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I actually don't get why corporation should pay taxes. When the profit of the company is distributed, or paying the employees, the employees/shareholders will be taxed on that money.
So it would be fine if only corporations would pay taxes? Get rid of all income tax, sales tax, etc...
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Corporations enjoy signficant benefits of being in the state, including, for example, a police force that protects them from attack, and a legal system that will resolve disputes they have both internally and with others. They should pay reasonable (not low) taxes in any event, not subject to the caveat you identify.
Everyone they employ already pays tax. Everyone that gets a dividend pays tax. Everyone that enjoys capital growth pays tax. Just looking at the direct corporate tax rate is grossly myopic.
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How was it paid out that your federal income tax liability is 40% Or are you talking about withholding? Which is not accurate to describe as “taxes paid”. Also, if including state tax, then it might be higher, but I would still be surprised if your total tax liability was over 40%.
They didn’t claim their federal tax liability was 40%; they claimed they were paying 40% total tax rate on the acquisition-related income, something which is true for most employees in most states for many acquisitions.
I actually don't get why corporation should pay taxes. When the profit of the company is distributed, or paying the employees, the employees/shareholders will be taxed on that money.
Well, one problem is this just encourages companies to collect and never disburse funds to employers or shareholders. Companies in some cases are holding onto hundreds of billions in cash offshore. Your idea would make that money free to keep out of the economy and out of employee's hands.
The whole point is for stakeholders to eventually get paid in a taxable event; either shareholders through a capital gains taxable event or employees through an income taxable event.
Some tech companies are hoarding cash but I don't believe this is due to incentives created by taxation, although I could be mistaken.
Earlier quoted context omitted.
How was it paid out that your federal income tax liability is 40% Or are you talking about withholding? Which is not accurate to describe as “taxes paid”. Also, if including state tax, then it might be higher, but I would still be surprised if your total tax liability was over 40%.
They didn’t claim their federal tax liability was 40%; they claimed they were paying 40% total tax rate on the acquisition-related income, something which is true for most employees in most states for many acquisitions.
This is crazy how economy is tilted in favour of these big corporations. If you are a worker, it is not uncommon to pay over 40% of tax and if you work on your own small business you can pay even more and have very little left to reinvest. Then you have progressive tax that is preventing you from saving much - if you want to save for a deposit to buy a house, spend time on education and getting a better job, you'll g…
> if you want to save for a deposit to buy a house, spend time on education and getting a better job, you'll get hit by much higher tax and it will take ages to save anything. I actually disagree. The issue isn't the tax rate, the issue is the arms races we have embedded all over our economy. Take housing, for example. No matter what you put as your tax rate the people in the region are going to compete for the limit…
I actually don't get why corporation should pay taxes. When the profit of the company is distributed, or paying the employees, the employees/shareholders will be taxed on that money.
Earlier quoted context omitted.
Flaw in argumemt: real wages not improving for several decades. Can you please provide sources where corporations were the primary tax vehicle?
See my reply to my original post. Tax rate changes are well known, but here's an example. Click on 'max' for a decades long look. https://tradingeconomics.com/canada/corporate-tax-rate In terms of 'real world' wages not improving, that's a somewhat arbitrary term. If you mean 'pre-tax', wages HAVE improved over time pre-tax. We're talking over 50+ years here. 'post-tax', they did improve, but that was before the grea…
This is crazy how economy is tilted in favour of these big corporations. If you are a worker, it is not uncommon to pay over 40% of tax and if you work on your own small business you can pay even more and have very little left to reinvest. Then you have progressive tax that is preventing you from saving much - if you want to save for a deposit to buy a house, spend time on education and getting a better job, you'll g…
Yes, but... Decades and decades ago, corporations paid most of the tax. People paid very little. Then things shifted. Instead of taxing corporations, people were taxed. Said people, with less money in their pocket, required raises. And so, over time, tax shifted from corporate to personal, but with people in the end taking home approximately as much as they had before. For example, you have $60k pretax, $50k take hom…
For example, wages moving to countries with less worker protections. Couldn't the same argument advocate for lowering worker protections in the US, so that the jobs don't move to China? Which many of the jobs have done anyway, despite low corporate taxes?
I actually don't get why corporation should pay taxes. When the profit of the company is distributed, or paying the employees, the employees/shareholders will be taxed on that money.
Corporate taxes allow governments some level over control over corporate policy by incentivizing certain behaviors through deductions/credits etc. Also, dropping the corporate tax rate to 0 would probably be politically impossible, even an identical amount was then taxed on the individuals who benefit.
A government should be able to achieve control through Pigovian taxation, regulations and fines. I'm not convinced that a blanket corporate tax (which does indeed facilitate targeted tax breaks) is necessary beyond the other tools that already exist.