Why are corporate taxes in the United States so high? 39%

2009-07-31 12:32:18

#101

Bertster7: Confused Pothead; +1,101|6876|SE London

Turquoise wrote:
It sounds like we need to cut military spending some.

But would you be safe then? You're already spending slightly less than the rest of the world put together.....

FEOS wrote:
If you look at the actual data behind the graph in the OECD report from your earlier post, the US is within 2% of the OECD figure. Hardly worth splitting that hair, tbh.

Looks very much like you're right about the overall tax burdens. I had no idea taxes were so high in the US. There seem to be a fair few varied scenarios where you'd be paying substantially less in the UK than in the US, which is totally contrary to what I had expected.

The system seems pretty harsh on low earners though. I can't believe you guys don't (seem to) have any sort of tax free earnings threshold. It's a good system that is of tremendous benefit to the lowest earners and is completely fair because everyone benefits the same amount from it (it just seems proportionally better for poorer people).

2009-07-31 22:03:30

#102

FEOS: Bellicose Yankee Air Pirate; +1,182|6705|'Murka

Bertster7 wrote:
The system seems pretty harsh on low earners though. I can't believe you guys don't (seem to) have any sort of tax free earnings threshold. It's a good system that is of tremendous benefit to the lowest earners and is completely fair because everyone benefits the same amount from it (it just seems proportionally better for poorer people).

We do. It's why the top 50% of wage earners pay more than 90% of the income taxes.

Additionally, low-income families qualify for what used to be called "food stamps" (debit card nowadays). That buys foodstuffs and is not taxed (if food is taxed in their locale).

Low earners pay almost no income tax (I've been one...I got all my tax back every year). The only taxes they are stuck with are the marginal ones (consumption taxes mostly).

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular

2009-07-31 23:39:11

#103

Turquoise: O Canada; +1,596|6699|North Carolina

We were talking about fairness and taxation earlier, but if you think about it, even a flat percentage income tax isn't fair in a mathematical sense.

If we're being technical about fairness, then income tax would have to be a flat amount that everyone pays. For example, it could be set to something like $5,000, which you couldn't deduct from.

Even a flat percentage means rich people would be paying more than the poor.

2009-08-01 01:02:58

#104

LividBovine: The Year of the Cow!; +175|6674|MN

Turquoise wrote:
We were talking about fairness and taxation earlier, but if you think about it, even a flat percentage income tax isn't fair in a mathematical sense.

If we're being technical about fairness, then income tax would have to be a flat amount that everyone pays. For example, it could be set to something like $5,000, which you couldn't deduct from.

Even a flat percentage means rich people would be paying more than the poor.

Yes, but it would be fairer than the sliding scale currently being used.

Did anyone notice that the OP graph was based on the average income level and average tax burden on that income level? Does this not leave out the sliding scale that we, the US, or any other country may or may not have? Stupid chart is stupid.

So, I looked for a better representation of the difference between countries. Tough to find one that takes a sliding scale into account. Here is one that compares a $40k/year single person with no kids and $150K/year single person with no kids.

Punching a few numbers I found that comparing Germany to the US yielded an increase of 41.6% in the taxation of the US citizen when jumping income levels, and 26.3% for the German citizen. Wonder what would happen for a single wage earner that made $500K or heaven forbid more.

After doing all that I realized the OP was about corporate taxes and therefor makes my post stupid.

OT: Lower federal coporate taxes and lower the federal government involvement in my life. Thanks.

"The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation" - Barack Obama (a freshman senator from Illinios)

2009-08-01 01:06:08

#105

PureFodder: Member; +225|6580

FEOS wrote:
If you look at the actual data behind the graph in the OECD report from your earlier post, the US is within 2% of the OECD figure. Hardly worth splitting that hair, tbh.

Tax burden on the US = 28.3% GDP
OECD average = 35.9% GDP

(35.9/28.3)*100 = 125%

ie. the OECD average tax burden is a full 25% higher than the US number.

Does this mean if the US government proposed a 25% increase in your taxes you'd consider that a hair hardly worth splitting!?

2009-08-01 01:38:35

#106

LividBovine: The Year of the Cow!; +175|6674|MN

PureFodder wrote:
FEOS wrote:
If you look at the actual data behind the graph in the OECD report from your earlier post, the US is within 2% of the OECD figure. Hardly worth splitting that hair, tbh.
Tax burden on the US = 28.3% GDP
OECD average = 35.9% GDP

(35.9/28.3)*100 = 125%

ie. the OECD average tax burden is a full 25% higher than the US number.

Does this mean if the US government proposed a 25% increase in your taxes you'd consider that a hair hardly worth splitting!?

He was saying that the US federal government total tax burden was around 30% and that was close enough the figure the OECD had calculated for the US tax burden. You are comparing your orange to his apple.

I really don't care how our tax burden compares to the rest of the world. I only care how our government runs our country and how they spend the money they have taken from me and my family.

"The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation" - Barack Obama (a freshman senator from Illinios)

2009-08-01 05:12:46

#107

PureFodder: Member; +225|6580

LividBovine wrote:
PureFodder wrote:
FEOS wrote:
If you look at the actual data behind the graph in the OECD report from your earlier post, the US is within 2% of the OECD figure. Hardly worth splitting that hair, tbh.
Tax burden on the US = 28.3% GDP
OECD average = 35.9% GDP

(35.9/28.3)*100 = 125%

ie. the OECD average tax burden is a full 25% higher than the US number.

Does this mean if the US government proposed a 25% increase in your taxes you'd consider that a hair hardly worth splitting!?
He was saying that the US federal government total tax burden was around 30% and that was close enough the figure the OECD had calculated for the US tax burden. You are comparing your orange to his apple.

I really don't care how our tax burden compares to the rest of the world. I only care how our government runs our country and how they spend the money they have taken from me and my family.

No, the US federal tax burden is less than 20% GDP according to the US federal government and the OECD numbers.

2009-08-01 08:44:29

#108

FEOS: Bellicose Yankee Air Pirate; +1,182|6705|'Murka

Why don't you look at growth of GDP for those countries over the same period, then come back and tell me how horrible lower tax rates are?

And again, there is far more to US citizens' taxation than simply federal taxes. That is only a part of the picture...less than half in some areas/income brackets.

Last edited by FEOS (2009-08-01 08:45:22)

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular

2009-08-01 10:22:35

#109

Turquoise: O Canada; +1,596|6699|North Carolina

FEOS wrote:
Why don't you look at growth of GDP for those countries over the same period, then come back and tell me how horrible lower tax rates are?

That's a strange juxtaposition for our discussion. We have higher corporate taxes than most of the other OECD countries, but yet, we've had higher GDP growth than most of them...

Are you suggesting that higher corporate taxes equal more growth?

FEOS wrote:
And again, there is far more to US citizens' taxation than simply federal taxes. That is only a part of the picture...less than half in some areas/income brackets.

Very true. Some states are much more taxing than others. Then again, I thought that original chart took into account local taxes?

2009-08-02 09:38:48

#110

FEOS: Bellicose Yankee Air Pirate; +1,182|6705|'Murka

Turquoise wrote:
FEOS wrote:
Why don't you look at growth of GDP for those countries over the same period, then come back and tell me how horrible lower tax rates are?
That's a strange juxtaposition for our discussion. We have higher corporate taxes than most of the other OECD countries, but yet, we've had higher GDP growth than most of them...

Are you suggesting that higher corporate taxes equal more growth?

Not at all. There is a difference between stated tax rates and effective tax rates. I was referring to income taxes--where our discussion had strayed. Our corporate income taxes are certainly higher than some other countries...and our economy has suffered for it. In a free market economy, higher tax burden on industry equates to fewer jobs as those industries will locate elsewhere. Fewer jobs equates to lower income tax (the primary source of the US government's income). It's a nasty cycle.

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular

2009-08-02 09:43:46

#111

Turquoise: O Canada; +1,596|6699|North Carolina

FEOS wrote:
Turquoise wrote:
FEOS wrote:
Why don't you look at growth of GDP for those countries over the same period, then come back and tell me how horrible lower tax rates are?
That's a strange juxtaposition for our discussion. We have higher corporate taxes than most of the other OECD countries, but yet, we've had higher GDP growth than most of them...

Are you suggesting that higher corporate taxes equal more growth?
Not at all. There is a difference between stated tax rates and effective tax rates. I was referring to income taxes--where our discussion had strayed. Our corporate income taxes are certainly higher than some other countries...and our economy has suffered for it. In a free market economy, higher tax burden on industry equates to fewer jobs as those industries will locate elsewhere. Fewer jobs equates to lower income tax (the primary source of the US government's income). It's a nasty cycle.

I don't disagree; however, I would suggest that personal income taxation has no relation to economic growth.

Corporate taxation does, but there is very little evidence to suggest that taxing the rich more in personal income affects overall economic growth. For example, Scandinavian countries typically have high levels of personal taxation, yet they also have some of the best performing economies in Europe.

Last edited by Turquoise (2009-08-02 09:44:22)

2009-08-02 12:07:54

#112

Catbox: forgiveness; +505|7010

Turq said:
"I would suggest that personal income taxation has no relation to economic growth."

Don't you think if people had more of their own money instead of giving it to the govt in taxes...
That the person would spend more money on entertainment...fixing up their house... buying supplies for their small business...
which in turn would boost corporate sales of products... which in turn would mean the corporation would pay more taxes on their increased sales
from consumers?

Last edited by [TUF]Catbox (2009-08-02 12:08:27)

Love is the answer

2009-08-02 12:09:53

#113

13urnzz: Banned; +5,830|6791

econ 101, tbh

2009-08-02 13:08:30

#114

FEOS: Bellicose Yankee Air Pirate; +1,182|6705|'Murka

Turquoise wrote:
FEOS wrote:
Turquoise wrote:

That's a strange juxtaposition for our discussion. We have higher corporate taxes than most of the other OECD countries, but yet, we've had higher GDP growth than most of them...

Are you suggesting that higher corporate taxes equal more growth?
Not at all. There is a difference between stated tax rates and effective tax rates. I was referring to income taxes--where our discussion had strayed. Our corporate income taxes are certainly higher than some other countries...and our economy has suffered for it. In a free market economy, higher tax burden on industry equates to fewer jobs as those industries will locate elsewhere. Fewer jobs equates to lower income tax (the primary source of the US government's income). It's a nasty cycle.
I don't disagree; however, I would suggest that personal income taxation has no relation to economic growth.

Corporate taxation does, but there is very little evidence to suggest that taxing the rich more in personal income affects overall economic growth. For example, Scandinavian countries typically have high levels of personal taxation, yet they also have some of the best performing economies in Europe.

When you are talking about megacorporations (like Walmart and such), then you're likely correct. The part you are missing are all the small incorporated businesses that make up the bulk of the US economic engine. At that level, personal income from the owners and corporate income from the business are not clearly delineated. Thus, income tax on the owners results in a defacto increase in corporate taxation on the business, as much of the profit gets rolled back into the business by the owner(s)...as alluded to by Catbox.

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular

2009-08-02 15:07:54

#115

Turquoise: O Canada; +1,596|6699|North Carolina

[TUF]Catbox wrote:
Turq said:
"I would suggest that personal income taxation has no relation to economic growth."

Don't you think if people had more of their own money instead of giving it to the govt in taxes...
That the person would spend more money on entertainment...fixing up their house... buying supplies for their small business...
which in turn would boost corporate sales of products... which in turn would mean the corporation would pay more taxes on their increased sales
from consumers?

If your economy is angled toward personal consumption, yes. Ours currently is, but that's not a requirement for a strong economy.

There are other First World economies geared less toward personal consumption. For example, Norway's economy is considerably less angled that way, and they have one of the strongest economies in the world. They have rather high personal income taxes as well.

2009-08-02 15:13:02

#116

Turquoise: O Canada; +1,596|6699|North Carolina

FEOS wrote:
When you are talking about megacorporations (like Walmart and such), then you're likely correct. The part you are missing are all the small incorporated businesses that make up the bulk of the US economic engine. At that level, personal income from the owners and corporate income from the business are not clearly delineated. Thus, income tax on the owners results in a defacto increase in corporate taxation on the business, as much of the profit gets rolled back into the business by the owner(s)...as alluded to by Catbox.

As countries like Norway show us, that isn't a bad thing. If small businesses choose to reinvest their money more and give the owners less overall, the net effect of reinvestment leads to the growth of the business from being small to becoming much larger.

Business reinvestment is actually one of the most stable ways to encourage economic growth. With Norway again, corporate taxes are relatively low, both for small and large businesses. In combination with high personal taxes, there is heavy reinvestment.

Also, Norway devotes a lot of its tax revenue to healthcare and education, which enriches their workforce.

Overall, this difference in taxation and government spending results in a stabler economy and a better educated and healthier workforce, while at the same time, business reinvestment is high.

2009-08-02 15:35:16

#117

Harmor: Error_Name_Not_Found; +605|6843|San Diego, CA, USA

And Norway has the same GDP as Minnesota (don't know if this map is up-to-date):

https://img39.imageshack.us/img39/5582/gdpb.jpg

Perhaps that your reasons are why.

2009-08-02 17:09:14

#118

Turquoise: O Canada; +1,596|6699|North Carolina

Harmor wrote:
And Norway has the same GDP as Minnesota (don't know if this map is up-to-date):

http://img39.imageshack.us/img39/5582/gdpb.jpg

Perhaps that your reasons are why.

Norway has only about 4 million people, but there's no reason to assume that similar policies in taxation wouldn't work with our country.

I understand why people don't see an adequate parallel in healthcare situations between us and Norway, but yeah, taxation wise, it is adequate, because our standards of living are similar.

2009-08-03 03:47:14

#119

FEOS: Bellicose Yankee Air Pirate; +1,182|6705|'Murka

Turquoise wrote:
FEOS wrote:
When you are talking about megacorporations (like Walmart and such), then you're likely correct. The part you are missing are all the small incorporated businesses that make up the bulk of the US economic engine. At that level, personal income from the owners and corporate income from the business are not clearly delineated. Thus, income tax on the owners results in a defacto increase in corporate taxation on the business, as much of the profit gets rolled back into the business by the owner(s)...as alluded to by Catbox.
As countries like Norway show us, that isn't a bad thing. If small businesses choose to reinvest their money more and give the owners less overall, the net effect of reinvestment leads to the growth of the business from being small to becoming much larger.

Business reinvestment is actually one of the most stable ways to encourage economic growth. With Norway again, corporate taxes are relatively low, both for small and large businesses. In combination with high personal taxes, there is heavy reinvestment.

Also, Norway devotes a lot of its tax revenue to healthcare and education, which enriches their workforce.

Overall, this difference in taxation and government spending results in a stabler economy and a better educated and healthier workforce, while at the same time, business reinvestment is high.

There is a lot more to comparing tax rates (corporate or personal) than just the numbers.

Wikipedia wrote:
Tax rates around the world vary considerably both in their statutory rates, and in their effective rates after all offsets are considered, preventing any straightforward comparisons of tax rates between countries. In some countries, for example, the United States, Canada and Switzerland, subnational governments also collect taxes, which further complicates the calculation of the tax rate.

In the United States, the top marginal federal corporate rate for taxable income over $18.3 million is 35% (it can be as low as 15% for taxable income under $50,000). Most states also tax companies,[2] but the state tax is a deductible expense in calculating federal tax, so the overall tax rate is not simply the sum of the two tax rates.

Normally, the comparison is between federal rates, not effective rates (which would include state and local rates and their implications to federal rates). The numbers can be wildly different. There is also the difference in depreciation of capital and debt calculations--again making the raw percentages not comparable.

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular

2009-08-18 09:00:32

#120

Kmar: Truth is my Bitch; +5,695|6895|132 and Bush

Turquoise wrote:
I understand why people don't see an adequate parallel in healthcare situations between us and Norway, but yeah, taxation wise, it is adequate, because our standards of living are similar.

Probably because we have looked at the systems in the other countries that have 100 million+.

Xbone Stormsurgezz

2009-08-19 16:37:16

#121

Turquoise: O Canada; +1,596|6699|North Carolina

Kmarion wrote:
Turquoise wrote:
I understand why people don't see an adequate parallel in healthcare situations between us and Norway, but yeah, taxation wise, it is adequate, because our standards of living are similar.
Probably because we have looked at the systems in the other countries that have 100 million+.

Japan is doing quite well with healthcare, actually.

2009-08-20 00:36:17

#122

PureFodder: Member; +225|6580

Turquoise wrote:
Kmarion wrote:
Turquoise wrote:
I understand why people don't see an adequate parallel in healthcare situations between us and Norway, but yeah, taxation wise, it is adequate, because our standards of living are similar.
Probably because we have looked at the systems in the other countries that have 100 million+.
Japan is doing quite well with healthcare, actually.

and none of the other 100+ million countries are first world countries, unless the US was genuinely using Bangladesh and Nigeria as potential models for it's healthcare system.

2009-08-20 12:37:50

#123

FEOS: Bellicose Yankee Air Pirate; +1,182|6705|'Murka

PureFodder wrote:
Turquoise wrote:
Kmarion wrote:

Probably because we have looked at the systems in the other countries that have 100 million+.
Japan is doing quite well with healthcare, actually.
and none of the other 100+ million countries are first world countries, unless the US was genuinely using Bangladesh and Nigeria as potential models for it's healthcare system.

There's 100+ million countries? Wow. My atlas is out-dated, apparently.

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular

2009-08-21 08:10:22

#124

PureFodder: Member; +225|6580

FEOS wrote:
PureFodder wrote:
Turquoise wrote:

Japan is doing quite well with healthcare, actually.
and none of the other 100+ million countries are first world countries, unless the US was genuinely using Bangladesh and Nigeria as potential models for it's healthcare system.
There's 100+ million countries? Wow. My atlas is out-dated, apparently.

As in countries with populations above 100 million, obviously.

2009-08-23 09:17:52

#125

FEOS: Bellicose Yankee Air Pirate; +1,182|6705|'Murka

PureFodder wrote:
FEOS wrote:
PureFodder wrote:
and none of the other 100+ million countries are first world countries, unless the US was genuinely using Bangladesh and Nigeria as potential models for it's healthcare system.
There's 100+ million countries? Wow. My atlas is out-dated, apparently.
As in countries with populations above 100 million, obviously.

Sorry...should've used [sarcasm][/sarcasm] tags.

“Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.”
― Albert Einstein
Doing the popular thing is not always right. Doing the right thing is not always popular

BF2S Forums Why are corporate taxes in the United States so high? 39%

Turquoise wrote:

FEOS wrote:

Bertster7 wrote:

Turquoise wrote:

FEOS wrote:

PureFodder wrote:

FEOS wrote:

LividBovine wrote:

PureFodder wrote:

FEOS wrote:

FEOS wrote:

FEOS wrote:

Turquoise wrote:

FEOS wrote:

FEOS wrote:

Turquoise wrote:

FEOS wrote:

Turquoise wrote:

FEOS wrote:

Turquoise wrote:

[TUF]Catbox wrote:

FEOS wrote:

Harmor wrote:

Turquoise wrote:

FEOS wrote:

Wikipedia wrote:

Turquoise wrote:

Kmarion wrote:

Turquoise wrote:

Turquoise wrote:

Kmarion wrote:

Turquoise wrote:

PureFodder wrote:

Turquoise wrote:

Kmarion wrote:

FEOS wrote:

PureFodder wrote:

Turquoise wrote:

PureFodder wrote:

FEOS wrote:

PureFodder wrote:

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