And then in the subsequent 6 years, corporations built up $1 trillion overseas hoping for another tax holiday/amnesty. It’s a moral hazard type of situation. If you give corporations tax amnesties, it encourages them to adopt the same behavior in future.
That’s what I said, in different words. The point is, we are eliminating complications that end up costing us in unpaid taxes (by cheating or gaming), and can therefore collect less from everyone, expressed by this simple rate.
ETA: And again, I don’t support the flat tax. But I think its basic appeal is not insane. A more nuanced and moderate tactic is probably in order.
I’ve never understood complaints about double taxation. You think that money is only taxed twice? Any given dollar has been taxed somewhere between dozens and hundreds of times, on average. Whenever you spend money on anything, ultimately the money you’re spending goes to paying someone else’s wages. Who in turn spend it on other things, which in turn pays other peoples’ wages, and so on. And every time someone’s wages get paid, and most of the times it’s spent, taxes are paid on it.
You need to consider like scenarios - how a company takes income and gives it to people (employees/owners).
Money paid in the form of salary is a business expense and the company pays no tax on it. The individual pays tax at their particular income tax rates. Taxed once.
Money paid in the form of dividends is not a business expense and comes out of profit that the company has already been taxed on. The individual is then taxed on the dividends. Taxed twice.
Then all the other stuff happens that you mention, but that is not relevant to the argument.
You’re saying that they only repatriated 300+ billion dollars at 5% the first time around but you think they might repatriate a trillion dollars the next time around?
The folks I talk to say they like their factories in China that they built with their overseas profits and don’t intend to sell them to pay dividends to shareholders. The only real reason to repatriate money is if you needed to invest the money in the USA or if you have no capital requirements outside the US.
I agree with you, the tax holiday was a frikking travesty. If you want to reform the corporate tax code then do it, don’t have these one off blue light specials that keep people waiting around for the next blue light special.
The stuff I types in allcaps was sarcastic.
The notion of closing loopholes is fine. The notion of eliminating progressivity in the tax code is not.
I really don’t know - I just quoted what has been reported.
Exactly.
Well corporations get to deduct wages and interst but not dividends paid.
To some extent, you are paying an additional layer of taxes on money that is already yours.
So imagine if you had a bank account that earned income. You pay taxes on that income as it accrues. Then when you want to withdraw money form your account, you get taxed on the withdrawal.
Similarly lets say you own a company and your company pays corporate taxes on its income. Then when you want to pull out some of the built up earnings you have to pay taxes again.
Sure every dollar passes gets taxed over and over again as it circulates through the economy but it doesn’t gets taxeds over and over again in the same hands. Now I think the notion that they are in the same hands belies the notion that corporations are separate entities (see Citizens United) or that an estate tax transfer is taxation in the same hands but that is the complaint.
Well, I think we can all agree that e3th best thing that can happen to the Democratic party is Rick perry winning the republican nomination.
This is why Obama is campaigning against Romney. He doesn’t think there is any need to try to beat Perry of cain, those folks will beat themselves. (see Pat Robertson).
If Perry’s flat tax proposal includes elimination of loopholes, it’s up to him to make that case. I’m not going to assume it.
From previous economic history there is no reason to suppose that cutting taxes for the rich and raising them for the lower half to two thirds of the income distribution will lead to economic growth. It will almost certainly not reduce the unemployment rate.
Right now the economy suffers from low consumer demand. Raising taxes for wage earners will reduce consumer demand even more.
But we’re assured that THIS TIME it’s going to work.