> No corporation with a good tax team pays anything more than 20% of taxes.
That's not true. Companies with large domestic brick-and-mortar businesses that account for most of their income often pay a lot more than that. CVS pays about 34%. Costco and Walmart pay about 30%. Most of the tricks with foreign tax havens or intellectual property licensing don't work for their kinds of business.
> No corporation with a good tax team pays anything more than 20% of taxes
Seems like a good reason to level the playing field, no? We want businesses to succeed by providing better products and services at better prices, not by being extra good at bureaucratic arbitrage.
> Saavy multi-national corporations pay little to no tax here, and it is widely documented.
> Meanwhile, a 20-something engineer at a six-figure salary can tell you how much of that they get to keep.
Isn't this actually a good situation, from the point of view of the tax collector? Corporations can afford to spend a lot of money figuring out tax loopholes and financing schemes so they can avoid paying taxes. But your average high-income individual can't. You might as well let the large corporations have lower taxes, pass on the extra revenue to shareholders and employees, and then tax the shareholders and employees.
> When you do your taxes, don't you with your accountant try to pay as little as possible?
As a salary-earning individual, there's very little you can do to actually reduce your taxes by a meaningful amount, let alone down to zero like these corporations can.
> Top marginal income tax rates in many countries now exceed 50%
You mean, for people right? I have never heard about any place that taxes anywhere near 50% of a corporation revenue, but yeah, it's not rare to find places that tax more than 50% of a worker's income (all taxes in, if you are talking exclusively about income tax, I never heard about it either).
Why do corporations need lower taxes than individuals?
> If you own shares in a corporation, on every dollar of profit that corp pays 21% tax.
No, it doesn’t, which is why many corporations with large profits still pay ~$0 corporate tax. On every $ of retained profits not negated by some special tax deduction, they pay 21% before considering special tax credits, sure. But the 21% is, as a result, an upper limit on the tax on retained profits, the lower limit is zero, and the biggest corporations tend to also have the most effective tax optimization (and also lobbying, so that the rules favor them from the outset) and so end up toward the lower limit.
> The investor pays 23% on what's distributed.
Nope, they pay the same rate as long term cap gains, 20% max (not flat, can also be as little as 0% depending on thr taxpayers income.)
> Fed: 28 cents (corp tax) State: 8 cents (corp tax) Fed: 43 cents (Biden admin proposed top capital gains rate) CA: 13 cents (Top CA income rate) Shareholder: 8 cents
Earlier, you correctly combined taxes where one applies only to the residual, despite the other misleading elements, but here tou seem to have forgotten how to do that and are, in addition to the mistakes made earlier, treating personal maximum tax rates applicable to distributions as applying not to the distributed amount but the amount before corporate taxes. This further overstates the total tax take.
> Corporations seem to do a good job of avoiding taxes in a way that people cannot replicate. The ultra-rich founders also do a great job of making sure they pay a lower tax rate than the rest of us.
Focusing on the latter is fair enough. Thinking that a corporation having lots of money is bad seems completely pointless. That money ends up as dividends or higher salaries or lower prices. Tax the first two and celebrate all three.
Taxes for corporations are not very high at all. Fortune 500 companies routinely pay a less than 0 income tax at the federal level[0], and state level income taxes max out at 12% [1].
The race to the bottom has happened for the big businesses that have leverage. Just not for the little guy.
> What annoys me the most is that, as a small company, I can't evade from my country tax system. I pay the taxes. All of them, at full rate.
This is a real problem in the US, too. The corporate tax rate is very high, but there's so many exemptions and deductions that few end up paying the headline rate. There's a lot of variation between businesses in what they pay.
Lowering the tax rate and simplifying the tax code could make it more fair in a revenue-neutral way.
> Those companies, due to the inability to avoid/reclaim taxes pay more than 10% now (even with an accountant). I know a lot of companies (a few people large) to pay that much.
And a 1.5% rate isn't enough to replace those taxes, so it would be paid on top of them.
Moreover, revenue taxes disproportionately impact non-vertically integrated smaller companies. Megacorp is vertically integrated, they pay 1.5%. A supply chain containing twelve smaller companies pay 1.5% each, which compounds into nearly 20%.
> If corporations are taxed then there is effectively double taxation.
Not really. Corporate profits are taxed, not revenue. Taxes aren't figured until salaries are already paid.
> ... if Nike had $0 taxable income it’s only because they shifted the taxable income to the CEO’s pay.
I'm sure it's a lot more complicated than that. Companies aren't avoiding tax by giving all excess revenue to their CEO as compensation. That wouldn't really make sense at all.
>if Google "avoids" taxes on its' income it will end up being paid (at probably a much higher rate) by the shareholders and employees
Also not true. Long term capital gains tax is 15%. Dividends are taxed at the same rate, unless you make over $400k per year, at which point you pay 20%. Corporate taxes, in contrast, are 35% at the federal level. Taken with state taxes the effective rate is close to 40% (http://www.kpmg.com/global/en/services/tax/tax-tools-and-res...). So it's a net loss when Google dodges taxes.
(And I didn't even get into shares held abroad or in retirement accounts.)
(Edits with slightly less confrontational language.)
Corporate tax is incredibly high in the United States. It is why corporations funnel their money into other areas where it is taxed at a lower rate. No one gets away without being taxed. Payroll taxes, property taxes, use taxes, L&I taxes, etc.
> This is simply because companies pay money to individuals who then pay taxes. This is a feature not a bug as taxing companies is less efficient from just having employee pay as a deduction that gets taxed downstream.
So if a company has a large revenue that it mostly reinvests and pays low salaries, very little tax would be paid on this revenue, and that seems okay to you?
> People who complain about “companies not paying taxes” are like the “47% don’t pay taxes” people in that they don’t understand the principles behind taxation very well
Are you sure about that? Amazon paid a federal income tax of 1.2% in 2019 on 13B of U.S. income. I think this is what people complain about when they talk about companies not paying taxes.
That's not true. Companies with large domestic brick-and-mortar businesses that account for most of their income often pay a lot more than that. CVS pays about 34%. Costco and Walmart pay about 30%. Most of the tricks with foreign tax havens or intellectual property licensing don't work for their kinds of business.
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