Good For Him...

[mikoyan29]

We hear about how the US has the highest corporate tax in the world yet we also hear about how some companies (Exxon-Mobil for one) pay little to no taxes. I will agree that part of the problem is the high tax rates because there are companies that do have to pay those. So what's the point of having high rates if you have so many loopholes and credits that favored companies pay little to no taxes? I mean one of the complaints about Obama's Energy Policy is that he is picking winners and losers. How is that any different than what any other President and Congress has done?

And one of the problems I have when politicians talk about tax reform is that it lowers taxes for some people and raises them for others. And with the wealth of this country getting concentrated in fewer and fewer hands and with those fewer and fewer hands getting their tax burden lowered...guess what happens to the treasury.

[drunkenwildmage]

Mikoyan,

Fundamentally that's one of the glaring problems with the current US TAX code, is all the little loopholes, shelters and nuances that you have to work with. That in itself has basically caused a formation off the current tax 'industry' It doesn't matter what side of the isle they are on, alot of those nuances and loopholes are a result of a series of presidents and Congress have done as a pay off their campaign donations. And frankly the US Tax payers are getting tired off it. You can see that with the formations of the Tea Parties and and increase awareness political parties like the Libertarian party.


I feel If you lowered the rates to a reasonably level, elimination off ALL the loopholes, tax credits, etc, not only should revenue would increase, but there would be a savings because all the IRS employees wouldn't be needed, not to mention a cost saves to corporations that wouldn't need to hire so many people just to understand the tax code.

[Tuxian]

The current US Tax Code, as John Stossel pointed out the other night on his show, is currently around 70,000 pages of legalese, loopholes, rules, regulations, and traps set by the IRS and Congress to extract money from the people. But the fact that it _is_ that large is part of the problem: People who are bound and determined are GOING to find some kind of loophole there to exploit, no matter how hard you try to close them all, it just isn't possible.

And yes, the best solution to dwindling tax 'incomes' (if you can call it that, I certainly despise using that word for legalized extortion, but that's me) is to lower the tax rate. Lower taxes stimulate business because entrepreneurs won't be as paralyzed about the tax burden they'll shoulder every year, so they'll be more willing to pay than they currently are, and more taxes will be collected.

[HYHYBT]

Lower taxes stimulate business because entrepreneurs won't be as paralyzed about the tax burden they'll shoulder every year, so they'll be more willing to pay than they currently are, and more taxes will be collected.

Obviously (but almost always ignored by people who put that forth) there is a point below which that is no longer true, because an overall tax rate of 0% yields no revenue at all. At the low end, at least, raising the rate *increases* revenue. If the "lower rate = higher revenue" theory is *ever* correct, it only works above a certain, unknown point. Why, then, does everyone who puts it forth apparently just presuppose, usually without even acknowledging it, that the current rate is in that high area? On what basis do they declare we're not in the lower area (and the only one proven to exist) where higher rates mean higher revenue?

[draco664]

Obviously (but almost always ignored by people who put that forth) there is a point below which that is no longer true, because an overall tax rate of 0% yields no revenue at all.

Exactly the same argument could be made for a 100% tax rate. Set it to that and your revenues will be 0 too. The number of people suggesting a 0% rate is vanishingly small, and they can be ignored for the purposes of this argument.

Raise the rate over a certain, nebulous level, and tax revenues drop. Lower it below another, nebulous level, and tax revenues drop. The trick is to get the rate right. These two levels are different, and change depending on economic and confidence factors. That's why a rate that works *now* may not be optimum *later*.

It is safe to say that if the rate is raised slightly and tax revenues drop, that the case for lowering them is strong. Lower tax rates encourage more businesses to start, and it's better to skim 10% off two trillion dollars of economic activity than it is to skim 15% off a trillion.

[mikoyan29]

It is safe to say that if the rate is raised slightly and tax revenues drop, that the case for lowering them is strong. Lower tax rates encourage more businesses to start, and it's better to skim 10% off two trillion dollars of economic activity than it is to skim 15% off a trillion.

I don't care what the rate is, as long as it is fair to everyone. The current tax code is weighted too much in favor of investors and big corps at the expense of people who work for a living and don't have the luxury of incorporating in the Bahamas or whatever.

[Panacea]

Exactly the same argument could be made for a 100% tax rate. Set it to that and your revenues will be 0 too. The number of people suggesting a 0% rate is vanishingly small, and they can be ignored for the purposes of this argument.

Raise the rate over a certain, nebulous level, and tax revenues drop. Lower it below another, nebulous level, and tax revenues drop. The trick is to get the rate right. These two levels are different, and change depending on economic and confidence factors. That's why a rate that works *now* may not be optimum *later*.

It is safe to say that if the rate is raised slightly and tax revenues drop, that the case for lowering them is strong. Lower tax rates encourage more businesses to start, and it's better to skim 10% off two trillion dollars of economic activity than it is to skim 15% off a trillion.

We've had high marginal rates up to 90% in the past . . . with so many loopholes that almost no one actually paid those rates.

The rates we have now actually work. The biggest problem we have are corporations who are allowed to shelter their income abroad, and certain financial sectors (hedge fund managers in particular) who make vast sums of money and pay only capital gains . . . 15% compared to the 28% I paid this year (I worked 3 jobs this year and bumped myself into a higher tax bracket for my trouble).

Now granted, corporate tax rates are too high compared to the rest of the world. I'd like to see corporate tax rates drop . . . but corporations required to bring their profits home and pay taxes on them.