Posted on 07/17/2012 4:02:47 AM PDT by tobyhill
Most of the time being number one is good. But when it comes to having the highest tax rate in the world, it is much better for a country to be bringing up the rear.
Currently Japan holds the inauspicious distinction of having the highest corporate income tax rate in the world (39.5 percent). The United States is a close second, only a few tenths-of-percentage points behind.
Japan will soon fall from the top spot because it has finally recognized what the rest of the industrialized world realized over a decade ago: A low corporate income tax rate is vital for economic growth in the global marketplace. As such, Japan just announced it will reduce its corporate income tax rate by 5 percentage points down to around 35 percent. This remains far above the 25 percent average rate of other industrialized countries, but for them it is a start.
(Excerpt) Read more at blog.heritage.org ...
So am I and every time I have revenue, the government taxes it. So no dice. Corporations get taxed unless they meet my requirements stated earlier.
It is simply a legal construct to protect against risk.
Correct, it's a form of socialism wherein the government - paid for by the taxpayers - acts as a safety net. If you want the liability for taxes onto the owners/stockholders, then they need to be liable for lawsuits/bankruptcies and whatever ills befall a corporation, hence the corporation no longer is a person.
Either the corporate "person" pays the tax or it isn't a person.
As bad as the corp marginal rates are here, thank our lucky stars we do not have a VAT. VAT’s are pure evil.
That’s all great. Now please use the information in your post to explain where in the process a high corporate tax burden is “passed along to the consumer.”
Interestingly, there are many common U.S. business practices that are driven by U.S. tax law more than anything else. Financing capital expenditures is a good example of this. U.S. tax law actually penalizes companies for paying major capital expenditures up front out of the company's profits -- because the capital expenditure is not deductible as a current expense, and because profits are taxed at the corporate tax rate. As a result, companies have a huge financial incentive to borrow money for these capital expenditures -- since interest on bank loans or corporate bonds is deductible as a current expense.
If a policy makes it more expensive for one particular entity to do business, that entity will not be able to pass those costs along to consumers. On the other hand, if a policy imposes added expenses on competitors (or entities which would be competitors but for such expenses), the consequent reduction in competition will allow an entity to raise consumer prices or cut employee wages.
In general, if the number of businesses in some particular market field increases, worker wages will rise and consumer prices will fall, but shareholder returns will decrease. Since investments flock toward market fields which can offer better returns than could be achieved elsewhere, and away from those which do not, this results in an equilibrium number of businesses in each market field.
Corporate tax rates reduce the shareholder returns that are available within many market fields, thus reducing the number of businesses competing within them. This in turn depresses wages for employees while increasing prices for consumers.
I wish there were some way to make more people look at the behaviors which result from various policies, and ask whether the behaviors on the whole produce or destroy real wealth (e.g. by causing things to be used more or less efficiently than they otherwise would be). Policies which promote the net destruction of wealth cannot yield prosperity for anyone other than a few elite. Policies which promote the creation of wealth, by contrast, can yield prosperity for everyone.
Just wait until Phony-Care kicks in full tentacles. Year by year leverage and all. Along with all their Phony “products” and “instruments.”
The explanation is in the last paragraph of my prior message. Further, GATT requires all expenses be considered prior to profit. Thus, taxes come out before the owners get paid.
Do you or have you ever incorporated?
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