Corporate Taxes

[SamSpade]

For those who are for them, or for increasing them....

What's the point? Isn't increasing corporate taxes just a way of increasing taxes on the population, since corporations just pass the cost of taxation on through their products and services?

If I tax Joe the Barber 35% and he gives 10 dollar hair cuts, doesn't he just decide to give $13.50 hair cuts?

Why do we bother taxing corporations?

 

[Aerogal]

and then price controls raise their ugly little head.....................

 

[NCalif]

and then price controls raise their ugly little head.....................

Yep, and another nail in the coffin of freedom.

 

[Tilted]

For those who are for them, or for increasing them....

What's the point? Isn't increasing corporate taxes just a way of increasing taxes on the population, since corporations just pass the cost of taxation on through their products and services?

If I tax Joe the Barber 35% and he gives 10 dollar hair cuts, doesn't he just decide to give $13.50 hair cuts?

Why do we bother taxing corporations?

Why, to get more revenue of course.

But seriously, it's a source for additional tax revenue that isn't quite as politically perilous to enact (or maintain) as additional personal income taxation is. I think some would make the point that it's appropriate as the cost of being a corporation and enjoying the benefits of that shell. I might be willing to go along with that notion if the cost (i.e. the level of taxation) was much lower.

For my part, I think corporate taxation should be done away with. It's (at a minimum) double taxation and it's counter-productive in so far as economic expansion and prosperity go. We'd be better off with businesses making decisions without regard to tax consequences. Unfortunately, the way we've constructed our tax system, that's not practical for most businesses.

 

[Toxick]

If I tax Joe the Barber 35% and he gives 10 dollar hair cuts, doesn't he just decide to give $13.50 hair cuts?

Not if he loves America.

If he loves America, he'll eat the 35%, and hire a couple minority barbers.

 

[Gilligan]

But..now that the vast majority of American corporations are of the 'S' variety and those same are also creating the majority of all new jobs..what does it mean therefore to 'tax corporations' any more? (S corps not subject to any fed (or state, with few exceptions) income tax, of course) Has 'corporate taxation' not become almost meaningless rhetoric in the real scheme of things?

 

[Tilted]

But..now that the vast majority of American corporations are of the 'S' variety and those same are also creating the majority of all new jobs..what does it mean therefore to 'tax corporations' any more? (S corps not subject to any fed (or state, with few exceptions) income tax, of course) Has 'corporate taxation' not become almost meaningless rhetoric in the real scheme of things?

That may be the case for smaller corporations, but it isn't for the big players. Corporate (income) taxation is still pretty significant - it dropped well below $200 Billion (on the federal level) in 2009 because of the economic conditions, but will likely be back above that by next year.

 

[Gilligan]

That may be the case for smaller corporations, but it isn't for the big players. Corporate (income) taxation is still pretty significant - it dropped well below $200 Billion (on the federal level) in 2009 because of the economic conditions, but will likely be back above that by next year.

I know that what C-corps pay is still significant; I was actually more trying to point out that you must differentiate between the types and not say 'corporations'..because the 'S' corporations are at least as well represented if not more so in the current economic landscape as are 'C' corps. The number of S corps rising..the number of C corps not so much. And it is 'S' corps that will be affected by an increase of the current tax rates if the Bush-era levels expire.

 

[philibusters]

For those who are for them, or for increasing them....

What's the point? Isn't increasing corporate taxes just a way of increasing taxes on the population, since corporations just pass the cost of taxation on through their products and services?

If I tax Joe the Barber 35% and he gives 10 dollar hair cuts, doesn't he just decide to give $13.50 hair cuts?

Why do we bother taxing corporations?

Not necessarily, but tax cost will be spread out a bit, but the majority probably lands on the consumer. The barber may take a slight pay cut. He may cancel his cable tv for the TV in the barbershop and use cheaper scissors and equipment. If he has any leverage or if there are a lot of barbers they are going to put pressure on the suppliers of barber equipment to lower prices slightly. So haircuts won't go up 35% exactly, but the consumer would probably take the brunt of the tax nevertheless.

 

[philibusters]

I took Corporate Taxation in law school my last semester. For various reasons I didn't study much for the exam. I remember getting the exam reading the fact pattern, seeing the fact pattern involved a failed takeover where they were still holding 7% of the stock and they were attempting a new hostile takeover which included that 7% of stock acquired in the first hostile takeover and trying to claim it was a tax free acquisition--and I remembered the Professor in class talking about failed takeovers where the company held more than 5% of the stock and how that could poison a future hostile takeover, but I could not remember a statutory provision or how it worked. It was pretty awful---seeing the issue, but not being prepared enough to address how to handle it.

 

[Gilligan]

In the case of my company, an S corp, a tax increase simply increases how much has to come out of the profits to cover the payment of personal income taxes, leaving less in the company to fund reserves, growth/expansion and new-hire costs. Its quite simple math really. We cannot raise our prices to directly compensate; it simply puts a damper on growth options.

 

[PrepH4U]

In the case of my company, an S corp, a tax increase simply increases how much has to come out of the profits to cover the payment of personal income taxes, leaving less in the company to fund reserves, growth/expansion and new-hire costs. Its quite simple math really. We cannot raise our prices to directly compensate; it simply puts a damper on growth options.

That reasoning is still the same for small business C Corps also, all except the personal income taxes. Corp income taxes comes out of the measly profit reserve, which means lower pay raises, less benefits offered and nothing left for expansion or new hires.

 

[Gilligan]

That reasoning is still the same for small business C Corps also, all except the personal income taxes. Corp income taxes comes out of the measly profit reserve, which means lower pay raises, less benefits offered and nothing left for expansion or new hires.

True of course. But the 'talking heads' in Dc and on liberal media blithely ignore the simple fact that the curent tax debate hits the personal returns only..and the personal returns of a huge number of corporate business owners.

I know why that is. The narrative has to be taylored to the audience. Corporations = Bad. Middle Class = Good. Therefore the fact that so many owners of LLCs and S-corps are middle class yet 'see' over 250K show up on their personal returns...the left has to make that fact disappear, knowing that the vast majority in the country know no better anyway. Pelosi and Reid have elevated that deceptive narrative to an art form even.