Taxing Employers
Source: New report by the Cato Institute
Richard Rahn analyzes the study in The Washington Times.
Michael Boskin argues for abolishing the corporate income tax in The Wall Street Journal.
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No wonder our unemployment rate is so high.
Corporations don’t pay taxes, they merely pass them on to consumers in the form of higher prices. Corporate taxes are just another way of siphoning revenue away from the private sector to fund government spending on services taxpayers would not be willing to fund if they paid the costs directly.
Awful looking chart.
The case for abolishing the income tax is very persuasive.
It sound so good to tax corporations. Politicians make the case so easily: “We’re taxing those evil giants so that we don’t have to tax the consumer.”
But, of course it’s not true. The cost gets passed along to the public. It’s the same with minimum wage. It sounds good. “We’re going to be ‘fair’ to the worker.” But, in the long run, the worker ends up paying more.
That’s a very misleading chart. Through a variety of loopholes, most large corporations pay much less then the actual tax rate. Exxon and GE, for example, paid no income taxes last year. Microsoft has managed to lower its tax rate to 28% by hiding income offshore.
Art, your explanation of why this is misleading rings hollow. First, Exxon paid a ton of taxes last year (Yahoo! Finance will tell you that). Second, scanning through GE’s portfolio (and Note 14 of the 10-K), you will see that they have a lot of business elsewhere in the world. They keep that money there so that it isn’t taxed at such a high rate (until proceeds are repatriated). In other words, they maximize their tax position by investing elsewhere. And your “reason” Microsoft doesn’t pay a full 35% is that they “hide” money offshore? That money is taxed somewhere, but they knocked 7 percentage points off by not having it taxed here. Sounds like there are lower tax rates elsewhere in the world. The chart isn’t misleading, your 2 legit examples noticed it and took advantage of their multi-national status.
Paul, the fact is that Exxon paid 0 US taxes, you can’t tell me that they didn’t earn any income in the US. It’s very common for large corporation to shift profits to offshore shell corporations to avoid US income tax. In
Here’s the US tax rate for a few more companies:
WalMart 34%
Exxon 0%
Chevron less then 1%
GE 0%
ATT 34%
Bank of America 0%
Ford 2.3%
HP 18.6%
Berkshire Hathaway 31%
JP Morgan Chase 27%
Verizon 10%
McKesson 22%
Cardinal Health 31%
IBM 25%
Wells Fargo 30%
UnitedHealth 34%
Boeing 23%
Sales: $107 billion
artk–these numbers are worthless without dates and listings for multiple years.
You really should learn accounting, Art. Exxon “recorded” no income tax in the US in 2009. They did “pay” income tax in 2009. They overpaid in 2008, so they got credits (for recording purposes). It’s called accrual accounting. Looking at their 10k again, they paid over $15B in income taxes (cash). Not all of that was in the US (they don’t specify where), but not all the money was made here. It is taxed where it is made. Then when they bring it here it is taxed here. If they don’t bring it here it isn’t taxed here. I don’t have time to go over all of these, but please don’t just use what you read at Thinkprogress and call it gospel.
The fellow “artk” needs to read the study. The whole purpose was to calculate the “effective” tax rates on companies, not the legal or statutory rates that he criticizes. Artk might also consider that corporations based in every other nation enjoy “loopholes” as well. The tax avoidance problem that concerns him is made worse in this country by our high statutory rate. Please read my book with Dan Mitchell, Global Tax Revolution. Chris Edwards, Cato Institute.