The NY Times Editorial Board actually provides a rational, well researched, well thought out plan, and offers some facts, figures, and likely outcome on corporate taxes. Is it workable, though? What it does do is get money grabby
The Right Way to Cut Corporate Taxes
Republicans are right about the corporate tax system being broken, but wrong about why it’s failing and how to fix it.
The EB says that lowering it from 35% to 20% is the wrong way to go about this. They note that, on average, American companies actually pay an average effective federal-state rate of 18.1 percent, per a 2016 report, which they say is lower than many other 1st World nations (which is a little disingenuous, since this is a combination of taxes, while Trump is talking about the federal rate being the highest in the developed world). They note all the tax schemes “cooked up” by all sorts of different people, embedded in law, which means that the corporate share of tax revenue is just 1.6% of GDP, when it was 4% in 1967. Still a bit shoddy of a stat, since things have changed quite a bit since 1967. But, this isn’t really the point of the editorial.
They also try to show that trickle down from corporate tax cuts didn’t work in either the 1980’s corporate tax cut nor from Britain’s same in recent years. Here’s what the Times offers
So what would true reform look like? First, it would not blow a $1.7 trillion hole in the budget over the next decade, which is what the House plan would do, according to the Congressional Budget Office. Second, it would make the system fairer and more efficient. If Republicans worked with Democrats, they could reach a compromise to lower the top corporate tax rate to between 25 percent and 28 percent, eliminate loopholes and reduce the incentive businesses have to take on debt, rather than to use equity to expand. Under current law, interest is deductible for tax purposes while dividends are not.
Suddenly, the Democrats at the NY Times are worried about debt. They never seem to wonder if perhaps Los Federales should spend less, and, get this, spend wisely. Don’t spend $500 on hammers (which tend to get lost quite a bit) when you can get a really good one for less than a $100 on a Craftsman or Stanley with lifetime guarantees. Don’t spend money on fish on treadmill studies. Don’t pay $2 million for a road that should cost $100,000 for real. And so forth. Regardless, would this work? The point of the GOP plan is to attempt to keep companies in the United States, so that the money stays here. And the jobs stay here.
Real reform would also include a minimum tax on profits earned abroad by American corporations in the year those profits are earned, minus a credit for taxes paid to other countries. Businesses can now defer taxes on such profits indefinitely, as long as they do not bring the money back to the United States. Big companies like Apple, General Electric and Microsoft have kept an astonishing $2.6 trillion in profits offshore, hoping Congress will lower the tax rate or give them a tax holiday to repatriate the money at ultralow rates. The House bill would let companies bring those profits home at 7 percent (for money invested in hard-to-sell assets) or 14 percent (for cash). A plausible compromise would let businesses repatriate all past profits accumulated overseas at a somewhat discounted rate, say 15 percent to 16 percent. All of this money could be used to rebuild America’s dilapidated infrastructure.
Good? Bad? Would companies repatriate for 15% or 16%? Or say “nope”? Of course, the Times is happy to put yet another tax on companies. I wonder if they keep their own profits earned overseas overseas. And here’s another
While the outlined changes would solve an immediate problem, Congress also needs to consider longer-term obstacles to tax avoidance by multinational companies. One smart idea that deserves more study is a proposal by economists like Kimberly Clausing, a professor at Reed College. She argues that the United States and other countries ought to tax profits that corporations earn from sales inside their borders, similar to the way American states now tax corporate profits. Each country would control its tax rates, deductions and credits. But companies would lose the ability to game the system by booking profits through subsidiaries registered in zero- or low-tax countries like Bermuda and Luxembourg, where they might be making few sales.
The NYTEB is all about increasing taxes.
Eventually, Congress will need to do more than just patch the tax system. Even without the Republican tax cut plans, the Congressional Budget Office expects the federal deficit to grow to 5.2 percent of gross domestic product in 2027, up from 3.2 percent in 2016, thanks in part to the Bush tax cuts and the Iraq war. Lawmakers will need to consider new sources of revenue, including a value-added tax, a carbon tax and a financial transactions tax. Each would broaden the tax base and achieve important policy goals, like encouraging savings, reducing greenhouse gas emissions and reducing risks in the financial system.
Apparently, Obama’s proliferation Stimulus plans and massive spending, which almost doubled the US deficit in 8 years, isn’t even considered as a big deal by the EB. But, of course, they want more and more taxes, regardless of what it does to consumers and economic activity negatively.
The Republican proposals do none of these things. They do, however, reward the wealthy. Among the worst offenders is the proposed corporate tax cut, which is larger than needed and does nothing to make the system more efficient. The victims here are the economy as a whole and the workers and ordinary folk to whom Mr. Trump promised relief.
Right. Because no one would be victims of a far left tax increase on almost everything. We’ll all be equally poor. The question with the GOP plan is “will it keep corporate profits here, and will it stimulate companies to stay in the U.S. and hire employees”?
The GOP should take a page from the NYTEB and cut any loopholes that effect newspapers. Let’s see what the Times thinks then.
Crossed at Right Wing News.
America’s wealthy (and their minions – our government) have done an effective job of convincing people that the reason the economy has been stagnant since 1980 (except during the Clinton years) is because of high taxes on the wealthy!!
Businesses (and the wealthy) have been raking in record profits the past several years – why would we expect a modest cut in their taxes to suddenly re-invigorate the economy? The short answer is, we wouldn’t. It makes no sense at all.
Tax cuts for the wealthy have always helped the wealthy and harmed the working classes. Always. This scam bill is no different.
By all means make the government more cost conscious and efficient, but to blame hammers for the deficit is disingenuous. Our spending is made up largely of defense, healthcare (Medicare, Medicaid, CHIP), pensions (SS) and interest on the debt. Conservatives want to increase defense spending and cut Medicare, Medicaid and SS (they already trashed CHIP). They continually cut the progressive income taxes (rewarding the comfortable) and raise payroll taxes (afflicting the afflicted). And the debt continues to increase as the wealth of the wealthy continues to increase. The people continue to suffer.
Except for the times that those tax breaks of allowing people to keep more of their own money encourage more growth and investment which helps all.
Progressives and liberals think that there is one solution to everything: theft of other people’s money.
If only there was evidence to support your claim.
Are all taxes “theft” in your opinion?
Do you take deductions, Jeff, or pay the full tax rate?
There is and you know it.
To some degree, yes. However, taxes for some programs are clearly enumerated in the Constitution. Others are not.
The problem is, of course that people like you believe that all money and earned income belongs to the government. That is why you want to call it a “tax break,” as if the government controls a person’s income and is giving them a “break” or a “gift” of “allowing” them to keep their own money.
But we have gone down this path before. You think that people who have higher income levels should pay more, but you yourself won’t pay or donate more to the Federal government.
It is difficult to listen to someone who says “do this!” when they themselves won’t do the very thing they want others to do.
Does GC stand for gimme cash?
That’s a lie and merely far-right bumper sticker mentality. What is the exact value when a top marginal rate tips from fair to communistic thievery?
We likely paid more in federal taxes than you made last year, certainly more than 90% of American households pay – now you demand we pay even more to subsidize you??
We pay what the government requires of us, and support candidates who also support progressive taxation. We have been forced onto Medicare based on our age, and because of our 2016 income we will pay a ton for it (several hundred a month), surely subsidizing people like you and other aged commenters here. And that’s OK. This nation afforded us the opportunity for rewards for our family. Yes, we planned well early in terms of education, employment choices, hard work and frugality. But it’s unlikely we could have been so successful except in America. And we appreciate that. Our federal taxes and fees are one way of giving back for those less fortunate (and lucky), including those like you who hate America. We would prefer you just say, “You’re welcome”, rather than demanding we pay more to finance your bad choices or bad luck.
So don’t give us your bull about demanding of others what we won’t do, we’re not buying it.
Do you collect Social Security and Medicare that we subsidize? If not, will you?
If only there was evidence to support your claims.
If only there was evidence to support your claim.
GC:
Then this is where you would present some reliable evidence.
And this is where I say, “we’ve been down this path before as well. You won’t accept evidence and studies that don’t support your view, so what is the point of me working to give you something that we both know you will dismiss out of hand?”
Perhaps you just need better evidence!
And the House plan is chockablock with goodies such as eliminating the tax deduction for college tuition waivers, which they hoped would discourage students from getting higher educations.
You may not be aware of this but most colleges reward their workers with family tuition waivers, that is, the janitor’s child can attend the school for free! That expense, although a real benefit, was never taxed… until now! So the school cook making $35,000 is suddenly hit with a tax bill that includes as income her son’s $30,000 “free” tuition. She pays federal tax as if she made $65,000! And heaven help her is she had twins!
Just so the GOP can CUT the taxes of wealthy folks! It’s a quadruple whammy for the GOP. 1) Discourages higher education. 2) Slams the working classes. 3) Rewards the wealthy. 4) Makes college professors pay more taxes.
No wonder the GOP wants to rush this turkey of bill through without any examination. Maybe the Senate will fix this mess.
https://www.huffingtonpost.com/entry/how-the-house-gop-tax-plan-soaks-university-employees_us_5a07836ee4b0e37d2f37d1bb?utm_campaign=hp_fb_pages&utm_source=main_fb&utm_medium=facebook&ncid=fcbklnkushpmg00000063§ion=politics
To fix corporate taxes there needs to be a law against these companies printing the money in their basements to pay these taxes. That’s where the companies get the money to pay taxes with isn’t it?!? They certainly wouldn’t charge their customers more to cover the taxes….
“Rewards the wealthy..†Funny way to put it, J. Actually, the correct response would be it rewards those who pay most of the taxes. “We support progressive taxationâ€. It’s always fun responding to Jl on this site, it’s so easy. The US has the most, or one of the most progressive tax policies in the free world. But you’d never know that listening to liberals and their bumper sticker “tax cuts for the rich. The US relies on an extremely small number of people to pay most of the taxes, while the bottom half pays next to nothing in income taxes.
Tax cuts that do nothing but reduce the tax burden of the wealthy certainly do reward the wealthy. These cuts will do nothing to help the overall economy and will increase the debt pushing the burden further to the states and cities who will be forced to raise more money through regressive sales and other local taxes.
Your assumption seems to be that the govt owns all of the fruits of the labor of the citizenry and are entitled to keep all that they want. That would be slavery. Are you in favor of slavery?
Hillbillery,
Why do you Con Men always insist that liberals believe all money belongs to the government? That’s just silly, even by Con Man standards. No one I know believes that peoples’ earnings belong to the government, except maybe tRump’s hero, Putin.
One of your brethren here calls taxation thievery. Smarter people call taxes the price of civilization.
So now you equate taxation with slavery. That’s just silly.
Are lies the only thing you Con Men have?
If only there was evidence to support your claim, little perv…
To illustrate the hypocrisy of J and his band of liberals on taxes, consider if the federal gas tax were cut instead income taxes. Would everybody benefit the same? Of course not-those who drive the most would have the biggest savings, obviously because they paid the most to begin with. But yet you’d never see liberals running around with signs whining about “tax cuts for the truckers!â€, even thought it’s the exact same thing that happens with an income tax cut.