The shortest tax policy post in recent memory
posted at 10:16 pm on July 6, 2011 by Jazz Shaw
It was no surprise that this post wasn’t going to be popular with doctrinaire conservatives, and it immediately provoked an interesting response from J.E. Dyer. But rather than delve into an endless rabbit hole of theories and talking points, let’s boil the question down to the basics. Start with two assumptions.
1. The vast majority of fiscal conservatives agree that a 35% corporate tax rate is far too high and the economy, employment and government revenue will be much improved if it is significantly reduced.
2. During election time, the vast majority of Republican candidates include as part of their platform an acknowledgment that the tax code, as currently written, is “broken” and should be improved if only somebody would do something about it.
With those two assumptions in mind:
Resolved: We should lower the corporate tax rate from 35% to 10% immediately. This would represent a cut to less than 1/3 of the current rate. But as an added proviso, the minimum amount that any American corporation would actually pay would be 10% of the difference between the raw amount of dollars they had to lay out to run their business over the course of the year subtracted from the raw amount of dollars they took in. No further deductions, devaluations of equipment, expenses for hiring, nor anything else would apply which would lower the total tax bill for the year below the threshold of 10% of the raw profit described above. If there is no profit, you pay no taxes and may possibly qualify for a rebate to encourage growth.
What say you? In the midst of these heated, rhetoric filled debates, hearing what not only conservative readers, but GOP leaders in Congress would think of such a proposal would be, I think, highly informative.
This post was promoted from GreenRoom to HotAir.com.
To see the comments on the original post, look here.
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Why tax a business any ways? The only people factually paying the tax are the customers? Simply tax the end result of the business, the product. A one time, once ever tax on a final product delivered to the end user. The tax must be visible in the transaction showing both the % and the total tax paid. The tax must be flat, in that all products, whether it is for tiny little baby medical care devices or top end mega modified unbelievably way over priced luxury items that no sane person in the world would ever pay that price for, have the same % tax rate applied.
This places all companies on a fair playing field. Chinese, American, European, their products all get the same tax treatment. When we want to protect American goods, we place an import tax on those items, limited upon the treaties we have signed.
astonerii on July 6, 2011 at 10:18 PM
Okay, but if you get rid of or drastically cut corporate income tax, you should eliminate the capital gains tax rate, which was only created in response to corporate income taxes.
There’s no reason to prefer income from investments over income from labor. It’s all income.
alwaysfiredup on July 6, 2011 at 10:20 PM
What would the congressional budget office say?
GaltBlvnAtty on July 6, 2011 at 10:20 PM
The Wall St. Journal had a good editorial today about this. The entire tax code needs to be thrown away and started from scratch–which is where it should stay–scratch. No “incentives” or social engineering, just a low rate everybody, who makes any money, pays.
cartooner on July 6, 2011 at 10:22 PM
Nah…in the purest form of libertarianism we need to charge the companies a fee for buying their stuff./r.p.
Limerick on July 6, 2011 at 10:23 PM
You were making sense until you said this.
cartooner on July 6, 2011 at 10:24 PM
Oh, there’s no way that would be abused.
pedestrian on July 6, 2011 at 10:29 PM
A Flat Tax?…
Gohawgs on July 6, 2011 at 10:30 PM
It’s really disingenuous to have a discussion about tax policy and exclude regulatory considerations.
bloghooligan on July 6, 2011 at 10:32 PM
First, let’s agree that all taxes burden economic growth, employment, etc. So if we’re going to cut a tax, let’s cut the individual income tax instead. Individuals can do all kinds of business without ever incorporating. The corporate income tax at least discourages people from becoming entangled in our horribly complex and perverse corporate liability laws. In fact, individuals can adopt all the corporate mannerisms they want without subjecting themselves to our government’s corrupting corporate incentives.
JohnJ on July 6, 2011 at 10:33 PM
*Howard Dean scream* Uhh, actually yes there is a reason. It’s the very foundation of capitalism. Jeez.
bloghooligan on July 6, 2011 at 10:35 PM
This is somewhat of a straw man lite… After taking a beating on the “increase taxes” thread, Jazz now looks to the radical end of reduced taxes – as if there is no middle ground. The point is that there is a line in which revenue and tax rates can be optimized… maybe a curvy line. The chuckle curve… no… giggle curve… well someone will come up with it.
maninthemiddle on July 6, 2011 at 10:36 PM
Hard work is also the foundation of the country. Personal income is personal income. How you get it is up to you.
alwaysfiredup on July 6, 2011 at 10:39 PM
The business would realize such saving in reduced accounting and their businesses would be completely drive based on what they need to do (not what keeps their taxes low) that it would cause MASSIVE growth.
BTW: entertainment is NOT a true business expense- period. A HUGE hit on professional sports but tough. That busines is so incredibly government subsidezed (through the entertainment deductions and government sponsored facilities) they are practically welfare cases- riding in limos.
michaelo on July 6, 2011 at 10:42 PM
No rebates. Lower taxes, combined with prudently applied deregulation, would be enough to encourage growth. Keep taxes low, leave us alone, and let us succeed or fail on our own. Meddling by government in the markets (and in the lives of its people generally), however well-intentioned, should be discouraged.
troyriser_gopftw on July 6, 2011 at 10:43 PM
And they would spend a ton on lawyers to change all their organizational structures and investment choices. Score!
alwaysfiredup on July 6, 2011 at 10:44 PM
Discontinue all business taxing. All it does is provide a money-laundering method for the government, because to most people the action of the government collecting their money is invisible. Nearly 30% of the cost of a gallon of gas is taxes, while you scream about the evil oil company.
Businesses do not pay taxes. They funnel your money to the government via higher prices, lower wages, reduced benefits and, if necessary, inferior product infrastructure. But every cent a business is “taxed” is converted from one of those sources. Replace it with the end user sales tax, and make sure it is prominent on every transaction.
Tax individual income at 8% across the board, with a $13,500 floor. The guy making $20k/year gets that floor, Bill Gates gets that floor.
Institute a 15% federal end-user sales tax across the board, no exemptions.
Sit back and watch the economy explode.
Freelancer on July 6, 2011 at 10:45 PM
You know, I’m sure I’ll be laffing at myself when I can remember what it’s called.
The 48er on July 6, 2011 at 10:46 PM
No way. Sales taxes just disappear with no reckoning and I can’t afford a 15% increase in the price of everything I buy.
alwaysfiredup on July 6, 2011 at 10:46 PM
Tax reform may be desirable and necessary in its own right. Linking it to the issue of the debt ceiling is a counterproductive idea that won’t be a revenue neutral “reform” but instead a ploy to raise overall taxes.
For some of us that wonder what purpose some entire federal agencies even have for existing, the assumption that this is in any way a revenue problem seems fairly absurd.
Resolute on July 6, 2011 at 10:47 PM
Businesses do not pay taxes! Businesses COLLECT taxes!!!! Duh!!!
Dingbat63 on July 6, 2011 at 10:48 PM
Whether substituting a flat tax, a VAT, or a combination thereof, it still results in a tax burden of X overall. The nightmare in politicians pointy little heads is that all the green shaded number crunchers will guess wrong. After all, they have missed on projected revenues after virtually every tax cut or hike.
The point being that this is the time to hold the proverbial line in the sand – nothing else is possible. Only a sweep in 2012 will enable reformation.
maninthemiddle on July 6, 2011 at 10:51 PM
We can never allow a federal sales tax while the IRS is still in existence. Neither party will be able to resist maintaining both revenue streams indefinitely, and any promise to not do so cannot be believed.
I don’t see that there is any way to get rid of the IRS.
slickwillie2001 on July 6, 2011 at 10:53 PM
I say, weak:
The costs of running a business include buying machines, hiring people. That’s what business does to create the product. You say “devaluing”..I assume you mean depreciate. Depreciate means that you take the cost of the machine over a period of years…and don’t expense it in the year purchased.
r keller on July 6, 2011 at 10:55 PM
Only if we remove ALL tax credits
Grunt on July 6, 2011 at 10:56 PM
“We don’t score blog posts”?
disa on July 6, 2011 at 10:58 PM
And you were reading it correctly until then.
If China subsidizes their steel industry such that ours is destroyed, is that good for America?
If France and Germany subsidize Airbus to the effect that it destroys Boeing, is that good for America?
There is a reason that I placed the disclaimer of “limited upon the treaties we have signed.” That is that we have treaties that indicate that if a trading partner uses these tactics, that we can tax their imports to take away the benefit of the subsidy they are giving their industries in order to keep the playing field fair.
astonerii on July 6, 2011 at 11:25 PM
If your not paying income taxes, do you think you would keep more money to pay that tax? I think so. If a company is not paying taxes and they have competition, do you think the money they save from not paying taxes would reduce the base cost of an item? I think so.
The idea is replace all other taxes with a flat tax with no exemptions. You get to see the tax right on the receipt. Only the end user pays the tax, so if the product takes 10 steps to go from in the ground to your hand, it only gets taxed once.
astonerii on July 6, 2011 at 11:30 PM
Since it’s precisely one of the points (absent the specific tax rate) I made in response to Jazz’s original post, I think it’s very smart.
SukieTawdry on July 6, 2011 at 11:33 PM
I don’t pay income taxes right now. But I still buy things.
alwaysfiredup on July 6, 2011 at 11:40 PM
And seeing the tax on the receipt is not enough. I like the annual accounting that tells me and the government exactly how much it is taking from me. It is much easier to keep track of than a million little scraps of paper.
alwaysfiredup on July 6, 2011 at 11:45 PM
How about a flat 10% tax on EVERYONE. That way EVERYONE has some skin in the game. Including ‘the poor’.
GarandFan on July 7, 2011 at 12:04 AM
Consumption tax. No income taxes. Flat rate, across the board, personal and business.
No class warfare, no loopholes, no corporate jet bullshit.
BobMbx on July 7, 2011 at 12:31 AM
Jazz — I don’t necessarily disagree with your comment response to my post.
Someone else made the point that isolating our “problem” to a single source is a bad approach, and I agree with that. Featuring the regulatory problem was a rhetorical device to get a point across; it’s not our only problem, and the intrusive, dirigiste mindset of modern government is really at the root of everything: the problems created by tax policy, regulatory policy, and programmatic spending.
Even the issue you raise — our hilarious labyrinth of deductions and mitigations to a individual tax bill — derives from the same source. We have that arrangement because government is unwilling to step away from trying to control outcomes, down to the minutest detail. It keeps government in that game for tax rates to be relatively high, and for businesses and individuals to be invested in deductions designed to encourage specific behavior.
I focus on regulation as much as I do because it’s the “forgotten tax,” and if I don’t point out how deeply and broadly it affects all our economic prospects, it usually won’t get pointed out. We literally cannot change our economic course without addressing regulation. Tax and spending policy are inadequate because we are so heavily regulated now; much more so than 30 years ago.
Part of that will be addressing the regulatory mindset, which is a matter of political philosophy; but the bottom line is that regulation and our methods of imposing it have to be rolled back. Until they are, the economic box we can’t claw our way out of will get smaller and smaller.
J.E. Dyer on July 7, 2011 at 12:33 AM
I’d rather have a 0% corporate tax and either a flat or consumption tax that would affect all citizens, not just the top 45% of income earners that the bottom 55% of citizens can vote themselves goodies from.
besser tot als rot on July 7, 2011 at 12:38 AM
The basic problem with any tax on ‘income’ is that it is very easy to game the system, especially if your income is all cash.
A much better and fairer tax would be on the products you consume. Everybody would pay into the system(no moocher-class)and at the end of the year if your income for your family size is less than a defined amount, you file a one page return to get your tax refunded. No deductions for anything, businesses and individuals pay the same rate. So, if you want that nice new Armani designer shirt to wear you can buy it at Needless-Markup and pay a much higher tax than you would if you bought a functional shirt at say J.C.Penney.
There is an added bonus with this tax code. The lobbyists disappear and the size of the IRS shrinks. Government is made smaller and the corruption inside the Beltway is reduced and easier to pinpoint.
belad on July 7, 2011 at 12:43 AM
You can’t really fix a problem, until it’s cause is properly diagnosed…
Nothing this big will ever happen so long as all the Congressional Critters and their workerbees get defined benefit retirement plans that are immune from market forces. Toss in all the bureaucrat pensions while you’re at it…
The big corporate taxation is a direct result of Congressional (and bureaucrat) defined benefit plans that largely remove negative political and regulation decisions, such as high corporate taxation, from Congresscritters pensions.
If Congresscritters pensions were converted to defined contribution plans sensitive to market whims, we’d quickly see corporate taxes (as well as regulations and more) get significantly reformed so stock based pensions would grow faster (along with the economy), and we’d also see a parade of retirements in both parties from folks who don’t want to be in the position of having their political decisions negatively effect their pensions…
drfredc on July 7, 2011 at 12:45 AM
Ok, lets cut all subsidies as well while we’re at it. If you can’t run your business at all without the government funneling taxpayer money to you (Amtrak, I’m looking at you’ but I suspect some of the greenies get smacked as well).
I’m good with this. Simplify the freaking system so everyone knows what the rules are, how they work, and that they’re being applied fairly across the board.
You want to know why Congress tends to get a 10% approval rating? because nobody has any idea what the $*#& the rules are, how the work, who set them up, who benefits, or why… so the assumption (possibly warranted) is that they’re set up for bribes, kickbacks, influence, and personal benefit.
If the rules are simple enough a 5th grader can understand them without help; then people will start to trust that maybe you aren’t a crooked lawmaker trying to set up a scam by which I (the person not “in the know”) get screw-ed and your buddies get fat loot which they then share with you under the table…
There’s a prettier way of explaining exactly why myself and like-minded people don’t trust the government. IF you give someone enough power and a goal to “control outcomes” what are they odds they’ll “control outcomes” in a way that is to their personal detriment?
Power corrupts; that’s what it’s there for.
gekkobear on July 7, 2011 at 1:00 AM
Revenue from the corporate income tax right now is about $200B. (I honestly have no idea why no Hot Air discussion of tax policy takes actual revenues into account–it’s almost like you idiots are content spouting your favorite misunderstood theories and have no regard for any actual consequences). Cutting the rates to 10% would, in the immediate term (before the changes in incentives led to economic growth etc etc) reduce the receipts to about $60B. That would only increase our present deficit by 7%. Furthermore, $60B is a drop in the bucket in a $3.8T budget, so why bother keeping the corporate tax at all? If 10% is good, 0% is better.
Why, indeed? Because then America would become a Cayman-esque haven for shell corporations doing business abroad. This isn’t in itself a bad thing, but American taxes would fund the registration, court system, etc for these businesses, so they realistically ought to contribute something. Five or ten percent would be plenty to offset the costs, but would be low enough we could enjoy all the benefits.
Interestingly, a low corporate tax rate plus a high individual tax rate is the scheme employed by Sweden, hardly a bastion of right-wing economic thought. Somehow our Democratic Party is to the left of Sweden’s socialists when it comes to corporate taxation.
hicsuget on July 7, 2011 at 2:14 AM
Uhhh. So subsidizing failure?
modnar on July 7, 2011 at 3:57 AM
How about some social engineering? (Better ours than theirs)
Reduced corporate taxes (limited of course) dependent upon the number of new jobs they create-raise the tax as they lay off more folks than the day the law goes into effect. This would apply only to the present high taxes. Now all corporations have an incentive to create wealth to use that labor.
Does that make any sense? (not an economist-just a dreamer)
Don L on July 7, 2011 at 6:32 AM
Fairer? I think you might want to ask the old folks who never had the benefit of grand pension plans and are living from social security paycheck to social security paycheck, and who would then have the burden of taxation shifted disproportionally upon their shoulders, with no ability to earn more money as do those still in the marketplace.
Don L on July 7, 2011 at 6:40 AM
The consumers pay all corporate taxes. Let us just make it visible, and labeled at the point of retail purchase.
Slowburn on July 7, 2011 at 7:17 AM
Corporations are tax collectors, not taxpayers. Consumers pay “corporate taxes.” Actually, the only intellectually honest rationale for corporate taxation is to provide gainful employment for accountants and attorneys.
osogrande on July 7, 2011 at 7:27 AM
So they make a huge purchase, say a 40 story office building, and that’s part of their cost of doing business so it is written off in one year. I see that as a problem phasing in even though it will average out when they sell that building and pay taxes on the sale. The transition period will be painfully wrenching.
Aside from that – why not reduce corporate taxes to a big fat zero? We the people, you and I, are the only people who really pay taxes. Corporations and businesses simply pass it on to you and me, the consumers.
The thing on that proposition that worries me is what happens to international trade with countries that still have confiscatory taxes on corporations? Hopefully it will do more to stimulate more income from real manufacturing and production in this country than we lose with the goods going overseas. (It’s late and working this out in detail on a fuzzy brain just isn’t working. I’m simply taking the Milton Friedman statement of truth and starting to run with it.)
{^_^}
herself on July 7, 2011 at 7:37 AM
You create a monster here.
First, the definitional problem you will face is as high as Mount Everest. Is, for example, a mining company’s purchase of new machinery a “cost laid out to run the business” and therefor expensed entirely in the year purchased? Or should it be the year the equipment was put into service? Remember, mines often take years to install and test new equipment. Should an airline expense all the cost of new jets in the year ordered or the year delivered? Or should the costs paid to Boeing or Airbus be deducted in the year actually paid, regardless of when the equipment is delivered? The definitions to these and ten thousand other questions need answering before the economic impact of your dream can be understood. Life sucks, but simple solutions create a lot of questions.
Secondly, the differences you will create between the accounting books your proposal woukd create and the second set of books used for shareholder reporting is immense. Your proposal amounts to a “full employment act” for accountants.
Your goal isn’t clear. What are you trying to accomplish? Large corporations have too high a salutatory tax rate relative to the world and it should be lowered, yes, but the real problem is that most business owners pay company taxes on their personal tax returns, at personal rates. Those are the people Obama and the Democrats are trying to bankrupt, to tax into oblivion, and they love the larger crony capitalists running big companies. Your proposal helps those who sort of, kind of need your help, the big buddies of Barack who would be happy to have a more up to date tax structure, and it completely ignores the huge swath of American employers who the Evil Democrats are stomping all over- small business people. You remember those people, don’t you? They are the majority of businesses and they create virtually all new jobs.
MTF on July 7, 2011 at 7:47 AM
A rebate for companies not posting a profit…?
So let’s examine that a bit. In addition to modnar’s point about this subsidizing failure, it also invites a certain degree of gamesmanship. To wit:
Assume an industry with two companies. Company A seeks to maximize profit and is taxed accordingly. Company B decides to pursue a strategy where it prices goods such that it posts a loss each year. The strategy is optimized where the subisidy received cancels out the loss and in net terms the company breaks even.
Further, the pricing strategy of Company B creates a pricing war as Company A must seek to capture sales lost at the margin.
Depending on how things shake out you now either have two companies receiving subsidies because of losses, or Company A (a previously profitable company) is driven out of business because of the pricing strategy of Company B and the industry is now a monopoly.
No subsidies or rebates for non-profitable companies. Better yet, no corporate income tax at all.
JohnTant on July 7, 2011 at 7:51 AM
We need a moratorium on passing legislation in Congress. They pass bills that no one has read with Easter eggs and traps built in for friend and foe.
Congress’s productivity should not be graded on how many bills are passed. They need to go back and clean up past bills containing useless regulations, subsidies and entitlements. Delete them entirely, do not add to them.
Fallon on July 7, 2011 at 7:58 AM
Here’s the thing. What is proposed here is STILL only one part of what needs to be a significant reformation of the tax code.
That proposal “sounds” good, but what I would want to know is, what is the current effective tax rate for corporations ? You see, if you total up all their profits, divide their total taxes paid by total profit right now, what is that percentage ? Because if it is less than 10%, what you are proposing is a tax INCREASE, not a decrease. And if the current percentage is 10%, then you have really done nothing but reduce the workload of corporate accountants. But then again, if you eliminate all deductions, credits, and writedowns that are currently on the books to incentivize hiring and investment, yet the maintain the same effective tax rate, you have actually dis-incentivized hiring and investment.
Changing tax rates and setting pro-growth policies isn’t as easy as you think, is it ?
deadrody on July 7, 2011 at 8:13 AM
This!!
VelvetElvis on July 7, 2011 at 8:17 AM
Ugh. You cannot assess one tax as part of a list of changes by itself. Are you currently paying more than 8% total income tax ? If so, the REDUCTION in income tax would offset the increase in sales tax. Good lord.
deadrody on July 7, 2011 at 8:18 AM
There is no reason to have a corporate profit tax. Set it to zero, and tax dividends as normal income.
Actually, if we are looking for real change, set up a system of personal investment accounts where neither capital gains nor dividends are taxed until funds are moved from that account to spending accounts (or moved out of the country).
Count to 10 on July 7, 2011 at 8:51 AM
Sails taxes are much easier to game than income taxes. Income is for the most part from one or two sources for most people, which means that you are either all criminal or all law abiding with respect to tax law. Sales taxes, on the other hand, end up being from numerous sources, and people casually cheat on them. Try to fun the government on a sales tax, and you will break down the rule of law as everyone becomes a tax cheat.
Count to 10 on July 7, 2011 at 9:01 AM
“If so, the REDUCTION in income tax would offset the increase in sales tax. Good lord.”
The problem is that that will not actually happen. State and local governments will still have their own sales taxes, and they will still have an income tax. And that’s not even getting into the pervasive multiple taxation that’s designed right in to a federal sales tax.
I don’t understand the appeal of a VAT over a flat tax.
GalosGann on July 7, 2011 at 9:11 AM
You won’t be paying an EXTRA 15% on your items, dude.
See, there will no longer be any corporate income taxes. That means the 22% – 25% embedded tax won’t be there any longer. For example, a $1 loaf of bread is currently comprised of $0.22 – $0.25 of “corporate income tax”. If that corporate income tax no longer exists, then the bread maker will pass along the savings to consumers. Competitive pressure will guarantee that. Case in point:
A number of years ago in FL (I want to say 2004 or 2005), the state passed a one-month moratorium on collecting sales tax on gasoline. The law said that for the month of August, the state would not charge sales tax on gas, and the gas companies had to pass that savings on to consumers. One loophole: any gas that had already been purchased (at the higher price) could still be sold for that higher price until it was used up. That would keep gas stations from losing money on gas already in the ground. But once that gas was used up, they had to pass the savings on. All the “experts” agreed that on 8/1, prices wouldn’t be lowered, but around 8/3 or 8/4, they would be.
Well, all it took was for one gas company (Gate) to say “We’re going to pass on the savings NOW, regardless of what we paid for gas in the ground.” Once Gate did that, the other companies had to compete or get left behind. About 95% – 99% of gas companies dropped their gas prices on the first day of August…all because ONE company did it first.
Competition will guarantee that the once-embedded “corporate income taxes” would get waived, in part or in whole, from the items you buy. So if 22% – 25% gets removed from the price, but a 15% sales tax is added to the new price, you’re still paying about 10% less than you were in the first place.
It’s a win-win for everyone, except class warmongers.
crushliberalism on July 7, 2011 at 9:36 AM
Incorrect. The reckoning is directly on the receipt. The receipt of the User of the Product, the only proper person to pay that tax. And removing the corporate tax will immediately result in lower prices through unregulated competition.
So it’s just about which method benefits you. Nice liberal position…
Let me help you with that. By your previous words, exactly how much the government is taking from you is ZERO.
The current system of income and business taxes creates tax collectors out of every employer, every retailer. Since when can the government demand that each of those agents be conscipted to perform the business of the IRS? It’s wrong, plain and simple.
Oh, and you needn’t keep track of a single “scrap of paper” under the proposal I outlined (not taking credit for the idea, mind you, I just believe in it). Since there would be no exemptions, no tax credits, no itemization, whether you track your sales tax outlays would be up to only you. And I’m sure a smart guy like you could figure out how to use something like Quicken to bundle up your retail expenditures each month and know that a fixed % of the total was therefore sales tax.
As crushliberalism said, the only loser in this system is the class warmongers (and I’ll add the socialist ideologues) who need a dependency class for their power and influence. This nation is supposed to be about the government being an absolute minimum source of influence on people’s lives.
Freelancer on July 7, 2011 at 10:19 AM
Get rid of the refund, and you got a descent idea there.
NO REFUNDS, that is what makes a moocher class and allows politicians to warp the system.
astonerii on July 7, 2011 at 10:27 AM
They already pay taxes on SS benefits.
astonerii on July 7, 2011 at 10:50 AM
Corporate tax should not exist. Profits are already taxed as they are distributed at the individual level. To the extent that they exist at all, they should be as low as possible.
Pablo Snooze on July 7, 2011 at 10:59 AM
The quote above typifies the reason why business does not (and cannot) trust Washington D.C.
One of the latest ploys the anti-business politicians are trying is to claim that deduction of legitimate business expenses…things which actually take real money out of the business…are somehow “tax breaks”. Is a piece of major business equipment free?? If I have to spend $20000 to buy equipment which will allow me to make only $10000 this year, should the government pretend that I’m somehow getting a “break” just because I’m willing to wait until the third year to get a payback???
“Depreciation” is a scam whereby the government gets money before the business has even earned it. It removes needed capital from the business just to fund more government. In the mean time, businesses are forced to obtain financing and pay interest on the stolen capital. It is outrageous that certain uneducated politicians and others call this government scam a “tax break”!!! This is like calling rape a “sex break”!!!
The bottom line is that before we can discuss tax rates, we must remove the government’s ability to arbitrarily make accounting rules in order to take more money for itself. Until we have a stable, “real world” definition of “profit” (the base upon which tax will be levied), there is no point in discussing the rates.
landlines on July 7, 2011 at 11:05 AM
“If there is no profit, you pay no taxes and may possibly qualify for a rebate to encourage growth.”
WHAT!!! thats the same kind of thinking that has gotten us to where we are today.
Yes, lower the Corp tax rate.
Yes, STOP SPENDING STUPID,
NO, dont raise the debt limit.
Yes, to learn to balance a F*cking check book.
Yes, to Learn to live within OUR means.
“The trouble with socialism is that sooner or later you run out of other people’s money.” Maragret Thatcher
ColdWarrior57 on July 7, 2011 at 11:25 AM
I have a better solution. Let’s go after those people who own private jets, and tax them at 125% of their income. Problem solved!
– Barack Hussein 0bama
UltimateBob on July 7, 2011 at 11:39 AM