Corporations pay 12.1% tax rate


From the WSJ:

"U.S. companies are booking higher profits than ever. But the number crunchers in Washington are puzzling over a phenomenon that has just come into view: Corporate tax receipts as a share of profits are at their lowest level in at least 40 years.

Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That's the lowest level since at least 1972. And well below the 25.6% companies paid on average from 1987 to 2008."

I fully expect all of you deficit hawks out there to be truly outraged by this. (just kidding)

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Corporations don't pay taxes. They pass it on to stockholders and customers.

Please stop promoting this falsehood. You might as well say that you don't pay your rent or mortgage payment-- your employer does. Right? NO.

Taxes are paid by those who pay them. Period. And corporations insist on being legal 'people', hence they are valid targets for paying income taxes.

End of story.

They just raise the price of their product or service to cover the cost, so we pay either way. I am my employer.

End of story.

So corporate profit margins don't shrink, eh? That's news to the entire business community.

Why not just go back to school instead of seeking out embarrassment on a public message board?

Pass it on to the customers? They corporations pay taxes on PROFIT… if “they pass it on to their customers” they’ll have to pay taxes on that too. Funny thing is, conservatives also argue that shareholders shouldn’t pay taxes on the profit either.

We’re should be living in a conservative’s dream, they have everything they want. Corporate at a 40 year low; personal taxes are at a 60 year low; union membership is at 60 year low; domestic oil production is at a 10 year high.

Yet now conservatives tell us, that to even though taxes are at a 60 year low, if we lower them more the economy will really pick up this time, they promise. Even though oil production is at a 10 year high, they tell us if we just pump a little more, price will go down, they promise this time…

Give it up, you have everything you want and haven’t delivered a thing.

Did anyone actually read this entire article? Probably not because you have to be a WSJ subscriber to read it.

Anyway, the reality is that as of this past weekend, the U.S. has the "honor" of having the highest corporate tax rate in the world. Sure, just like individuals, corporations have legal deductions they may take; but that means little to companies who might be interested in coming to the United States. The only thing that they will know is that the tax rate is the highest in the world--not very inviting.

12% is the hightest in the world? Really? Your talking about the 35% federal tax rate what NO ONE pays. Here is the real scoop -

In fact, the United States collects less corporate tax relative to the overall economy than almost any other country in the world.

On that measure, the United States had the third lowest corporate tax burden, behind France and Germany. The worldwide average was 2.8%.

One reason U.S. corporate tax collections are low is that many U.S. small business owners file personal income tax returns, said Eric Toder, co-director of the nonpartisan Tax Policy Center.

In other countries, many small businesses pay both corporate and personal income tax. So a business owner in a country with a lower corporate tax rate could end up paying more than his U.S. counterpart.

U.S. businesses have another edge over countries with lower tax rates: They don't pay a Value Added Tax or VAT, a type of sales tax.

All other developed nations raise a significant part of their tax revenue through VATs, but it is not included in the comparisons of corporate tax collections.

Keep in mind, 2/3 of American corporations PAY NO FEDERAL INCOME is 0 taxes too high...

Again, unless you have a WSJ subscription and can read the entire article, you really can't understand what the 12% means.

on profits. Making it the second highest corporate tax only behind Japan's 38%.
Russia's rate is 20%, China's corporate tax rate is 25%.

Add to that 35% , is State, County, and Local tax rates , amounting to a WHOPPING accumulated tax rate of 55%,in some States , ruined by the D's.
New York, Illinois, & California, all come to mind !

Even the godless communists have more economic sense than Liberal's, will ever have.

The effective rate means everything. you really believe that those who run businesses are so shallow that THEY don't investigate to analyze what rate they will really pay before they decide where to place or expand a business? And, since it's their lobbyists who have had these tax hula-hoop holes (they're a LOT bigger than loopholes) placed into the tax laws, many of the decision-makers know what breaks are coming even before they are part of the tax code!

SENSORG...Great point on that old, tired, erroneous conservative argument about "passing along" taxes on profits. That's why, on the state and local levels, we must increase income and profits taxes and DECREASE PROPERTY TAXES. Property taxes ARE part of the COST of doing business and ARE PASSED ALONG to consumers. (I ran a small business with my father for 15 years.)

Once again, the idea that tax payers don't actually pay taxes, since the costs are "passed along", is provably false. After all, if that's true, then your employer pays your rent or mortgage, not you. Right? NO.

Taxes are paid by the payers. Period.

If businesses just 'pass along' all costs, then why do their profit margins shrink over time? They can just (and effectively) pass those along too, right? They just raise prices to cover those, right? NO.

Once again, Dale, your economic knowledge is so spotty that it's a wonder why you ever speak out in public about such topics. Do you like being embarrassed or something?

Raising taxes just encourages Corporations to use loopholes to defer their taxes or even worse hide their money in countries with less open banking laws.

This is just another reason to simplify the tax code to remove the loopholes all together.

Liberals complain about it not being "fair" yet do not define what is "fair".

Simplifying the tax code is fair for all parties involved and is less encouraging for sneaky or nefarious accounting.

Of course the liberals aren't advocating simplifying the tax code. I wonder why.


The problem is how simple? What should be eliminated?

Should we not have exemptions or deductions for dependents? What about greater exemptions and deductions for the elderly? How about deductions for other taxes paid? Should there continue to be a lower rate for capital gains than for wages earned? How about deductions for charitable contributions? IRAs? College savings accounts? Annuities? I can go on. I'm working on my tax return today!

Whose oxen shall we gore?

Fair means all oxen are gored. There's no reason why anyone needs their little tax break, since the system has invoked so many that collectively they are making tax enforcement far too difficult if not impossible. Taxes should simple, equal and 100% collected. If you make $100 million, you should owe 10%, due and payable; if you make $10000, you also owe 10%, due and payable. Anyone who can't pay will be subject to asset seizure, and barring that, should be jailed.

All 'sides' in this issue are terrified they'd lose their little tax break. So nothing will get done, and the ~40% of the population that doesn't pay income taxes, and the ~40% of the corporations that end up with zero tax liability, will just grow until we have a real catastrophe.

Arguably we already have a catastrophe, since the federal government now subsists on borrowing ~40% of its budget yearly. The federal government is clearly bankrupt, when you look at the major numbers and knock off about 8 zeroes. If I told you that I made $22K yearly, but spent $37K, and I had $150K in debt to service, wouldn't you conclude rightfully that I was bankrupt? Those are the numbers for the federal government of the USA, minus 8 zeros.

Right on the money GZ.

The liberals really don't want a fair tax code because there it eliminates some of the bones they like to throw their constituents. Conservatives do it too but you see way more conservatives advocating a fair tax code than liberals.

In many instances the voters exercise in futility. I recall the story I told how my parents argued that they shouldn't pay off their house and the interest it accrued because they'd lose their tax break. After showing them the math and how they'd save almost $4K they realized how clinging to a tax break can be very dumb in some instances.


I don't see Republicans lining up to eliminate child tax credits and home mortgage deductions in the name of fairness. Both of which were expanded into their current forms under Republican Presidents BTW…

The mortgage interest deduction (MID) is essentially a subsidy for wealthy homeowners and wealthy housing markets. The top 4 or 5 metropolitan areas of the USA suck up 75% of the MID by dollar measure. What we pissants in the flyover get, is a pittance, as a bribe so that we'd allow the MID in the first place.

No wonder Republicans like it.

"This is just another reason to simplify the tax code to remove the loopholes all together. Liberals complain about it not being "fair" yet do not define what is "fair". Simplifying the tax code is fair for all parties involved and is less encouraging for sneaky or nefarious accounting. Of course the liberals aren't advocating simplifying the tax code. I wonder why."

This is crazy. Many liberals call for closing tax loopholes every day. A quick Google search shows this:

Pink Slip

Only selectively.

For instance, yes they do say "close corporate tax breaks" yet they jump right behind the President when it comes time to give money to Solar Energy Companies. Ironically of which another is failing which received 2.2 BILLION dollars of taxpayer money. Yet it's the Big Oil companies who are evil and who they will demonize for taking subsidies yet Big Oil actually makes a profit AND employs far more and creates more jobs.


"Only selectively"

That's fair to say. Now if you just would have said it about both sides, your statement would actually be true, rather than singling out one "team"

"yet Big Oil actually makes a profit AND employs far more and creates more jobs"

Do you understand the reasoning behind subsidizing alternative energy sources?

Pink Slip

If we are going to close loopholes let's close all of them.

I didn't advocate subsides for Big Oil there now did I? I stated the demonization of Big Oil while dumping money into failing energy companies is insane.

Let's stop Big Oil subsides and Alternative Energy subsides but for God's sakes simplify the tax code.


"Conservatives do it too but you see way more conservatives advocating a fair tax code than liberals."

If your definition of a "fair" tax code is closing all loopholes (I assume it is, since you said "This is just another reason to simplify the tax code to remove the loopholes all together"), then there is NOT ONE conservative who advocates this. At least not any that have signed Grover Norquist's pledge to never raise taxes. Ending loopholes means raising taxes. And almost everyone in the GOP has pledged NOT to do so.

So, which conservatives are you speaking of?

Pink Slip

Really? So not one conservative is in favor of it.

I disagree. I can point to SEVERAL who either support the Flat tax, the Fair tax, or Herman Cain's 999 tax plan.

All of these eliminate the loopholes. I know in 1992 Gov Brown of California advocated the Flat tax but the same Gov Brown of 2012 doesn't appear to support it anymore and he's the only Democrat I can think of that has thrown his support behind a plan that definitively ends loopholes.


I'm talking about closing current loopholes. That is (or should be) FAR easier than implementing some scheme like The Fair Tax

Pink Slip

Typical Democrat thinking. Close loopholes I hate = fair. Closing loopholes I like = scheme.

Still waiting for the definition of "fair" from you guys. But of course you can't/won't define it. You might be wrong and have to change the definition later.


It seems we're talking about two different things. I'm talking about making corporations pay the marginal tax rate. You're suggesting we implement something most economists dislike

RE: fair

In my opinion, the tax rates should be progressive--something Adam Smith advocated. And the top marginal rate should be 70%. That would go a long way to meeting my definition of "fair"

Pink Slip

Why so low? 70% that just seems like a number pulled out of the air. Let's go 99%, seems to be a popular number nowadays.

For the record I have been long in favor of the progressive tax we use but I'm also for a simplification of the code.


There was actually a study done by a couple of nobel laureates that estimated the optimal top marginal rate to be about 70%, so maybe I cheated a little.

Pink Slip

Sadly, Cain's 999 Plan isn't worth advocating. It's bad enough that capital-gains boys like Romney and Santorum and the rest of 'em, get such a good tax break from those over the sad sacks like you and myself who get socked for having the temerity of living off of "inome". But Cain would have zapped ALL cap-gains taxes, giving the Romney/Santorum class their desired FREE RIDE in the United States.

There's no sane or fair justification for taxing income and not capital gains. It's all income in the wider definition, and that's not even that wide. Money or wealth coming into your life from wages, capital gains, even sales, should be taxed, and taxed the same. Gifts should be included in this definition since that's how the rich move money around to avoid tax.

That's what's fair, and Cain knew it, but he didn't want fair at all.

You're making some sense here! You'll alienate your base of support! their idea would solve the problem.It would take power away from politicians with all their loopholes and tax breaks for those they like.

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