Rise of the Tea Party

[JeffreyS]

In a letter sent March 21 to Gov. Pat Quinn, Caterpillar chief executive officer Doug Oberhelman said officials in at least four other states have approached the company about relocating since Illinois raised its income tax in January.

Luckily Florida does not have an income tax.  There are going to be different solutions in different places. In a high tax state cutting taxes may be very stimulating to the economy in a low tax you may not get much bang out it at all. In fact cutting taxes so low that you can't maintain QOL initiatives or properly educate your workforce may drive some businesses away.  My fear is that now we govern for our next quarterly report sound long term investments in our state may be ignored as not having the immediate political bang to a politician just working for his next job.

[finehoe]

But as you read this, remember that from 2002 to 2008 (latest available data), 67% of U.S. corporations paid NO income taxes. Also remember these facts next time you hear someone blathering about our high corporate income tax rates. 35% X $0 is still $0.

[buckethead]

Even if the figure you offer is factual, it doesn't account for the profitability of those 67% of corporations.

Even corporations that do pay income taxes... do not pay income taxes. They charge their customers, and pass the money on to the federal government.

[BridgeTroll]

But as you read this, remember that from 2002 to 2008 (latest available data), 67% of U.S. corporations paid NO income taxes. Also remember these facts next time you hear someone blathering about our high corporate income tax rates. 35% X $0 is still $0.

So... the problem isnt the rate(35%).  The problem is the tax code and loopholes passed by our Congress year afteryearafteryearafteryear...

http://www.nytimes.com/2011/03/25/business/economy/25tax.html?pagewanted=1&_r=1&hp

[urbanlibertarian]

Teabaggers...er...extremists...er...anarchists hijack trade union protest in London.



http://www.dailymail.co.uk/news/article-1370053/TUC-anti-spending-cuts-protest-200-arrested-500k-march-cut.html

[buckethead]

The British version of teabaggers (Tories) caused this. (better throw in the winky here)

What else were these brilliant young citizens to do?

[BridgeTroll]

The taxation rate is 35%.  Why do they not pay 35%?  Loopholes and sweetheart deals like the one Rangel wrangled for GE to the short term benefit of his election chances...

[urbanlibertarian]

What if we had a flat corporate income tax of 10% of profits (no deductions, exemptions or depreciation)?  At 10% it would probably generate more revenue (I'm guessing) than the current tax with all the loopholes. 

[buckethead]

What if we had a flat corporate income tax of 10% of profits (no deductions, exemptions or depreciation)?  At 10% it would probably generate more revenue (I'm guessing) than the current tax with all the loopholes. 

What is wrong with the current system, urban libertarian?

I'm not UL, but I will offer this:


Corporate control of a malleable tax structure.

Nutshell version.

[urbanlibertarian]

This, Stephen:

But as you read this, remember that from 2002 to 2008 (latest available data), 67% of U.S. corporations paid NO income taxes. Also remember these facts next time you hear someone blathering about our high corporate income tax rates. 35% X $0 is still $0.

I'm actually not a fan of the corporate income tax or income taxes in general but if we gotta have them they should be simple and apply equally to everyone.

[JeffreyS]

What if we had a flat corporate income tax of 10% of profits (no deductions, exemptions or depreciation)?  At 10% it would probably generate more revenue (I'm guessing) than the current tax with all the loopholes. 

What is wrong with the current system, urban libertarian?

The big corporations don't pay.  The complicated nature of our system leads to loopholes and corruption.

[JeffreyS]

Yes to coerce those who get the loopholes to do worthwhile things for society such as a "green tax break".  The system however has been corrupted as in lobbyists give contributions to legislators who pass loopholes favorable to whomever hired the lobbyists.

[urbanlibertarian]

Does anyone realize what those loopholes are there for?

To give certain corporations an advantage over their competition?

[BridgeTroll]

The loopholes are there to get re elected... usually under the guise of "creating jobs" or as an "incentive".

http://www.nytimes.com/2011/03/25/business/economy/25tax.html?pagewanted=1&_r=2&hp

By 2008, however, concern over the growing cost of overseas tax loopholes put G.E. and other corporations on the defensive. With Democrats in control of both houses of Congress, momentum was building to let the active financing exception expire. Mr. Rangel of the Ways and Means Committee indicated that he favored letting it end and directing the new revenue â€" an estimated $4 billion a year â€" to other priorities.

G.E. pushed back. In addition to the $18 million allocated to its in-house lobbying department, the company spent more than $3 million in 2008 on lobbying firms assigned to the task.

Mr. Rangel dropped his opposition to the tax break. Representative Joseph Crowley, Democrat of New York, said he had helped sway Mr. Rangel by arguing that the tax break would help Citigroup, a major employer in Mr. Crowley’s district.

G.E. officials say that neither Mr. Samuels nor any lobbyists working on behalf of the company discussed the possibility of a charitable donation with Mr. Rangel. The only contact was made in late 2007, a company spokesman said, when Mr. Immelt called to inform Mr. Rangel that the foundation was giving money to schools in his district.

But in 2008, when Mr. Rangel was criticized for using Congressional stationery to solicit donations for a City College of New York school being built in his honor, Mr. Rangel said he had appealed to G.E. executives to make the $30 million donation to New York City schools.

G.E. had nothing to do with the City College project, he said at a July 2008 news conference in Washington. “And I didn’t send them any letter,” Mr. Rangel said, adding that he “leaned on them to help us out in the city of New York as they have throughout the country. But my point there was that I do know that the C.E.O. there is connected with the foundation.”

In an interview this month, Mr. Rangel offered a different version of events â€" saying he didn’t remember ever discussing it with Mr. Immelt and was unaware of the foundation’s donation until the mayor’s office called him in June, before the announcement and after Mr. Rangel had dropped his opposition to the tax break.

Asked to explain the discrepancies between his accounts, Mr. Rangel replied, “I have no idea.”

[JeffreyS]

So let's close the loopholes and if it is revenue positive enough we can lower rates.