The great corporate tax scam
Politicians who claim U.S. companies pay the highest taxes in the world are lying. Here’s proof
http://www.salon.com/2011/11/03/the_great_corporate_tax_scam/singleton/
To me the travesty is that effective taxes are unequal. Take just this one example:
DuPont and Monsanto both produce chemicals. But over the 2008-10 period, Monsanto paid 22 percent of its profits in U.S. corporate income taxes, while DuPont actually paid a negative tax rate of –3.4 percent.
If I ever am able to finally build one of my many companies into a profitable entity I would not want to compete in a field where I must make at least 22% higher margins in order to have the same profits as my competitors. As mentioned before, I favor doing away with corporate taxes as corporations simply pass that cost along to their customers, thus allowing the government to minimize the apparent level of taxation for individuals. I once calculated how much of what I earn ultimately goes toward paying taxes at the local, regional, state and federal level and got a number substantially north of 50% (it has been a long time and I have tried to erase the memory (else I likely would have died from high blood pressure by now), but I have a vague recollection of something in the 80% range). Sound silly? Everything you buy not only has sales tax, but it has at least 30% taxes built into it from the corporate level. So, just with a 5% sales tax we are at minimum of 35% (a more realistic minimum is 40%) for EVERY SINGLE THING YOU BUY. Recall that as individuals we don’t get to expense such things as living expenses (i.e., food, electricity, fuel, etc.), so we already paid (at least in my tax bracket, lcoal, county, state and fed) on the order of 40% on the income that we bought the stuff that has at least 35% taxes built-in.
The reality in business is you put your target margins on top of your expenses, so if you increase your costs due to taxes you are paying then you automagically increase your profits as well. If I, as a profit seeking entity, am taxed at 40% (local, county, state and fed, ever notice how the focus always seems to be exclusively on federal taxes?), then I am putting that 40% right on top of my costs, thus jacking up my prices so I can keep my same margins (for those of you who would quibble about economies of scale, inventory turnover, etc., yes I am aware I am making simplifications, but not all industries have such turnover that they can amortize their taxes over a large enough volume to eliminate the impact of the taxes). Of course, our government needs revenue to operate, but I favor citizens actually knowing how much of their paycheck is being extracted for taxes rather than hiding those taxes in multiple layers that are difficult or impossible to understand, even for highly trained finance professionals. It would really suck for our income taxes to jump to 80%, but perhaps then people would be motivated to expect less from our government and then the government could get by with less taxes.
