You won’t hear this discussion in Canada, France or anywhere else that people with no understanding of economics are in power. I will avoid most of the technical mumbo jumbo and this article wil not, by any means, be a comprehensive examination of tax law or economics.
First of all, who do you think pays corporate taxes? If you said corporations–BZZZZZZZZZ Sorry, wrong answer. It’s consumers who pay the tax with the economy as a whole also suffering. Products and services are dispensed on the basis of cost to benefit where you add up all the costs to deliver the product or service and then add a profit margin on top of that. So, the higher the corporate tax the higher the cost to the consumer. Almost everything, actually, is passed onto the consumer since business is, well, in the business of business. These aren’t charities, those taxes come out of the cost section, not the profit section as some would have you believe.
Without getting too deep into “price elasticity” and such, excise taxes, corporate taxes, etc. increse the gross cost of a product or service to the consumer there by making it affordable to fewer and fewer people. Since fewer people can afford to purchase, the demand goes down and businesses must adjust to the new, lower, demand. Layoffs, hiring freezes and product/service discontinuation are but a few of the calamities that can happen when taxes are levied, let alone increased. That is the reason why food isn’t taxed on a sales basis, they realize that it would be too burdensome of the poorest in our society.
Corporations are merely conduits for products & services and money, money comes in and products & services go out. A corporate tax is just another tax on the average citizen but, in this environment of hyper-fairness, we tax an entity that isn’t real. While I agree with excise taxes on harmful or socially expensive pruducts such as alcohol and cigarettes, it doesn’t make sense to tax corporations who are just going to turn right around and increase consumer prices.
Along with abolishing Social Security, a flat tax on sales would be a fantastic start to a fair tax system that is balances across all segments of the population. Taxing dividends (if any company still pays them) of stock and also on mutual funds as regular income would ensure that those with more contribute more (liberals oughta love that one) whether it’s logical or not. The best part? With the IRS gone there will no longer be any temptation for politicians, as Bill Clinton did, to collect the tax records and files of political opponents or to stage false audits of the opposition.
I will say that that is a very well-written article RT, besides the Clinton-bashing at the end. Kind of like ******* a hot broad and having her hock up a luggy right before you *******.
Trickle-down economics explained extremely well by Right. I don’t believe in this theory for a number of reasons…but the kids have finally gone to sleep and I’m only capable of eating my dinner and falling asleep at this point. Thanks for this contribution Right!
I hope there’s more to come!
Captial gains are already taxed, as are dividends. The GOP wants to get rid of those too Right. If you get rid of capital gains and dividend taxes and couple that with tax cuts on income, how do you fund the government? More important, how do you get back into a surplus to pay off the debt?
To me it seems like a discussion, let alone any kind of a radical change to the tax code, should occur when the FED is flush. You implement a change and see how it plays out in terms of tax revenue. If you don’t take enough in to run the government after the change, the next move shouldn’t be to cut more revenue. Especially from a stock market that has seen gains.
What can’t be made in this country? What corporations are finding themselves unable to grow due to the tax burden they’re facing?
We already had a grace period for corporations to move money in from overseas w/out having to pay any tax. That’s enough in my mind.
And dividends are income. Why would Republicans and President Bush want to eliminate that revenue source out of all the people out there in America who could use a break? Real head scratcher, isn’t it?
If you get rid of capital gains and dividend taxes and couple that with tax cuts on income, how do you fund the government?
Either with the flat tax (if there is absolutely no way to get off the Federal gravy train) or, more preferable, get back to the state control like it was intended to be from the beginning. The fed was never supposed to rule our lives like it does, especially the congress.
More important, how do you get back into a surplus to pay off the debt?
Debt isn’t a bad thing, did you go into debt to buy a house or a car? Credit, when managed wisely, is a key to growth. Natioanl debt isn’t as important as the trade deficeit for the short term.
To me it seems like a discussion, let alone any kind of a radical change to the tax code, should occur when the FED is flush.
This is impossible as long as the Fed has more control than the individual states. The current social wellfare system ensures that we will never get ahead.
What can’t be made in this country? What corporations are finding themselves unable to grow due to the tax burden they’re facing?
Take the case of Boeing, Airbus is subsidized by the French government so when a tax is applied to Boeing it’s a double whammy. Airbus doesn’t have to pay our tax so they can compete on price.
And dividends are income. Why would Republicans and President Bush want to eliminate that revenue source out of all the people out there in America who could use a break?
Because the stock market is where companies get capital to grow so these cuts encourage people to invest, especially now that Social Security will fail by the time I retire. People can’t depend on the government to fix all their problems. Invest now!!!!
I will say that that is a very well-written article RT, besides the Clinton-bashing at the end. Kind of like ******* a hot broad and having her hock up a luggy right before you *******.
Thanks, there is always room for Clinton bashing. I think we are going to be finding out stuff about that crook for years to come. Democrats are trying to block the Cisneros independant counsel report as I write this.
I see a stark difference between “ruling our lives” & “setting a federal tax rate to pay for things the states cannot provide on their own“. Our military, federal law enforcement/corrections system, social security, medicade, medicare, foreign aid/dues, etc.
If you feel that we don’t need any of those things, that’s a seperate discussion altogether. What you’re arguing here is that the government hasn’t utilized the most cost effective system when it comes to taxation. That we could roll up more money with a flat tax? If this is your comtention, then what matricies can we look at to prove that it’s true?
I view Economics as a science. I don’t think everyone we have in Washington DC treats the subject accordingly. You have an idea in science and from there it’s a matter of going out and proving that idea’s probability is worth changing things in favor of. While taxation comes up quite a bit in political discussion, when it comes to changing the system so drastically, the data (not ideology) must prove out.
I disagree. 2005 was a disapointing year diplomatically as we couldn’t get any help in southeast Asia. The Chinese and S. Koreans own our debt, and also happen to be two countries intent on surpassing us in the century to come. When we can’t get China to at least meet us halfway in terms of their currency value, the trade defecit continues to grow. The money we owe them is the reason why we’re in no position to make demands of them.
Moreso, if we’re the ‘adult’ in these relationships, then what kind of an example are we setting for the rest of the world? We’re too lose with our money, and because of that, countrys dictate terms to us – not the other way around.
Not to mention the fact that a Republican President has been in charge for all but 9.5 years of my life, and not once was Reagan, Bush Sr or Dubya able to balance the budget. All three of them consistently ballooned the national debt and subsequently blamed the tax code for their failures.
You haven’t even looked at the federal budget and what money goes where, have you? The so-called ‘social welfare system’ is a tiny sliver of the pie.
How many military contracts has the federal government thrown Boeing’s way since Bush took office? How many scandals have blown up within Boeing during that same time? They’re an embarassment in terms of the corruption and inability to find a CEO…
If Boeing is your example Right, the point hasn’t been made in my mind. Is Airbus receiving billions in government contracts and relief on top of it as well? Perhaps Airbus’s operation is tighter and their products are better.
Barrons has been talking about this for months now. Do you realize how much cash is being held right now by corporations on the DJIA? Right, they’re holding on to billions and have no idea of what to do with it. Dividends are up in certain sectors, but unfortunately wages have not moved…executive salaries and bonuses are definitely in this year.
I’m not just making this up. Barron’s articles are most likely pay, but I’ve got a subscription so I’ll try to get in there.
Right, corporate America is not strapped for cash right now. The tax cuts end up going mostly into executive bank accounts. Trickle down doesn’t happen, and a flat tax…I need to see studies, numbers. We know how much we consume, so how would it work?
It’s science.
While taxation comes up quite a bit in political discussion, when it comes to changing the system so drastically, the data (not ideology) must prove out.
This is like not going into space until we have data from previous space missions to prove we can sucessfully go into space. Your asking for data before you implement a tax that can’t exist because you first require the data.
The flat tax was the backup plan anyway in case we can’t shake the federal dependancy.
The money we owe them is the reason why we’re in no position to make demands of them.
When did this happen? The Chinese buy some bonds and now they own us like slaves? What are they gonna do, sell our bonds at a loss? I doubt Ted Kennedy is going to be forced to vote, say, pro-life because the Chinese who own some bonds told him too.
All three of them consistently ballooned the national debt and subsequently blamed the tax code for their failures.
What failures?
You haven’t even looked at the federal budget and what money goes where, have you? The so-called ’social welfare system’ is a tiny sliver of the pie.
I’ll pull it up again but I don’t think your counting everything that is welfare.
How many scandals have blown up within Boeing during that same time? They’re an embarassment in terms of the corruption and inability to find a CEO…
I know of one that wasn’t to much of a big deal and how do you justify the corruption claim?
Is Airbus receiving billions in government contracts and relief on top of it as well? Perhaps Airbus’s operation is tighter and their products are better.
If is wasn’t for the government contracts Boeing would have gone under long ago. That is how subsidies work, France floods Airbus with cash that Boeing doesn’t have access to so an artifical gain is given to Airbus. Suppose France subsidized Burger King and now all Burger King Burgers are 25 cents. McDonalds dollar menu goes down the crapper.
Barrons has been talking about this for months now. Do you realize how much cash is being held right now by corporations on the DJIA? Right, they’re holding on to billions and have no idea of what to do with it.
Yeah, I’ve read that 2005 was one of the 5 best years of the last 25 years economically across the board. Gains in productivity, jobs, income, profits and wages were phenopminal.
The tax cuts end up going mostly into executive bank accounts.
No, everyone is still price sensitive thanks to Democrats saying one of the best economic times is actually the worst of times. Everything is price now so I doubt corporations are going to take an obvious market strategy and put it in the bank. People will drive miles to save 2 cents a gallon on gas, you think Exxon won’t pass on the cut and make their gas 3 cents cheaper?
Right, thousands of societies tried every method of taxation known to man before anyone got into space. It’s economics, science. Studies can be done. If this was a legit cure to what ails us, you don’t think there would be a link you could find to the math?
Name the diplomatic accomplishments achieved with China during the Bush Jr. Presidency.
THEIR FAILURES TO BALANCE THE BUDGET.
I’m sure a right-wing think tank has one that lists veterans as part of that ‘welfare state’.
The highest ranking procurement officer in the Air Force (may have been a civilian position), she was awarding contracts in exchange for getting her family members jobs. Then there’s the problem with a CEO who was booted for sexual harrassment, this guy married his first cousin. Management at Boeing is seriously lacking.
Then France makes airplanes and we don’t. If their people are alright with their tax dollars going to a private corporation, that’s their business. Regardless of all this, if Boeing makes a better airplane, they’re still a player. The entire industry is in severe limbo.
Link to that – I need to read whatever says that.
Also in Barrons, as part of that same article, was the part about executives rewarding themselves. This is common practice. Not an honest way to do business, but quite common in America.
This is a classic conservative explanation of our social systems.
Do you know why our social systems continue to grow? Because very very large corporations are the primary beneficiary of social programs. These corporations and their consulants are also the primary designers of these systems. Government is seldom able to design a system itself, it usually relies on outside “experts”.
Medicaid, Medicare, and SSI (supplemental security income for disabled/elderly) all flow directly (or indirectly) to HMOs and pharmaceutical companies to pay for overpriced healthcare services and high priced drugs. If ANY politician were to truly suggest cuts to these “welfare” programs hundreds of corporate lobbyists would be storming the halls of Congress.
You present the cliche point of view that millions of Americans are sitting around getting rich by receiving a $500 SSI check every month (which generally goes right towards their rent), or getting medications and procedures that KEEP THEM ALIVE. Some Americans are getting rich from our “welfare” system… the companies (including shareholders) that sell drugs and healthcare.
You want real social reform. Make Medicaid and Medicare fraud (and profiteering) a capital offense.
Go sell your plan to seniors (21% Americans are 55 or older) and disabled Americans (20% of Americans are disabled, I’m sure there is overlap between the two groups). Before you start talking about what’s best for America be sure you clarify exactly who in America you are talking about.
As for the public assistance form of “welfare”… I’m all for doing away with that. If you’re healthy enough to work, then you should work, or move to a place where you can find work. Of course there are repurcussions to this as well. What do you do with all the children that end up selling themselves on the street because their parents aren’t providing housing/food? Do you set up government-run housing for “troubled” youth AKA orphanage?
Key phrase, “when managed wisely”. If our social programs aren’t managed wisely by our government, what makes you think our government is able to manage credit wisely?