Corporate Tax Laws Put Obama in a Bind

Flaws in our corporate tax laws were sponsored by lobbyists, and it will be difficult to change them while special interest groups maintain their power over congress.

That leaves the administration with just two options:
(1) Eliminate deficit spending, which undoubtably would be opposed by special interest groups and the members of congress they control.
(2) Increase the tax rates imposed on working Americans. I have no objection if increases were restricted to the rich (Obama promised not to increase taxes on those earning less than $250,00; the excise tax in the Senates health care bill already contradicts that promise).

Unfortunately, the rich have far greater influence over congress than all working class Americans combined. I recently read that only 50% of Americans pay any income tax. That means that a substantial increase will be imposed on the rest of us while we face increased expenses for health care and little or no hope for wage increases. We also have to question whether we'll ever receive benefits from the taxes we pay for Social Security and Medicare. Both government administrated programs have serious problems, and the pending health care bill proposes to reduce Medicare spending despite the large number of eligibles as baby boomers retire.

Our weak economy makes life difficult for all of us common folks. The inevitable tax increases will hit us even harder. (My bet is that Congress will delay most increases until after next year's elections just to keep incumbents in office.)

joey123219
4:25PM Oct 12th 2009
"I assume you don't make over 250,000 a year otherwise you wouldn't be so quick to say "I have no objection if increases were restricted to the rich" because it wouldn't directly effect you."

You are correct in your assumption and justified in questioning my fairness.
I really don't want any of us to pay the higher taxes which are coming. My only excuse is that the very wealthy could better afford what's coming, and I agree with most of what you posted.
My wife is an unpaid volunteer at a local hospital. When she stands in line to fill a prescription (the hospital generously gives a 10% discount to volunteers) she has noted that more than 50% of others in line usually pay nothing because of Medicaid or other welfare programs. But she also can't help noticing the expensive jewelry and stylish clothing worn by many of the welfare recipient.

The article is a little misleading. True, partnerships and sub-chapter S businesses don't pay corporate tax, but they do pay personal income tax on the business' profit. If the business is a successful one, that personal tax rate will be much higher than the corporate rate. BTW, while the lower half of income earners only pay about one half of 1% of the income tax burden, the upper 1% shoulders 40% of the income tax burden. And that was after Bush's tax cuts "for the rich", that liberals are always complaining about.

The US corporate tax system is an anachronism that discourages growth and undermines job creations. High tax rates drive jobs and investments overseas..

Russia used to have a 70% tax rate after about $12,000 annual income. They collected squat. They changed to a 13% flat tax on annual earning and their collections went up over 300%. Then again we have Charle Rangel in charge of the Tax Law!

The Government doesn't create taxable profits...jobs do, employers do...and yes , those "rich" people that own the companies ...that employ people. The Government...is a leach...a huge blood-sucking leach.

government needs to stick to it's budget. we all have budgets and a third grader can tell you if you don't have the money you can't/shouldn't spend the money. Obama has spent way to much money already and soon he will come a knocking to the working class smucks that will be required to forfeit even more of their hard earned income, for what? for who? for much of nothing that's what. spend and tax spend and tax.

Foolish Libs think the rich can pay for everyone else to be lazy. Yes, if you are on welfare YOU ARE LAZY. There are help wanted signs everywhere. Yes they are lower paying jobs, but YOU HAVE NO JOB NOW. The greatest threat to this country is when people realize they can vote themselves free stuff. But what the stupid Dems and Libs dont understand is nothing is free. If you have a young child or grandchild, look at them tonight and know they are going to have less than you because you want free stuff now. To hell with your welfare, make it illegal or at least limited to 6 months.

We need a pro-growth agenda that urges congress and the Obama administration to enact policies that bring tax rates in line with our global competitors. We need to keep chipping away at the deficit by taking steps to control wasteful government spending. See http://www.friendsoftheuschamber.com/issues/index.cfm?ID=104

The economy will bounce back. Government spending created many jobs in the Great Depression, Hoover Dam for example. Some paint that as socialism, others as a wise public investment -- saw a cool site; Balkingpoints ; incredible satellite view of earth

What Bull!

Show Us what the Corporations pay after all the deductions.
Most of the largest ones pay "ZERO" taxes.
http://www.reuters.com/article/newsOne/idUSN1249465620080812


Tue Aug 12, 2008 12:54pm EDT
"WASHINGTON (Reuters) - Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.

The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005..."

"The GAO report showed that 61 percent of US corporations paid no federal income taxes from 1996 through 2000, a period of rapid economic growth and rising corporate profits.

An estimated 94 percent of US corporations reported tax liabilities amounting to less than 5 percent of their total income in 2000. The corporate income tax rate is ostensibly 35 percent, but companies are able to reduce their effective burden by claiming various deductions and credits.

US companies paid an average of $11.88 in corporate taxes for every $1,000 in gross receipts, the study said...

The percentage of federal tax collections paid by corporations has tumbled from a high of 39.8 percent in 1943 to a low of 7.4 percent last year. It ranged from 10 percent to 11 percent in 1996-2000, the period studied by the GAO. But since World War II, the share paid by individual income tax filers has remained relatively stable, bouncing between 40 percent and 50 percent. Most of the difference is explained by higher payroll taxes for Social Security and Medicare."

http://www.boston.com/business/globe/articles/2004/04/11/most_us_firms_paid_no_income_taxes_in_90s/

One way to get true tax reform is to figure out how much we need to collect and set tax rates to achieve those goals or use other simple forms of taxation. Eliminate the 9,000 plus pages of exceptions, special favors and deductions put in for lobbyists or special interests. Most of the IRS could be eliminated, saving salaries and benefits. Personal productivity would be increased by not having to spend hours and hours filling out tax forms.

A consumer group used a fictitious family of four with a home mortgage, a set household income and other factors to call the IRS tax help line. After making 23 calls with the same information they received 23 different tax liability figures. Even the experts can't figure out what those 9,000+ pages say.

Tell the government you are tired and can't take it anymore. They won't listen, now, but maybe when we vote out the incumbents, no matter what party, they will start to listen. Then we may get back some of the industry the politicians and special interests have driven out of the country.