I’m a Patriots fan, having once shaken Tom Brady’s hand. Last night’s Super Bowl was the first I ever watched all the way through. (Really, Wes Welker? Really?) If you want to know what it’s like watching a Super Bowl for the first time, here’s Mo Rocca in that situation some years back reporting for the “Tonight Show.”
THE 12% CORPORATE TAX RATE
Per Friday’s Wall Street Journal:
WASHINGTON—U.S. companies are booking higher profits than ever. But . . . corporate tax receipts as a share of profits are at their lowest level in at least 40 years.
Total corporate federal taxes paid fell to 12.1% of profits earned from activities within the U.S. in fiscal 2011, which ended Sept. 30, according to the Congressional Budget Office. That’s the lowest level since at least 1972. And well below the 25.6% companies paid on average from 1987 to 2008. . . .
☞ It would be great if corporate America would allow Congress to raise more revenue by eliminating loopholes while reducing the 35% rate some corporations do pay. But in the meantime, please just laugh when people argue that the Obama Administration is killing business with taxes.
DOUBLE TAXATION – II
Mike Martin: “If you want to worry about double taxation, why not mention that Social Security and unemployment taxes are paid from income, and then income taxes are paid on the same income without first deducting the Social Security and unemployment taxes that were paid. It means we pay taxes on taxes. We should be allowed to deduct those taxes paid from our income for income tax purposes. There is no double taxation for taxing dividends that everyone claims. They claim the corporation pays income taxes then people pay income taxes on their dividends from the corporations. But people pay taxes on THEIR income, not the corporation income. They are two different entities. I pay taxes on my income, then I hire you to mow my lawn and you pay taxes on your income from mowing my lawn. This is not double taxation. We are two different entities. But when I pay taxes on taxes I already paid, that is only me: one entity paying taxes twice on the same income.”
☞ One might argue that the unemployment deduction – insurance against the risk of unemployment – should be no more deductible than, say, homeowners or auto insurance; and that the money deducted for Social Security is like the purchase of an annuity, to insure that you will have some minimum income as long as you live – annuity purchases are not deductible either.
But I think Mike makes says it very well. And look, as I argued Friday, whatever nice theoretical arguments one can have about the fairness of this or that tax, the reality is that any taxation we eliminate will just require taxes someplace else . . . or else an even larger deficit. It’s all well and good to say it should come from $600 hammers and bridges to nowhere – and, yes, we should always be trying to eliminate waste and fraud. But, realistically, the billions in waste and fraud we can squeeze out of the system can’t possibly solve a trillion-dollar problem.
(Note to the innumerate: it takes a thousand billions to make a trillion. For more on innumeracy, come back tomorrow.)
Bob Stromberg: “Double taxation happens all the time. A corporation makes a profit, and pays corporate income tax. The corporation pays salaries to employees, and those employees pay individual income tax. An employee of the corporation buys tires, and pays excise and sales taxes on the purchase. The tire company makes a profit, and pays corporate income tax. In general, dollars flow from one financial entity (person, business, non-profit organization) to another, and our elected representatives pick and choose which of those dollar transactions to tax. The dollars are not ‘tagged’ with a ‘been taxed already’ attribute to make them henceforth non-taxable. . . . If nobody paid taxes, we’d all be richer – except that we’d each need to pay membership fees in private fire departments, private police departments, etc. In such a world, I bet that one town would figure out how to make the process less expensive and more efficient and form an organization to consolidate all the administrative work and save citizens from having to manage multiple payments and memberships, and that town would become a model for others to emulate.”
☞ And can I point out that – for all we are justifiably dismayed by government inefficiency wherever we encounter it – the business and nonprofit worlds are not without inefficiencies and lapses in judgment of their own?
Of the $200+ billion that Americans give non-profits each year, as much as a third or more often goes to the cost of raising that money – paying the salaries of the fundraisers, doing the direct mail appeals, putting on the fundraising dinners, sending the thank you notes – all so the museum can spend $4 million to buy a new painting or the hospital can care for patients that our crazy health care system should have covered in the first place. The government’s cost of “fundraising” – tax collection – is negligible by comparison.
As to private inefficiencies and lapses in judgment? Well, for starters, the insurance industry and Wall Street spring immediately and massively to mind.
Quote of the Day
When I walk into a grocery store and look at all the products you can choose, I say, 'My God!' No king ever had anything like I have in my grocery store today.~Bill Gates
Request email delivery
- Aug 5:
Democracy Dies In Darkness — And Hungary
- Aug 4:
But First . . .
- Aug 3:
Swimming To Israel On EVLO Cap Gains For Norman Lear’s Birthday
- Jul 31:
How To Tax Wealth — Your Feedback
- Jul 28:
How To Tax Wealth
- Jul 27:
Newsweek: Teachers Union Has Become A Public Menace
- Jul 26:
Moses . . . R.I.P.
- Jul 23:
PRKR, COVID, CLIMATE, AND MORE!
- Jul 22:
Macron and Maddow
- Jul 21:
Field Of Dreams
- Aug 5: