ONEs way does not. The proof is in the pudding.

I think I may be misunderstanding you, or vice versa.

If a flat tax rate on income is imposed, then you've still got to use the ratio of payment vs. taxable money, as opposed to payment vs. number of people.  Let's say you have a society of 100 people.  Those 100 people collectively earn $1,000.  One guy earns $200, which is 20% of the society's total income.  The other 99 people collectively earn $800.

If the flat tax rate is 10%, then that one guy will pay $20.  The other 99 people will collectively pay $80.  In total, $100 was collected in tax.  The one guy who earned much more than everyone else paid 20% of the total tax collected, but he only constitutes 1% of the population.

So even with the flat rate, the top 1% is not going to pay only 1% of the total taxes collected.  The only way that would happen is if the top 1% of earners only earned 1% of the total income reported for all citizens.  And if that were the case...well, then they would no longer be the top 1% of income earners.

[wreckingball]

I say that we do away with inheritance and impose a 100% death tax.

[GarMan]

If 60% of America's corporations aren't making a profit, then we've got more problems than tax rates.  Do you seriously think that this many corporations aren't paying taxes due to the fact that they are not making a profit?  I run a business that's only two years old, and even I've had to pay taxes on taxable profits for both years that we filed.

Seriously...  Two of my last employers had failed to turn a profit for most of the time that I have known of them.  Another only recently started turning a profit.  This should not be surprising... 

But just to show you how absurd corporate taxes in the United States can be,  Exxon Mobil made $19 billion in profits in 2009.  Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.

Wow...  Now, let's look at the facts pulled from their latest annual report. 
- To earn the $19B, they conducted $301B in business.  That's a profit margin of 6.3%.  Pretty crappy if you ask me...
- According to page 62 of their latest annual statement, they actually paid over $15B in various income taxes with an effective tax rate of 47%.   
- On the same page, they paid another $26B in sales-based taxes.
- Also on the same page, they paid another $37.5B in various other taxes and duties.
- In summary, they paid nearly $79B to various federal, state and local taxing authorities taking what-could-have-been a 30% profit margin all the way down to 6.3%. 

Those mean-ol' bad-ol' corporations...  They need to pay their fair share!!!  Of course, the various gubm'et taxing authorities profited more from Exxon's operations than the company itself.  Maybe, they did receive a federal rebate for $156M, but the feds got their money out of them.  I'm sure of it.

Bank of America received...
Over the past five years, General Electric made...
Chevron received...
Valero Energy...
Goldman Sachs...
Over the past five years, Carnival Cruise Lines made...

These statistics are from Senator Bernie Sanders, and I honestly haven't taken the time to prove or disprove them, but I personally can believe that they're true.  I've seen enough shenanigans pulled with the tax code to know that zeroing out your income, even as a multi-million dollar corporation, is entirely possible.

I disproved the first one.  These stats are not entirely accurate.  They're dishonest interpretations of the facts designed to demonize corporations. 

If all corporations were being raped by the United States tax system, then I could agree with you.  But in light of what many corporations have been able to get away with, I simply can not sympathize with multi-million and billion dollar industries that are paying no taxes whatsoever.

Exxon's getting raped, if you ask me...  And, the rapists are getting away with it.
 

The PWC study to which you're referring only took into account the 2,000 largest world companies listed by Forbes.

http://businessroundtable.org/uploads/studies-reports/downloads/Effective_Tax_Rate_Study.pdf

When you take into account all corporations within the United States, as the study that I cited did, then you see that the majority of them report no tax liability whatsoever.

Of course!!!  Again, many corporations exist with a minimal profit.  I know of several publicly traded software companies that have been in existence for 10+ years with hundreds of employees that have never turned a profit.  By the way, that doesn't necessarily mean that they don't pay any federal taxes.  It just means that they don't pay a substantial amount of federal income tax. 

First, these pass through entities aren't new.  LLCs are treated as partnerships for tax purposes, and partnerships have been around for a loooong time.  But, even if you were to narrow the discussion down to LLCs and similar entities, they've been around since the 1970's.  So, generally speaking, they're not so new.

This is an example of why you were recently singled out.  I used quotations around the term, "new".  I realize that they are not actually new, but relatively recent legislation has made LLCs and LLPs attractive alternatives to the typical C Corp structure.  Many organizations including some relatively large corporations reorganized under these pass-through entity structures.  Their income is no longer reported as "corporate income" and would not show up in most of the corporate comparison studies that you referenced. 

Second, the graph that I posted addresses your concerns either way.  It not only shows the percentage of GDP that the U.S. collects from corporate taxes, but it shows the percentage of GDP that the U.S. collects from all taxes.  This would include taxes from LLCs and other pass through entities, such as partnerships.

Sure...  But, the way the corporate chart had been referenced was intentionally misleading.

If you don't think that there are loopholes in the law, then I don't know what to tell you.

Most of the time, those loopholes that you reference are intentional. 

I find it somewhat ironic that the study to which you refer compares the taxes collected to the GDP, and also shows that the United States is inferior to many other countries in that regard.

There you go again using terms like inferior.  Really?  Didn't you also say, "there was no advocating that we follow other countries' examples"???  YOU just judged the US as being inferior.  Personally, I find it to be far superior along with all of our economic freedoms... 

Additionally, the study to which you refer focuses upon the investment incentives of corporations; it is not focused upon a pure comparison of corporate tax rates amongst various countries.

Why is this important?  Well, because the CBO study didn't take into account all corporations.  Your cited study states the following on page 14:  "CBO has limited the comparisons it presents to the top corporate tax rates in those schedules. An international comparison of, for example, intermediate statutory corporate tax rates would add little information about investment incentives because most corporate investment is undertaken by corporations that face the highest statutory rates."

Therefore, just as with the PWC study, only the largest corporations with the highest tax rates were taken into consideration.  If you want to talk about number games and only examining one piece of the puzzle, then the studies that you've cited exemplify that very well.

Unbelievable...  Your pure comparisons of corporate tax rates amongst various countries is incomplete as I have explained.  These studies were designed to intentionally misrepresent the facts.  And then, you use terms like inferior referencing your incomplete and misleading studies. 

I don't think you understand what I am saying.  The 4.1% is not the rate that they're paying.  The 4.1% statistic represents a part of what was collected overall. 

OK...  So, it's not really their effective rate.  It's just their percentage of the total paid into the system. 

At a minimum, it will be 2.9% plus the portion of the 7.5% on the first $106,800 they earn.  There are approximately 1.5M taxpayers making up this top 1% who earn approximately $2T.  Doing the math from those numbers, the average approximate effective rate is 3.25% with those at the bottom of the group paying an effective rate of 5.2% and those at the top paying a minimum of 2.9%.  Of course, you don't necessarily pay this tax on dividends or other forms of income, so this is just an ugly approximation. 

To simplify it, if the United States government collected a total of $100 in payroll taxes, the top 1% of income earners would have paid $4.10 in payroll taxes.  The remainder ($95.90) is paid by the other 99% of taxpayers.  This comes from companies that aren't in the top 1% of earners, as well as self-employed individuals who pay both the employee and employer's share of payroll taxes. 

Yes...  That seems more reasonable than the income tax disparity.  We all know, or should realize, that the top 1% will never receive any of those benefits.  Confiscating a portion of their income for the benefit of others is theft. 

[GarMan]

I say that we do away with inheritance and impose a 100% death tax.

I say that we revert back to our founding principles and abolish most forms of regulation and taxation on our job creators for half a decade.  We would reassert our global economic dominance and turn nation's economy around overnight. 

[GH2001]

, I would take Bernie Sanders with a cup of salt. A grain won't do. The guy thinks Obama is a right winger. In other words, he so out there to the left, he's about to fall off the edge. He isn't gonna paint capitalism or corporations in a positive light.


Garman, I hope wreckingball was kidding.

[GarMan]

Garman, I hope wreckingball was kidding.

Oh, I know, but I wasn't... 

[GH2001]

I think I may be misunderstanding you, or vice versa.

If a flat tax rate on income is imposed, then you've still got to use the ratio of payment vs. taxable money, as opposed to payment vs. number of people.  Let's say you have a society of 100 people.  Those 100 people collectively earn $1,000.  One guy earns $200, which is 20% of the society's total income.  The other 99 people collectively earn $800.

If the flat tax rate is 10%, then that one guy will pay $20.  The other 99 people will collectively pay $80.  In total, $100 was collected in tax.  The one guy who earned much more than everyone else paid 20% of the total tax collected, but he only constitutes 1% of the population.

So even with the flat rate, the top 1% is not going to pay only 1% of the total taxes collected.  The only way that would happen is if the top 1% of earners only earned 1% of the total income reported for all citizens.  And if that were the case...well, then they would no longer be the top 1% of income earners.

All I really want is for the tax RATE to be the same for all. I get the rest of what you're saying. I think we agree.

[GarMan]

All I really want is for the tax RATE to be the same for all. I get the rest of what you're saying. I think we agree. 

Flat tax everyone using the same rate across corps and personal and introduce modest regulations and reasonable deductions over time...  You can't enforce Clean Air standards on a company overnight without giving them the opportunity to offset those costs.  If our gubm'et keeps it up, more are just going to offshore everything or transfer to Bermuda, Ireland and New Zealand as many have already done. 

[Vandy Vol]

Seriously...  Two of my last employers had failed to turn a profit for most of the time that I have known of them.  Another only recently started turning a profit.  This should not be surprising...

Wow...  Now, let's look at the facts pulled from their latest annual report. 
- To earn the $19B, they conducted $301B in business.  That's a profit margin of 6.3%.  Pretty crappy if you ask me...
- According to page 62 of their latest annual statement, they actually paid over $15B in various income taxes with an effective tax rate of 47%.   
- On the same page, they paid another $26B in sales-based taxes.
- Also on the same page, they paid another $37.5B in various other taxes and duties.
- In summary, they paid nearly $79B to various federal, state and local taxing authorities taking what-could-have-been a 30% profit margin all the way down to 6.3%.

I disproved the first one.  These stats are not entirely accurate.  They're dishonest interpretations of the facts designed to demonize corporations.

The fact still stands that they paid no federal income taxes for tax year 2009, regardless of what they did or didn't do in 2010.  This alone proves my point that many corporations, even multi-million dollar corporations, are able to zero out their taxable income due to the variety of deductions, exemptions, and credits that exist.

Essentially, I think you're missing my main point here.  No, not every corporation zeroes out its taxable income with deductions.  And no, even those corporations who can do that aren't able to do it every year.  But the fact that they can and do zero out their income completely despite making millions in profits exemplifies why the tax code as it stands is completely screwy.

Do I think that corporations which have paid 47% of their income into taxes should be taxed more just because they still have millions of dollars left over?  No, of course not.  My only point is that even this particular corporation which got raped in 2010 didn't pay anything in 2009 in income taxes.  The fact that they did this in 2009, even if they get raped in subsequent years, shows me that there's a problem with the tax code that needs to be fixed.  And yes, the fact that they then turned around in 2010 and got raped also shows me that there's a problem with the tax code on the opposite end of the spectrum that needs to be fixed.

Sure...  But, the way the corporate chart had been referenced was intentionally misleading.

All of the studies you referenced dealt with corporations, not "companies" which could include pass through business entities.  All of your initial posts prior to the chart I presented was in reference to the corporate tax rates.  It wasn't until after the chart was posted that you brought up pass through entities, so I'm not sure how my use of a corporate tax rate chart was misleading when the topic was, in fact, corporate tax rates.

There you go again using terms like inferior.  Really?  Didn't you also say, "there was no advocating that we follow other countries' examples"???  YOU just judged the US as being inferior.  Personally, I find it to be far superior along with all of our economic freedoms...

You're creating strawman arguments and comparing apples and oranges at the same time.

Strawman argument:  I didn't state that we should follow their examples.  Yes, our current method of assessing and collecting taxes is inferior to many other countries, as other countries are able to collect a larger percentage of the GDP in the form of tax.  This doesn't mean that we should implement their system of collecting taxes.  What it means is that we need to better our system of collecting taxes.  Whether we should do so by adopting their system or creating our own system is an entirely different point, and I've never made any statements addressing that point one way or the other.

Erroneous comparison:  The fact that the U.S. has more economic freedoms doesn't relate to whether its ability to assess and collect taxes is better than other countries' abilities to do so.  Just because I state that we are inferior in one aspect doesn't mean that I also believe we're inferior in all other aspects, or that we're inferior in general.

Unbelievable...  Your pure comparisons of corporate tax rates amongst various countries is incomplete as I have explained.  These studies were designed to intentionally misrepresent the facts.

Ignore my study for a moment; we can get back to its accuracy or completeness at a later point in time if you desire to do so.

Look at what you've just said, and then look at your own studies.  Completeness?  Your studies didn't compare all corporations.  One compared the 2,000 largest corporations, and the other only compared corporations with the highest tax rates.  How is this a "complete" study which shows the average effective tax rate for American corporations when it doesn't even compare all American corporations?  How do you get an average by looking at the largest, most taxed corporations?  Am I going to get the average weight of Americans by studying the 2,000 fattest people?  That sounds incomplete to me.

Misrepresenting facts?  You're attempting to tell me that American corporations pay an average effective tax rate of X% by using a study which only took into account corporations with the highest tax rates.  And the purpose of the study wasn't even to compare tax rates; it was to look at investment incentives for corporations.  That sounds like a misrepresentation of facts to me, or at the very least a misapplication of a study to prove something that it wasn't meant to prove, nor is it capable of proving because it doesn't use statistics from all American corporations.