[sparkscoffee] Re: Emailing: Scan0158 - Captalism Stinks On Ice
- From: "D.J.J. Ring, Jr." <n1ea@xxxxxxxx>
- To: "sparkscoffee@xxxxxxxxxxxxx" <sparkscoffee@xxxxxxxxxxxxx>
- Date: Fri, 26 Sep 2014 20:36:00 -0400
Stanley,
If Corporations paid NO taxes on income, then there would be more money for
them to invest in Research and Development, maybe a new plant near you in
Florida, and of course many new jobs because of all these things.
One thing I forgot is that "We the People" have given Corporations a TAX
BREAK to move out of the Country to build foreign factories.
No to me - that is plain INSANE. I am guessing you'd agree with me on that
- as does the author below.
(More below). You can read just the first paragraph if you wish - cutting
Corp taxes results in POSITIVE income to the US Treasury.
73
DR
*Forbes*
<http://www.forbes.com/sites/anthonynitti/2013/07/30/president-obamas-plan-for-corporate-tax-reform-a-grand-bargain-or-simply-another-name-for-an-old-proposal/>
http://www.forbes.com/sites/anthonynitti/2013/07/30/president-obamas-plan-for-corporate-tax-reform-a-grand-bargain-or-simply-another-name-for-an-old-proposal/
*President Obama's Plan For Corporate Tax Reform: A 'Grand Bargain' Or
Simply Another Name For An Old Proposal?*
Earlier today, President Obama took some time away from motivating
sputtering baseball teams to propose a “grand bargain,” whereby the
President would be willing to reduce corporate tax rates if the additional
tax revenue were used to create jobs for the middle class.
Now, if you’re particularly sharp, you might have noticed an oddity in that
opening sentence. Specifically, if corporate tax rates would go down, why
would there be additional tax revenue available to spend on job creation?
That’s because along with the promised tax rate reduction, President Obama
would broaden the tax base by eliminating many of the deductions and
preferences available under today’s law. The net effect of these two
changes would result in an increase in total tax revenue collections; in
other words, the reduction in rates would be more than offset by the lost
deductions.
This is a bit of a departure from the President’s previous proposals for
corporate reform, which have always been promised to be revenue neutral. In
a revenue neutral plan, only enough deductions would be cut to generate the
revenue necessary to “pay for” the revenue lost to lower tax rates. No
more, no less.
I say the President’s latest plan is a “bit” of a departure because the
goal would still be to have the “grand bargain” reform be revenue neutral
over a ten-year period; however, the plan would generate net revenue in its
initial years, which would then be spent on job creation efforts such as
investing in infrastructure, manufacturing and community colleges.
So what exactly is in the President’s “grand bargain” plan?
As best I can tell, the limited details of the proposal pitched today align
neatly with the President’s previously published and creatively named “The
President’s Framework for Business Tax Reform.” The headlining item of that
proposal – which was echoed today – is to reduce the maximum corporate rate
from 35% to 28%, a promise that is likely to win some appreciation from the
Republican Party.
But that’s about all the Republican Party will like about this plan,
because let’s call it what it is: a tax increase to fund additional
governmental spending. Not exactly true to Republican core values.
The President’s plan can be separated into three distinct categories:
general corporate reform, manufacturing industry reform, and international
reform.
General Corporate Reform
The President (correctly) points out that our current tax system — replete
with innumerable deductions, exclusions and preferences — benefits certain
industries over others. Take a gander at the following table, which
illustrates the effective tax rate paid by different industries in 2007 and
2008, even though they were all subject to the same 35% marginal rate:
The president believes that when eliminating deductions and preferences,
care should be taken to equalize the benefits of the code across all
industries. To that end, he has placed a number of provisions on the
chopping block, calling for the following changes:
Elimination of “Last in first out” accounting. Under the “last-in,
first-out” (LIFO) method of accounting for inventories, it is assumed that
the cost of the items of inventory that are sold is equal to the cost of
the items of inventory that were most recently purchased or produced. This
allows some businesses to artificially lower their tax liability.
Elimination of oil and gas tax preferences. The President would repeal the
expensing of intangible drilling costs, and percentage depletion for oil
and natural gas wells. .
Taxing carried (profits) interests as ordinary income. The President would
eliminate the loophole for managers in investment services partnerships and
tax carried interest at ordinary income rates.
Eliminate special depreciation rules for corporate purchases of aircraft.
This would eliminate the special depreciation rules that allow owners of
non-commercial aircraft to depreciate their aircraft more quickly (over
five years) than commercial aircraft (seven years).
Addressing depreciation schedules. Current depreciation schedules generally
overstate the true economic depreciation of assets.
Reducing the bias toward debt financing. Steps would be taken to reducing
the deductibility of interest for corporations. This would reduce
incentives to overleverage and produce more stable business finances,
especially in times of economic stress.
Manufacturing Industry Reform
While the president asserts that all industries should be treated equally,
his plan then goes on to bestow certain preferences specifically on the
manufacturers by proposing the following:
Effectively cutting the top corporate tax rate on manufacturing income to
25 percent and to an even lower rate for income from advanced manufacturing
activities by reforming the domestic production activities deduction. The
President’s would focus the current I.R.C. § 199 deduction more on
manufacturing activity, expand the deduction to 10.7 percent, and increase
it even more for advanced manufacturing. This would effectively cut the top
corporate tax rate for manufacturing income to 25 percent and even lower
for advanced manufacturing.
Expand, simplify and make permanent the R&D Tax Credit. The President’s
framework would increase the rate of the alternative simplified credit to
17 percent.
Extend, consolidate, and enhance key tax incentives to encourage investment
in clean energy.
*International Reform*
It is in the international arena that the president’s proposals most
deviate from those of his Republican counterparts. While Republican leaders
have loudly called for a move to a “territorial” tax system, whereby U.S.
corporations would only pay tax on U.S. income, leaving other nations to
tax foreign profits, President Obama wants to expand the current corporate
tax regime to tax profits earned by foreign affiliates of U.S. corporations
before they are repatriated to the U.S.
The president’s proposals include the following:
Require companies to pay a minimum tax on overseas profits. Specifically,
under the President’s proposal, income earned by subsidiaries of U.S.
corporations operating abroad must be subject to a minimum rate of tax.
This would stop our tax system from generously rewarding companies for
moving profits offshore. Thus, foreign income deferred in a low-tax
jurisdiction would be subject to immediate U.S. taxation up to the minimum
tax rate with a foreign tax credit allowed for income taxes on that income
paid to the host country. This minimum tax would be designed to balance the
need to stop rewarding tax havens and to prevent a race to the bottom with
the goal of keeping U.S. companies on a level playing field with
competitors when engaged in activities which, by necessity, must occur in a
foreign country.
Remove tax deductions for moving productions overseas and provide new
incentives for bringing production back to the United States. The President
is proposing that companies will no longer be allowed to claim tax
deductions for moving their operations abroad. At the same time, to help
bring jobs home, the President is proposing to give a 20 percent income tax
credit for the expenses of moving operations back into the United States.
Other reforms to reduce incentives to shift income and assets overseas. The
President would strengthen the international tax rules by taxing currently
the excess profits associated with shifting intangibles to low tax
jurisdictions. In addition, under current law, U.S. businesses that borrow
money and invest overseas can claim the interest they pay as a business
expense and take an immediate deduction to reduce their U.S. taxes, even if
they pay little or no U.S. taxes on their overseas investment. The
President would eliminate this tax advantage by requiring that the
deduction for the interest expense attributable to overseas investment be
delayed until the related income is taxed in the United States.
Republican leaders have already shouted down the President’s “grand
bargain” proposal, with Senate Republican Leader Mitch McConnell taking
issue with the planned increase in revenue by calling it, “…just a
further-left version of a widely panned plan he already proposed two years
ago – this time, with extra goodies for tax-and-spend liberals.”
Needless to say, the hyperpartisan environment that exists in Congress
today is not conducive to tax reform. One side is going to have to be
willing to budge, or today’s speech is as close as we’ll ever get to a
grand bargain.
On Fri, Sep 26, 2014 at 12:08 PM, Redacted sender Sblumen123@xxxxxxx for
DMARC <dmarc-noreply@xxxxxxxxxxxxx> wrote:
> DR
> If we don't tax the corporations because they simply pass it on to us
> consumers including with other expenses and profits then would you be
> willing to have your taxes increased? If not, who is there left to tax?
> I didn't take a course in economics, did you? Think, think, think.
>
> Stanley
>
> In a message dated 9/22/2014 7:42:19 P.M. Eastern Daylight Time,
> dmarc-noreply@xxxxxxxxxxxxx writes:
>
> DR
> Think, think,think. No taxes means BIGGER PROFITS to buy bigger mega
> Yachts, bigger mega Mansions etc.. Killing unions, lower wages, longer
> working hours, fewer holidays, shorter vacations, less safety rules etc,
> which is the same as less taxes to maintain or increase profits which we
> must not hurt, will also bring jobs and the factories back. Slave labor is
> the best. Think, think, think,
>
> Comrade B, the mensh
>
> In a message dated 9/21/2014 9:43:20 P.M. Eastern Daylight Time,
> n1ea@xxxxxxxx writes:
>
> Corporations pass taxation costs to consumers. Eliminate corporation
> income taxes, you will increase gross national product because goods will
> cost.
>
> Only a socialist would be stupid enough to tax corporations.
>
> 73
>
> DR
> On Sep 19, 2014 4:43 PM, "Redacted sender Sblumen123@xxxxxxx for DMARC" <
> dmarc-noreply@xxxxxxxxxxxxx> wrote:
>
>> Everyone
>> Ask what you can do for your country, not what your country can do for
>> you. Patriotism Before Profitism,
>> Not Profitism Before Patriotism.
>>
>> Reducing Corporate Taxes to keep Businesses here is a form of bribary and
>> shifts the burden of necessary
>> taxes on the rest of us no matter how you slice it.
>>
>> Stanley
>>
>>
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