Please help me...

[volprof]

In the short time that I've been on this forum, I've gathered that there is a consensus for a lowering of the corporate tax rate (and furthermore, deregulation), as well as a consensus for keeping the corporate rate where it is, comparable to the middle-class tax rate. The rationale, often, of the first party mentioned is that cutting corporate taxes, etc. will create jobs, and this may very well be true. To be honest, I have no clue as to how this would play out if indeed placed into effect. My question, however, is why should this be the case? Why do we require a system that needs minimal corporate taxes to create jobs, while the middle-class is taxed (statutory) higher than the wealthy? Even if this creates jobs, what kind of sense does this make? I don't claim to know how the economy works. I'm sure many on here will call me out. But I just wonder what is the justice in a system where regular folks are taxed more than the super-wealthy, and we deem this necessary for job growth. Maybe I just don't get it.

In all honesty, those of you who support the first party mentioned above (roughly speaking), please explain why this is just beyond just merely creating jobs, or, please explain why I have it all wrong. Maybe I have it all wrong. I don't pretend to understand the intricacies of our economy, not for one second. So I am open for input.

 

[govols09]

In the short time that I've been on this forum, I've gathered that there is a consensus for a lowering of the corporate tax rate (and furthermore, deregulation), as well as a consensus for keeping the corporate rate where it is, comparable to the middle-class tax rate. The rationale, often, of the first party mentioned is that cutting corporate taxes, etc. will create jobs, and this may very well be true. To be honest, I have no clue as to how this would play out if indeed placed into effect. My question, however, is why should this be the case? Why do we require a system that needs minimal corporate taxes to create jobs, while the middle-class is taxed (statutory) higher than the wealthy? Even if this creates jobs, what kind of sense does this make? I don't claim to know how the economy works. I'm sure many on here will call me out. But I just wonder what is the justice in a system where regular folks are taxed more than the super-wealthy, and we deem this necessary for job growth. Maybe I just don't get it.

In all honesty, those of you who support the first party mentioned above (roughly speaking), please explain why this is just beyond just merely creating jobs, or, please explain why I have it all wrong. Maybe I have it all wrong. I don't pretend to understand the intricacies of our economy, not for one second. So I am open for input.

I'm reading and don't want to write the book I could, but start with this. A middle class family in Anerica that makes 75k a year pays an effective tax rate of 5.7 percent on average. There is a difference in marginal and effective tax rates. The marginal rates are what the progressive rates are set at. People who earn a higher income are in a higher marginal tax bracket and thus pay higher taxes. 47 percent of Americans pay no federal income tax. The media has got it in the minds of the simple that rich people pay no taxes. This is false and if you don't believe me google how much the 1 percent pays as a total of income taxes collected. Taxes are a cost of doing business. I will put this simply. If you want to make apples scarce tax people who eat apples, tax people who produce apples, and pay people not to buy apples. This is what we do with jobs. We tax people for working, we tax job creators and we pay people not to work.

Raising marginal tax rates cause people to avoid taxes and seek deductions. Tax deductions regulate behavior. With the capital gains tax lower than the income tax for those who make substantial incomes, the government is saying we will punish you less by investing your money. The same thing goes for the mortgage interest deduction. The government would rather you buy a home than rent. People get mad about the lower capital gains rate but not mad that the government positively helps them with things like child tax credits and the mortgage or student loan deductions.

Vilifying the rich for taking as many deductions as possible is like getting mad at a football team for passing the ball instead of just running the football. It is completely within the rules and is actually encouraged by said rules.

 

[PKT_VOL]

A corporate tax is nothing more than a cleaver way to tax the dumb consumer base without them realizing that they are getting taxed. Corporations are seen as these mega wealthy evil entities flush with cash they stole from the middle class. Thus, it is easy to demonize them. In reality, the "corporate" taxes are passed onto the consumer via the point of sale. So in essence, it is a tax upon the middle class.

 

[Volst53]

The free lunch myth has to end. People just want the government to either tax corporations or print more money, both of those things hurt the poor and middle classes the most.

People pay taxes not corporations. This is imposed by worker's wages not growing, stock holders, or the price of the product costing more.

The Fed keeps printing money to cover debts. Because we want stuff for free, but don't want to pay for it by taxes. This causes inflation which hits the poor and middle class the hardest, and effectively becomes a tax.

The federal minimum wage keeps a lot off people from being hired and learning a skill to work their way out of poverty. It hurts minorities and the low socioeconomic class the most. Because of high chances of them going to a poor public school, and the federal minimum wage pricing their labor out of the market. This leads them to living a life of poverty and not advancing.

 

[Rasputin_Vol]

If you want to make apples scarce tax people who eat apples, tax people who produce apples, and pay people not to buy apples. This is what we do with jobs. We tax people for working, we tax job creators and we pay people not to work.

 

[Rasputin_Vol]

A corporate tax is nothing more than a cleaver way to tax the dumb consumer base without them realizing that they are getting taxed. Corporations are seen as these mega wealthy evil entities flush with cash they stole from the middle class. Thus, it is easy to demonize them. In reality, the "corporate" taxes are passed onto the consumer via the point of sale. So in essence, it is a tax upon the middle class.

The middle class is always getting the shaft. That is the problem. Rich guys and welfare queens get all of the benefits of the drones and wage slaves.

 

[TennxxVol]

In the short time that I've been on this forum, I've gathered that there is a consensus for a lowering of the corporate tax rate (and furthermore, deregulation), as well as a consensus for keeping the corporate rate where it is, comparable to the middle-class tax rate. The rationale, often, of the first party mentioned is that cutting corporate taxes, etc. will create jobs, and this may very well be true. To be honest, I have no clue as to how this would play out if indeed placed into effect. My question, however, is why should this be the case? Why do we require a system that needs minimal corporate taxes to create jobs, while the middle-class is taxed (statutory) higher than the wealthy? Even if this creates jobs, what kind of sense does this make? I don't claim to know how the economy works. I'm sure many on here will call me out. But I just wonder what is the justice in a system where regular folks are taxed more than the super-wealthy, and we deem this necessary for job growth. Maybe I just don't get it.

In all honesty, those of you who support the first party mentioned above (roughly speaking), please explain why this is just beyond just merely creating jobs, or, please explain why I have it all wrong. Maybe I have it all wrong. I don't pretend to understand the intricacies of our economy, not for one second. So I am open for input.

We have the highest corporate tax rate in the world.

How does that encourage domestic investment?

A corporate tax is nothing more than a cleaver way to tax the dumb consumer base without them realizing that they are getting taxed. Corporations are seen as these mega wealthy evil entities flush with cash they stole from the middle class. Thus, it is easy to demonize them. In reality, the "corporate" taxes are passed onto the consumer via the point of sale. So in essence, it is a tax upon the middle class.

In order to bring about a modern day system which amounts to feudalism, the middle class, aka the bourgeoisie, must be eliminated, that seems to be the current political policy by the executive branch of our government.

The middle class is always getting the shaft. That is the problem. Rich guys and welfare queens get all of the benefits of the drones and wage slaves.

In eastern Europe the countries that were formerly under the thumb of the soviet socialist system now tax their citizens at the rate of between 9% and 18%, they learned their lesson, the government is a poor choice as far as making all the decisions.

 

[volprof]

I'm reading and don't want to write the book I could, but start with this. A middle class family in Anerica that makes 75k a year pays an effective tax rate of 5.7 percent on average. There is a difference in marginal and effective tax rates. The marginal rates are what the progressive rates are set at. People who earn a higher income are in a higher marginal tax bracket and thus pay higher taxes. 47 percent of Americans pay no federal income tax. The media has got it in the minds of the simple that rich people pay no taxes. This is false and if you don't believe me google how much the 1 percent pays as a total of income taxes collected. Taxes are a cost of doing business. I will put this simply. If you want to make apples scarce tax people who eat apples, tax people who produce apples, and pay people not to buy apples. This is what we do with jobs. We tax people for working, we tax job creators and we pay people not to work.

Raising marginal tax rates cause people to avoid taxes and seek deductions. Tax deductions regulate behavior. With the capital gains tax lower than the income tax for those who make substantial incomes, the government is saying we will punish you less by investing your money. The same thing goes for the mortgage interest deduction. The government would rather you buy a home than rent. People get mad about the lower capital gains rate but not mad that the government positively helps them with things like child tax credits and the mortgage or student loan deductions.

Vilifying the rich for taking as many deductions as possible is like getting mad at a football team for passing the ball instead of just running the football. It is completely within the rules and is actually encouraged by said rules.

Thanks! That was a pretty fair explanation. You are right in that there is a double-standard. Certainly things like child tax credits or education credits are deductions that might help people, comparable to deductions that are allowed corporations, and not just everyone may qualify for them (just like we obviously don't all qualify for corporate deductions). I will be the first to admit that we do sometimes tend to have a double-standard when approaching the issue. I often confront the issue with mostly how big corporations fit into the picture in mind, but you are right, there is another view that can point to some discouraging things as well, like almost half of Americans paying no federal income tax. I will say, however, that I think there's a difference between allowing a person, who might need the money for certain needs, a tax deduction for having a child (although I know that can also be manipulated) and a corporation being allowed a deduction to incentivize investment, so I don't know that the analogy works perfectly in every case, although it is probably the most apt comparison (among the others you provide) for rationalizing corporate incentives that I've seen so far.

 

[volprof]

A corporate tax is nothing more than a cleaver way to tax the dumb consumer base without them realizing that they are getting taxed. Corporations are seen as these mega wealthy evil entities flush with cash they stole from the middle class. Thus, it is easy to demonize them. In reality, the "corporate" taxes are passed onto the consumer via the point of sale. So in essence, it is a tax upon the middle class.

The middle class is always getting the shaft. That is the problem. Rich guys and welfare queens get all of the benefits of the drones and wage slaves.

So this goes back to my original question here about why such a system is just or right. I guess one argument could be that if we substantially lower the rate then that is the less the consumer (or middle-class) has to pay, and for that reason is a good or just thing. And that view makes sense. There's another view, however, and perhaps it's a naive one, that wonders why these costs are necessarily passed on at the point of sale (so to speak) when we hear about rising executive salaries, etc.

And I'll just add that I'm not including small businesses in this; just mega-corporations. The Wall Streets and Dow Jones of the world.

 

[OrangeYankee]

This is one area you have got to not listen to the class warfare rhetoric. The progressives have been very successful at vilifying corporations (and believe me a lot have done themselves no favors in that department), but at the end of the day the corporate tax is probably the silliest thing in the world. You are not taxing a person when you tax a corp. You are taxing a business, thus adding another cost to doing business that they pass to consumers. And just like all business expenses the more they add up, the more expensive their product is going to be. So if domestic company has to pay the highest wages, the highest corp taxes, and spend the most trying to meet unrealistic regulatory rules, their product is going to be much more expensive than that foreign company who has lower expenses across the board. This will force company A to move as much of their operations as they can to the foreign country if they want to keep their doors open.

It is a viscous cycle that the American public has largely enacted on themselves and are too dense to see it.

 

[utvolpj]

There's another view, however, and perhaps it's a naive one, that wonders why these costs are necessarily passed on at the point of sale (so to speak) when we hear about rising executive salaries, etc.

why wouldn't they pass on a cost in the price of their product? Should they also not pass on other costs (like freight for example)?

 

[volprof]

This is one area you have got to not listen to the class warfare rhetoric. The progressives have been very successful at vilifying corporations (and believe me a lot have done themselves no favors in that department), but at the end of the day the corporate tax is probably the silliest thing in the world. You are not taxing a person when you tax a corp. You are taxing a business, thus adding another cost to doing business that they pass to consumers. And just like all business expenses the more they add up, the more expensive their product is going to be. So if domestic company has to pay the highest wages, the highest corp taxes, and spend the most trying to meet unrealistic regulatory rules, their product is going to be much more expensive than that foreign company who has lower expenses across the board. This will force company A to move as much of their operations as they can to the foreign country if they want to keep their doors open.

It is a viscous cycle that the American public has largely enacted on themselves and are too dense to see it.

That's a pretty solid explanation. Like PKT said above, the extra costs will simply be passed on to the consumer (although as I've said before this raises ethical questions for some, whether these questions are fair or not). I think it's safe to say that, like with numerous issues, there's some sort of give-or-take and no universal solution. If we create more incentives for big corporations to invest, grow, etc., some of them will use the incentives wastefully and some of them will use them wisely and fairly (like creating more jobs, for instance). In that sense, it may sound ironic, but I guess we could say that there are a few similarities between welfare/entitlement and corporate incentives (although certainly not a perfect analogy; personal welfare is not creating jobs obviously). Determining which ones will act wisely or not, however, is perhaps impossible until we actually see the waste materialize. And just as we wonder about the wastefulness of some of those on personal welfare and the justice of all of us having to sport their bill, we might also wonder at the justice of some of these corporate incentives. I'm not completely sure, but if the current tax money that comes to the fed/states from corporations were to be cut dramatically, wouldn't this bill still have to be taken up somewhere else, like the middle-class possibly? How would the tax gap be filled? Like I said, I don't know if the middle-class would have to fill the gap or not, but it sounds very plausible that it could, at least in part.

 

[volprof]

why wouldn't they pass on a cost in the price of their product? Should they also not pass on other costs (like freight for example)?

That's a fair point. I think many of the ethical questions for some, though, stem from corporate waste and profits. For instance (and this might not be the best example), but consumers have watched the price of gas go up for years now while the big oil companies' profits continue to go up. Some of the price increase can be justified by increased expenditure costs (so it is passed on to the consumer), but the concern then becomes why are they making exponentially more in profit. Perhaps some of this can be justified if there is indeed job growth allowed by increased profit, and, obviously, businesses need to constantly increase profit if they are to grow. But if we don't see any job growth, or anything that helps the consumer/worker, with increased corporate profits and prices, then it becomes an ethical concern.

Obviously the oil example is not indicative of all industry; I just thought it might help to clarify that particular viewpoint that I alluded to earlier.

 

[utvolpj]

and what's bad about companies making a profit? Pretty sure that's their function. Why does the govt deserve a larger cut when a company does well?

I also disagree with the example you used. Look at the profit % of businesses that have been vilified, like healthcare/insurance or oil companies, and tell me they're out of line. People like to trot out profits only using a dollar figure but that's a pretty useless number.

If it costs more to get a product to market then the cost of that product will also increase. I remember trying to sell when every carrier in the US instituted a fuel surcharge. Should we have just eaten that cost and made less?

 

[OrangeYankee]

Ehh while I see your direction I think your use of unethical in the context is a bit off. While many do see taxation as some sort of moral obligation it honestly is an expense that is forced on all of us. is it necessary? Yes to a point, but we have far surpassed that point almost 100 years ago. Taxation is simply a political weapon, plain and simple.

To me a great example of crappy ethics are the telcom contracts from the TV and Phone folks. We are locked in tight and if we even want to fart sideways we are paying 100's of dollars in penalties and early term fees. Yet they have an open book and screw us seven ways to Sunday without even blinking an eye. That is unethical.

As far as your example on the oil. The raw money yes is high, but the percentage? Not so much. They only clear an 8% profit (and that figure could be high). So, even if they, for some unexplainable reason, said "Ok we are good with 5 billion versus 10 billion in profits, and we will spread that 5 billion back to the consumers." It would actually only end up being pennies per gallon in savings.

On the other hand the government makes 50 cents per gallon in taxation for roads, (which is much higher than 8%) and you don't see them lowering their cut. What makes it worse is that money is almost always squandered on things that don't even improve the infrastructure it's intended to pay for. Then they have the balls to come back and gripe how the infrastructure that they are failing to fix with the large sums of money they are making is crumbling. It's why I want to pull my hair out every time a dang bike trail is built for more money than it's worth, while I'm driving across a bridge that is halfway into the water from age.

 

[82_VOL_83]

I'm reading and don't want to write the book I could, but start with this. A middle class family in Anerica that makes 75k a year pays an effective tax rate of 5.7 percent on average. There is a difference in marginal and effective tax rates. The marginal rates are what the progressive rates are set at. People who earn a higher income are in a higher marginal tax bracket and thus pay higher taxes. 47 percent of Americans pay no federal income tax. The media has got it in the minds of the simple that rich people pay no taxes. This is false and if you don't believe me google how much the 1 percent pays as a total of income taxes collected. Taxes are a cost of doing business. I will put this simply. If you want to make apples scarce tax people who eat apples, tax people who produce apples, and pay people not to buy apples. This is what we do with jobs. We tax people for working, we tax job creators and we pay people not to work.

Raising marginal tax rates cause people to avoid taxes and seek deductions. Tax deductions regulate behavior. With the capital gains tax lower than the income tax for those who make substantial incomes, the government is saying we will punish you less by investing your money. The same thing goes for the mortgage interest deduction. The government would rather you buy a home than rent. People get mad about the lower capital gains rate but not mad that the government positively helps them with things like child tax credits and the mortgage or student loan deductions.

Vilifying the rich for taking as many deductions as possible is like getting mad at a football team for passing the ball instead of just running the football. It is completely within the rules and is actually encouraged by said rules.

Well said....now to read the rest of the thread.

 

[lawgator1]

Up until I'd say about the late 1970s or so, the way to make money as an investor was to identify the need for a product or service, then put money into the physical plant and hiring of people in order to fill it. An investment meant dedication of capital for years so as to earn a return on the money invested.

Then, you could credibly argue that higher taxes on the investment class left less money available for them to put into such projects.

But now, fortunes are made and loss on fictional investment vehicles in a matter of hours. The financial industry has created a self-contained casino, where only other super wealthy are allowed to play, and they make huge sums based on exchanges between microchips, not based on creation if anything.

In fact, for many, dedication of investment capital to real, sustained industry is effectively a huge loss because the money could generate so much more in these fake vehicles.

When the investment class these days say they want to pay less tax on their investment returns, it's not because they can or will use it to build a factory in Indiana. It's so they have more cash to put into credit derivatives, bundled mortgages, and covering trades that last seconds, and yield virtually no jobs or economic growth relative to the amounts involved.

Now-a-days they call it too much taxing of job creators. But that's code for trickle down economics. You would think we'd have learned our lesson after the failure of the Bush tax cuts, which dramatically increased our debt and produced no jobs, just led to a boom time for the casino mentioned above.

Alas, people are still buying into that great fraud. You want proof ?

Look at the amounts of money accumulated by corporations and the investment class. It's enormous. And just sitting there. Arranging the tax structure to give them even more, to put into the casino, is just insanely stupid for everyone else.

 

[82_VOL_83]

In order to bring about a modern day system which amounts to feudalism, the middle class, aka the bourgeoisie, must be eliminated, that seems to be the current political policy by the executive branch of our government.

The quickest way to do this is to redefine the classes. Whereas 20 years ago, given the same income "position" in the economy, my wife and I would have been considered on the upper end of the "middle middle" class. Now, with the regime in power, we are approaching the "rich" level. When you lower the income class definitions, you automatically begin to create a two class system. Then when you tax the hell out of the "rich", you begin to see those of us who consider themselves middle class actually drop into what used to be the lower end of the middle class, thus further creating a gulf between the evil haves and the pitiful have nots. Please note that Nobama always talks about the million and billionares when he talks about that "upper" tax bracket. But the real level is a family making $250k a year. The folks that buy the cars and larger homes. The ones where the mom AND dad work 60 - 80 hours a week and eat out 4 times a week. The ones that keep the day care centers in business. The ones whose kids go to the movies and also drive cars of their own when they are old enough. The ones who send their kids to local state schools like UT. I am not bragging, I am saying that when you stand in the picket line and scream tax the rich, remember who you are actually talking about.

My question is this, if you have ever been to California and talked to anyone who has property there, if they are making 250k a year, they are living in a shack or they have rented any spare area they have out just to keep their home. Why are they consistently supporting the very people that want to tax the living crap out of them?

Additionally, you could tax those folks making over a mil a year at 75% and run the government (not pay the debt, just run the day to day stuff) for about 3 days (I know the numbers aren't exactly right, but they are close). This is the fallacy that the current regime wants you to believe. Taxing the rich is the solution......all it is is a vote grab.

 

[Lexvol]

Discussing the ridiculous complication of the tax code would be a much more productive and honest discussion. Talking about rates/profit is inconsequential. The problem lies in the labyrinth of the tax code itself. Simplify that and you would take billions of dollars of cost out of the system, and it would make tracking profit and loss a much simpler process as well.

It would also provide for more transparency. I think both sides want that. Progressives aren't going to get transparency from corporations with the current tax codes. Conservatives aren't going to get it from the government for that same reason.

 

[82_VOL_83]

Thanks! That was a pretty fair explanation. You are right in that there is a double-standard. Certainly things like child tax credits or education credits are deductions that might help people, comparable to deductions that are allowed corporations, and not just everyone may qualify for them (just like we obviously don't all qualify for corporate deductions). I will be the first to admit that we do sometimes tend to have a double-standard when approaching the issue. I often confront the issue with mostly how big corporations fit into the picture in mind, but you are right, there is another view that can point to some discouraging things as well, like almost half of Americans paying no federal income tax. I will say, however, that I think there's a difference between allowing a person, who might need the money for certain needs, a tax deduction for having a child (although I know that can also be manipulated) and a corporation being allowed a deduction to incentivize investment, so I don't know that the analogy works perfectly in every case, although it is probably the most apt comparison (among the others you provide) for rationalizing corporate incentives that I've seen so far.

Another item that the current regime is attacking are the "subsidies" for the "big" oil companies. For the most part, they don't get a "subsidy", what they do get is accelerated depreciation that allows them to invest capital and then write it off more quickly. This creates more jobs and creates a larger oil supply. You don't hear Nobama and his cronies telling you this......they want to call the oil company subsidies. Another case of relabeling something to change it's meaning.

 

[OrangeYankee]

Now-a-days they call it too much taxing of job creators. But that's code for trickle down economics. You would think we'd have learned our lesson after the failure of the Bush tax cuts, which dramatically increased our debt and produced no jobs, just led to a boom time for the casino mentioned above.

It was not the cuts that failed it was the dramatic increase in spending across the board that failed, and was exasperated with the job losses netting less tax payers in the 08 crash. Our debt is a spending problem and no tax increase, even to 100%, is going to fix that. Bush was a bad spender, and then Obama came in and doubled that spending.

 

[lawgator1]

It was not the cuts that failed it was the dramatic increase in spending across the board that failed, and was exasperated with the job losses netting less tax payers in the 08 crash. Our debt is a spending problem and no tax increase, even to 100%, is going to fix that. Bush was a bad spender, and then Obama came in and doubled that spending.

OP, this is what the GOP says whenever you point out that tax cuts for the investment class, and particularly the lower capital gains tax, is not working to spur real investment, jobs, or growth. They just say "too much spending caused the debt."

Sure, spending is a huge problem. But so are obscene tax breaks that were adopted under the guise of causing investment, but clearly do not.

I am all for curbing spending and sensible entitlement reform. I think everyone is. But the other side of the equation is to end the charade of trickle down.

 

[Volst53]

How is trickle down a charade?

For advancement and growth it takes investments and risk, why should those driving that engine be punished and villainized?

The issue is all of the government policies that hinder the free market, and keep people from the chance at working their way up.

 

[rmsmith]

I wouldn't call it a charade, but trickle down just didn't work.

 

[PKT_VOL]

The middle class is always getting the shaft. That is the problem. Rich guys and welfare queens get all of the benefits of the drones and wage slaves.

The middle class is responsible, politically speaking, for most all problems we have. They are the victims of their own actions; albeit unintended and unforeseen consequences when they were voting for their various candidates with lofty Utopian ideals.