Here is a chart showing US corporation profits/GDP from 1950-2023.
Compare this with US corporate tax revenues/GDP from the same period.
Two rapidly diverging curves that should be kept in mind when asking the question “Who are not paying their fair share of taxes?”.
Or to be Mr. Obvious, “Why are corporate tax revenues/GDP flat since 2000 while corporate profits/GDP have risen to historic highs?”.
This divergence coincides with the following changes in the national deficit from 2000.
Maybe kill these evil corporations and take profit to 0 ? That would make these curves match.
Well you could, but as with most of your suggestions that would be dumb.
One alternative is to take corporate tax rates back to where it was during the Clinton-Gore administration. You know, the last time the US ran a surplus.
That is the point isn’t it, to find a system where tax revenues are at least equal to government spending? The democrats pulled it off 20 years ago. Why not follow the same game plan?
Oh, this surplus? Unburdening the “JCs”, twice, while prosecuting two made up wars took care of that.
I’m not sure if taxing corporations instead of individuals would make much of a difference overall. That’s because every penny that every corporation brings in comes from their customers. So whatever additional money that would be paid in corporate taxes would still be coming from the customers.
Now I know some might say “but it’ll come out of profits”, and while that’s possible, it doesn’t work that way in real life. Because prices (and thus profits) are set via competition, not via tax policy. If a lower acceptable profit exists, the competitors will lower prices to a level that results in that amount of profit. If not, then it won’t happen. If an item is $100, and tax is $5, and net profit is $10 (10% profit margin). Then if taxes go up to $10, it’s possible that net profit goes down to $5 initially, but very quickly the price of that $100 item has to go up to $105 to maintain the 10% profit margin that makes it worthwhile to invest in this industry. In the end, any extra money collected in taxes comes mostly from the customers. In some areas, it is immediate, for example hotels and airlines. When a certain city instituted a $3/night hotel tax, the very next day, the hotels added a $3 charge per night to the bill. The customers paid that tax directly and immediately. In other areas, it isn’t immediate and isn’t directly apparent, but it happens nonetheless.
US corporate taxes obviously vary from company to company. Compared to other countries our tax rates are pretty much in the middle of the pack.
“Prior to US tax reform in 2017, the United States was largely responsible for keeping the weighted average higher, given its relatively high tax rate, as well as its significant contribution to global GDP. Figure 4 shows the significant impact the change in the US corporate rate had on the worldwide weighted average.”
Figure 4:
“In the United States, the 2017 Tax Cuts and Jobs Act brought the country’s statutory corporate income tax rate from the fourth highest in the world closer to the middle of the distribution.”
DB2
US government is spending like drunken sailors. It collected $5 T.
It needs to live within its means.
Government needs to stop spending on stupid wars and wasting tax payers money on pork.
Cut redundant agencies and reduce dumb regulations that slow innovation and progress.
Fine idea … except for the lack of agreement on what it means.
Except if there isn’t any competition or the competition is so weak that they really are not competition at all.
Exactly and if they can’t compromise they can’t accomplish anything. That is why I see the next 4 years as another 4 years of nothing getting done. They are already talking about another fight over the House majority leader, get your popcorn.
And, if they don’t have a Speaker by 6 January, who runs the counting of Electoral College votes?
Ok, let’s say there is no real competition, and taxes go up by $5 per unit, they simply raise the price by $5 per unit. Again, all the money for the increased taxes comes from the same place. The consumers. Your statement strengthens the point I am making.
Let’s say they do not raise the taxes and they simply raise the price of the unit by $5 dollars per unit. Now how does that strengthen your argument? Or let’s say, since they have a monopoly, they raise the price by 100 dollars by unit and their taxes go down by 10 percent. Now how is your argument?
Hope springs eternal.
Now if some of the people in the House , that were from the opposition party, wanted to have some fun. This could go on for months. LOL. Ahhh the drama!!!
Republicans facing ‘doomsday scenario’ of inability to certify Trump win on Jan 6: report
Maybe they collected more from business than from consumers but consumers are only ones paying taxes, either directly to Uncle Sam or via the price of the products they purchase.
The Captain
I think you are missing the point. In general, if there exists a monopoly or a near monopoly, there is STILL some constraint on prices. Because if the prices are raised enough, someone will be enticed to enter that market and begin competing with the [former] monopolist. In this case, if they were earning 10% on $100 item, nobody else was willing to make that item at a potential profit margin of 10%. But if they raise the price by $100, and then enjoy a ~110% profit margin, then surely someone will want in on that action and will begin competing.
The point is that taxes don’t have much of a bearing on the eventual outcome, and that the money used to pay those taxes always comes from the consumer of the product.
Note: This is a joke for those of you who are too wired up
He is a joke, but I agree with him for a very different reason.
Intelligent extraterrestrial life will assume we’re all morons because we just elected one to be our leader.
