Would you support the following corporate tax reform?

[Indy Texas]

Eliminate federal taxation of corporate entities. Make this change revenue neutral by increasing capital gains taxes and by increasing income taxes on the highest tax bracket.

[Maxwell]

What would that top bracket be? In order for it to be revenue neutral, we'd probably have to make capital gains just into a normal income tax bracketing, and then the top rate be something like 50% or 60%, which is borderline unacceptable to me.

I'd think about it. But I actually don't know, it depends on how the numbers work out.

[H. Ross Peron]

Yes, enthusiastically

[Indy Texas]

What would that top bracket be? In order for it to be revenue neutral, we'd probably have to make capital gains just into a normal income tax bracketing, and then the top rate be something like 50% or 60%, which is borderline unacceptable to me.

I'd think about it. But I actually don't know, it depends on how the numbers work out.

Why is it unacceptable? The same amount of revenue is getting collected, it's just all getting collected at once.

[IceSpear]

Mitt and Ann would not be happy about this.

[DC Al Fine]

Yes, this is my preferred corporate income tax policy. I've never seen the point of a corporate tax. While many may rally against "corporations", they're nothing but a bundle of contracts. Redistributive efforts should be directed against actual rich people

[GaussLaw]

Like Maxwell, I'd have to see what the new rates are.

[True Federalist (진정한 연방 주의자)]

No, largely because I favor eliminating the capital gains tax entirely, tho with safeguards to ensure such an elimination isn't used for tax avoidance on other income disguised as capital gains.

[ElectionsGuy]

It would be better than what we have now but I still wouldn't support it. If we just remove a 35% corporate tax rate (one of the highest in the world), we would need a big increase in capital gains and income taxes. Though at least we wouldn't be essentially taxing consumers (as that's ultimately what taxing corporate entities does).

[Maxwell]

What would that top bracket be? In order for it to be revenue neutral, we'd probably have to make capital gains just into a normal income tax bracketing, and then the top rate be something like 50% or 60%, which is borderline unacceptable to me.

I'd think about it. But I actually don't know, it depends on how the numbers work out.

Why is it unacceptable? The same amount of revenue is getting collected, it's just all getting collected at once.

It would probably be closer to fine if there were a couple more brackets toward the top, but nevertheless I think that in order for rates to make sense to me. To me, taking more than 60% of someone's income, money they've earned, is wrong.

However I do think we could do a lot of things differently in terms of revenue if we got rid of the corporate rate. We could get rid of a lot of those subsidies for big companies, we could do away with all of those deductions that are done to inspire employment, since we are incentivizing in a much bigger way with that reduction. I'm not sure how much it would take to make things revenue neutral, but we certainly have a lot of areas to do so.

It would also require making capital gains taxed much much closer to regular income, if not exactly at regular income.

[RI]

Yes, enthusiastically

[Deus Naturae]

I'd reluctantly vote for it if it came up while I was a Congressman. Zero corporate tax would be worth the other tax hikes, but it makes no sense to try and make the plan revenue-neutral by increasing taxes on capital gains, since data suggests that capital gains cuts actually have a positive effect on revenues (since investors have more incentive to realize their gains):

[Indy Texas]

What would that top bracket be? In order for it to be revenue neutral, we'd probably have to make capital gains just into a normal income tax bracketing, and then the top rate be something like 50% or 60%, which is borderline unacceptable to me.

I'd think about it. But I actually don't know, it depends on how the numbers work out.

Why is it unacceptable? The same amount of revenue is getting collected, it's just all getting collected at once.

It would probably be closer to fine if there were a couple more brackets toward the top, but nevertheless I think that in order for rates to make sense to me. To me, taking more than 60% of someone's income, money they've earned, is wrong.

However I do think we could do a lot of things differently in terms of revenue if we got rid of the corporate rate. We could get rid of a lot of those subsidies for big companies, we could do away with all of those deductions that are done to inspire employment, since we are incentivizing in a much bigger way with that reduction. I'm not sure how much it would take to make things revenue neutral, but we certainly have a lot of areas to do so.

It would also require making capital gains taxed much much closer to regular income, if not exactly at regular income.

That sounds like more Republican feel-good nonsense. Companies aren't going to hire more workers or pay their workers more because we got rid of the corporate tax. They're going to increase the dividends they pay out to their wealthy shareholders. Which is why we'd be raising capital gains and income taxes - so that they're getting the money and paying the taxes on it.

Distinguish between marginal and effective rates. No one is going to have a 60% effective capital gains tax. And even if they did, why is that "wrong"? "Wrong" according to what?

[Deus Naturae]

That sounds like more Republican feel-good nonsense. Companies aren't going to hire more workers or pay their workers more because we got rid of the corporate tax. They're going to increase the dividends they pay out to their wealthy shareholders. Which is why we'd be raising capital gains and income taxes - so that they're getting the money and paying the taxes on it.

Dividends are taxed separately from capital gains and regular income, so that aspect of  plan makes little sense.

You really believe that no company is going to hire more workers if we get rid of corporate tax? By your logic, no company with shareholders would ever expand, because they would devote all of their profits to increasing dividends. Expanding operations can be profitable in the long term, which is good for shareholders and the reason that companies expand at all. Additionally, eliminating corporate tax would allow companies to reduce prices, which would have a progressive effect as lower-income people spend a greater percentage of their income on consumption.

[Maxwell]

What would that top bracket be? In order for it to be revenue neutral, we'd probably have to make capital gains just into a normal income tax bracketing, and then the top rate be something like 50% or 60%, which is borderline unacceptable to me.

I'd think about it. But I actually don't know, it depends on how the numbers work out.

Why is it unacceptable? The same amount of revenue is getting collected, it's just all getting collected at once.

It would probably be closer to fine if there were a couple more brackets toward the top, but nevertheless I think that in order for rates to make sense to me. To me, taking more than 60% of someone's income, money they've earned, is wrong.

However I do think we could do a lot of things differently in terms of revenue if we got rid of the corporate rate. We could get rid of a lot of those subsidies for big companies, we could do away with all of those deductions that are done to inspire employment, since we are incentivizing in a much bigger way with that reduction. I'm not sure how much it would take to make things revenue neutral, but we certainly have a lot of areas to do so.

It would also require making capital gains taxed much much closer to regular income, if not exactly at regular income.

That sounds like more Republican feel-good nonsense. Companies aren't going to hire more workers or pay their workers more because we got rid of the corporate tax. They're going to increase the dividends they pay out to their wealthy shareholders. Which is why we'd be raising capital gains and income taxes - so that they're getting the money and paying the taxes on it.

Distinguish between marginal and effective rates. No one is going to have a 60% effective capital gains tax. And even if they did, why is that "wrong"? "Wrong" according to what?

The fact that majority of benefit that someone worked toward won't even go back to them. That may not be the right way to discuss this issue though.

You do mention something good in the discussion, the difference between effective and marginal rates. I think that's where most of my changes would go, to make it closer to marginal rates so that those rates don't have to have such a substantial hike. And maybe it won't go all to expanding the company, though suspect, unlike you and others, it would, but it would be an incentive for other companies, who would be paying higher rates over in those countries, to start coming back over here to employ. If that's Republican feel-good nonsense, so be it.

[Blue3]

I'd rather we get rid of the capital gains tax (the more I understand it, the less sense it makes) and have a corporate tax that's lower than it is, and only on the biggest companies, but with very little to no deductions/credits. While also raising the personal income tax for those with higher income, and getting rid of the highly-regressive payroll tax, with the new personal income tax rates something like: $0-50k/year=0%, $50-150k/year=1%, $150-250k/year=5%, $250-400k/year=40%, $400k+/year=67%.

[Deus Naturae]

I'd rather we get rid of the capital gains tax (the more I understand it, the less sense it makes) and have a corporate tax that's lower than it is, and only on the biggest companies, but with very little to no deductions/credits. While also raising the personal income tax for those with higher income, and getting rid of the highly-regressive payroll tax, with the new personal income tax rates something like: $0-50k/year=0%, $50-150k/year=1%, $150-250k/year=5%, $250-400k/year=40%, $400k+/year=67%.

You realize that under those rates, someone making $450k/yr. would end up with less than someone making $150k/yr?

[Indy Texas]

That sounds like more Republican feel-good nonsense. Companies aren't going to hire more workers or pay their workers more because we got rid of the corporate tax. They're going to increase the dividends they pay out to their wealthy shareholders. Which is why we'd be raising capital gains and income taxes - so that they're getting the money and paying the taxes on it.

Dividends are taxed separately from capital gains and regular income, so that aspect of  plan makes little sense.

You really believe that no company is going to hire more workers if we get rid of corporate tax? By your logic, no company with shareholders would ever expand, because they would devote all of their profits to increasing dividends. Expanding operations can be profitable in the long term, which is good for shareholders and the reason that companies expand at all. Additionally, eliminating corporate tax would allow companies to reduce prices, which would have a progressive effect as lower-income people spend a greater percentage of their income on consumption.

You don't follow corporate news very much, do you? Because that's exactly what most major publicly traded companies have been doing the past few years. Lay off workers, avoid hiring new workers, do whatever you can to keep earnings-per-share within consensus estimates, increase the dividend and watch your stock price go up. I own a couple thousand dollars worth of IBM and that's exactly what they've been doing -- it's great for the rich, old people who run American business and government and will be dead in 20 years anyway. It's terrible for people like me who would like to get hired by one of those companies and/or who would like to see them use that money to make the firm more productive and profitable over a longer time horizon.

[TNF]

I would support zeroing out corporate taxation on activities that actually add value, rather than act as a net drain on society.

[🦀🎂🦀🎂]

It's pretty blatant that corporation tax in the US should be lower, seeing as it's a fairly crude revenue raiser. I wouldn't mind it being lowered by a BC-style carbon tax, but your suggestion seems fine, apart from relying on unreliable capital gains.

However I do think we could do a lot of things differently in terms of revenue if we got rid of the corporate rate. We could get rid of a lot of those subsidies for big companies, we could do away with all of those deductions that are done to inspire employment, since we are incentivizing in a much bigger way with that reduction. I'm not sure how much it would take to make things revenue neutral, but we certainly have a lot of areas to do so.

Forbes had a suggestion like this the other day

=>

http://www.forbes.com/sites/stancollender/2014/08/27/how-to-abolish-the-federal-corporate-income-tax-without-increasing-the-deficit/


I'm always sceptical of that argument though, because it seems TOO good. I always want to say "where's the catch?".

[Deus Naturae]

Forbes had a suggestion like this the other day

=>

http://www.forbes.com/sites/stancollender/2014/08/27/how-to-abolish-the-federal-corporate-income-tax-without-increasing-the-deficit/


I'm always sceptical of that argument though, because it seems TOO good. I always want to say "where's the catch?".

As the article notes, the catch is that there are just too many entrenched special interests that profit from corporate taxation and subsidization. It's human nature to do everything possible to prevent your livelihood from being damaged or destroyed. The crony capitalists, tax lawyers, etc would fight to the death to prevent this if it was ever attempted.

[True Federalist (진정한 연방 주의자)]

I'd rather we get rid of the capital gains tax (the more I understand it, the less sense it makes) and have a corporate tax that's lower than it is, and only on the biggest companies, but with very little to no deductions/credits. While also raising the personal income tax for those with higher income, and getting rid of the highly-regressive payroll tax, with the new personal income tax rates something like: $0-50k/year=0%, $50-150k/year=1%, $150-250k/year=5%, $250-400k/year=40%, $400k+/year=67%.

You realize that under those rates, someone making $450k/yr. would end up with less than someone making $150k/yr?

I presume those are marginal rates of taxation so that someone earning $150K would have a post-tax income of $149K and someone earning $450K would have a post tax income of $350²/₃K.

[Indy Texas]

I'd rather we get rid of the capital gains tax (the more I understand it, the less sense it makes) and have a corporate tax that's lower than it is, and only on the biggest companies, but with very little to no deductions/credits. While also raising the personal income tax for those with higher income, and getting rid of the highly-regressive payroll tax, with the new personal income tax rates something like: $0-50k/year=0%, $50-150k/year=1%, $150-250k/year=5%, $250-400k/year=40%, $400k+/year=67%.

You realize that under those rates, someone making $450k/yr. would end up with less than someone making $150k/yr?

ITT: People who don't understand how marginal tax rates work.

Now I understand how Reagan won 49 states in 1984.

[bedstuy]

It seems like a complicated tax code with high corporate taxes is actually good for a lot of businesses.  If you're a corporation with great tax evasion department, you have a competitive advantage.  If you're a tax lawyer or an accountant, the complications allow you to add a ton of value to a corporation.  Basically, every major corporate action needs to be strenuously evaluated independently for its tax impact and its tax law compliance.  So, that's a massive industry and those industries will fight any rationalization or improvement of the tax code. 

So, it seems to me that is a great idea.  The more simple the tax code, the more we can focus on actually getting our cut at the most efficient level.  But, it's needs to be paired with laws that anticipate how people will weasel out of the new system.  Ultimately, I think we also need international tax treaties that really go after the super-rich and prevent hiding money and accumulations of huge fortunes by a few people.

[Redalgo]

Yes, Indy, though depending on how much of a income tax hike that entails I might support having the burden spread out across multiple income tax brackets rather than all piled on the top. If the rates get too high a lot more people might respond to incentives for avoiding or outright evading their payments.

I am in full agreement with Bedstuy here, as well.