Dupe of <a href="https://news.ycombinator.com/item?id=14186874" rel="nofollow">https://news.ycombinator.com/item?id=14186874</a>
No corporation with a good tax team pays anything more than 20% of taxes. This idea that 15% is going to really be THE thing that spurns business, well, it might work initially, but the reality is, it will just create more federal debt (think Bush tax cuts of 2003). Also, the current tax codes (loop holes) are too favorable for corps. With the proposed lower corp. base tax rate it will just make it easier for corporations to not pay ANYTHING. Wonderful, if it wasn't hard enough to fund schools and roads, now we'll make it even harder. How about simply closing OFF the tax loopholes, give corporations "kickers" to earn tax credits on hiring in the US and other things that could help. Giving them 15% right off the top -- that's so Trump, it's insulting.
Just to make sure: for something to be "revenue neutral" means it can't contain a real reduction in tax revenue offset by a hypothetical gain through "dynamic effects" in the economy?
I am pretty liberal, but I DO think corporate taxes should be lower. We should tax the money that people pull OUT of a business for personal consumption, not the money that is being used to drive the economy.
A largely meaningless figure without the included context about targeted cuts elsewhere.<p>That said, corporate taxes[1] currently make up around 10% of the total US tax revenue, so major cuts (35% -> 15%) actually stand to result in a 4.2% drop in total US tax income. This assumes no positive change in corporate growth as a result of the reduced taxes.<p>1: <a href="http://www.taxpolicycenter.org/statistics/amount-revenue-source" rel="nofollow">http://www.taxpolicycenter.org/statistics/amount-revenue-sou...</a>
We don't know about the side effects yet, but a 15% corporate tax would be the starting signal for some entrepreneurial friends of mine to found a company in the USA the second the bill has passed. There is no other big market with such a low corporate tax.
It's amazing how many people simply don't understand how taxes work.<p>Taxes are paid on profits, not gross revenue. If my company makes $1M net but I decide to expand my business by buying more equipment or staffing up I can spend that $1M on that and have a net of $0 profit and owe $0 in taxes.<p>Explain how by lowering the tax rate from 35% to 15% gives me any more money to expand my business when it is taxed on profit, which I could choose to reinvest as much as I want when I want and write it down (current, past or future years)?<p>All it does it does is it means when I have no where else to spend my profits that it shows up on the balance sheets as profit. Do you know who benefits from that? Shareholders, execs and board members.<p>All of that extra money will just get locked up in the bank accounts of the people who already can't figure out how to spend the money they already have. It does not create more revenue for the govt, it does not accelerate growth.<p>History has shown time and again supply side economics does not work. It's not just a theory, the Laffer Curve has been proven to be nonsense as much as it can outside of a vacuum.<p>The reason the wealthy love the idea is because there are only so many ways to create the growth on the balance sheets that the market demands each year and this would be an easy way to do it.<p>You think wealth inequality is bad now, wait until you see a 15% Corp tax rate. The people who will pay for the missing trillions in revenue will be the 99% that are already struggling. At some point the system will be too stressed and this could be the proverbial straw.<p>I would recommend those reflect on the origins of our tax system and how tax was to be derived exclusively from business income and not wages before feeling sympathy for the non-human entity called a corporation.<p>If you want to see a large influx of growth to the system you force that money to reenter the system. Making it illegal to use shell companies and tax havens purely to reduce tax liability would have injected trillions back into the economy that would have created some great outcomes just based on tax revenues and the need to reduce tax liability thru investment. Read healthcare, education, wages, infrastructure, better jobs, etc.
To me it's strange how federal law allows local governments to offer tax breaks to individual companies in order to attract them. Conversely, large corporations can play states against each other for the sweetest deal. As a comparison this isn't allowed e.g in the EU and not between regions within most countries.<p>Shouldn't a tax reform close that possibility, which should raise a lot of tax revenue, which could then be used to cut corporate taxes, but now in a fair way?
This seems bad to me. Without a border-adjustment tax (or some easy, intuitive way to figure out what to tax) this just lowers the bar with the same number of loopholes as before.<p>Companies will still use tax loopholes but now the government will lose even more money.
I'm skeptical that tax reform has a better chance of making it through this Congress than ACA reform, but:<p>Can anyone comment on how a lower corporate rate would likely affect S corps and incentives to form them? Maybe a new 15% rate wouldn't apply to such firms, but if it did, wouldn't it represent a pretty big new benefit/loophole for incorporation?
Two thoughts on stories on taxes:<p>1) I'd prefer stories on government finances tell the whole story: Slashing taxes and government services by X. That may or may not be an acceptable trade-off, but usually it's presented as something like Walmart is slashing prices - there's a sale! - only looking at the cost side.<p>2) Present it as the zero-sum situation it is: If person A pays less, everyone else has to pay more for the same result. Somehow, people have to pay for things, and I think it's widely accepted that people should be making roughly equivalent sacrifices.<p>(That's not a call for a flat tax rate; 10% of income is much more of a sacrifice to someone making $10K than to someone making $1 million. FWIW, another HN reader told me recently that research says there is roughly a logarithmic relationship between utility and dollar amount.)
Honestly, corporate taxes don't make much sense. It would be much better if we reduced the corporate tax rate to 0% and made up the difference by increasing capital gains tax.
Republicans talk a big game of fiscal responsibility but when given the chance they do irresponsible things like this and Bush's extensive tax cuts for the wealthy that cost the rest of us billions by running up debt.
It will lead to a generalized and obnoxious "IR35" problem, which says that "you are NOT a real company", because you just incorporated your activity as an employee to pay a much lower corporate tax instead of the higher personal income tax and other contributions that you should be paying. Paying the lower corporate tax is reserved for TRUE capitalists and not for smaller entities such as yourself, who are in fact meant to be treated as substantially higher-taxed wage slaves.