Why a Corporate Tax Rate at All?

[badlydrawnjeff.livejournal.com]

Today, President Obama unveiled his latest plan to reform the corporate tax structure. I'm not too curious about the community's thoughts on this overall since I'm fairly sure we all know where we all sit on Obama making good/bad choices here, but I do have a more general question:

Why have a corporate tax rate at all?

I'd like to think we all agree on these basic points:

a) The corporate tax rate is not really paid by the corporation or business in question. Taxes are simply another cost that is levied on a company, a cost recouped through fewer services, lower wages/employment, higher prices, or some combination therein. It's not an issue of "fair share," really, since we're all paying it.

b) Our corporate tax rate is comparatively high when stacked up against other nations. We're #1 in the OECD at 35%. Canada, directly to our north, is at 15%. And that's without factoring in the corporate tax rates of individual states. Whether you think this matters much is up to you.

c) We only tax profits, and that's proper: If a company doesn't make a profit, it's not paying that tax rate. It's one reason why many corporations don't end up having a tax obligation.

d) We offer a lot of tax credits and opportunities to lower the effective rate: From green energy tax credits to employment credits, even profitable companies are able to reduce their effective rate to zero - or lower.

e) Corporate taxes account for a fairly small amount of overall receipts: Well under $250b in 2010.

So the question I pose is this - if you're in favor of a corporate tax at all, why? Is it worth it given what we all know and agree on? Is the value of getting $220b in revenue from the corporations worth it?

Comments

[eracerhead.livejournal.com]

Since corporate entities reap the benefits paid for by the taxpayer, they should also play a part in paying for it. Case in point: all the laws being passed to enforce copyright. This costs money. Why should an individual artist pay for it through taxation but not Time-Warner?

This idea that taxation is just a black hole that provides no value is faulty. Corporations need to pay for these services as well.

[badlydrawnjeff.livejournal.com]

But, again, the corporation isn't really paying it. A corporation/business is unique in that it is able to pass along all of its costs - I'm asking why keeping that facade up that corporations are actually paying any taxes is reasonable.

[enders-shadow.livejournal.com]

This is an inane line of reasoning.

"Corporations never have any costs of their own! They just push it on to consumers! So let's protect corporations and say we are protecting consumers! YAY!"

nonsense, just nonsense jeff.

I don't pay a wal-mart tax. But wal-mart should be paying taxes in my state. Taxes that go to roads, schools, police, firemen, mailmen and other important social services that I may, in fact, use.

[badlydrawnjeff.livejournal.com]

I don't pay a wal-mart tax. But wal-mart should be paying taxes in my state. Taxes that go to roads, schools, police, firemen, mailmen and other important social services that I may, in fact, use.

Why? Wal-Mart isn't paying them, but everyone else is. In fact, in a way, when I shop at Wal-Mart, I'm helping pay your share in your locality. Is that a fair or reasonable way to tax?

You claim to be about the poorest people. Isn't a corporate tax just levying more costs onto the poorest citizens?

[enders-shadow.livejournal.com]

"Why? Wal-Mart isn't paying them, but everyone else is. In fact, in a way, when I shop at Wal-Mart, I'm helping pay your share in your locality. Is that a fair or reasonable way to tax?"

You are ignoring the point. It's false to say that "everyone else" pays for this. Cause I do not.
If you do, you do. But you're not paying my share, cause I don't pay no share of the wal-mart tax.

[badlydrawnjeff.livejournal.com]

You are ignoring the point. It's false to say that "everyone else" pays for this. Cause I do not.

"Everyone else" means "those who are not Wal-Mart." That you're not a customer there means, no, you're not paying that tax, but the other folks you claim to care about do. Those who really probably can't afford to be paying other people's taxes.

If you do, you do. But you're not paying my share, cause I don't pay no share of the wal-mart tax.

You misunderstood. Wal-Mart is not paying your local taxes, its customers are. As a Wal-Mart customer in Massachusetts, that means I'm really paying a share of everyone's state and local taxes. Tell me - should I be responsible for paying your community's taxes?

[prog-expat.livejournal.com]

"I'm asking why keeping that facade up that corporations are actually paying any taxes is reasonable."

Surely you've heard all the noise about the need to stop up the loopholes being exploited by corporations to eliminate their tax burden even when taking in record profits. There's no façade being kept up that corporations are actually paying taxes, except by the Republicans when they're stumping for lower taxes for corporations.