CONNECT
NationofChange / Op-Ed
Published: Monday 30 April 2012
“We hear these claims often, even though they’re entirely false. An analysis of the facts should make that clear.”
Five Tax Fallacies Invented by the 1%
We hear these claims often, even though they're entirely false. An analysis of the facts should make that clear.
(1) The Rich Pay Almost All the Taxes
That's simply not true. The percentage of total taxes paid by the very rich (the top 1%) is approximately the same as the percentage paid by middle class Americans (the 4th quintile, average income $68,700). Here are the details:
Internal Revenue Service figures show that the very rich paid 23% of their incomes in federal income taxes in 2006. The middle class paid about 8% of their incomes in federal income taxes. Based on U.S. Congressional Budget Office figures, the very rich pay just under 2% of their incomes toward social security, while the middle class pays just under 10%. According to a study by The Institute on Taxation and Economic Policy, the very rich pay about 7% of their incomes in state and sales and property and excise taxes, while the middle class pays approximately 10%. Another year of Bush tax cuts will reduce the taxes of the very rich by at least 3% more than the middle class.
So total taxes for the very rich are 29% of their incomes (23% + 2% + 7% - 3%). Total taxes for the middle class are 28% of their incomes (8% + 10% + 10%). These figures agree with CTJ's 2011 estimate of total taxes paid.
(2) Tax Rates Are Too High
In 2009, the United States ranked 26th out of 28 OECD countries in total federal, state, and local taxes as a percent of GDP. Only Chile and Mexico had lower tax rates.
According to the Center on Budget and Policy Priorities, "federal taxes on middle-income Americans are near historic lows." For taxpayers in the top 1%, the tax burden has fallen dramatically in recent years.
At very high income levels, beginning at about the million dollar range, federal income tax actually becomes regressive. Effective tax rates level off at about 25%, and then go down from there. This is because all incomes over $388,000 are subject to the same 35% maximum. The $4 billion hedge fund manager pays no more, percentagewise, than the $400,000 doctor. In fact, even less. At the highest levels most of the income comes from capital gains, which are taxed at 15%.
How about corporations? Even worse. They paid only 12.1% in 2011, dramatically lower than the 25% average since 1987. According to U.S. Office of Management and Budget (OMB) figures, they're paying about a THIRD of the inflation-adjusted share of GDP paid by corporations in the 1960s.
Compared to foreign countries, U.S. corporations paid a smaller rate of income taxes than 24 of 25 OECD countries analyzed by the Office of Management and Budget and the Census Bureau.
Most stunning is the shift in taxpaying responsibility from corporations to workers over the years. For every dollar of workers' payroll tax paid in the 1950s, corporations paid three dollars. Now it's 22 cents.
(3) Tax Cuts Boost the Economy
In the 1970s, University of Chicago economist Arthur Laffer convinced Dick Cheney and other Republican officials that lowering taxes on the rich would generate more revenue. The delusion has persisted to this day.
Soon after the Reagan tax cuts, in 1984, the U.S. Treasury Department came to the logical conclusion that tax cuts cause a loss of revenue. A 2006 Treasury Department study found that extending the Bush tax cuts would have no beneficial effect on the U.S. economy.
Other sources confirm that economic growth was fastest in years with relatively high top marginal tax rates.
The reality is that supply-side, trickle-down economics simply hasn't worked. Various economic studies have concluded that the revenue-maximizing top income tax rate is anywhere from 50% to 75%.
(4) Eliminating Tax Breaks for the Rich Wouldn't Significantly Reduce the Deficit
First of all, just eliminating the Bush tax cuts on the highest-earning 5% of Americans could knock $150 billion off the deficit. Congressional Budget Office data shows that the tax cuts have been the single largest contributor to the return of substantial budget deficits in recent years.
But there's so much more. The IRS estimates that 17 percent of taxes owed were not paid, leaving an underpayment of $450 billion.
Most of the annual $1.3 trillion in "tax expenditures" (tax subsidies from special deductions, exemptions, exclusions, credits, and loopholes) goes to the top quintile of taxpayers. One estimate is $250 billion a year just to the richest 1%.
Another $100 billion could be retrieved by collecting taxes from Fortune 500 companies at the 26% rate paid from 1987 to 2008. CTJ puts the figure at over $200 billion.
Worse yet is the loss from tax havens, which the Tax Justice Network estimates as $337 billion.
Despite some overlap in these figures, it all adds up to a pretty good chunk of the deficit.
(5) A Financial Transaction Tax (FTT) Would Hurt the Economy
This fallacy would have us believe that a tiny tax on financial transactions is going to hurt the economy, even though the underlying reason for our economic collapse was the excessive, reckless, unrestrained, free-for-all trading of trillions of dollars of speculative derivatives.
The inventiveness of this fallacy is impressive, with claims of lost jobs, harm to ordinary investors, and the threat of exchanges moving overseas. The Wall Street Journal calls the FTT a "sin tax."
An FTT isn't likely to interrupt the global trading frenzy or cause any sudden defections from financial mega centers. The United Kingdom has had a tax on stock trades for decades, and the London Stock Exchange is humming along as the third largest exchange in the world. The CME Group, made up of the Chicago Mercantile Exchange and the Chicago Board of Trade, had a profit margin higher than any of the top 100 companies in the nation from 2008 to 2010.
On the contrary, the FTT has extraordinary revenue-generating potential, on a global scale. The Bank for International Settlements reported in 2008 that annual trading in derivatives had surpassed $1.14 quadrillion (a thousand trillion dollars!). For the U.S. alone, revenue estimates by the Center for Economic and Policy Research and the Chicago Political Economy Group approach a half-trillion dollars annually.
And at the more basic level of simple fairness, it should be noted that while an American mother pays nearly a 10% sales tax on shoes for her kids, millionaire investors pay .002 percent (2-thousandths of a percent) for a financial instrument. That kind of tax disparity is what really hurts.
Get Email Alerts from NationofChange
ABOUT Paul Buchheit
Paul Buchheit is a college teacher with formal training in language development and cognitive science. He is the founder and developer of social justice and educational websites (UsAgainstGreed.org, RappingHistory.org, PayUpNow.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.
Top Stories
By Aviva Shen
56 comments on "Five Tax Fallacies Invented by the 1%"
May 07, 2012 2:49pm
Quoting legal maximum tax rates is perpetuating fiction in that there are scads of both universal and special secretive tax breaks written into the tax code.
*
Effective tax rates are the only numbers real enough to use.
*
Fairness would be Alternative Minimum Tax rates for businesses and individuals to do away with the "bums-on-the-plush" as Utah Philips called them.
May 02, 2012 4:28pm
We should fire the Federal Reserve Banksters and then no one would owe taxes. The Banksters have raped our economy since its inception and continue to do so at will. Our founding fathers forbid us to have a central banking system for a reason. Now we are all waking up. Most Americans are not taxpayers anyway. Go read the IRS code. Know who you are. Stop allowing your money to be siphoned off. Step into your power and take it back. Become a fully informed Juror and just say no to taxation period. We all pay sales tax and this tax and that tax. Go read the code fully inform your selves.
May 04, 2012 4:17pm
"Taxes are what we pay for civilized society." - Oliver Wendell Holmes.
In 1811, two years after Jefferson left the Presidency, Jefferson wrote a letter to General Thaddeus Kosciuszko, a hero of the American Revolution. Jefferson said that he supported taxes (then tariffs, since there was no income tax yet) falling entirely on the wealthy. As Jefferson explained: "The farmer will see his government supported, his children educated, and the face of this country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings."
Here is someone else who was an outspoken proponent of progressive taxation: Adam Smith, who literally "wrote the book" on capitalism. In 1776, in The Wealth of Nations, Smith wrote:
"The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion."
May 02, 2012 4:28pm
We should fire the Federal Reserve Banksters and then no one would owe taxes. The Banksters have raped our economy since its inception and continue to do so at will. Our founding fathers forbid us to have a central banking system for a reason. Now we are all waking up. Most Americans are not taxpayers anyway. Go read the IRS code. Know who you are. Stop allowing your money to be siphoned off. Step into your power and take it back. Become a fully informed Juror and just say no to taxation period. We all pay sales tax and this tax and that tax. Go read the code fully inform your selves.
May 04, 2012 4:20pm
Repeating this screed 3 more times makes it no more compelling.
May 02, 2012 4:27pm
We should fire the Federal Reserve Banksters and then no one would owe taxes. The Banksters have raped our economy since its inception and continue to do so at will. Our founding fathers forbid us to have a central banking system for a reason. Now we are all waking up. Most Americans are not taxpayers anyway. Go read the IRS code. Know who you are. Stop allowing your money to be siphoned off. Step into your power and take it back. Become a fully informed Juror and just say no to taxation period. We all pay sales tax and this tax and that tax. Go read the code full inform your selves.
May 02, 2012 4:27pm
We should fire the Federal Reserve Banksters and then no one would owe taxes. The Banksters have raped our economy since its inception and continue to do so at will. Our founding fathers forbid us to have a central banking system for a reason. Now we are all waking up. Most Americans are not taxpayers anyway. Go read the IRS code. Know who you are. Stop allowing your money to be siphoned off. Step into your power and take it back. Become a fully informed Juror and just say no to taxation period. We all pay sales tax and this tax and that tax. Go read the code full inform your selves.
May 01, 2012 9:08pm
The service thing explains your point of view.
April 30, 2012 9:42pm
Hey, Gina, This is a progressive site. You don't belong here. You need to go back to Faux News so Rupert Murdoch can tell you what to think. A huge majority in the US pay taxes but many get complete refunds. I, for instance, won't pay any taxes in 11 and 12 because of a gigantic casualty loss. People whose homes are destroyed by hurricanes, tornadoes, floods, get complete refunds for for up to 5 years. People with no health insurance and huge medical bills don't pay taxes (get refunds). People with many dependents and little income get complete refunds. Get it? Go away!!
May 01, 2012 5:13pm
Yellowdog, I have to clarify. I understand completely who does not pay taxes. I have lost a home in a flood. I spent 8 months rebuilding. My father was a builder and I had the skills to do much of the work myself, along with my sons. I have been a single mother who took in other children from the community who had nowhere else to go. I have a single mother daughter with two sons, and I have been supporting them for years so she can go back to college and get a Master's degree and become self-sufficient. She pays no taxes, and gets a large refund every year. I have lived in hurricane zones. I am an Army mom and an Air Force mom. I know what too little income looks like. I also know what working and paying a lot of tax looks like, and watching 37% of my income disappear and not getting a refund, and still taking in kids who have nowhere to go, and supporting my childrens' families while they are do the work of defending our nation for too little pay. I know what corporate tax looks like, and I've watched it increase every year with brand new taxes added on in my state. I don't want to make the choice between paying more tax or hiring the woman who came to me to get credits for her college degree for work experience, and now wants to stop taking disability and make a full-time income instead. That's what higher corporate taxes means to me.
May 17, 2012 2:10pm
Hello Gina,
YOU GO GIRL !
Sorry I missed the fun.....
It's fun to see how blind some people are... and sad.
Fellow truth seeker
May 01, 2012 9:11pm
Corporations should pay their fair share. They should get some breaks for keeping work in the US instead of overseas.
May 01, 2012 6:26am
Oh, it's a progressive site, so you only want to hear facts and opinions that support your point-of-view? So this is the 'closed mind' site? I guessed as much.
April 30, 2012 11:34pm
I respectfully disagree YellowDog. All opinions are welcome. Even if they are based on ridiculously wrong information.
April 30, 2012 9:31pm
Dear Desertdweller, I agree with you. Could you help me with some information? My friend says that the rich have already paid taxes on their capital gains, so taxing it again at an income rate equals double taxation. Would appreciate facts that can help me discuss with her.
May 01, 2012 10:49am
Tell your friend that Capital Gain or Dividends are paid at a 15% Tax Rate. Also that the Corporate Tax Rate in the USA is lower than most Countries. As you mayknow the to 500 corporations in the S&P 500 paid no Income Tax. But the problem is that after the use of the many Loop-Holes the Rich and Powerful usually pay zero dollars of Tax.
Will Rogers said: “The difference between Death and Taxes is Death doesn't get worse every time Congress meets.”
Thomas Paine urged that everything "beyond what a man's own hands produce" was a gift that came to him simply by living in society, and hence, "he owes on every principle of justice, of gratitude, and of civilization, a part of that accumulation back again to society from whence the whole came."
Here is my plan for Income Tax Reform.
First I will say that any Income Tax Reform that continue to allow for Exceptions, Exemptions and Deduction will never be Fair and Equal to all. To many loopholes will exist through which the 1.0% of the Rich and Powerful Individuals and Corporations, Companies, Institutions and Organizations squeeze through and pay NO TAXES. Even if we made the INCOME TAX RATE on every individual who made over one million dollars be 99%, with the use of the Exceptions, Exemptions and Deductions they could not pay any taxes.
The Entire Income Tax Code MUST be Repealed and Replaced. By the elimination of ALL the EXCEPTIONS, EXEMPTIONS, and DEDUCTIONS and by making every source of Income [Wages, Bonuses, Benefits, Interest Earnings, Capital Gains, and any other earnings or Gains] be subject to the same Tax Code and Rate no matter How it was earned, Where it was earned, or What it was earned from.
If Congress wants to provide an incentive to Corporations, Companies, Institutions or Organizations, Congress can do so by creating a Tax Credit with specified amounts and time limits.
HERE is an Income Tax Code that is based upon Fairness and Equality, and the ability to pay, Just like everything else in life. PLEASE note that the implementation of this Tax Code would significantly reduce the size of the IRS, reduce the amount of time to prepare your Taxes, and sorry to say it, but it gets rid of the need for Tax Preparation Companies.
The official numbers don’t tell the full story. The situation of the poor is actually considerably worse than the Government reports. The official poverty line is calculated as simply three times the minimal food budget first introduced in 1959, and then adjusted for inflation in food costs. In other words, the American poverty threshold takes no account of the cost of housing or fuel or transportation or health-care costs, all of which are rising more rapidly than the cost of basic foods. So the poverty measure grossly understates the real cost of subsistence.
Existing Poverty Income Taxes:
[1.0] Income earned from $.01 to $13,537.00 for a family of one would pay Zero Tax Rate.
[2.0] Income earned from $.01 to $23,689.00 for a family of two would be Zero Tax Rate.
[3.0] Income earned from $.01 to $30,478.00 for a family of three would be Zero Tax Rate.
[4.0] Income earned from $.01 to $37,267.00 for a family of four would be Zero Tax Rate.
[5.0] Income earned from $.01 to $44,056.00 for a family of five would be Zero Tax Rate.
[6.0] Income earned from $.01 to $50,845.00 for a family of six would be Zero Tax Rate.
[7.0] Income earned from $.01 to $57,634.00 for a family of seven would be Zero Tax Rate.
[8.0] Income earned from $.01 to $64,423.00 for a family of eight would be Zero Tax rate.
For those who are not in the Poverty Income Level the Tax Rates would be as follows:
[9.0] Income earned from $13,537.00 to $100,000.00 would pay a 15.0% Tax Rate. PLUS.
[10.0] Income earned from $100,000.01 to $500,000.00 would pay 17.5% Tax Rate. PLUS.
[11.0] Income earned from $500,000.01 to $1,000,000.00 would pay 20.0%Tax Rate. PLUS.
[12.0] Income earned from $1,000,000.01 to $50,000,000.00 would pay 25.0% Tax Rate. PLUS.
[13.0] Income earned from $50,000,000.01 to $1,000,000,000.00 would pay 30.0% Tax Rate. PLUS.
[14.0] Income earned from $1,000,000,000.01 and up would pay 35.0% Tax Rate.
I would also create a Financial Transaction Fee of $ .50 on each and every Financial Transaction, to generate from $2 to $3 Trillion in Revenue to “Reduce the Deficit and to Invest in our future, our Infrastructure and our middle class.”
U.S. Corporate Income Taxes that were actually paid (the effective rate) fell to a 40 year low of 12.1 percent in fiscal year 2011, despite corporate profits rebounding to their Pre-Great Recession heights. The United States of America, both taxes its Corporations less and raises less in revenue from corporate taxes than its foreign competitors.
Therefore; under my Corporate Tax Rate Corporations would pay 15.0% Income Tax Rate with NO Exceptions, No Exemptions and the NO Deductions. Or they can pay the same Tax Rates as an Individual, seeing as the Supreme Court has ruled they have the same Right to Freedom of Speech, therefore they should have the same Right to pay the same Income Tax Rates. Corporations should not make Business decisions based upon the Income Tax Loopholes, they should be based on what is the best thing for the Corporation, Employees and the Investors. The top 500 Corporations, Companies, Institutions and Organizations within the Fortune 500, Pay No Taxes today. This Income Tax Plan would ensure that all Corporations, Companies, Institutions or for Profit Organizations that earned a Profit would PAY TAXES.
April 30, 2012 11:30pm
AuraDiamond I am a licensed tax analyst and believe me nobody has to pay tax twice on their capital gains. The truth is that they pay tax at a rate that varies from 0% to 15%, and they don't have to pay anything until they sell the asset. Dividend income is taxed at the same 0 - 15% rate. Compare that to a range of 13% to 48% if you are self employed and work to earn a living. Example: A household where husband and wife each make 25,000 self employed will pay $9,413 of tax. A family making exactly the same income from dividends and capital gains will pay 0. That's right. Nothing. Those numbers are real. Grab a Form 1040 and enter it yourself to prove it.
April 30, 2012 9:48pm
Capital gains is the increase in an investment, as I understand it. If you have stocks worth $100,000 you have paid taxes on the money you bought them with. However, if your stock becomes worth $110, 000, your capital gains are the $10,000 and you pay 15% on that amount. I am no economist and this is just my understanding.
April 30, 2012 11:38pm
Yes and no. You actually don't have to pay tax at all until you sell the asset. Just because something you bought for 100 is now worth 110 doesn't mean you have a taxable gain unless you sell it. Then you pay tax on the gain of 10. But you only pay it once. And the tax rate is ridiculously low compared to income earned from working. 15% is just the maximum cap gains rate. For many taxpayers it's lower. See my example in response to AuraDiamond.
April 30, 2012 7:01pm
This article disappointed me in a couple of ways. It didn't address one of the biggest lies floating around right now that goes like this: "46% of Americans pay no tax." That statistic only looks at income taxes and fails to take into account Social Security taxes, among others. It also fails to mention that many of those 46% don't work because they are children or students or retired or stay-at-home parents, etc. And many are quite wealthy but don't pay taxes because their income is from dividends and capital gains.
Another disappointment is it's failure to address the Estate Tax myth which the GOP and many Dems want to abolish, and which is responsible for about 18% of federal tax revenue. Most economists, regardless of party affiliation, agree that this is the most efficient tax we have. In other words, it has the lowest impact on the economy per dollar raised. Further, it supports some of the most basic pillars that made the American economy successful in the first place. It's critically important that we reward people for hard work and innovation regardless of their background. Without the estate tax we end up rewarding people not for hard work and innovation, but for nothing more than being born into the right family. Ultimately this policy weakens the economy for obvious reasons.
Lastly, the article has a bias in some areas that hurts its credibility. Tax cuts do, in fact, boost the economy. And a FTT tax would, in fact, hurt it. The author may not like these facts, but he/she should at least be honest about them. An FTT hurts the economy because it can prevent transactions from taking place that would otherwise make good economic sense. This doesn't mean an FTT is a bad idea. It needs to be compared to other taxes to see which is worse. The same is true of tax cuts. It is a well known phenomenon that lowering taxes stimulates the economy. It is also well known that since consumer spending has a huge impact, there is a MUCH bigger benefit when you cut taxes for lower and middle income taxpayers. So while raising taxes for the wealthy would hurt the economy, it would hurt much less than raising taxes for the middle class. Given our deficit, we have to raise taxes where it will do the least harm. But let's not pretend it won't have any price at all.
May 01, 2012 8:15am
Well said, SOFTY! We need tax reform. We need a substantial increase in federal revenue to compensate for years of unfunded wars and social programs. And assuming that tax increases are the answer, we need to increase taxes in ways that maximize the long-term, overall benefits of those increases. This requires doing some ideologically neutral, level-headed calculating. And the result will always be someone's best guess at how to achieve the desired end. Economic systems are nonlinear and dynamic: they will always punish efforts to adjust them using linear, sloganesque thinking -- "reducing taxes always increases net government revenue."
April 30, 2012 6:14pm
National corporate tax rates. From UK The Guardian (so their progressive news, not a 'right-wing' suspect source! )States the US already has nearly the world's highest corporate taxes, which our own government will agree with. And Japan recently CUT their rates, so I believe we recently took over the #1 spot quite firmly!
Australia 30.0
Austria 25.0
Belgium 34.0
Canada 29.5
Chile 17.0 ..
Czech Republic 19.0
Denmark 25.0
Finland 26.0
France 34.4
Germany 30.2
Greece 24.0
Hungary 19.0
Iceland 15.0
Ireland 12.5
Italy 27.5
Japan 39.5
Korea 24.2
Luxembourg 28.6
Mexico 30.0
Netherlands 25.5
New Zealand 30.0
Norway 28.0
Poland 19.0
Portugal 26.5
Slovakia 19.0
Spain 30.0
Sweden 26.3
Switzerland 21.2
Turkey 20.0
United Kingdom 28.0
United States 39.2
May 04, 2012 4:25pm
"...no major company really pays the nominal rate—just as no one walks into a car dealership expecting to pay sticker price. Big companies enjoy a huge buffet of credits, shelters, deductions, and other preferences that reduce their rate to an average of <<13 percent>>. Many profitable companies pay no federal income tax at all. Regardless of our nominal rate, our real corporate tax rate is among the lowest. Further cuts cannot stimulate growth." - http://www.usnews.com/opinion/blogs/economic-intelligence/2012/04/04/the...
April 30, 2012 9:44pm
Gina, Gina, Gina.... Let me know which one of our corporations actually paid taxes equal to 39.2%. That may be the rate, but that isn't what they pay. Last I heard, GE paid nothing. In fact, I'm willing to step up and pay what they pay. While you're at it, could you tell me how to qualify for one of those off shore accounts? If they can do it, why can't I? PS, they already took their money and ran. Some of them are now putting their tail between their legs and crawling home cuz it didn't work out so well for many of them. I'm hoping Apple sees the wisdom in manufacturing in the United States.
May 01, 2012 4:38pm
Well, Aura, you could pay what Exxon paid, that would be at least 32.8% effective tax. Same as JP Morgan. Same as Starbucks, and many other major American corporations. Care to belly up to that bar?
The notion that corporate America pays nothing is a FALLACY being perpetrated upon you. No one is crawling home to manufacture in home state, I can tell you. We have the highest corporate taxes in the US in my state, and we've watched all our manufacturing go to Asia or to the Southern States. Don't tell me corporate taxes don't influence decisions on where to locate operations.
May 06, 2012 2:24pm
How on Earth did Exxon pay 32.8% ? Their kick-back exploration subsidies cut that at least in half.
April 30, 2012 6:51pm
Gina what you fail to realize is that the average effective tax rate is much lower in the US than your chart would indicate because there are so many special interest tax breaks, loopholes, etc. I have to agree that the top rate is too high and would support cutting it if we also eliminated the countless corporate loopholes that most of those other countries don't have. And you also forgot that corporate dividends are taxed at a FAR lower rate than almost all those other countries to adjust for the high corp tax rates.
April 30, 2012 7:49pm
Given all the deductions, a great many of the most-recognized big American corporations actually paid will in excess of 30% on their corporate taxes, paying in excess of 32.8% for example, was Exxon/Mobil, FedEx, JP Morgan Chase, WalMart, Starbucks, Walt Disney. And if a US corporation is multinational, they must pay the other nation's tax on money made there, and then again, our tax on the same money when it is returned to the US, minus any credits we are willing to give them. Taxing the dividends does seem like double-dipping since it's already been taxed.
April 30, 2012 11:12pm
Gina you have your facts wrong. Multinationals do not have to pay again after they pay foreign taxes. They get a credit for that so they do not have to pay tax on the same income twice. Whoever indoctrinated you to believe the stuff you're spewing out did a good job.
May 01, 2012 4:43pm
So, Softy, if you made your profit in a country where the tax rate is lower, and transfer funds to the US, your credit for that lower tax rate covers your entire obligation to the US where your obligation would be higher? Did I not say minus credits we give them? Credits for tax paid to the foreign nation may not cover the entire tax obligation.
May 06, 2012 2:37pm
Gina said: "And if a US corporation is multinational, they must pay the other nation's tax on money made there, and then again, our tax on the same money when it is returned to the US, minus any credits we are willing to give them."
Gina, Gina. You are speaking out of both sides of your mouth, here. Sure, you did say "minus any credits we are willing to give them," but you ALSO said "they must pay the other nation's tax ... and then again, our tax on the same money when it is returned to the US,"
But if they indeed get a tax credit, for the amount of tax they paid overseas, then they do NOT have to pay ANY of it "again" at all! And that is the USUAL CASE. There IS no routine "double taxing," as FAUX would have it, and as you parrot in your turn.
If a point you make willfully misrepresents the actual case, you are simply lying. You seem to either be making up these lies yourself, OR you simply believe what you are told on FAUX and in Forbes. It is the END percentage paid, that tells the story, not momentary anecdotes on the way to the truth of averages.
April 30, 2012 4:57pm
Here's a thought...look at taxes like insurance. When the military goes off to defend this country...who has the most assets to defend?. When a large business catches fire, how mamy counties and trucks respond? How much of the infrastructure to you use and abuse if you are in the 1%? How many tax supported airports do you and your employees fly into? You don't complain about higher premiums for more expensive assets, why complain about higher taxes for excessive use?
April 30, 2012 5:32pm
Thea, who do you think is already paying for all those? I'm trying to determine where the folks on this website assume the current pot of money the government is running off of has been coming from. Yes, the Congressional Budget Office (not me, not 'right-wing' anybody) determined that 46% of wage-earners pay no income taxes. And that the top 20% earn 60% of the income, but pay 70% of all income tax collected in the United States. So how is that not the top earners already paying higher premiums? And wait a minute. We're not blocking access to the airport or the roads we pay for for the 46% paying nothing, right? So they are gaining access for free to facilities paid for by someone else. And there are far more home fires than large facility fires, so corporations are not using more public facilities. And when a business catches fire, is it only the owner who benefits when the business is protected, or all the employees who continue to have a job? But there are road use fees, higher tolls.
So, long story short, high earners are paying a lot of the insurance already. It seems the Nation of Change people feel businesses exist only for the benefit of the owners, and forget the people who work there, who have jobs to feed their families. And when the military goes off to defend the country, it's literally my sons doing the defending. I have a lot at stake. I own businesses here, I feed families depending on me. Sometimes the person who works with me will become sole support of her family and I'll have to pull rabbits out of a hat to find ways to increase her income to cover it. My family owned businesses before me, after coming to this country. They never invited a union in, and the workers never wanted one because the wages and benefits were always better than the unions ever offered. But success and hard work is not the goal any longer here. Now it has become suspect. Regardless, even in this economy, my goal is to find ways to provide for even more families. More taxes will certainly not help. Someone said to me here 'Trickle down does not work'. It does for the people who work with me and who worked with my family. I think that's true for more businesses than you credit.
April 30, 2012 3:50pm
Gina has obviously drunk from all the kool-aid given her by the Heritage Corporation and the Kock brothers. She really believes what she says. She reads the litany as if she learned it in her crib. Well, Gina, perhaps you did. But you didn't learn anything about people. Just about profits. Most people, 95% I'd say, do not want a government handout but they could use a government handup. Why a GOVERNMENT handup? Because it just isn't in the morality of Capitalism to give a handup and it is no longer a part of religion in America to give anyone a handup. That leaves the government whose job, according to the general welfare clause is to provide for the general welfare of the population. Now, if you don't like that, Gina, I suggest you move somewhere where there isn't any government - like Somalia. That would be a perfect place for you to practice your threats and fearmongering. As for the 1% taking all their money and running? Well, they were never patriots anyway so who needs them? They don't make anything, they don't create anything - they just suck everything up like huge vacuum cleaners and leave their poisonous, rotten messes behind them. Good riddance, I say.
April 30, 2012 6:57pm
Oh, you have felled me with your fact-less Nation of Change rhetoric! Do you really think the opinions expressed on this website truly represent the '99%?' Be serious. And the general welfare clause (as you put it) does NOT mean that the government must provide financial support for everyone . That's an absurd interpretation. Most people in this country are happy to provide for themselves, and aren't looking for a hand-out, hand-up or hand-over, just asking for the government to keeps hands-off. We aren't looking for bigger and bigger government. 95% of people aren't looking for anything from anyone else as you suggest.
Perhaps you should consider relocating to China? They have lots of government oversight there and it is responsible for providing everything. But wait, no, they have just discovered capitalism there, too.
May 06, 2012 2:47pm
"And the general welfare clause (as you put it) does NOT mean that the government must provide financial support for everyone ."
No one said it DID mean that, Gina; certainly not George. You are dodging at shadows. Maybe you DON'T KNOW what a "hand up" means. It does NOT mean sending people money. What it means is making healthcare affordable. Making education affordable. Houses affordable. Jobs common.
And ALL of these things CAN be accomplished by taxing EVERYONE for the PRIVILEGE of being able to live and work in a DEVELOPED country. Our GOVERNMENT has built up a fantastic infrastructure that LETS the rich use their money to make more money, not build roads and bridges with it, in order to get their products to market.
The GOVERNMENT has educated a good workforce for them. Companies don't have to educate, they just have to hire. Without such a comprehensive social infrastructure, even GE wouldn't show a profit.
In real terms our corporate tax structure is NOT too high. In fact, it is too low, when one looks at the effective rates.
April 30, 2012 3:29pm
I don't know what you mean when you say 46% (or whatever the right wing number of the week happens to be) of Americans paid no taxes. That's an outright lie. Everybody pays taxes! I assume you mean income taxes, and of course, a lot of people pay no income taxes. My 99 year old mother, for instance, is in a nursing home and they take all of her income from her pension and half of my Dad's Social Security. And that's after they took all of her savings (about $300,000) to let her into the place to begin with. She's is flat broke, just because she insisted on staying alive. She has no money to pay taxes. Is that who you're talking about?And then there's my 14 year old grandson. He worked in the cherry orchards last summer and made about $1,000. People who make only $1,000 a year don't fall into any tax bracket anywhere in the world, even America. Is that who you're talking about?And then there's my 3 year old granddaughter. She's never paid any taxes in her whole life. Is that who you're talking about?All you right wing whackos forget about good people who just want to get by and be left alone. Why do you people think everything has to be so hard? What's wrong with making things easier for good people?
April 30, 2012 5:46pm
No one here was suggesting raising taxes on anyone else, Dennis. I'm just arguing that increasing taxes on corporations right now will cause them to move jobs off-shore. Fewer jobs will make things harder on everyone.
May 06, 2012 2:55pm
Great. First the huge corrupt push to globalize corporations and finance, and then this. So, BECAUSE we made it easier to move jobs overseas (we give them tax CREDITS for that, doncha know), NOW we can't make any changes in the corporate tax codes?
I would go so far as to posit that this dynamic was FORESEEN by those who pushed Globalization.
The Economy as Envisioned by the Rich is a clamp applied to everyone else. At every opportunity, they tighten the screws "just one more turn," and then when people yell about the pressure, they say the jobs (that they have already sent overseas) will suffer "further."
As you just said.
Lies and propaganda, Gina. You seem like an intelligent person. Isn't it about time you stopped falling for the lies?
April 30, 2012 2:46pm
What nobody talks about is taxation based on "ability to pay." Financial assets in the US are hugely controlled by the top 20% - about 90% or more last I looked. If tax rates were based on financial assets as well as income, which add up to one's ability to pay, the top tier pays LESS THAN their share of taxes, not more. Perhaps a financial transaction tax would redress this imbalance.
April 30, 2012 7:59pm
I think we've long been discussing a progressive tax. But there is already a property tax in many states, and there's tax on investment income, tax on interest. And before it became your 'asset' it was income you paid tax on, right? So it was already taxed. So if you were smart enough not to blow it, and saved it so it became an asset, you should be taxed on it some more? How many times do you want to tax the same money?
April 30, 2012 11:56pm
Sorry Gina but you apparently aren't "smart enough" (to borrow your words) to know what capital gains from investments are. Suppose you did earn the money to buy the asset in the first place. You never get taxed on that income again. Not ever. If you sell it at a gain you only pay tax on the gain, not the original asset cost. And if you earn dividends or interest from that asset, it is subtracted from any gain so please stop making things up.
April 30, 2012 2:37pm
Good Riddence
April 30, 2012 2:17pm
Of course, the tax changes do not effect just the top 1%. A financial transaction tax would hurt, for example, union pension funds. Since they are not managed by magic or fairy dust, after all. And not just unions, but any employee pension or 401K. Hm. Wait a minute, we're talking everybody here! Gee, I thought only the top 1% actually had anything to do with STOCKS or financial transactions! No, your teacher, welder, or dental hygenist actually would be impacted, too! But, but, but, they don't trade stocks, because they're not rich enough! But they do own stock and trade them via the firms handling their pensions and 401K
May 06, 2012 2:58pm
Are you talking about the pension funds that your Rich Reich cronies are dead set on REMOVING from all Union contracts? Are THOSE the shares you mean?
After all, if they succeed in killing all the Unions, there will BE no more pensions.
April 30, 2012 1:45pm
LOL. Conservative propaganda. Keep telling yourself that. Watch what happens over the coming few years. We've already seen an unprecedented defection of the high-earners in the last few years. Any increase in taxes the way the folks on this lovely website are salivating for, and those who are holding up this entire nation's economy are going to hop the border and take their toys with them. Who will be paying for the benefits then? Maybe some high-minded but unemployed progressives can plow some acres by hand? I don't care what it sounds like 'can't raise taxes because it will upset the 1%'. Because they do, and can, just up and move out and take their resources, and companies with them.
May 06, 2012 3:04pm
"who will be paying for the benefits then?"
Typical propaganda, Gina. What you "forget" to mention is the dire enmity that corporations have toward benefits of any kind for their workers. You ask who will pay them? If the corporations DO have their way, Gina, then NO ONE AT ALL will pay them, because the CORPORATIONS will have killed them.
This is not a "who will pay" question, when the corporations are dead set against paying in the first place. Rather, it is a life-or-death question -- and it's the Corporations, who are wearing the hooded black cloaks.
April 30, 2012 3:13pm
that doesnt mean that we have to be slaves to them.....i am not kissing any more 1% butt !!!!!!!your logic is skewed for sure.
April 30, 2012 7:51pm
And how are you kissing 1% butt now? Holding a job in a corporation and drawing a paycheck? Not sure how you feel you've been abused by any one person specifically?
April 30, 2012 2:33pm
non sense the super rich did not leave the country in the fiftys when the top marginal rate was 90% and the effective rate was 70% which has been the case from 1916 through 197o Trickle down DOES NOT WORK