Because not all taxes are equal. For example, property taxes are paid no matter how much money a company makes or loses. Federal corporate taxes, however, are on profits after expenses. Big difference.
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I personally think we should move to no corp taxes and tax only individual income. I think it would solve a lot of issues as it pertains to employment. Individuals are a lot easier to tax (canât hide an individual in a shell company) with far less complex taxes and structures, and far less likely to move their domicile to a favorable tax haven.
Cut corp taxes to zero and increase individual taxes by the amount of revenue lost (including the removal of special tax treatment for dividends and capital gains) and I think it would have a very positive impact on our economy.
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I personally think we should move to no corp taxes and tax only individual income. I think it would solve a lot of issues as it pertains to employment.
I heard this is how it works in Europe. No or trivial corpo tax, then heap big individual income tax that actually pays for things.
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And people would be aghast at how much theyâre paying and start to complain about it, just as they do now, even with the lowest personal income tax rates in 50 years. In theory, fine. In practice: leads to more of the same tax complaining, tax avoidance, payment under the table, stock shenanigans, etc.
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Are tax complaints really a valid objection?
Tax avoidance (including various shenanigans) is (are) likely far easier with a corporation than with an individual.
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You have been treated like a pet rock. Repeating that line of crap.
No one is envious. We want things to run better here. That means paying a higher marginal tax rate.
It does not mean going with the âMe Generationâ garbage. Self-centeredness should not be an economic plan.
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Because their location is third rate.
NYC does not generally offer rebates or incentives after AOC and a few people put a stop to it. All the major tech companies came to NYC without getting any incentives and set up HQ there. Location, location, location.
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Leading to 100% offshoring.
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I want a higher tax rate on corporations.
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I do not want any corporation paying taxes.
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I want them reinvesting in the US to avoid paying taxes.
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This would bring down inflation in the long term.
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There is no evidence anywhere in history that this would be beneficial. Just consider that TFG cut corporate tax rates and the deficit swelled under him. But sure, go ahead and increase my tax burden for zero benefit to me and somehow call that a âwinâ. Why would any corporation pay me more salary? Or lower the cost of my goods and services? They wonât. Because taxes never enter that part of the equation to begin with. The tax burden has zero impact on wages, zero impact on prices. Taxes are all post-expenses.
If a company really wants to lower their tax burden all they need to do is lower their taxable income: raise salaries, increase benefits, spend more on R&D, etc.
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There are existing countries right now with no corporate taxes.
Yes, because cutting one tax without increasing the other obviously will not work. If you want to offer a counter-argument, you must argue against my full position, not just half of it.
You already pay the corporate tax in the cost of everything you buy.
The reason why they may increase your salary is the same reason why now so many fast food companies pay $20 an hour - because they have no choice if they want a warm body. They will likely pay even more for a quality employee.
Sure, for accounting purposes but not from budgeting purposes. No corporation ignores the impact of taxes when they determine the price of their goods and services.
A very simple example - I just finished watching Bloodlines on Netflix (pretty good show - up until the last two episodes). That show filmed in the Florida Keys for 3 seasons. The show creators are on record indicating that they had planned for 5-6 seasons but then cancelled it after season 3 due to a change in the tax environment in Florida.
Taxes are ALWAYS part of the equation.
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Did anyone, other than the âJCsâ, receive a pay increase, when the âJCsâ took away their company funded pension plan, and retiree medical?
Steve
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Canât tell from looking briefly online, but that could have been caused by a significant reduction in the stateâs changing (subsidy) laws regarding benefits for making films/movies in Florida.
Are they major manufacturing countries?
25%
Major Taxes in the PRCCorporate income tax (âCITâ) - standard tax rate is 25%, but the tax rate could be reduced to 15% for qualified enterprises which are engaged in industries encouraged by the China government (e.g. New/high Tech Enterprises and certain integrated circuits production enterprises).
The national rate of corporate tax in Japan is around 23% and an additional 5-10% local tax rate is implemented. The table below summarizes the total tax rate for each bracket of taxable income in Japan according to the Japan External Trade Organization (JETRO).
The Corporate Tax Rate in South Korea stands at 27.50 percent. Corporate Tax Rate in South Korea averaged 29.92 percent from 1974 until 2024, reaching an all time high of 40.00 percent in 1975 and a record low of 24.00 percent in 2023. source: National Tax Service, South Korea.
Corporate Taxation in Germany
15 percent
All corporations are liable to corporate income tax. This is levied at a flat nationwide rate of 15 percent on the taxable profits of the company.
I am telling you, in a 40 year history of business, everything from running multimillion dollar business units for Westinghouse to several of my own small companies, never once did I consider the impact of taxes on pricing.
On location? Yes. Tax comes AFTER the sale, and you cannot raise prices in the face of competition just because you pay corporate taxes. Thatâs not how it works.
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With the VAT taxes are considered constantly in the manufacturing process and the competitionâs prices are more worrisome.
I think your anecdotal experience is not the norm.
We study the impact of corporate taxes on barcode-level product prices using linked survey and administrative data. Our empirical strategy exploits the dichotomy between the location of production and the location of sales, providing estimates free from confounding local demand shocks. We find significant effects of corporate taxes on prices with a net-of-tax elasticity of 0.24.
On average, a one percentage point increase in the local corporate tax rate raises the retail prices of the exported products of taxed firms by around 0.4%.
There is a lot more data out there supporting this finding but I pulled from the sources least likely to suffer an ad hominem attack based on their source.
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You are not discussing the economics involved.
A higher corporate tax rate increases reinvestment. The more factory output the more competition across product lines.
From your NBER link
Approximately half of corporate tax incidence falls on consumers,
suggesting that models used by policymakers may significantly underestimate the incidence of
corporate taxes on consumers.
Wouldnât all of the taxes come out of revenue from sales? Yes it would be known what the rate was before hand. Yes there would be pressure on performance. I was not the one denying that.
But as a corporate leader if you know you can reduce your taxes with expenditures you make different plans. You invest to reduce your taxes.
If corporate taxes are low you offshore your production.
This is kind of a ridiculous discussion. Taxes are inherently part of pricing. BECAUSE TAXES ARE AN EXPENSE similar to the other expenses of a business. Obviously prices are set primarily based on what a willing buyer is willing to pay to a willing seller, thatâs always and forever the case. But what those willing people are willing to pay/take for a good or service is influenced by the expenses (one of which is taxes).
If you have a business selling widgets, and you sell about a hundred thousand of them a year for about 10 bucks each. So you bring in about $1M each year in revenue. You have expenses of $100k rent/etc, $100k taxes, $300k employees, $400k COGS, so you have about $100k profit each year. What happens if expenses go up? If rent doubles, you either have to raise prices or close down. Similarly if taxes double, you either have to raise prices or close down. If COGS goes up by $100k, you have to raise prices or close down. The same applies to all the expenses. Now since expenses donât usually go up or down in step functions, but rather tend to go up/down incrementally, you sometimes suffer lower profit for a while, but then you raise prices a bit to get back to normal, and sometimes, when possible, you raise prices a bit extra, to get ahead of those rising expenses, or to improve profit. But itâs a continuum, and it is a fact that changes in expenses indeed to affect prices over the long term. It canât possibly be otherwise!
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But we are discussing corporate taxes here Mark, which are taken off of net revenues minus expenses (like salaries, COGS, etc.). So no, in that case it is not an expense in the traditional sense. In fact if the company has no profit it would have no tax. This is ignoring other types of taxes which would not be impacted by things like that. Property taxes would be one example, you pay no matter how much money you make or lose, and what you pay is not related to how much you make or lose.
The only way this insane argument that âpeople pay all taxesâ would make any sense is if, as Iâve said multiple times now, you make the transition neutral. The reduction of corporate taxes would have to come with an increase in my taxes but also an increase in my wages and a reduction in prices of the goods and services I buy. And there is zero reason to think any of that would actually happen, because the corporate tax rate has zero impact on the companyâs ability to set my wage or impact the price of their goods.
But some people just want to make the rich even richer. Shrug.
They would have and impact.
Lower taxes and your wages go down and product costs go up. Unless we outsource production to other countries. Then your wages go down relatively speaking, costs on the shelf are less inflationary, and the national debt grows.
Higher taxes and production ramp up in the US, competition lowers prices, and your wages go up. Utility prices are also lower in relative terms.