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A box is a 3 dimensional construct and is not a rectangle any more than you are an eyeball.
The semantics of the word 'is' aside you should just stop.
True, but lowering taxes on the rich tends to be viewed as "trickle down".
Edit: As Fuzzy pointed out, you probably meant to say "square" instead of box up there. That's what I assumed you meant when I first read it anyways.
Last edited by LnGrrrR; 09-12-2012 at 06:44 PM.
A box is a 3 dimensional construct and is not a rectangle any more than you are an eyeball.
The semantics of the word 'is' aside you should just stop.
^
there's no magic bullet to fix this economy. raising/lowering taxes, giving money to banks for existing, going into debt to rebuild infrastructure are all nice sounding ideas that just distort the economy. the best thing politicians and central bankers can do is just get out of the way and let this thing bottom out so it can start growing again.
Maybe this will help:
See how much worse we are with the trade imbalance today than before. Other Reagan policies actually started to reverse the trade deficit. Then Clinton authorized all those free trade deals.
All in the eye of the beholder.
Wow...
You mean he finally got something right?
I went back and edited it.
Yes. We need to let it play out, and the more it gets manipulated the longer it will last.
The only thing I see to fix things is to stop taxing productivity, and start taxing consumption instead.
Reading comprehension fail.
Go back and re-read it.
Net income was not given as $10M, by my reading.
That is the incremental net income under consideration.
A heavily regulated climate, in which no new regulations were introduced would meet this requirement.
This would also strongly imply a large problem is inherent in the unpredictability induced by radical re-writing or repealing of laws, e.g. tea party proposals.
Business needs predictability, not "no regulations".
The radical re-structuring of government at all levels advocated by Mssrs Ryan, Paul et al, would introduce a great deal of uncertainty.
and with uncertain, if any, benefit. killing regulatory agencies like Paul wants would be a disaster, just like deregulating financial sector was and will be a disaster, repeatedly.
I get what you're saying here with regards to personal income tax rates, but does the same concept apply when dealing with corporate income tax rates? Here's my premise which I will attempt to sail Lusitania style past the U-boat of your superior knowledge on this subject.
Preimse: It would be beneficial to our economy to cut corporate income tax rates by half, if not more.
Justifications:
1) The 35% rate present too big an incentive for multinationals to stash their cash outside the U.S. Lower rate = less incentive to avoid.
2) Domestics and smaller corps who can't afford the armies of tax attorneys and accountants needed to avoid U.S. corp taxes are placed at a compe ive disadvantage.
3) Lower the rate enough and you become the country foreign corps want to stash their money in as opposed to being the one U.S. corps want to get their money out of.
4) Lower tax rate would increase corporate profits, which would be a good thing. Pay that extra money to the corp's executives? That money ends up getting taxed at the much higher personal income tax rate of that executive. Pay it out to shareholders via dividends? Those dividends get taxed. Reinvest in the business? That's more jobs. Even if they just want to sit on the cash they're either going to put it into a bank which improves that bank's liquidity, or use it to buy bonds or other investments which spurs economic activity as well.
Economically, I don't see any downside to the idea. Sort of like the captain of the Lusitania never saw the U-boat or the torpedo.
Your thoughts?
"The 35% rate present too big"
effectively NONE of the big corps pay that, and even some get paid by the taxpayers.
Corps sitting on $2T+ cash, how much more do they need to sit on from more tax cuts and loopholes?
Right. None of the big boys are paying it to begin with, thus there's not much to lose by cutting it, and potentially a lot to gain.
A complicated argument that I could personally argue for or against. Depends on what the objectives of tax policy are, but given all the cir stances (the need to create jobs while simultaneous funding our historically under-funded level of Government expenditures), I personally would argue against it.
To your specific justifications:
A common argument and not facially unsound. But if your objective was to prevent tax avoidance in the way you mentioned, couldn't we just close the loopholes that allow it?Justifications:
1) The 35% rate present too big an incentive for multinationals to stash their cash outside the U.S. Lower rate = less incentive to avoid.
To improve your argument for you, it would be better to say that taxing domestic production disadvantages it versus overseas production. In which I think there is a case to be made.
This one I'm not buying. Essentially the argument is: "we created this system, then we added all these loopholes that puts some at a disadvantage, so we should just abandon the system."2) Domestics and smaller corps who can't afford the armies of tax attorneys and accountants needed to avoid U.S. corp taxes are placed at a compe ive disadvantage.
Why not just abandon the loop holes that advantage some over others?
Interestingly, America is already where foreign corporations want to "stash their money". America has a negative "net foreign investment" position, meaning the value of foreign investments in the United States exceeds the value of domestic investments abroad. The imperial evidence would suggest that our tax code hasn't been a hindrance to this.3) Lower the rate enough and you become the country foreign corps want to stash their money in as opposed to being the one U.S. corps want to get their money out of.
An important point to be made is that US Corporations are already provided a legal and macro-economically beneficial means of tax avoidance: wages paid and capital investment are completely tax deductible, and lowering income tax rates (corporate or personal) actually increases the opportunity cost of paying hire wages or making capital investment.4) Lower tax rate would increase corporate profits, which would be a good thing. Pay that extra money to the corp's executives? That money ends up getting taxed at the much higher personal income tax rate of that executive. Pay it out to shareholders via dividends? Those dividends get taxed. Reinvest in the business? That's more jobs. Even if they just want to sit on the cash they're either going to put it into a bank which improves that bank's liquidity, or use it to buy bonds or other investments which spurs economic activity as well.
There is definitely a point where taxes are "too high" and there is definitely a point where they are "too low". I present the argument that they are too low. With that said, I can simultaneously be of the opinion that we need to get control of our spending, both in terms of the nominal amount but also the efficiency and effectiveness of such spending.
My last point is one that is much more qualitative, personal, and I don't have any well-thought out economic justification for: If corporations want to be people, they should be taxed like people.Economically, I don't see any downside to the idea. Sort of like the captain of the Lusitania never saw the U-boat or the torpedo.
Your thoughts?
And just for reference, here is Year End 2011 figures on our Net Internatinoal Investment Position. http://www.bea.gov/newsreleases/inte...f/intinv11.pdf
The gap continues to widen as more investment flows into the US than out.
Interesting.Financial derivatives held as assets increased $1,052.4 billion to $4,704.7 billion, mainly due to increases in U.S. claims from single-currency interest rate swaps.
I wish I understood what these two items meant, exactly.Financial derivatives held as liabilities increased $1,036.5 billion to $4,578.4 billion, mainly due to increases in U.S. liabilities from single-currency interest rate swaps.
http://en.wikipedia.org/wiki/Interest_rate_swap
Very textbookish, but not overly helpful. I wish I had time to crunch through it, as these changes seem somewhate important, given the size of the increase.
All in all, the graph at the end shows a huge flight to the safety of US assets.
The cost for the US to borrow money or raise capital has got to be cheeeap.
This is the biggest screaming need we have in terms of needed reforms of any sort, IMO.
As someone whose job occasionally requires understanding complicated tax strategies, I can say they are edly complex.
Simplify, simply simplify. Put some accountants out of work, but for the greater good, of not wasting so much productivity nationally.
I shudder to think of the amount of effort we spend collectively calculating taxes due to all the credits, exemptions and everything else snuck into the tax code by effective lobbyists over the decades.
Seems to me like just cutting the rate and not worrying about the loopholes would be the easier fix than getting bogged down in sifting through all the loopholes. But, I get your point.
That does surprise me.Interestingly, America is already where foreign corporations want to "stash their money". America has a negative "net foreign investment" position, meaning the value of foreign investments in the United States exceeds the value of domestic investments abroad. The imperial evidence would suggest that our tax code hasn't been a hindrance to this.
Pretty much the same scenario as you outlined for the small business owner getting taxed at personal rates, correct?An important point to be made is that US Corporations are already provided a legal and macro-economically beneficial means of tax avoidance: wages paid and capital investment are completely tax deductible, and lowering income tax rates (corporate or personal) actually increases the opportunity cost of paying hire wages or making capital investment.
I agree that whatever we do needs to be revenue positive. It just seems (seemed) to me that cutting taxes on the corporate side would stimulate growth and allow you to make it up on the personal side.There is definitely a point where taxes are "too high" and there is definitely a point where they are "too low". I present the argument that they are too low. With that said, I can simultaneously be of the opinion that we need to get control of our spending, both in terms of the nominal amount but also the efficiency and effectiveness of such spending.
Interesting point.My last point is one that is much more qualitative, personal, and I don't have any well-thought out economic justification for: If corporations want to be people, they should be taxed like people.
Thanks.
Wow... you want serious restrictions on free market goods?
Who do you think will want to buy things from expensive US manufacterers after we do that?
You would spur domestic manufacturing, at the expense of hyperinflation for everybody, and the inability of US manufacturers to sell anything overseas.
Hawly Smoot tariff redux.
Exports $1.497 trillion (2011 est.)[11]
Export goods agricultural products (soybeans, fruit, corn) 9.2%, industrial supplies (organic chemicals) 26.8%, capital goods (transistors, aircraft, motor vehicle parts, computers, telecommunications equipment) 49.0%, consumer goods (automobiles, medicines) 15.0%
Main export partners Canada 19%, Mexico 13.3%, China 7%, Japan 4.5% (2011)
Imports $2.236 trillion (2011 est.)[11]
Import goods agricultural products 4.9%, industrial supplies 32.9% (crude oil 8.2%), capital goods 30.4% (computers, telecommunications equipment, motor vehicle parts, office machines, electric power machinery), consumer goods 31.8% (automobiles, clothing, medicines, furniture, toys)
Main import partners China 18.4%, Canada 14.2%, Mexico 11.7%, Japan 5.8%, Germany 4.4% (2011)
http://en.wikipedia.org/wiki/Economy..._United_States
US doesn't have any trouble exporting. A weak dollar would help greatly.
inflation is tamed by Fed raising interest rates, strenthening the dollar, weakening exports, making imports cheaper.
Aren't loopholes typically created to solve legitimate problems within the code that end up getting exploited?
Like exempting playgrounds and then a business installing a playground and claiming it exempts them. I am sure that loopholes are often passed only for exploitation at times but many do address legitimate concerns.
What we need is a rewrite of how corporate charters work which stipulates that the limit of liability and legal status is in exchange for the surrendering of equal protection. Then you can treat Exxon different than a family that owns some mineral rights or the like.
" edly complex."
complexity and opacity are how the 1% and UCA game the system in their favor, be it tax code, or financial dealings, etc, etc.
Trickle down is a 1% LIE
and
"Tax cuts pay for themselves" is a 1% LIE
Apple Gets Better At Tax Avoidance, Drives Rate On Foreign Profits Down To 1.9 Percent
Apple Inc. paid an income tax rate of only 1.9 percent on its earnings outside the U.S. in its latest fiscal year, a regulatory filing by the company shows.
The world’s most valuable company paid $713 million in tax on foreign earnings of $36.8 billion in the fiscal year ended Sept. 29, according to the financial statement filed on Oct. 31. [...]
Apple may pay some income taxes on its profit to the country in which it sells its products, but it minimizes them by using various accounting moves to shift profits to countries with low tax rates. For example the strategy known as “Double Irish With a Dutch Sandwich,” routes profits through Irish and Dutch subsidiaries and then to the Caribbean.
http://thinkprogress.org/economy/201...dodging-bette/
trickle down does not work for government money either.
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