So Taxing Small Business Owners is Going to Lead to Jobs/Growth?

[RJKarl]

Don't be so dismissive of what 15k means to a small business. I'm on the board of a local small business that has about 12 full time employees and a handfull of part time employees and I can tell you that 15k makes a huge difference, because this business, like many others, is struggling in this economy.

Off the top of my head here is what we can do with an extra 15k:

* Pay about half of our property taxes.
* Make 1 month worth of mortgage payments.
* Lower the amount we require our employees to contribute to their health care plan. The 10 or so full time employees could pay $100+ less per month for their insurance.
* We wouldn't have had to cut everyone's salary by 3-5% last January.
* The employees could get a holiday bonus for the first time in 3 years.
* A much needed IT upgrade of the company computer systems.
* Capital Improvements to the building owned by the company
* Marketing costs - this one is huge as it's one area where we could spend money and expect to make money.

not having that $15,000 doesn't stop you from doing ANY of those things. If ALL of those things are necessary, you can still do them right now with a $500,000 pretax profit.

If it's worth doing and you have a pretax profit of $500,000 you can do it with $500,000 or $485,000.

The concept that you CAN'T do it without that $15,000 is ABJECTLY, TOTALLY, COMPLETE BS.

 

[Sgt Hulka]

not having that $15,000 doesn't stop you from doing ANY of those things. If ALL of those things are necessary, you can still do them right now with a $500,000 pretax profit.

If it's worth doing and you have a pretax profit of $500,000 you can do it with $500,000 or $485,000.

The concept that you CAN'T do it without that $15,000 is ABJECTLY, TOTALLY, COMPLETE BS.

They could probably do without 30k as well, so lets raise their taxes to 6%! Hey, you know what, what is the REAL difference between 30k and 40k...nothing really, so lets have the govt take that from them as well...afterall, they don't really need it.

 

[ONW]

They could probably do without 30k as well, so lets raise their taxes to 6%! Hey, you know what, what is the REAL difference between 30k and 40k...nothing really, so lets have the govt take that from them as well...afterall, they don't really need it.

I find it ironic that we're moaning over 15K when the biggest fucking corporations in the world make billions and pay nothing in taxes.

 

[84Deac]

I find it ironic that we're moaning over 15K when the biggest fucking corporations in the world make billions and pay nothing in taxes.

One of the best reasons for enacting the Fair Tax!

 

[ONW]

One of the best reasons for enacting the Fair Tax!

I'd go consumption tax.

 

[ChrisL68]

I find it ironic that we're moaning over 15K when the biggest fucking corporations in the world make billions and pay nothing in taxes.

That's not reality.

 

[Wakelaw2006]

I find it ironic that we're moaning over 15K when the biggest fucking corporations in the world make billions and pay nothing in taxes.

That's not reality.

Save your breath (fingers?) - we've been through this ad nausem.

 

[ONW]

That's not reality.

Really? "US government survey: Most corporations pay no taxes

A study released Tuesday by the Government Accountability Office (GAO) reveals that the majority of corporations pay no federal taxes on profits accrued through business conducted within the US.

From 1998-2005, the period covered by the survey, about two thirds of both domestic and international businesses paid no federal taxes, while about one quarter of large US corporations, defined as those with over $250 million in assets and at least $50 million in sales, had no tax liability.

While it failed to name the ways specific corporations avoided taxes, the GAO survey, based on Internal Revenue Service records, attributes the failure to three factors: tax credits, operating losses and “transfer pricing,” which means corporations internally shift taxable profits to their own subsidiaries in lower-tax nations."

 

[Shorty]

Really? "US government survey: Most corporations pay no taxes

A study released Tuesday by the Government Accountability Office (GAO) reveals that the majority of corporations pay no federal taxes on profits accrued through business conducted within the US.

From 1998-2005, the period covered by the survey, about two thirds of both domestic and international businesses paid no federal taxes, while about one quarter of large US corporations, defined as those with over $250 million in assets and at least $50 million in sales, had no tax liability.

While it failed to name the ways specific corporations avoided taxes, the GAO survey, based on Internal Revenue Service records, attributes the failure to three factors: tax credits, operating losses and “transfer pricing,” which means corporations internally shift taxable profits to their own subsidiaries in lower-tax nations."

I find it interesting that the GAO report uses the word "failure" Where does the failure lie? Certainly not with the corporations cited in the report as having paid no federal taxes.

 

[clol69]

What happens when your read CNSNEWS.COM without a high degree of skepticism?

CNS has nothing to do with the story...watch the clip as Geithner nails Democrat party economic principles...

 

[ChrisL68]

Really? "US government survey: Most corporations pay no taxes

A study released Tuesday by the Government Accountability Office (GAO) reveals that the majority of corporations pay no federal taxes on profits accrued through business conducted within the US.

From 1998-2005, the period covered by the survey, about two thirds of both domestic and international businesses paid no federal taxes, while about one quarter of large US corporations, defined as those with over $250 million in assets and at least $50 million in sales, had no tax liability.

While it failed to name the ways specific corporations avoided taxes, the GAO survey, based on Internal Revenue Service records, attributes the failure to three factors: tax credits, operating losses and “transfer pricing,” which means corporations internally shift taxable profits to their own subsidiaries in lower-tax nations."

The analysis of that data wouldn't get a passing grade in a college level business class.

A couple of "factors" that they missed.

Those numbers included S corporations, which don't pay corporate taxes except under a few unusual circumstances.

Also, how can they discuss the factors during that period and not mention either stock option deductions or bonus depreciation is beyond me.

 

[ChrisL68]

CNS has nothing to do with the story...watch the clip as Geithner nails Democrat party economic principles...

Geithner says he wanted to raise taxes on those over $250K. CNS concluded that this meant he wanted to raise taxes on all small businesses in the US. That conclusion is full of manure.

 

[ONW]

The analysis of that data wouldn't get a passing grade in a college level business class.

A couple of "factors" that they missed.

Those numbers included S corporations, which don't pay corporate taxes except under a few unusual circumstances.

Also, how can they discuss the factors during that period and not mention either stock option deductions or bonus depreciation is beyond me.

Chris, I'm not saying the corporations have lawyers and accountants to maneuver their way around the tax codes, I'm saying that blaming/focusing on tax rates for small businesses/individual is misguided.

 

[ChrisL68]

Chris, I'm not saying the corporations have lawyers and accountants to maneuver their way around the tax codes, I'm saying that blaming/focusing on tax rates for small businesses/individual is misguided.

Your conclusion based on that report that big corporations aren't paying taxes because they have lawyers and accountants that "maneuver their way around the tax codes" based on that report is not correct.

Again, those numbers include all of the corporations that have their income flow-through to their shareholder's individual tax returns and have their taxes paid there. To say that those corporations don't pay any corporate taxes doesn't mean anything, and it is by far the biggest factor in those numbers. And don't believe for one second that there aren't many S Corporations that would fall under those large corporation metrics. We have a client that meets that definition.

That 8 year period also included a giant recession year. Look at the percentages of corporations that didn't pay taxes that year. They skyrocketed.

Coming out of that recession, corporations that didn't pay taxes were higher due to two factors:

1st, all of those companies that lost money in 2001 and made money in later years didn't pay any taxes until those losses in 01 were offset with income. If you lose 100 million one year and make 80 million the next, you really shouldn't have to pay taxes on the 80 million of income since you lost 20 million over the 2 year period.

Secondly, congress passed bonus depreciation to spur economic activity. Any qualifying fixed assets which were placed in service got a % of the cost depreciated in the 1st year. Of course this increased the % of companies that didn't pay any taxes. It was the intent of the legislation.

Both extremes will take reports like this, concoct some self-serving analysis and try to justify their political objectives. The extreme left will argue that corporations are gaming the system and should be punished (for the vast majority, they are not). The extreme right will argue that the system is broken and that we need to change to all consumption taxes (which would really favor their constituency, which are the same corporations and their owners that are supposedly gaming the system). Both are incorrect.

 

[ONW]

You obviously have a dog in this fight, I'll trust your judgement.

 

[2&2 Slider To Leyritz]

Whether he has a dog in the fight or not, he is factually correct.

 

[WPDeac]

Whether he has a dog in the fight or not, he is factually correct.

Generally agree, but a third factor raised previously by the GAO report is factually correct - transfer pricing leads to an abundance of multinational profits not flowing back to the US. And yes, corporations have lawyers and high priced consultants that advise them on ways to maximize tax strategy via the cumbersome tax code.

In many cases, the tax strategies are legal (maybe not ethical) but in other cases there are instances where corporations are illegally shifting profits via transfer pricing practices.

Chris has raised this issue before, I am guessing we are on the same side in advocating a reduction in the corporate tax rate to mitigate some of this.

 

[RJKarl]

If they can get away do this, why would any amount of change (other than zeroing it out) make a difference?

If these machinations are still allowed to keep corporations from paying "corporate taxes" why does it matter?

We should put a tax on every dollar that goes to bogus HQs in Switzerland, Bahamas or anywhere else.

 

[ChrisL68]

Generally agree, but a third factor raised previously by the GAO report is factually correct - transfer pricing leads to an abundance of multinational profits not flowing back to the US. And yes, corporations have lawyers and high priced consultants that advise them on ways to maximize tax strategy via the cumbersome tax code.

In many cases, the tax strategies are legal (maybe not ethical) but in other cases there are instances where corporations are illegally shifting profits via transfer pricing practices.

Chris has raised this issue before, I am guessing we are on the same side in advocating a reduction in the corporate tax rate to mitigate some of this.

You are correct.

 

[84Deac]

If they can get away do this, why would any amount of change (other than zeroing it out) make a difference?

If these machinations are still allowed to keep corporations from paying "corporate taxes" why does it matter?

We should put a tax on every dollar that goes to bogus HQs in Switzerland, Bahamas or anywhere else.

Great idea! Let's drive all the manufacturing plants overseas!! Then we can use all the abandoned plants here for prisons when all the unemployed start protesting in the streets.