Corporate Taxes, Why?

[McDad]

Police, fire, legal system, road system, standing army, welfare (corporate subsidies), regulatory protections, etc. Corporations don't exist in a vacuum.

If we are talking a corporation with a physical location, wouldn't the property taxes paid fund police, fire, legal? My corp rents part of our home from my wife and I. The property taxes paid contribute to those public resources, no?

 

[Vol8188]

If we are talking a corporation with a physical location, wouldn't the property taxes paid fund police, fire, legal? My corp rents part of our home from my wife and I. The property taxes paid contribute to those public resources, no?

Sales taxes and inventory taxes also. And the inventory tax is the most disgusting of all.

Edit: I once had to sit in front of a panel of government leaches and answer questions like "what would you say the value of the paper towels you have on hand are"?
Probably the most disgusting thing I've ever heard. You want me to pay you property taxes for things I've yet to sale/use?

 

[McDad]

Agreed. I think many people feel this part and that's why the desire to increase corporate tax and increase taxes on the wealthy exists. They're an easy place to point your finger. Not different than the way it was more common (I agree it still happens, but less) to blame outsiders (immigrants, minorities, etc) for problems within a country.

They see the government has a deficit. They think "I'm paying my share, clearly it's the others that are the problem". Without considering any other factors.
.

An article was referenced recently about NYC losing wealthy residents to other areas. The article predicted tax revenue issues because of the exodus. In the article, the small percentage of wealthy people (as defined by the article's criteria) compared to the exponential percentage of taxes paid by that small group was astonishing.

 

[McDad]

Sales taxes and inventory taxes also. And the inventory tax is the most disgusting of all.

Edit: I once had to sit in front of a panel of government leaches and answer questions like "what would you say the value of the paper towels you have on hand are"?
Probably the most disgusting thing I've ever heard. You want me to pay you property taxes for things I've yet to sale/use?

Some municipalities will assess a yearly tax on the value of the physical assets (furniture, equip, inventory, etc) on businesses. Which, is different than me as an individual paying taxes on the purchase by not yearly thereafter.

 

[volkyries]

If we are talking a corporation with a physical location, wouldn't the property taxes paid fund police, fire, legal? My corp rents part of our home from my wife and I. The property taxes paid contribute to those public resources, no?

Sure, property taxes handle local stuff and their state taxes handle state stuff. Noticed you avoided the more national type things they enjoy the use and protection of. Yes, their gas and state use taxes would pay for some of the roads, but I am sure not all of their use is covered by those.

 

[Vol8188]

Some municipalities will assess a yearly tax on the value of the physical assets (furniture, equip, inventory, etc) on businesses. Which, is different than me as an individual paying taxes on the purchase by not yearly thereafter.

Can you give me an example of what you mean in the second sentence? Are you comparing it to sales taxes? If so, it’s the business that pays the sales tax

 

[McDad]

Sure, property taxes handle local stuff and their state taxes handle state stuff. Noticed you avoided the more national type things they enjoy the use and protection of. Yes, their gas and state use taxes would pay for some of the roads, but I am sure not all.

I avoided the other because there is a difference. I'll address in this reply.

Gas taxes and such can be mixed bag when it comes to a corporation funding the resources used. Some companies get to write off gas as an expense. Farmers, I think, still get to avoid sales taxes on gas and other items, as long as those are used in their farming. So, there is no repayment for roads, and infrastructure.

The corp subsidies is an area where taxpayers are footing the bill for the company. That should not happen, but since it does, the taxpayers should be reimbursed for that subsidy. By the way, corp welfare, the term you used, can mean tax write offs, so I appreciate you clarifying. There shouldn't be federal subsidy. If any subsidy is applied, it should only exist at the state level. This alleviates the issue for Corps to pay back public resources on a national scale.

 

[McDad]

Can you give me an example of what you mean in the second sentence? Are you comparing it to sales taxes? If so, it’s the business that pays the sales tax

I am loosely comparing to sales tax paid by me as an individual. But, it isn't exactly the same. In some cities, businesses (including corps) pay a yearly fee on the value of physical assets the business uses. So, my body shop business pays sales tax on the frame machine I purchased years ago. It also pays a tax related to the value of the frame machine every year it is owned by the business in that city.
If I buy and use the frame machine to work on my hobby of renovating cars, I only pay sales tax the one time at purchase.

 

[VolStrom]

I am loosely comparing to sales tax paid by me as an individual. But, it isn't exactly the same. In some cities, businesses (including corps) pay a yearly fee on the value of physical assets the business uses. So, my body shop business pays sales tax on the frame machine I purchased years ago. It also pays a tax related to the value of the frame machine every year it is owned by the business in that city.
If I buy and use the frame machine to work on my hobby of renovating cars, I only pay sales tax the one time at purchase.

I'm interested in the value of that BMW that you back into your driveway every night? Are you properly accounting for the miles driven?

 

[McDad]

I'm interested in the value of that BMW that you back into your driveway every night? Are you properly accounting for the miles driven?

Yes sir. I document all mileage associated with my corp endeavors, and my rental property. I submit all every year to get my mileage write off.

That BMW is worthless. Its got a rebuilt title from salvage. Dang thang needs to backed into a junkyard.

 

[volkyries]

Sure they don't die. But the money still comes out, unlike your 401k. Correct?

So why should we treat it differently? And why can't I save for retirement by investing in my business?

Think you missed the point on the 401k. A 401k is a finite entity, I will eventually die (hopefully not for many, many years) and then if anything is left in it, the 401k will either be cashed out or rolled to an heir that will need to start taking it. Either way it gets taxed. Corporations (not your business it seems) do not die because they just keep getting new employees/executives so they in theory can go forever. Two total different situations.

You should just change the name of this thread to "Corporate Taxes, why I don't like them and they should go away (along with all other taxes)".

 

[volkyries]

I avoided the other because there is a difference. I'll address in this reply.

Gas taxes and such can be mixed bag when it comes to a corporation funding the resources used. Some companies get to write off gas as an expense. Farmers, I think, still get to avoid sales taxes on gas and other items, as long as those are used in their farming. So, there is no repayment for roads, and infrastructure.

The corp subsidies is an area where taxpayers are footing the bill for the company. That should not happen, but since it does, the taxpayers should be reimbursed for that subsidy. By the way, corp welfare, the term you used, can mean tax write offs, so I appreciate you clarifying. There shouldn't be federal subsidy. If any subsidy is applied, it should only exist at the state level. This alleviates the issue for Corps to pay back public resources on a national scale.

My point about roads is there is a lot more tax dollars (on every government level) that are spent on them than just gas tax and usage fees. Those tax dollars have to come from somewhere which for a corporation is their corporate taxes (for the federal contribution) for interstates, federal highways, federal share of infrastructure projects, etc.

Regarding subsidies, I guess corporations could believe they are funding themselves collectively since corporations pay the taxes and then receive the benefit. I lump corporate welfare to mean all things they get that gives them an advantage or saves them money whether that is more favorable tax treatment, direct subsidies, favorable laws, etc.

Corporations still use/gain benefits on the national level so they still should contribute to them. Do corporations not rely on the government's participation in trade organization or use federal level resources like the state department in their business dealings? I am sure they do whether we agree with it or not. Do they thrive in a society that allows them to function without the threat of neighboring countries invading, etc.

 

[Vol8188]

Think you missed the point on the 401k. A 401k is a finite entity, I will eventually die (hopefully not for many, many years) and then if anything is left in it, the 401k will either be cashed out or rolled to an heir that will need to start taking it. Either way it gets taxed. Corporations (not your business it seems) do not die because they just keep getting new employees/executives so they in theory can go forever. Two total different situations.

You should just change the name of this thread to "Corporate Taxes, why I don't like them and they should go away (along with all other taxes)".

Yes a corporation could go forever, but the money not would stay there forever. Unlike the 401k their money is still flowing.

So if your reasoning is that you have to tax corporations because they’re eternal, but a 401k ends, it doesn’t hold up. Because the earnings of the corporation will flow and be taxed through multiple avenues while the 401k stays stagnant

 

[ClearwaterVol]

Odd given many people here seem upset that it's only 7%, that you would call it favorable. But yes, it is favorable for someone who can afford to keep their money within the corporation (also liability reasons). But why should that money specifically be taxed? The money that stays within the company.

If you invest in your 401k are your earnings taxed on that before you withdrawal it? Why should their investment?

Seems to me you are just arguing against the taxing of savings in general.

 

[Vol8188]

Seems to me you are just arguing against the taxing of savings in general.

In a way yes. Money that remains in a business or savings should not be taxed until removed. I also have a bigger issue that gets towards the unrealized gains portion of the equation. The idea that money you don’t have is somehow money you have. Granted that’s probably just tangently related

 

[volkyries]

Yes a corporation could go forever, but the money not would stay there forever. Unlike the 401k their money is still flowing.

So if your reasoning is that you have to tax corporations because they’re eternal, but a 401k ends, it doesn’t hold up. Because the earnings of the corporation will flow and be taxed through multiple avenues while the 401k stays stagnant

I think money could stay in a corporation forever if it wanted to. Not sure there is a reason for it, but I believe once taxes on paid on the profits, a corporation can do whatever it wants with the funds including putting them into a savings account (and paying taxes on any gains from those savings likely, same as a person). Not sure shareholders would like that, but it is really no different. Also, companies do avoid taxation by growing/investing in their businesses so in a way they are the same as a 401k. Only paying taxes when they do start recognized profits off those investments (like Amazon did for so many years) the same as I pay taxes when I withdraw from the 401k.

 

[McDad]

My point about roads is there is a lot more tax dollars (on every government level) that are spent on them than just gas tax and usage fees. Those tax dollars have to come from somewhere which for a corporation is their corporate taxes (for the federal contribution) for interstates, federal highways, federal share of infrastructure projects, etc.

Regarding subsidies, I guess corporations could believe they are funding themselves collectively since corporations pay the taxes and then receive the benefit. I lump corporate welfare to mean all things they get that gives them an advantage or saves them money whether that is more favorable tax treatment, direct subsidies, favorable laws, etc.

Corporations still use/gain benefits on the national level so they still should contribute to them. Do corporations not rely on the government's participation in trade organization or use federal level resources like the state department in their business dealings? I am sure they do whether we agree with it or not. Do they thrive in a society that allows them to function without the threat of neighboring countries invading, etc.

I believe I understand where you are. Especially related to roads. I will draw a line of distinction on this and in a correlating way with you last paragraph.

Gas taxes, both federal and state, and other usage fees which are designed to fund our transportation infrastructure are modifiable by our government. If those taxes and fees are not adequate, then those taxes and fees should be raised to cover the deficiency in funding. The dereliction of that power and responsibility doesn't fall to the corporation to pay more in taxes in other areas outside of the usage. That is simply a justification for those taxes paid outside of the taxes and fees related to all things infrastructure. No one (including corps) should pay more to creates a slush of funds so those can be applied where the politicians desire. That is too much power and too open for corruption. We must expect more of our leaders and not look towards the "wealthy" to pay for the sins of our "leaders".

Corporations should contribute to those attributes offered by this country which make their existence lucrative. And, I contend they do. Just as the consumer will pay "hidden" taxes assessed to the corp but passed to the public, the corporation provides "hidden" revenue to government (also paid by the individual). The corporation provides goods and services to the marketplace. These goods and services allow for sales taxes to be added. Without these goods and services, there is not item to add a sales tax to. Payroll taxes are created as well because employees are needed. Big corporations, create wealth to shareholders and a portion of that will be siphoned as capital gains from dividends or sale of stock. These activities can (or should) be facilitated by keeping as much money inside the corporation as possible.

 

[McDad]

Seems to me you are just arguing against the taxing of savings in general.

If so, I think that is an argument with a lot of merit.

 

[FLVOL_79]

I'm still trying to figure out why Georgia charged me sales tax on my vehicle I bought and paid for, including taxes, in Florida, when I registered it in GA.

 

[GAVol]

I'm still trying to figure out why Georgia charged me sales tax on my vehicle I bought and paid for, including taxes, in Florida, when I registered it in GA.

Welcome to the ad valorem tax.

 

[Vol8188]

I think money could stay in a corporation forever if it wanted to. Not sure there is a reason for it, but I believe once taxes on paid on the profits, a corporation can do whatever it wants with the funds including putting them into a savings account (and paying taxes on any gains from those savings likely, same as a person). Not sure shareholders would like that, but it is really no different. Also, companies do avoid taxation by growing/investing in their businesses so in a way they are the same as a 401k. Only paying taxes when they do start recognized profits off those investments (like Amazon did for so many years) the same as I pay taxes when I withdraw from the 401k.

How would money stay in a corporation forever? Do they not have materials, payroll, other taxes, etc?

Unlike a 401k their capital has to move

 

[volkyries]

I believe I understand where you are. Especially related to roads. I will draw a line of distinction on this and in a correlating way with you last paragraph.

Gas taxes, both federal and state, and other usage fees which are designed to fund our transportation infrastructure are modifiable by our government. If those taxes and fees are not adequate, then those taxes and fees should be raised to cover the deficiency in funding. The dereliction of that power and responsibility doesn't fall to the corporation to pay more in taxes in other areas outside of the usage. That is simply a justification for those taxes paid outside of the taxes and fees related to all things infrastructure. No one (including corps) should pay more to creates a slush of funds so those can be applied where the politicians desire. That is too much power and too open for corruption. We must expect more of our leaders and not look towards the "wealthy" to pay for the sins of our "leaders".

Corporations should contribute to those attributes offered by this country which make their existence lucrative. And, I contend they do. Just as the consumer will pay "hidden" taxes assessed to the corp but passed to the public, the corporation provides "hidden" revenue to government (also paid by the individual). The corporation provides goods and services to the marketplace. These goods and services allow for sales taxes to be added. Without these goods and services, there is not item to add a sales tax to. Payroll taxes are created as well because employees are needed. Big corporations, create wealth to shareholders and a portion of that will be siphoned as capital gains from dividends or sale of stock. These activities can (or should) be facilitated by keeping as much money inside the corporation as possible.

The argument about slush fund management is an argument against taxes in general and not one that can be applied to just corporate taxes so I am not addressing it.

There will always be goods and services provided whether or not large corporations provide them. Corporations were not setup to provide goods so the government could tax them. They were setup to limit liability, gain favorable tax treatment, gain favorable legal treatment, etc. Without the special legislation to create them and give them special perks, they would not exist as they are not a natural entity in the world. No one is saying corporations can't keep money, they just have to pay a little bit off the top like the rest of us. Also, all of this is ignoring the true fact that keeping as much as possible in the corporation means passing as much as you can to the shareholders which is then taxed at a reduced rate.

Scrap the corporate tax if you will and go to a pay as you go VAT system and end special carve outs for capital gains, etc. Flat tax for all private income and VAT for corporate.

 

[volkyries]

How would money stay in a corporation forever? Do they not have materials, payroll, other taxes, etc?

Unlike a 401k their capital has to move

You were the one wanting to use your business as a retirement savings vehicle. I was just saying that you could do so if you wanted, after you paid your taxes on it. I didn't say it made business sense to do so.

Sure they don't die. But the money still comes out, unlike your 401k. Correct?

So why should we treat it differently? And why can't I save for retirement by investing in my business?

 

[Vol8188]

You were the one wanting to use your business as a retirement savings vehicle. I was just saying that you could do so if you wanted, after you paid your taxes on it. I didn't say it made business sense to do so.

Sure I’d have to pay taxes upfront like an IRA. But why should I have to pay the additional corporate tax? That’s the underlying question that I’ve not found a good answer to

 

[McDad]

The argument about slush fund management is an argument against taxes in general and not one that can be applied to just corporate taxes so I am not addressing it.

There will always be goods and services provided whether or not large corporations provide them. Corporations were not setup to provide goods so the government could tax them. They were setup to limit liability, gain favorable tax treatment, gain favorable legal treatment, etc. Without the special legislation to create them and give them special perks, they would not exist as they are not a natural entity in the world. No one is saying corporations can't keep money, they just have to pay a little bit off the top like the rest of us. Also, all of this is ignoring the true fact that keeping as much as possible in the corporation means passing as much as you can to the shareholders which is then taxed at a reduced rate.

Scrap the corporate tax if you will and go to a pay as you go VAT system and end special carve outs for capital gains, etc. Flat tax for all private income and VAT for corporate.

You aren't providing any further understanding of your perspective. You aren't exhibiting comprehension of mine.
There is nothing redeeming in continued dialogue.

Enjoyed it.