Corporate Tax Rate

Iceland is lower than ours, look how great their economy is doing. :sarc:

so often I hear people say "the US has highest corporate tax rate" it happened just now in the thread about Walmart moving manufacturing offshore or to China...

I don't pretend to understand all the nuances of corporate tax, or other tax systems either, but I have heard credible people say that our corporate tax rate is not, in fact, that high. This document seems to support that:
http://www.cbo.gov/ftpdocs/69xx/doc6902/11-28-CorporateTax.pdf

so can someone who has some real knowledge about it-- or some good research point me in the right direction to find some data?

Buz? Shopper? Anyone?

The Irish have the lowest and they are about to get bailed out. Whats your point exactly?

glad you posted this. many on here could use a hand in understanding.

keep in mind, its high corp tax, union pay/pension and huge government regulation combined that put us where we are. Just ask Detroit, NY and Cali. Fact is, we will never be the manufacturing nation we used to be no matter what happens. But, we can hold on to hi-tech jobs over time.

Here is a link to an editiorial that explains the issue:

http://washingtonexaminer.com/editorials/2008/10/high-corporate-taxes-hurt-real-economy?category=1529#ixzz17oA3FpCi

The key is found in this passage:

"These rates matter greatly, because corporations don?t pay taxes, the customers of corporations pay taxes through higher prices, or, for stockholders (again, including pensioners, including union pensions) in lower financial returns."
​

Corporate taxes are passed to the consumer through higher prices. This creates a disadvantage to our industry and contributes to the deficit that no one talks about: the trade deficit.

​

Thanks for posting, but this is an opinion piece from a ultra-conservative publication...and there is no attribution for the figures/information used.

I understand the passing to the consumer, etc., what I am trying to find is an objective source for the actual corporate tax rate...and how it is determined...data that I find shows it is not that high; I have heard many interviews from economists who support that opinion; yet, every Republican elected official and all the conservative publications and news shows tell a different story...so, where does the true fall--somewhere in between probably.

My understanding is that the nominal rates are between 15-39%. The actual rates vary by company due to the myrid of exemptions, deductions and credits that are contained in the Federal tax code. So, just as with individuals, the bottom and top of the income scale pay little and the middle pays the bulk of the taxes. The unfairness problem with the tax code is not the nominal rates but the effect all the exemptions and deductions have on the true rates.

so, then, the comment that "the problem is that we have the highest corporate tax rate"... is not really accurate and people who complain about high corporate rates are no different from people who complain about high tax rates for individuals....okay.

I think our tax system is 'way too complicated, but the rates do not seem to be extraordinarily high when one factors in, as you said, Idlewind, the exemptions, etc...thanks for the info.

Not to mention corporate welfare, I'm betting many companies actually don't pay anything and in fact get paid to be in business.

The irony is that the tax breaks and "corporate welfare" often go to the huge multi-national corporations who are sending jobs out of the country while the small business owner who hires Americans and fuels our economy are whacked with the higher tax rate.

That said, the high corporate rates are a drag on the economy and because they impact small business harshly. So, while some who champion the issue are shilling for the huge multi-nationals, many are honestly looking out for this country and our small businesses and workers.

The irony is that the tax breaks and "corporate welfare" often go to the huge multi-national corporations who are sending jobs out of the country while the small business owner who hires Americans and fuels our economy are whacked with the higher tax rate.

That said, the high corporate rates are a drag on the economy and because they impact small business harshly. So, while some who champion the issue are shilling for the huge multi-nationals, many are honestly looking out for this country and our small businesses and workers.

This should make your head spin:

Small Business Taxes & Management

There's also this:

The Gap Between Statutory and Real Corporate Tax Rates

I can't find a bias on that group, unless you're extremely pro government.

The Tax Reform Act of 1986 closed tens of billions of dollars in corporate loopholes, so that by 1988, the overall effective corporate tax rate for large corporations was up to 26.5 percent. That improvement occurred even though the statutory corporate tax rate was cut from 46 percent to 34 percent as part of the 1986 reforms.

Many really small businesses are "S" corps. It makes it significantly easier to comingle personal expenses, etc... with corporate ones and eliminates the double taxation of dividends.

Even for S-Corps there are plenty of real taxes that are dragging hard on small businesses are imposed by the ADA, OSHA, the EPA, the PPACA, etc... The reporting/conformance burden of big government oversight ways far more heavily on them than it does on large corporations.

Who told you that?

I hope you don't face an IRS audit and use that arguement.

Running personal expenses through your subchapter S corp is just as much a violation of IRS regs as in a C corp,.

Having a subchapter S corp allows the shareholder(s) to take distributions from the S crop and not pay Social Security and Medicare taxes.

The IRS has targeted highly profitable subchapter S corps for audit because their compliance models indicate there are high incidences of abuse.:(

Do you know... what are the IRS' defining thresholds for "highly profitable" subchptr S corpsOTE]

------------------------------------

Not exactly.

I read that subchapter S corp and sole propreitors who clear 100K are more likely to be audited.

There are other audit triggrers like high deductions.

You should discuss your situation with a Certified Public Accountant.

Making less than 100K does not mean the IRS will not audit your return.

Do you know... what are the IRS' defining thresholds for "highly profitable" subchptr S corpsOTE]

------------------------------------

Not exactly.

I read that subchapter S corp and sole propreitors who clear 100K are more likely to be audited.

There are other audit triggrers like high deductions.

You should discuss your situation with a Certified Public Accountant.

Making less than 100K does not mean the IRS will not audit your return.

I don't even have a 'situation' to discuss anymore :lol:!
However, I would observe that dogging 100K-sized small company/sole proprietorships, in the scheme of such ginormous big corporate abuses, strikes me as a pitiful ROI payback for the IRS at this juncture.

I think our problem very closely related to your 'way too complicated' observation.

I think we also don't know when to quit taxing.

To me, the traditional double taxation of corporate dividends never made sense.

Why should I pay taxes on my share of the after-tax earnings of a corporation that i own a piece of? I could see the logic if the corporation could deduct the dividends off of their taxes, but they can't (it is an after tax item.)

If the corp is in the 39% tax bracket and the consumer is in the 36% bracket then each dollar of a corporations's dividend (profit) is effectively federally taxed at 59.74%. Tack another 6-12% for state taxes and that 1$ of earnings becomes about 30? in the stockholders hand. That's ridiculous.

We've had some respite from this lately, but unless something changed and I missed it, we return to full double taxation of dividends in 2011.

Who told you that?

I hope you don't face an IRS audit and use that arguement.

Running personal expenses through your subchapter S corp is just as much a violation of IRS regs as in a C corp,.

Having a subchapter S corp allows the shareholder(s) to take distributions from the S crop and not pay Social Security and Medicare taxes.

The IRS has targeted highly profitable subchapter S corps for audit because their compliance models indicate there are high incidences of abuse.:(