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#61 Kreuger

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Posted 29 August 2014 - 16:25

My understanding right now is that they pay 35% tax on domestic sales and another 30% or so on global sales. They will no longer pay for it on the global side of things. So their taxes will drop drastically because their global sales are roughly half of the profit made. Also, in regards to my previous post it is apparently more about small businesses and unrelated to this.




#62 Fresh

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Posted 29 August 2014 - 16:31

And once again most of you are totally missing the point that corporations don't really pay their taxes, their customers do.

Corporate taxes are governments cowards way of taxing the citizenry by proxy. In doing so governments also create a fall guy/whipping boy for when it needs to deflect.

When government is too chicken #### to raise taxes on the citizenry, especially lower income folks who don't pay income taxes, they simply tax the companies they buy from instead - and the stupid sheeple (especially on the left) cheer "Yeah!! Get those mean old corporations!!", even though it's they who end up paying said corporate taxes via higher prices.

Dumb.

 

^ This! Well said!



#63 PGHammer

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Posted 31 August 2014 - 18:36

And once again most of you are totally missing the point that corporations don't really pay their taxes, their customers do.

Corporate taxes are governments cowards way of taxing the citizenry by proxy. In doing so governments also create a fall guy/whipping boy for when it needs to deflect.

When government is too chicken #### to raise taxes on the citizenry, especially lower income folks who don't pay income taxes, they simply tax the companies they buy from instead - and the stupid sheeple (especially on the left) cheer "Yeah!! Get those mean old corporations!!", even though it's they who end up paying said corporate taxes via higher prices.

Dumb.

I am rather forcibly reminded of Alexander de Tocqueville on Congress - "The issue with Congress is that it has the power to bribe taxpayers with their own money."  The budget (national, state, or local) is still the taxpayers' money - the job of the government (on the respective level) is to not merely collect it wisely, but to spend/use it wisely - which all too many governments, on every level, globally, outright fail in.  Unfortunately, the absolute WORST taxation system in terms of complexity is that of the United States - specifically, the Internal Revenue Code - and for all the carping about "special interests", EVERY taxpayer, without exception, is a member of at least one "special interest" that has at least three loopholes specifically for it in the Internal Revenue Code.  It's quite easy to imagine the IRC without the influence of "special interests" using JUST middle-school-level math - take your W-2s and/or 1099s and the US Tax Tables (or your income-tax-prep software of choice) and assume no exemptions OR deductions.  Subtract withholding from the amount from the Tax Tables gives you your net oweage (to the Treasury) or refund (if they took too much out) - most folks would be writing checks, refunds would be a lot smaller (if they happened at all) and taxpayers by the hundreds of thousands would be ticked off.  The complexity of the Internal Revenue Code is entirely due to Congressional tinkering; worse, several STATE tax codes have become nearly as complex.

 

I'm not calling the Internal Revenue Code a disaster for any one group of taxpayers - I'm calling it a disgrace and a disaster for ALL taxpayers.  It is bad enough that tax professionals can't understand the Internal Revenue Code - even at it's most basic; however, it is FAR worse when no less than the Internal Revenue Service - the agency that is supposed to enforce it - is unable to do so.  With the latter being the case, and having been the case, since the FIRST President Bush - if not all the way back to Nixon's FIRST term - before Watergate AND my first exposure to the IRC in 1972 - as a Civics project at the age of twelve - it should be scrapped forthwith.



#64 PGHammer

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Posted 31 August 2014 - 19:10

Everyone on this conversation is literally arguing a straw man.Burger king will continue to pay the us tax rate on EVERY location in the united states. This DOES NOT change. I'm all for closing tax loopholes AND raising the effective tax rate on corporations, but this has nothing to do with either.

No - it largely doesn't.  The reason the President (and other liberals) are arguing against inversion is because corporations are a nice convenient TARGET for their high-tax/high-spending policies - remember, most of the tax-bite on Burger King won't go away.  (In fact, how much of the tax bite on ANY company that has done an inversion went away?)  Liberals are also deliberately creating an assumption that the "corporate 1040" is how businesses are taxed - not only is that not true, it is not how even the Department of the Treasury collects the majority of taxes from businesses.  The Department of the Treasury no more relies on the income tax than the states do - even the states with the highest income-tax rates don't rely on it.  Do you think that businesses don't pay excise taxes, use taxes, or fees?  Businesses pay a greater amount in excise and use taxes than individuals do - especially fuels taxes.  (Pepsico has a "captive subsidiary" (as in they own one hundred percent of it) called New Bern Transportation, LLC - they deliver Pepsico products to retailers and distributors.  While New Bern doesn't necessarily do things any differently than any other single-product or single-company distribution, why would Pepsico go to the trouble of creating a subsidiary just for distribution of their own products internally?  Easily explained - Pepsico is a lot bigger than just Pepsi - look at the number of brands under Pepsico's umbrella; it also used to be a lot bigger - Burger King itself was part of Pepsico at one point, along with Pizza Hut.  Still New Bern trucks use a lot of fuel - and thus New Bern pays a lot in fuels taxes.  Because New Bern covers the whole of Pepsico, it makes it easier for Pepsico to track fuels spending, and thus fuels tax spending.  (It is also why large grocery store chains, such as Food Lion, FoodHold, Safeway, etc., use fleet-fueling cards - it makes tracking fuel spending - and fuels-taxes spending along with it - far easier.  Same applies to utilities - such as Public Service Energy or Verizon Communications.  It even applies to the military and GSA.



#65 sidroc

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Posted 31 August 2014 - 19:21

No - it largely doesn't. The reason the President (and other liberals) are arguing against inversion is because corporations are a nice convenient TARGET for their high-tax/high-spending policies - remember, most of the tax-bite on Burger King won't go away. (In fact, how much of the tax bite on ANY company that has done an inversion went away?) Liberals are also deliberately creating an assumption that the "corporate 1040" is how businesses are taxed - not only is that not true, it is not how even the Department of the Treasury collects the majority of taxes from businesses. The Department of the Treasury no more relies on the income tax than the states do - even the states with the highest income-tax rates don't rely on it. Do you think that businesses don't pay excise taxes, use taxes, or fees? Businesses pay a greater amount in excise and use taxes than individuals do - especially fuels taxes. (Pepsico has a "captive subsidiary" (as in they own one hundred percent of it) called New Bern Transportation, LLC - they deliver Pepsico products to retailers and distributors. While New Bern doesn't necessarily do things any differently than any other single-product or single-company distribution, why would Pepsico go to the trouble of creating a subsidiary just for distribution of their own products internally? Easily explained - Pepsico is a lot bigger than just Pepsi - look at the number of brands under Pepsico's umbrella; it also used to be a lot bigger - Burger King itself was part of Pepsico at one point, along with Pizza Hut. Still New Bern trucks use a lot of fuel - and thus New Bern pays a lot in fuels taxes. Because New Bern covers the whole of Pepsico, it makes it easier for Pepsico to track fuels spending, and thus fuels tax spending. (It is also why large grocery store chains, such as Food Lion, FoodHold, Safeway, etc., use fleet-fueling cards - it makes tracking fuel spending - and fuels-taxes spending along with it - far easier. Same applies to utilities - such as Public Service Energy or Verizon Communications. It even applies to the military and GSA.

Only someone who is utterly polarized and completely blind to anything left vs right would boil this down to left vs right. Almost all western nations besides america tax based on were the income is generated not on total profits irrespective of where their earned.

#66 PGHammer

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Posted 01 September 2014 - 19:39

Only someone who is utterly polarized and completely blind to anything left vs right would boil this down to left vs right. Almost all western nations besides america tax based on were the income is generated not on total profits irrespective of where their earned.

I'm not saying that this is a left vs. right issue; I'm saying that anti-inversionists are in favor of current tax policy, which is based on governmental greed.  And the very argument you just made is, in fact, part of current US tax policy - which I oppose utterly.  It's not MY fault that the vast majority of those defending the current policy are liberals (though, admittedly, not all of them are) - however, I'm not opposing the policy because it is being argued by liberals - I've been opposed to the policy since before I became old enough to vote.  It is those that are in FAVOR of anti-inversion law and/or regulation that are trying to make a political football out of it.



#67 OP DocM

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Posted 01 September 2014 - 21:19

^^ PRECISELY!! I've heard many liberals in both parties decry our stupid tax system based on just the arguments made by conservatives and libertarians in this thread. Doing anything other than ditch it for a flat and/or consumption tax is stupid.

Hell, maybe even using only a flat transaction tax should be explored. Wouldn't even need to fill out forms.

#68 PGHammer

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Posted 02 September 2014 - 18:39

^^ PRECISELY!! I've heard many liberals in both parties decry our stupid tax system based on just the arguments made by conservatives and libertarians in this thread. Doing anything other than ditch it for a flat and/or consumption tax is stupid.

Hell, maybe even using only a flat transaction tax should be explored. Wouldn't even need to fill out forms.

DocM, THAT is why I am very much in favor of flat/consumption taxes - very little in the way of paperwork.

 

Here are my major points in favor of consumption and other flat taxes:

 

1.  Pretty much unduckable - they are collected at purchase.

2.  The collection mechanism already exists - except where no consumption/sales-tax mechanism exists.  (In short, except for states lacking such a tax, it costs nothing extra to implement.)

3.  What paperwork that would be required already exists, mostly - remember, fuels taxes are collected by the states and forwarded to the Department of Transportation via the Department of the Treasury - again, except for states like Delaware.

4.  The biggest problem about setting a tax RATE for a Replacement Tax is what do you base the rate on - do you base it on estimates, or on what is actually collected?



#69 OP DocM

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Posted 02 September 2014 - 19:22

We already know how much is spent.

If you use that to model a transaction tax; a small percentage automatically collected on each inter-corporate production step from raw material processing to retail, and on bank transactions, you could come very close. Close enough for a trial period to iron it out. This would allow each collection step to have a minimal rate.

It also makes everyone have skin in the game, including low income folks. It also addresses corporations like GE paying $0 due to tax credits and exclusions.

Even better, it would encourage government to do things that increase economic activity. Add in what Michigan has, a rainy day fund for downturns and disasters, and it might work.

I realize the international bankers and H&R Block would have a cow, but in the end everyone should save money due to the reduced paperwork and bureaucracy.

#70 PGHammer

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Posted 03 September 2014 - 13:20

We already know how much is spent.

If you use that to model a transaction tax; a small percentage automatically collected on each inter-corporate production step from raw material processing to retail, and on bank transactions, you could come very close. Close enough for a trial period to iron it out. This would allow each collection step to have a minimal rate.

It also makes everyone have skin in the game, including low income folks. It also addresses corporations like GE paying $0 due to tax credits and exclusions.

Even better, it would encourage government to do things that increase economic activity. Add in what Michigan has, a rainy day fund for downturns and disasters, and it might work.

I realize the international bankers and H&R Block would have a cow, but in the end everyone should save money due to the reduced paperwork and bureaucracy.

DocM, it is international politicians (most of which are disguised as bankers) that would be mooing - the biggest reason for tax-haven nations (Switzerland, the Cayman Islands, etc.) would go away, as the United States' tax policy would actually make sense - further, as other nations adopt it, tax haven nations would have to find more honest ways of attracting investment capital - like gambling.

 

GE does not pay zero, even in the current system - the issue is that there are both individuals and corporations that pay zero in income taxes (and for the same reason - both indulge in tax-favored behavior; however, it is fine if an individual pays nothing or gets a refund, while a corporation is thoutght to be Lucifer Incarnate if it's true of them); in actuality, GE Capital pays more in taxes than RBC or TD BankNorth does, for example.  (I am referring strictly to Revenue Canada - or even the US IRS - individually.)