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US Corporations Pay little or no tax


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The full story is here:

http://moneycentral.msn.com/content/Taxes/...42.asp?GT1=3256

Is this fair? When politicians are screaming over government waste of tax payers dollars and a lack of resources and money to impliment and maintain various programs how come they don't call on corporations to pick up their fair share?

Any thoughts?

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thoughts? yes

bring that non-profit idea to the businesses in toronto - your capital trading hub of canada

it will only increase investments and motivate all growth projections ... i think businesses ONLY owe community relations to the public. companies are already governed by all sorts of rules and restrictions external to their control

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Corporate taxes should be abolished.

Why? Because they amount to double taxation. Shareholders must pay tax on dividends received after corporate taxes have been (in theory) paid.

Not surprisingly, most corporations don't pay dividends. Instead, they re-invest earnings, make the corporation more valuable and shareholders receive the benefit through a capital gain. Result? Corporations are larger than they really should be.

Organizing all this has created an entire industry of tax lawyers and accountants - smart people who waste their talents in a pointless exercise.

If corporate taxes still exist, it's because of the mindset of articles such as the one in the link. Typical left wing, demagogic nonsense. Really dumb.

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Shareholders must pay tax on dividends received after corporate taxes have been (in theory) paid.

Boo frigging Hoo. How many Americans have any say or any stake in the stock market? Less than 25 per cent? And of those, how many are dabblers and how many make fortunes on the market? And of the latter category, what's their bottom-line look like?

Basically, these people can afford to pay their way.

Organizing all this has created an entire industry of tax lawyers and accountants - smart people who waste their talents in a pointless exercise.

So your solution to corporations ducking out on paying their share of taxes is to eliminate the traxes? WTF?

If corporate taxes still exist, it's because of the mindset of articles such as the one in the link. Typical left wing, demagogic nonsense. Really dumb.

Yeah, this article (which appears on the web site of a new service co-owned by socialist icons Microsoft and NBC) is full of silly nonsense like:

"They don't pay their fair share, and the net result is that average taxpayers -- working families -- wind up paying more to make up that difference,"

Why, that's commie talk! :rolleyes:

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How many Americans have any say or any stake in the stock market? Less than 25 per cent? And of those, how many are dabblers and how many make fortunes on the market? And of the latter category, what's their bottom-line look like?

Your point has nothing to do with anything, BD. If you want to soak it to the rich, go ahead. But corporate taxes don't accomplish that objective.

Corporations pay divdends with after tax income. Then, shareholders pay income tax on dividends. This double taxation can be avoided by simply not paying dividends - instead earnings are retained and corporations get larger. The shareholder is compensated not by dividends but by a capital gain.

Why does this matter? The corporate tax induces larger corporations and this leads to other problems in an economy.

BD, you have every right to hold left wing opinions. But it would help if you had a better understanding of tax policy and economics when making your arguments.

BTW, most Canadians are very active in the stock market through their pensions.

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wait a minute.....let me check this logic...

i pay a tax on what little income i make. that is to pay for roads and crap. also, i pay sales tax on some items. this is a way to target extra taxes to people who have the expendable income to buy more luxory items. is this double taxing?

well if so, we would never be able to represent the true social cost of production. for example, SUVs. if nobody should be taxed again after profits, a rich person could buy 20 of the worst pollution dangerous SUVS for pure retail price. yet YOU AND I, woudl be the ones to suffer from the pollution and danger on teh highways of increased risk of fatality. in essense, i am occuring a cost that is not being represented.

the ethical way for a society to address this is to place an addition tax on teh SUV, which would pay for the environmental cost and highway cost of this product. only after taking into account the retail price AND the tax price would the true cost of teh SUV be accurate.

thus is it very desirable for additional targeted taxes to be levied on some activities in addition to income tax. this is because income tax is too broad a sword to accurately gauge the true social cost of some activities.

now that is the logic, which i think is sound and fair.

now someone tell me why specifically dividends are taxed?

could it be to prevent corps from taking in huge amounts of money, then funnelling it to a small number of elite shareholders?

could it just be a money grab by gov?

could it be to reflect true social cost?

i gotta think about this one...anybody have a sound reason why this would be a good case for additional taxation?

sirriff

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i pay sales tax on some items. this is a way to target extra taxes to people who have the expendable income to buy more luxory items. is this double taxing?
Yes it is. To spend money, you have to earn it. So the income tax and the GST are similar. The same activity is taxed in two ways - almost. The GST doesn't tax what you save.

More important, the only way to avoid these taxes is to stop working, stop buying or go underground. Difficult.

the ethical way for a society to address this is to place an addition tax on teh SUV, which would pay for the environmental cost and highway cost of this product.
You have my full attention. But the tax should apply not to SUVs but the use of SUVs. If a SUV sits in the garage, it's no danger to anyone. And there's not just pollution, your SUV takes up space on a road when you drive it. When you rent a hotel room, you pay for the space. The same should apply for a road space - even if it's moving.
now someone tell me why specifically dividends are taxed?
An individual must pay income tax on dividends received. Dividends are a source of income like any other. The problem is that corporations must pay another tax (corporate tax) on earnings before they pay any dividends. Not surprisingly, corporations don't pay dividends - they re-invest their profits.

The equivalent would be the following: You receive by direct deposit your after-tax salary and then also pay a tax every time you use your debit card. Not surprisingly, you stop using your debit card and start using the ATM alot. (Why would the government apply such a tax? Because voters believe only rich people have access to bank accounts and debit cards.)

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some will argue that double taxing is inefficient and immoral – while others would argue delete the tax this could only benefit the rich. i find that if you did work out the risk aversion with this double taxation – that there are minimal outcome affects i.e. give the profits to those will invest will have minimal change

well so you agree that the size of the tax bill for company/individual etc. is determine though government tax laws and based on the government forecasted budget

also you agree that tax is a result of political and economic forces

ideally a tax system should:

1) distribute tax burden equitably

2) tax should not influence efficient allocation of resources by market

3) easy to read and administer

here is my argument and an influence has to be in economic growth in order to change my mind

that tax burden on companies is for equal distribution. this idea is similar to the transfer higher income/lower income tax burden which is progressive, well if you are upset with the personal income tax system then you won’t like the corporate system much either

what i meant is that companies generate profits that rises in the corporate sector and falls in the unincorporated sector....until the rate of return for both sectors become equalize. corporate taxes then can fall on capital income BUT is spread among income from all capital sources hence being taxed twice

companies that want to invest they go ahead anyway and (a flip reasoning to what August 1991 says) economic powers is concentrated only in few corp. of which say large companies of where most revenues are derived.. may not necessarily be “profit maximizers” and since you don’t use profits before tax lets have some introduction of tax is adjustments ... and hello you can shift some burden to consumers in terms of prices/low wages

well it is better to find ways to launder via the tax-loops systems

how about a tax-free intercorporate dividend to a holding company that some growing out of control

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the ethical way for a society to address this is to place an addition tax on teh SUV, which would pay for the environmental cost and highway cost of this product.

this is usually a manufacturing/producers burden which mostly is filtered to the consumer.

it is a manufacturing because they have increase the safety of the vehicle or they are requirements e.g. say you want also clean air in the city (your can't tax the air we breathe), so the manufacturers will build the SUV to enhance livelyhood for clear air

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