As you know I tire of debating with people who are not only uninformed, but ideologues who have no problems lying in order to advance their cause. This is one of the reasons I no longer listen to the news, and instead pull data as my primary source of information and opinion forming. One such debate was the issue of "what corporations really pay in taxes."
The right screams bloody murder pointing at the stated corporate tax rate of 40%.
The left screams "loopholes," talks about GE and Google's 0% tax rate, and then claim the "effective tax rate" is 12%.
I know both sides of the argument, and know what is the correct approach to it:
"You shouldn't even have a corporate tax you idiots. You want jobs. You want to attract investors. Get rid of this cancer that is holding the US back from its full potential."
Regardless of philosophical arguments about whether there should even be a corporate tax, I decided to look up once and for all the REAL corporate tax rate. I'm not listening to the right fretting over the statutory 40% rate. And I'm CERTAINLY NOT listening to some bogus academian study made of whole cloth by biased socialists "professors." I simply took "Corporate Profits BEFORE Taxes," subtracted "Corporate Profits AFTER Taxes," divided it by the former and calculated the REAL AND TRUTHFUL tax rate the US has had since 1929.
Got it?
Before taxes. After taxes. Subtract and divide.
"I get the disks, you drop Walsh."
So here it is ladies and gentlemen.
So that's it. That's what all the hubbub is about. The current effective tax rate is about 22% and has been trending down since the 1930's.
Naturally the left (if they ever read this blog) would seize on this claiming that corporate taxes in the glorious 50's was around 41% and we were booming then. And naturally the right will seize on this saying 22% is more than the 0% leftists would like everything to think corporations pay.
But I'm going to try to introduce some reality into the situation as to why corporate taxes have been going down so that we MIGHT actually leave a better economy to our future;
Foreign competition.
And we're not talking about foreign competition from manufacturing or other economic competitors. We're talking about competition from other governments. Specifically, governments are competing for investors and corporations as they ALL lower their corporate taxes to lure them.
This is why you have Burger King merging with Tim Horton's. This is why you have Medtronic leaving for Ireland. This is why corporations have trillions parked overseas in Bermuda, the Caymans, Singapore and elsewhere. Because there ARE greener pastures.
I'm not going to call for the argument that the US eliminate its corporate taxes forever. It will fall on deaf ears of the left that are either too lazy to think this through or are too wedded to their ideology to have an independent thought or intellectual honesty. It is also an argument that doesn't need to be preached to the right-wing choir.
I will point out however a rare phenomenon that you won't see very often - governments competing.
In this one rare instance, governments are acting like private sector companies and actually serving their customers well. Governments want money, they want a tax base, they want a booming economy and some of them are waking up to what Hong Kong and Singapore woke up to nearly 50 years ago. MAKE IT ATTRACTIVE FOR INVESTORS TO MOVE AND INVEST THERE. Because of this some companies are scoring jobs. And not just "jobs," higher paying white collar jobs that typically come with relocating a headquarters there. This, like free markets always do, benefits the customers. The customers of which are the citizens of the countries lowering corporate taxes.
This is not complicated, complex, high end economics.
This is simple 3rd grade logic.
And the fact the left in this country is blinded with envy and hate of "corporations" to the point they can't see the benefits of getting rid of corporate taxes means half the population we're dealing with are not as smart as 3rd graders.
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The right screams bloody murder pointing at the stated corporate tax rate of 40%.
The left screams "loopholes," talks about GE and Google's 0% tax rate, and then claim the "effective tax rate" is 12%.
I know both sides of the argument, and know what is the correct approach to it:
"You shouldn't even have a corporate tax you idiots. You want jobs. You want to attract investors. Get rid of this cancer that is holding the US back from its full potential."
Regardless of philosophical arguments about whether there should even be a corporate tax, I decided to look up once and for all the REAL corporate tax rate. I'm not listening to the right fretting over the statutory 40% rate. And I'm CERTAINLY NOT listening to some bogus academian study made of whole cloth by biased socialists "professors." I simply took "Corporate Profits BEFORE Taxes," subtracted "Corporate Profits AFTER Taxes," divided it by the former and calculated the REAL AND TRUTHFUL tax rate the US has had since 1929.
Got it?
Before taxes. After taxes. Subtract and divide.
"I get the disks, you drop Walsh."
So here it is ladies and gentlemen.
So that's it. That's what all the hubbub is about. The current effective tax rate is about 22% and has been trending down since the 1930's.
Naturally the left (if they ever read this blog) would seize on this claiming that corporate taxes in the glorious 50's was around 41% and we were booming then. And naturally the right will seize on this saying 22% is more than the 0% leftists would like everything to think corporations pay.
But I'm going to try to introduce some reality into the situation as to why corporate taxes have been going down so that we MIGHT actually leave a better economy to our future;
Foreign competition.
And we're not talking about foreign competition from manufacturing or other economic competitors. We're talking about competition from other governments. Specifically, governments are competing for investors and corporations as they ALL lower their corporate taxes to lure them.
This is why you have Burger King merging with Tim Horton's. This is why you have Medtronic leaving for Ireland. This is why corporations have trillions parked overseas in Bermuda, the Caymans, Singapore and elsewhere. Because there ARE greener pastures.
I'm not going to call for the argument that the US eliminate its corporate taxes forever. It will fall on deaf ears of the left that are either too lazy to think this through or are too wedded to their ideology to have an independent thought or intellectual honesty. It is also an argument that doesn't need to be preached to the right-wing choir.
I will point out however a rare phenomenon that you won't see very often - governments competing.
In this one rare instance, governments are acting like private sector companies and actually serving their customers well. Governments want money, they want a tax base, they want a booming economy and some of them are waking up to what Hong Kong and Singapore woke up to nearly 50 years ago. MAKE IT ATTRACTIVE FOR INVESTORS TO MOVE AND INVEST THERE. Because of this some companies are scoring jobs. And not just "jobs," higher paying white collar jobs that typically come with relocating a headquarters there. This, like free markets always do, benefits the customers. The customers of which are the citizens of the countries lowering corporate taxes.
This is not complicated, complex, high end economics.
This is simple 3rd grade logic.
And the fact the left in this country is blinded with envy and hate of "corporations" to the point they can't see the benefits of getting rid of corporate taxes means half the population we're dealing with are not as smart as 3rd graders.
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