Can we have a polite discussion about poverty, government, and free markets?

[Mosier]

@ITR_champion

Not so.

So. At least, according to a 2011 NYT article.

A Government Accountability Office study released in 2008 found that 55 percent of United States companies paid no federal income taxes during at least one year in a seven-year period it studied.

The article details how they did it (by taking advantage of various tax breaks, or “loopholes” as some people call them). The myth that US corporations actually pay more tax than corporations abroad simply does not stand up to scrutiny.

[Sam_Stone]

@Mosier

So. At least, according to a 2011 NYT article.

The article details how they did it (by taking advantage of various tax breaks, or “loopholes” as some people call them). The myth that US corporations actually pay more tax than corporations abroad simply does not stand up to scrutiny.

Did you bother actually reading that article? That throwaway line about 55% of businesses not paying taxes at least 1 year in 7 has nothing to do with the rest of the article, which is about multinational corporations.

It’s not surprising at all that corporations occasionally don’t pay taxes in a given year. There are perfectly legitimate reasons why a company may not pay tax in a given year that has nothing to do with ‘loopholes’. For example, the company can lose money. Or it could have lost money in a previous year and carried it forward.

A company with a long project cycle might lose money in one year during development of the product, and pay no taxes, and then make money once it goes to market. Some industries are ‘boom and bust’ - like mining. Drill too many dry holes, and you lose money on the year and pay no tax. HIt a gusher, and your profits go through the roof - leading lefties to scream that you’re making ‘unfair’ profits and yet had a year recently where you didn’t pay tax.

It seems to me that the numbers in the article don’t even match the point the author was trying to make about how low corporate taxes are. From the article:

At the high end, American retailers paid 31 percent in total income taxes, construction 30 percent and manufacturers 26 percent. Financial services companies paid an average of 20 percent, real estate 19 percent and mining 6 percent.

So this goes to what I, some other board conservatives, and Mitt Romney have been saying: The problem with America’s corporate tax system is that it is set up to reward the powerful and influential companies with connections in Washington, while punishing small business and those businesses that can’t park their money overseas.

Take manufacturing (which is declining again). According to the article, U.S. manufacturers pay 26% corporate tax on average. Do you know what the corporate tax rate in Canada is? We have a federal rate of 15%, going down to 12.5%. Provinces add on another 10%. So we’re at 25%, and next year we’ll be at 22.5% total.

The problem in the U.S. is that small firms are hit with almost the full freight in taxes. Paying 39.2% in tax when your biggest trading partner’s companies only pay 22.5% in tax puts you at a significant disadvantage.

By the way, when Canada cut its corporate tax rate by 33%, our corporate tax revenues went up. From here:

Remarkably, the gradual lowering of the corporate tax rate appears to have resulted in little loss in corporate tax revenue (when compared with long-term, prerecession revenues). Corporate tax revenue did take a big hit ($10-billion) in 2008, the year of the market meltdown. But the tax cuts were barely started in 2008.

By 2010-2011, federal corporate tax revenue reached $30-billion, substantially more than the average of $25-billion in the last four years of the prior Liberal government: 2002 through 2005. Further, federal corporate tax revenue equalled 1.8 per cent of Canadian gross domestic product, a much higher percentage than the revenue produced during the recessionary years in the early 1990s. In tough-times 1992, for example, corporate revenue, with higher tax rates, fell to 1 per cent of GDP.

[Mosier]

@Sam_Stone

Did you bother actually reading that article? That throwaway line about 55% of businesses not paying taxes at least 1 year in 7 has nothing to do with the rest of the article, which is about multinational corporations.

It’s not “about multinational corporations.” It’s about how the US tax code regarding corporations is wrong-headed.

So this goes to what I, some other board conservatives, and Mitt Romney have been saying: The problem with America’s corporate tax system is that it is set up to reward the powerful and influential companies with connections in Washington, while punishing small business and those businesses that can’t park their money overseas.

Something we can agree on! Except Romney has been playing with his cards too close to the chest. Which loopholes will he close? Don’t know. He hasn’t said.

The problem in the U.S. is that small firms are hit with almost the full freight in taxes. Paying 39.2% in tax when your biggest trading partner’s companies only pay 22.5% in tax puts you at a significant disadvantage.

Agreed.

By the way, when Canada cut its corporate tax rate by 33%, our corporate tax revenues went up. From here:

Yes, but of course you know it’s not because Canadian corporations suddenly boomed enough to make up the difference. There was no difference to make up. The “advertised” rate was lowered, at the same time as tax breaks (“loopholes”) were closed. Canadian businesses didn’t double in profits at the same time that taxes were cut by 33%.

[Bpelta]

This thread is intended as a response to comments like this one, in which a poster simply knows that some conservatives hate and fear poor people and are determined to oppress them. Of course that comment is far from unique. It’s quite predictable on this board and elsewhere that when anyone posts a defense of free markets and capitalism, certain posters will pile on and insist that it’s merely a defense of the rich–see the first few responses in this thread, for instance. One of the names that comes up most frequently in articles attacking conservative economic freedom is Milton Friedman, who supposedly provided the intellectual basis for the rich to become entirely selfish and greedy while ignoring any concerns of the poor.

So I looked at that thread the OP referenced, and I saw the following comment from “OMG A Black Conservative”:

liberals (apparently) believe people with no money should run things

So apparently it wasn’t just a liberal using hyperbolic rhetoric over there. I can sympathize with the OP being upset by the dismissive tone of some posters at SD – indeed, in my more frustrated moments, I have been tempted to call it “The Cynical Dope” – but I think it’s a bipartisan issue.

Anyhow, why are people convinced that “some conservatives” don’t care about the poor, and are happy to let them suffer, without assistance? That’s a longer conversation, but there’s a timely video out from Mitt Romney – and conservatives the blogosphere and radiosphere over back him up – which doesn’t hurt..