Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
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Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#2A largely meaningless figure without the included context about targeted cuts elsewhere.
That said, corporate taxes[1] currently make up around 10% of the total US tax revenue, so major cuts (35% -> 15%) actually stand to result in a 4.2% drop in total US tax income. This assumes no positive change in corporate growth as a result of the reduced taxes.
1: http://www.taxpolicycenter.org/statistics/amount-revenue-sou...
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#3Just to make sure: for something to be "revenue neutral" means it can't contain a real reduction in tax revenue offset by a hypothetical gain through "dynamic effects" in the economy?
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#4A largely meaningless figure without the included context about targeted cuts elsewhere. That said, corporate taxes[1] currently make up around 10% of the total US tax revenue, so major cuts (35% -> 15%) actually stand to result in a 4.2% drop in total US tax income. This assumes no positive change in corporate growth as a result of the reduced taxes. 1: http://www.taxpolicycenter.org/statistics/amount-revenue-sou...
You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#5Two thoughts on stories on taxes:
1) I'd prefer stories on government finances tell the whole story: Slashing taxes and government services by X. That may or may not be an acceptable trade-off, but usually it's presented as something like Walmart is slashing prices - there's a sale! - only looking at the cost side.
2) Present it as the zero-sum situation it is: If person A pays less, everyone else has to pay more for the same result. Somehow, people have to pay for things, and I think it's widely accepted that people should be making roughly equivalent sacrifices.
(That's not a call for a flat tax rate; 10% of income is much more of a sacrifice to someone making $10K than to someone making $1 million. FWIW, another HN reader told me recently that research says there is roughly a logarithmic relationship between utility and dollar amount.)
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#6A largely meaningless figure without the included context about targeted cuts elsewhere. That said, corporate taxes[1] currently make up around 10% of the total US tax revenue, so major cuts (35% -> 15%) actually stand to result in a 4.2% drop in total US tax income. This assumes no positive change in corporate growth as a result of the reduced taxes. 1: http://www.taxpolicycenter.org/statistics/amount-revenue-sou...
> assumed there is no positive change in corporate growth as a result of the reduced taxes.
Or negative change due to reduction of necessary government services.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#7A largely meaningless figure without the included context about targeted cuts elsewhere. That said, corporate taxes[1] currently make up around 10% of the total US tax revenue, so major cuts (35% -> 15%) actually stand to result in a 4.2% drop in total US tax income. This assumes no positive change in corporate growth as a result of the reduced taxes. 1: http://www.taxpolicycenter.org/statistics/amount-revenue-sou...
You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country.
Is there evidence of this? Tax reduction proponents often claim some offsetting benefit, but rarely does it seem to come true. Look up the Laffer Curve from the 1980s, when the Reagan administration claimed that tax cuts would spur economic activity and actually increase tax revenue.
Also, to a degree it's based on the premise that these companies are overwhelmed with high taxes and that is determining their behavior. Perhaps they have other motives or the rate isn't really too high for them.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#8A largely meaningless figure without the included context about targeted cuts elsewhere. That said, corporate taxes[1] currently make up around 10% of the total US tax revenue, so major cuts (35% -> 15%) actually stand to result in a 4.2% drop in total US tax income. This assumes no positive change in corporate growth as a result of the reduced taxes. 1: http://www.taxpolicycenter.org/statistics/amount-revenue-sou...
You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country.
Does this actually get them to move it here? Apple has huge amounts of money around the world, and I'm not sure what they'd even do with it if they could repatriate it more cheaply. Give it back to investors?
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#9A largely meaningless figure without the included context about targeted cuts elsewhere. That said, corporate taxes[1] currently make up around 10% of the total US tax revenue, so major cuts (35% -> 15%) actually stand to result in a 4.2% drop in total US tax income. This assumes no positive change in corporate growth as a result of the reduced taxes. 1: http://www.taxpolicycenter.org/statistics/amount-revenue-sou...
You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country.
>You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country
They won't bring it back if they have to pay 15% on it.
We let them bring it back for 5% in 2004 and the result was a net loss to the taxpayer, if I remember correctly. https://www.wsj.com/articles/SB10001424052970203633104576623...
Businesses which repatriated money ended up shedding jobs and cutting R&D, which hurt all Americans outside of the Capitalist class. And the lost revenue from the tax break cost the taxpayer billions.
But, of course, the biggest reason to avoid this scheme is that it failed.
12 years after we did this scheme to bring back some $350 billion, these companies learned that we can be bent to their will, and now they've hoarded some $2,500 billion. Nearly 10X larger horde!
If we give in a second time, we reinforce this behavior that they can horde their money until enough useful idiots will give them anything they want to bring it back. Rinse, and repeat the next time enough useful idiots think that bribing you today will stop you from demanding the bribe again tomorrow.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#10Just to make sure: for something to be "revenue neutral" means it can't contain a real reduction in tax revenue offset by a hypothetical gain through "dynamic effects" in the economy?
That would seem to be table stakes for baseline discussion.
As a counterpoint, one could set the tax rate arbitrarily low and then carefully craft a dynamic function that achieves revenue neutrality based on that plan.