

U.S. Corporate Tax Rate Is 2nd Highest in Industrialized World - cwan
http://taxprof.typepad.com/taxprof_blog/2009/08/us-corporate-tax-rate.html

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locopati
And now, some alternative perspectives...

'Most Corporations Don't Pay Income Taxes'
[http://www.truthout.org/article/most-corporations-dont-
pay-i...](http://www.truthout.org/article/most-corporations-dont-pay-income-
taxes)

'Big business must pay it's fair share'
[http://www.cleveland.com/opinion/index.ssf/2009/07/big_busin...](http://www.cleveland.com/opinion/index.ssf/2009/07/big_business_must_pay_its_fair.html)

You can slice the numbers and both your point and my point turn out to be
true. The questions become: what kind of society do we want? how can we build
that society? and who will pay for it? It doesn't seem unreasonable to ask
corporations who benefit from the infrastructure of the nation (including
transportation, educational systems, public libraries, medical systems) to
help pay for those benefits.

~~~
cwan
I've often wondered about this line of reasoning - that corporations "benefit"
from a given nation and its infrastructure but the problem is that it's a two
way street. The others use incentives put in place by government encouraging
them to do things like research or investments. Local economies, consumers and
nations themselves benefit greatly from corporations - both in the obvious
point of jobs but even more so in the products and services they provide.

The report you cite at truthout also fairly points out that 80% of those
companies paid no taxes because they didn't make any money. This doesn't take
away from your point though that we have to ask what kind of society we want,
but we also should be asking what's fair and also how services are provided.

~~~
locopati
The trick with 'no profit' is that it's possible for a company to tweak the
numbers such that the books show 'no profit' while great profit was made and
distributed in ways to allow that (some legal, some illegal, some gray area
depending on interpretation). Big companies can take advantage of these rules
much more easily than small ones due to a greater ability to allocate
resources a legal dept that can explore these options.

------
eli
OK, but there aren't many (any?) corporations that actually pay that rate. The
_effective_ tax rate for US corporate income -- what companies actually pay --
is about 25%.

The "35% corporate tax rate" is a disingenuous business-lobby talking point.
Actual effective US corporate taxes are lower than those in many
industrialized European countries.

~~~
tjic
"business-lobby" ?

Does that mean "people in favor of profits, job creation, and value creation"
?

Count me in to that lobby.

Because, frankly, what's the alternative? Thinking that we have _too much_
entrepreneurialism, value creation, innovation, and employment, and we should
tax it more so that we end up with less of it?

~~~
skorgu
That's a nice straw man you're arguing against.

Lobbying for less regulation, lower taxes and free markets is one position.
Lobbying for increased oversight of potentially damaging behavior, increased
transparency in industry, reduced rent seeking and universal standards of
safety is another. The right mix is somewhere in between the two extremes of
course and each side can point to massive failures of the other's philosophy.

Implicitly framing one side as "people who don't like profits or jobs" is
distasteful and frankly surprising to see here.

~~~
CWuestefeld
Lobbying for free markets necessarily implies eliminating rent seeking.

You'll not that the only way that rent seeking is possible is when the
government gets its claws into the industry. Government regulation becomes the
tool of those it claims to watch. It happens every time: well-meaning
regulators get subverted toward the ends of business lobbyists.

Is there any reason to believe that something will suddenly turn this around
so that the government is never suberted?

~~~
skorgu
I'm not sure that rent seeking _requires_ gov't intervention, I suspect there
are instances of monopoly- or oligarchy-driven rent-seeking behavior but I
don't have the desire right now to do a comprehensive search.

Fundamentally I don't disagree, and I think my comment is pretty clear. I'm
not making a specific argument on where the balance of regulation ought to
exist. I take issue only with the framing of the debate in terms that make it
impossible to hold a conversation. No offense is meant towards anyone, I'd
just prefer to keep the discussion at a bit more civil tone. We already have a
reddit.

Edit: nuked two paras that didn't come out right.

~~~
CWuestefeld
I concede the finer point. It's probably true that rent seeking can be
accomplished with the intervention of government as such.

I maintain that, because government is so accessible and because they carry
such a big stick, the vast, vast portion of rent seeking is accomplished by
subverting government regulation.

That said, I'm up-voting your reply because it is a relevant argument. I just
watched a TED video with Paul Romer where he talked about the effect of
societal rules on development: not just governmental laws, but broader
societal norms that might prevent progress.

~~~
skorgu
I concur entirely, it's a risky bargain especially considering the temptation
to fight rent-seeking with more regulation with the attendant second- and
third-order effects.

Well said.

------
ivanyv
I'm surprised it's higher than in Mexico. I thought our government liked to
screw the corporations big time... Or maybe that's one of the reasons the
country remains an underdog?

