Skip to comments.Bush May Try to Cut Corporate Tax Rates [Warns China "not to start a trade war"]
Posted on 08/09/2007 7:15:44 AM PDT by indcons
President Bush said yesterday that he is considering a fresh plan to cut tax rates for U.S. corporations to make them more competitive around the world, an initiative that could further inflame a battle with the Democratic Congress over spending and taxes and help define the remainder of his tenure.
Advisers presented Bush with a series of ideas to restructure corporate taxes, possibly eliminating narrowly targeted breaks to pay for a broader, across-the-board rate cut. In an interview with a small group of journalists afterward, Bush said he was "inclined" to send a corporate tax package to Congress, although he expressed uncertainty about its political viability.
The president's comments came as he tried to calm volatile stock and mortgage markets and reassure the country that the economy is fundamentally strong. Despite mounting concern over the downturn in the housing market, he dismissed proposals advanced by prominent Democrats to grant government-chartered Fannie Mae and Freddie Mac more freedom to buy mortgages and mortgage-backed securities. And he ruled out any taxpayer bailout of lenders threatened by the subprime home-loan crisis.
In a 48-minute conversation on an array of economic issues, Bush also warned China not to start a trade war, blamed Congress for not doing more to shore up infrastructure such as the bridge that collapsed in Minneapolis last week, and pushed back against Democratic presidential candidates who are promising to renegotiate the North American Free Trade Agreement.
(Excerpt) Read more at washingtonpost.com ...
Corporate tax cut? Why, that would make sense. Boy are the Democrats gonna hate THAT idea.
So, he’s trying to sound like a conservative again? He’s not up for reelection, so why bother now?
Darn shame it has taken him 7 years to finally respond to the Democrat spin.
Let me be the first to suggest the new rate!
I suggest 0.00%.
Corporations don't pay taxes! The consumers of their products do.
You dump my Treasury notes, I cut my corporate tax rates. Sounds like a plan to me.
“Bush also warned China not to start a trade war,”
We’ll move the fleet from Iran?
We won’t let them buy any more Treasuries?
We won’t export any more jobs and factories to them?
He needs less reaction and more proaction.
That’s the American spirit!
It needs to be done, but he doesn’t have the clout to get it passed.
I’m in disbelief.
Ahhhhh...you may want to rethink that nugget of misinformation you just posted.
As a tax professional with several years of experience, including large international firm experience, I can assure you that corporation pay taxes.
Stop perpetuating the myth that “All taxes are just passed to the consumers”.
That shows how out of touch he is, but no surprise since he never did have an economic clue. The DOW is plunging again today, which reminds me of the stock market reactions in 2001 and 2002 when he gave some of his idiotic economic speeches.
No sir! Sorry!
Corporations have exactly ONE source from which to pay anything! It is called their sales receipts!
This sort of reporting ticks me off, is this guy a financial reporter, or not? "Modest," is one only looks at the tax rate superficially. What about the fact that U.S. corporations pay U.S. income tax on their world-wide income, while foreign corporations only pay (to their Treasuries) on what they earn at home?
is = if
So we are number two?
C’mon, Bush, just do it !
It’s tough to say . . . apparently there are conflicting measures. The WSJ has us at numba’ one. I should check Heritage.
Sounds good to me but it will give the rats and pseudo-cons plenty of propaganda for the upcoming election.
I’m just glad I wasn’t having a hedge moment.
That would have you checking EPI, Public Citizen, Common Dreams, or Media Matters for the info.
Down .8%, and that’s a plunge ?
And suffering hallucinations.
When I posted it was down over 16o points, which is over 1% and that is big for a one day move. The yield on the 10 year is down eight basis points.
That's what we hear in the drive-by media, but those guys have a bad habit of telling lies.
For all the bad press, GWBush has had a pretty darn good track record with his tax-cuts, likewise with national security issues. IIRC in the war against Bush, congress' biggest victories to date have just been Social Security, the Dubai ports deal, and the immigration bill.
If it’s good enough for corp’s, it’s good enough for everyone else.
Ahhhh...you’re taking a complex issue and reducing it to an overly simplistic, and inaccurate, approach...
Here, I’ll make it easier for you to understand with an example:
The corporate tax rate is 35%, which is different from a companies effective tax rate, but for simplicity sake we’ll leave it at 35%...
Your business is regulated by the government, let’s you are an oil and gas E&P, so...the barrels of oil one sells...or MCF of gas one sells is regulated by the market (exclusive of the US tax rate)...so...if you can follow me here...regardless of whether your tax rate goes up (or stays at 35%)...or down...it’s not going to affect the price at which you can sell Oil or Gas because that my friend is market regulated. U CANT PASS IT ON...What happens when the rate is increased, well companies still have to control cost...and “tax cost” is one of those costs...so...you either trim up the SG&A, which means lay off people, or become more efficient, because your shareholders still want their return regardless if your tax rate has gone up (THE BOTTOM LINE). Now, when tax rates go down...companies have more dollars to invest in capital improvements...etc, which is why, say it with me, TAX CUTS are good.
In manufacturing competitive pricing keeps one from increasing the cost of a good for an increase in the tax rate, and if there is a decrease in the tax rate companies...may or may not pass the savings on to the consumer, it just depends.
Now, service industries...could follow your example of passing tax costs on to their clients (Perhaps you’re thinking more of mah and pah grocery stores or something) but again...a price competitive market would probably keep them from doing so.
You understand a little better now? I could add a lot more detai, math, and nuances...but this above makes the general point.
market action has to do with the ECB liquidity action in response to the BNP Paribas problems.
Bush is a small target on the radar today.
And what did W have to say about that?
The corporate income tax is a subtrafuge. It is, in fact a VAT, that cascades throughout every part of the economy.
It can fall in one of three places or any combination of the three. It is either payed by those who who purchase the products in the price of the product, the people who actually produce the product in the form of reduced wages, or by the stockholders in the form of reduced returns. In all cases the ones who pay are individuals NOT the corporations themselves.
A huge BUMP to you.
I am amazed at the number of people who have absolutely no clue about this.
In a roundabout way, the stockholders pay for this too. Reducing taxes can increase profits which can increase the stock price.
Yours is probably the most succinct explanation of how this stuff works that I have seen. Thanks!
“....Corporations don’t pay taxes! The consumers of their products do.....”
Volatility seems to be the August mode. Down 300, up 250, down 100, etc etc.
I think we all need a vacation to cool down.
You’re right, he was wrong, but the ones who do pay the corporate tax are the shareholders.
Sure, it had nothing to do with 9/11, and the congress critters dragging their feet on revising the insurance industry's liability for terroristic acts which caused the construction industry to put large projects on hold.
HELLOOOOOOOOOOO.........! China started a trade war with us a long time ago. What do you call it when China insinuates itself into our economic infrastructure, produces huge percentages of our goods, and then sabotages our economy by producing said goods in a manner (i.e., using LEAD-BASED PAINT on toys and diethylene glycol in toothpaste) that is prohibited in the United States and that the Chinese KNOW will force its client to recall the product?
There is more than one way to fight a war, folks.
Silly W. Corporate Bigwigs pay those taxes, not consumers!!
Have a nice day.
I didn't think corporations paid taxes on its gross revenues. If not, your hypothetical is off base.
None of those things compared to the damage done by Greenspan and W in that order. The economy actually went through a short recovery after 911. W is ignorant and arrogant when it comes to economics.
Wille Nelson, is that you?
Look, I have used the law and the facts to substantiate an arguement...but I am not going to get into a philosophical, esoteric, down with the MAN yelling match with you over who pays taxes. I have explained to you how the system “accurately” works, and either you dont understand or are “unwilling” to understand. But that’s okay, we’re on the same side, neither of us believes in high taxes for either corporations or individuals. Trust me...if I could only send a check to support the military instead of paying taxes...I would, but that wouldnt change the fact that corporations are US taxpayers...and yes.
The US Tax regime is not subtrafuge in actuality it’s probably the fairest system of taxation in the world...and, thank God, we dont have a VAT regime...now you may beleive that one mythically exists by twisting the facts, or making it convenient with unsubstantiated rhetoric, but knowing the Internal Revenue Code as I do...trust me..we dont have a VAT tax either explicitly or implicitly as you advocate.
FOR REAL VAT MISERY look at the UK’s Tax Regime.
But hey...you know...u r right...one way or another every individual pays taxes...whether those taxes are sales, property, state income, sin taxes, or federal income taxes but CORPORATIONS do too. To deny such is being intellectually dishonest.
Well, no! Actually they collected those funds from any combination of their shareholders, their customers, or their employees and forwarded them to the government.
Corporations pay “US Federal Income” taxes on NET “Taxable”INCOME, but my hypothetical takes into account regulated commidity prices for which a tax increase or decrease would not affect the price of the product sold to the end consumer. This is done to show how US corporations “do” pay taxes without the ability to pass on that cost to the end conumer.
(i.e. my tax rate has gone up but because of my industry segment I am unable to adjust my product pricing for that rate difference.)
You’ve used a little logical sleight of hand to try to make your point:
1 - PRICE is “regulated by the market”
2 - Tax rate can stay the same or change and price will continue to be “regulated by the market”
3 - Therefore, tax rate does not effect the price
(Somehow this is supposed to disprove the assertion “Corporations do not pay taxes, their customers do”)
All you have proven is that there is more than just the tax rate that effects market regulated prices.
The reality that you try to conceal is that the tax rate is a very significant part of the “regulated by the market” dynamic you refer to.
If the tax rate goes up, the market will adjust accordingly.
Now it may be true that a company may trim it’s fat to compensate (make less profit as opposed to “passing it on”) in the event of a higher tax rate... However, it is still true that whatever monies are used to pay corporate taxes are a direct percentage of the price paid by consumers.
And it is therefore true to say, “corporations do not pay taxes, their customers do.”
Your condescending post above was deceitfully misleading.
Indeed we are and that is a GOOD thing! In fact, I think we are saying essentially the same thing in different ways.
I just happen to believe that the taxes people pay, ALL of them, ought to be transparent and EASY for them to discern.
"What's the frequency, Kenneth?"