30 Companies Paid Lobbyists More Than the IRS

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Originally Posted by Yonivore

That's usually only the case when there is no competition with another provider/supplier...or when crisis severely outstrips supply...when, such practices are typically called price-gouging.

But that's at the other end of the spectrum where competition for market share (either due to collusion or monopoly) allows it.

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The case you suggest is actually the exception rather than the rule. There are almost countless examples of one supplier setting their price at the market price rather than a price based on their individual supply curve. This is the case in all commodity markets, and is very common in cases where we see monopolistic competition (which is not monopoly).

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I dare say if the market will only bear a price lower than the cost to produce/provide, the company won't produce or provide -- or -- they will sacrifice in one of the areas already mentioned.

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True statement.

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But, back to the other question, from where do the dollars to satisfy the suppliers side of the equation come?

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You're going to have to rephrase your question, because I don't understand what it's trying to ask.

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Originally Posted by scott

The same can be said about taxes paid.

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I don't think so. Taxes are usually based on a percentage of gross income. I doubt any corporate bonus -- at Subway or elsewhere -- has approached the percentages the IRS expects in corporate taxes.

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Originally Posted by scott

In any event, I'm not advocating corporate taxes be any higher, any lower, or any more identical than they currently are. But so far as companies benefit from the services provided by governmental agencies (whether municipal, state or federal), they should pay into the system that creates those benefits (in some form or fashion).

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And, I'm saying it's done when the individuals that hold stock or ownership pay their taxes, when employees pay their taxes, and when customers pay sales taxes.

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Originally Posted by scott

The LLC structure, I feel addresses this issue quite well with pass-through taxation. This works well for businesses of this size (and the same with S-Corps) because there tends to be a more direct link between the company's profitability and the cash flows the shareholders receive.

My personal opinion is that pass-through taxation loses its feasibility when a company reaches a certain size (either in revenues or number of shareholders) because profitability (in the accounting sense) and actual dividends start to see a major disconnect.

With that said, my personal belief is the US would be better suited with a lower nominal corporate tax rate with fewer loopholes and exceptions, resulting in an overall higher effective tax rate.

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And, I think we'd be better served with a federal sales tax replacing all the imputed taxes already infecting commerce.

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Originally Posted by scott

You're going to have to rephrase your question, because I don't understand what it's trying to ask.

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"...but burden is split between producers and consumers..."

From where do producers get the money to satisfy their portion of the burden?

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Originally Posted by Yonivore

I don't think so. Taxes are usually based on a percentage of gross income. I doubt any corporate bonus -- at Subway or elsewhere -- has approached the percentages the IRS expects in corporate taxes.

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What the IRS expects and what the IRS gets are two different things. I agree that I doubt many large companies pay 35% of their net income at the end of the year in executive bonuses (though not at all unheard of for small companies - and there are lots of examples of executive bonuses being well above 35% of Net Income - even well above 100% - even incalculable because the company didn't make a profit).

But, do you real think it is unheard of for a company to have executive bonuses on par with their actual income taxes paid in a given year?

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And, I'm saying it's done when the individuals that hold stock or ownership pay their taxes,

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But they don't necessarily. There is a distinct disconnect between Net Profit and dividends, especially as a company grows larger.

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when employees pay their taxes,

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This is quite the stretch

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and when customers pay sales taxes.

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But this is fair argument since sales taxes, though levied on the consumer, are really "paid" by both parties (the split of the burden determined by the respective elasticities of supply and demand).

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And, I think we'd be better served with a federal sales tax replacing all the imputed taxes already infecting commerce.

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It would be one approach, but one I think has problems due to the variability of elasticities of supply and demand - but not an unnecessarily unsolvable problem.

You do realize that sales taxes also impact a company's profitability, right?

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Originally Posted by Yonivore

"...but burden is split between producers and consumers..."

From where do producers get the money to satisfy their portion of the burden?

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From the profits they otherwise would have earned.

"Thinking at the margin" Yonivore. C'mon, you can do it.

Running away from the computer now, be back later.

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Originally Posted by Yonivore

It does, however, cost you market share...which, reduces profits which, causes cut backs in other areas. Companies aren't going to spend any more than they must, nor are they going to spend any less than they have to, in order to market their product to seek the most profit.

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It doesn't cost you market share if your competitors have to make similar cuts.

And I think you overrate companies' expertise with regards to finding the optimal marketing budget. There are a ton of wasted ad dollars out there.

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I don't know what type of bonuses Subway awarded last year but, I would suggest the bonuses awarded to any of the companies of which you would criticize for doing so, are a speck in the ocean that makes up their balance sheet.

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I would suggest you might be surprised. But my point is that if cuts on the supply side of the equation would be significantly detrimental to their business, there would be pay cuts.

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Originally Posted by scott

From the profits they otherwise would have earned.

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And, if the profits didn't go to taxes, what would happen to them?

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Originally Posted by scott

"Thinking at the margin" Yonivore. C'mon, you can do it.

Running away from the computer now, be back later.

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Don't insult me, I'm going somewhere with this.

See you later.

One last tidbit before I go actually:

A $X sales tax on an item doesn't have the result of rising the price of the item by $X.

So if there is a $1 tax placed on Widgets, and as a result the price of Widgets goes up $0.75, then that $0.75 was the burden on the consumer and the $0.25 is the burden on the producer.

Okay, leaving for real now.

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Originally Posted by Spurminator

It doesn't cost you market share if your competitors have to make similar cuts.

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That suggests everyone's product is identically produced and, therefore, there's no difference. Might as well be just one sandwich business.

Each business has a formula for taking their assets and producing a product at a price that is competitive or (as scott points out) that the market will bear.

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Originally Posted by Spurminator

And I think you overrate companies' expertise with regards to finding the optimal marketing budget. There are a ton of wasted ad dollars out there.

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But, it's their money to waste. That doesn't give the government the right to confiscate it just because they don't think it's wise. How are advertising firms expected to make a profit and remain competitive?

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Originally Posted by Spurminator

I would suggest you might be surprised. But my point is that if cuts on the supply side of the equation would be significantly detrimental to their business, there would be pay cuts.

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No, I doubt I'd be surprised and, pay cuts also damage business.

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Originally Posted by scott

One last tidbit before I go actually:

A $X sales tax on an item doesn't have the result of rising the price of the item by $X.

So if there is a $1 tax placed on Widgets, and as a result the price of Widgets goes up $0.75, then that $0.75 was the burden on the consumer and the $0.25 is the burden on the producer.

Okay, leaving for real now.

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I understood the premise but, I have the same question.

Who pays the $0.25?

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Originally Posted by Yonivore

And, if the profits didn't go to taxes, what would happen to them?

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Any countless number of things. Provide jobs, invest in new equipment, issue a dividend, pay for lobbyists, go to the executive bonus plan, sit in a giant safe for Scrooge McDuck to swim around in...

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Don't insult me, I'm going somewhere with this.

See you later.

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Dude, I won't insult you if you don't act like a dunce. If you're going somewhere with your points, just go there. No need for me to walk you to the school bus.

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Originally Posted by Yonivore

I understood the premise but, I have the same question.

Who pays the $0.25?

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Literally, or effectively?

Running off again. Back late this PM.

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Originally Posted by Yonivore

If Congress did not have the ability to shift the tax burden around to whomever they wanted, they'd have no reason to pander. Maybe then they could concentrate on doing what's right instead of buy votes with tax policy.

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Of course they would have a reason to pander. They would pander to corporations who wanted other things like less regulations or government contracts. Not to mention companies are not the only thing that they pander to. They also pander to lobbyists from "family values" groups and others who want to affect social policy.

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Originally Posted by scott

Literally, or effectively?

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Either.

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Originally Posted by scott

Any countless number of things. Provide jobs,...

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Salaries go to individuals.

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Originally Posted by scott

...invest in new equipment,...

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No doubt, purchased from suppliers whose assets and liabilities are also shared by individuals.

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Originally Posted by scott

...issue a dividend,...

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To individuals.

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Originally Posted by scott

...pay for lobbyists,...

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Also individuals.

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Originally Posted by scott

...go to the executive bonus plan,...

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More individuals.

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Originally Posted by scott

...sit in a giant safe for Scrooge McDuck to swim around in...

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An individual fowl.

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Originally Posted by scott

Dude, I won't insult you if you don't act like a dunce. If you're going somewhere with your points, just go there. No need for me to walk you to the school bus.

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Every penny of asset or liability, in a corporation, belongs to or is the responsibility of individuals...either collectively or individually. Corporations don't pay taxes. The people who directly affect them do, from employees to consumers to suppliers.

That's my point.

That $0.25 burden in your example is going to directly affect the wealth of individuals.

In 2009, Subway sold $3.5 Billion dollars worth of $5.00 Foot Longs. If my back of the envelope math is accurate, that's $175,000,000 worth of quarters that make up the suppliers burden while the consumer picks up the additional $525,000,000 if, in fact, they're still enamored with a $6.00 Foot Long.

^Taxes don't go to individuals too? Do they get sucked into some economic black hole?

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Originally Posted by Yonivore

That $0.25 burden in your example is going to directly affect the wealth of individuals.

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So does not collecting the $0.25 burden. Everyone understands this. What's your point?

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In 2009, Subway sold $3.5 Billion dollars worth of $5.00 Foot Longs. If my back of the envelope math is accurate, that's $175,000,000 worth of quarters that make up the suppliers burden while the consumer picks up the additional $525,000,000 if, in fact, they're still enamored with a $6.00 Foot Long.

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It wouldn't be a $6.00 foot long. It'd be a $5.75 foot long in my example. :)

But what's your point again?

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Originally Posted by scott

So does not collecting the $0.25 burden. Everyone understands this. What's your point?

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Corporations don't pay taxes, individuals do. The money used to pay Corporate Taxes is drawn from the wealth of individuals and directly affect their individual stakes in a corporation.

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Originally Posted by scott

It wouldn't be a $6.00 foot long. It'd be a $5.75 foot long in my example. :)

But what's your point again?

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Same as above.

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Originally Posted by Yonivore

Corporations don't pay taxes, individuals do. The money used to pay Corporate Taxes is drawn from the wealth of individuals and directly affect their individual stakes in a corporation.

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Um... yeah, that's kind of the point of them.

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Originally Posted by scott

Um... yeah, that's kind of the point of them.

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I'm not sure everyone sees it that way. And, since you agree, would you also agree the vast majority of those stakeholders are not in the 1% and are, in fact, regular people who have retirement accounts, pensions, etc... invested in corporations?

Corporate taxes are paid by everyone who invests in that company. Many of whom are depending on their investments in some of these companies for their sustenance.

That was my original point. Calling them Corporate Taxes makes them impersonal. It allows groups like Occupy to demonize an abstract and injure real people.

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Originally Posted by Yonivore

I'm not sure everyone sees it that way.

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What other way do they see it, and why does it matter?

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And, since you agree, would you also agree the vast majority of those stakeholders are not in the 1% and are, in fact, regular people who have retirement accounts, pensions, etc... invested in corporations?

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Why does it matter?

And a significant chunk of stock ownership is, in fact, owned by the 1%. The disparity between the number of shareholders and the distribution of ownership in a company kind of goes along with the whole inequality argument being waged.

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Corporate taxes are paid by everyone who invests in that company.

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That's the point, because otherwise it isn't a true statement without Corporate Taxation.

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Many of whom are depending on their investments in some of these companies for their sustenance.

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Even if true, are you suggesting that you think tax policy should be tailored to suit people who "need" the money.

And in any event, who are these people who depend on stock dividends for sustenance? And what shitty financial planner helped them make that arrangement?

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That was my original point. Calling them Corporate Taxes makes them impersonal. It allows groups like Occupy to demonize an abstract and injure real people.

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Make them as impersonal or personal as you want, they still need to get paid. The people sustaining these "injuries" seem to be doing alright.

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Originally Posted by Yonivore

Corporate taxes are stupid since they're merely factored into consumer prices.

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Isn't it ironic how people don't realize they will pay more for US products by increasing corporate taxes, and less by decreasing them?

Want to return some jobs to America and have less leave... reduce or eliminate the productivity tax!

"less by decreasing them"

bullshit, you have no proof that lower corporate taxes result in anything but the savings being sucked up by mgmt and investors