• U.S. tax revenues at record high. Who's paying?
    43 replies, posted
[QUOTE] Over $2.67 trillion has come in so far this fiscal year, according to the latest Treasury Department report. That's a record -- in dollar terms -- for the first 10 months of the year (the government's fiscal year ends in September). Expect 2015 to finish at an all-time high. The increase in tax revenue is helping the U.S. pay more of its bills. While America still runs a deficit, the overspending has gone down substantially in recent years. So who pays the bulk of U.S. taxes? The burden has shifted from companies to individuals over time. In the early 1950s, corporations accounted for over 30% of U.S. tax revenues. Today, businesses pay about 11% of taxes, according to the U.S. Treasury. Businesses became smarter about finding ways to legally lower their tax bills over the years. Companies that operate globally moved their tax jurisdictions overseas to reduce how much they paid in U.S. taxes. Others have filed for "S corporation" status, which allows them to pass income through to shareholders, who pay taxes at a lower rate. In the meantime, the share of taxes paid by individuals has increased. In the 1950s, individual income taxes accounted for just over 42%. Today it's about 47%. But the biggest change has been in what is known as "Social Insurance and Retirement Receipts." Those are the taxes people and companies pay for Social Security and Medicare. Workers can see the money taken out for Social Security and Medicare on their weekly pay slips. In the 1950s, those taxes accounted for less than 10% of tax revenues. Today it's over 30%. The reason it's gone up so much is simple: the Social Security tax rate has been raised several times since the program started in 1937. When it commenced, the Social Security tax was a mere 2%. Now it's 12.4% for Social Security and 2.9% for Medicare. [/QUOTE] [t]http://i2.cdn.turner.com/money/dam/assets/150814115310-us-taxes-780x439.jpg[/t] [url]http://money.cnn.com/2015/08/14/news/economy/us-government-taxes-record/[/url]
People will complain about the fact they're paying an extra 4% long before they complain about corporations paying 20% less despite being [I]so[/I] much bigger than they were 60 years ago.
That... isn't good. Relying on a third of our income to come from Social Security seems like it would be a recipe for disaster in the future, as after all we are going to have to pay the majority of that tax back eventually.
[QUOTE=Jamsponge;48518613]People will complain about the fact they're paying an extra 4% long before they complain about corporations [B]paying 20% less despite being [I]so[/I] much bigger than they were 60 years ago[/B].[/QUOTE] Whats the point of even saying this?
I wonder if that helps college students in any way when tuition increased over here. Revene will probably go in developing the F36, so we have more efficient ways to deliver bombs. I'm glad the future of Americans seems bright. /s
Wait, did taxing 20% from corporations really get burdened onto retirement? People who spend their lives working have to pay a higher tax than corporations? I also wonder how much the 2015 chart would change if all corporations/entities couldn't evade taxes with out-of-US holdings.
[QUOTE=Rangergxi;48518642]Whats the point of even saying this?[/QUOTE] The point he's making is that Corporations now are much larger and stronger than they were before, but they also pay less taxes.
[QUOTE=Mr. Someguy;48518813]The point he's making is that Corporations now are much larger and stronger than they were before, but they also pay less taxes.[/QUOTE] Because they're a bunch of conniving non-corporeal entities.
So about that massive corporation tax that's the largest its ever been
[QUOTE=Reshy;48518594][t]http://i2.cdn.turner.com/money/dam/assets/150814115310-us-taxes-780x439.jpg[/t] [URL]http://money.cnn.com/2015/08/14/news/economy/us-government-taxes-record/[/URL][/QUOTE] I went and looked up the tax totals as a percentage of GPD, and it's interesting that they coincidentally took the year with second largest corporate tax income ever as a comparison. For example, the year before, 1951, had about 30% lower corporate tax income. The percent of GPD paid in taxes by corporations has been basically constant since 1980, and is actually on a slight rise at the moment. Also, the amount of social security tax revenue as a percentage of GDP is about the same as it was in the 1970s, and is lower than it's been for a few decades. So basically, this is ridiculously sensationalist. Data from here: [URL]http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205[/URL]
[QUOTE=sgman91;48518911]I went and looked up the tax totals as a percentage of GPD, and it's interesting that they coincidentally took the year with second largest corporate tax income ever as a comparison. For example, the year before, 1951, had about 30% lower corporate tax income. The percent of GPD paid in taxes by corporations has been basically constant since 1980, and is actually on a slight rise at the moment. Also, the amount of social security tax revenue as a percentage of GDP is about the same as it was in the 1970s, and is lower than it's been for a few decades. So basically, this is ridiculously sensationalist. Data from here: [URL]http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=205[/URL][/QUOTE] Things have also started going to pot since the 80s as well, if you'll remember.
[QUOTE=Zero-Point;48518983]Things have also started going to pot since the 80s as well, if you'll remember.[/QUOTE] That's fine, but let's not pretend like this is some new thing. It's been like this for a while, and like I said, the corporate tax percentage is actually going up. The lower point was around 1983.
[QUOTE=TornadoAP;48518637]That... isn't good. Relying on a third of our income to come from Social Security seems like it would be a recipe for disaster in the future, as after all we are going to have to pay the majority of that tax back eventually.[/QUOTE] Unless I'm wrong that graph is a little misleading. Social Security taxes goes ONLY to social security. you can safely remove them from the statistics because all of those taxes don't go to anything but social security.
If corporations are people. Then they shouldn't be able to avoid taxes.
[QUOTE=patq911;48519247]Unless I'm wrong that graph is a little misleading. Social Security taxes goes ONLY to social security. you can safely remove them from the statistics because all of those taxes don't go to anything but social security.[/QUOTE] Nope, the government sometimes "borrows" money from social security to pay their own bill. [url]http://www.forbes.com/sites/merrillmatthews/2011/07/13/what-happened-to-the-2-6-trillion-social-security-trust-fund/[/url] [url]http://dailysignal.com/2015/01/07/house-just-made-harder-politicians-steal-social-security-retirement-fund/[/url] [url]http://www.fedsmith.com/2013/05/23/government-owes-2-7-trillion-to-social-security/[/url]
[QUOTE=patq911;48519247]Unless I'm wrong that graph is a little misleading. Social Security taxes goes ONLY to social security. you can safely remove them from the statistics because all of those taxes don't go to anything but social security.[/QUOTE] Okay good, because otherwise that's just not right.
[QUOTE=TornadoAP;48518637]That... isn't good. Relying on a third of our income to come from Social Security seems like it would be a recipe for disaster in the future, as after all we are going to have to pay the majority of that tax back eventually.[/QUOTE] A third of tax income goes to about half of government expenditure. Social Security and Medicare are huge programs, the FICA taxes didn't have to be so high seventy years ago because a) Medicare didn't exist back then and b) Social Security was relatively new and very few people had retired and been able to claim it. Social Security still needs to be reformed though, the government should encourage more people to undertake 401k plans and have Social Security offered to only the people who need it the most. [editline]23rd August 2015[/editline] [QUOTE=Aide;48519353]If corporations are people. Then they shouldn't be able to avoid taxes.[/QUOTE] They aren't though? Corporate income tax revenues are always dwarfed by personal income tax revenues in the developed world. And yes S corporations don't pay corporate tax but that's because their profits are passed on to shareholders to avoid the double taxation effect.
[QUOTE=Jamsponge;48518613]People will complain about the fact they're paying an extra 4% long before they complain about corporations paying 20% less despite being [I]so[/I] much bigger than they were 60 years ago.[/QUOTE] Where's the incentive to start a corporation if you have to pay more taxes [editline]22nd August 2015[/editline] [QUOTE=Kagu;48518686]I wonder if that helps college students in any way when tuition increased over here. Revene will probably go in developing the F36, so we have more efficient ways to deliver bombs. I'm glad the future of Americans seems bright. /s[/QUOTE] The future of all americans does not solely exist in college...
[QUOTE=Aide;48519353]If corporations are people. Then they shouldn't be able to avoid taxes.[/QUOTE] Unlike people, over taxing a corporation will eventually kill it. Think about sales tax, you may think %13 is not a lot but when you're doing a $100,000 dollar sale, adding $13,000 onto the bill can really turn customers off the deal. If you absorb the cost your profit margins go from lets say %30 for a small business down to %17. And that's just the sales tax on that one deal. It makes it extremely difficult for start ups and small business to expand which leads to a lot of places doing things under the table or moving their business headquarters out of the country for lower tax rates which hurts tax revenue in the end.
[QUOTE=Reshy;48519412]Nope, the government sometimes "borrows" money from social security to pay their own bill. [url]http://www.forbes.com/sites/merrillmatthews/2011/07/13/what-happened-to-the-2-6-trillion-social-security-trust-fund/[/url] [url]http://dailysignal.com/2015/01/07/house-just-made-harder-politicians-steal-social-security-retirement-fund/[/url] [url]http://www.fedsmith.com/2013/05/23/government-owes-2-7-trillion-to-social-security/[/url][/QUOTE] First off, there's two issues here, the social security retirement fund is separate from the disability fund, the disability fund is much smaller and is supposedly going bankrupt in 2016, second the articles were about the government shutdowns preventing social security payments which happen when Congress refuses to pass a budget. Anyways congress passed a law banning any withdraws from the social security retirement fund for general budget issues, they can only transfer money to the disability fund [editline]22nd August 2015[/editline] Also a couple of those articles look like they're from sketchy sources, the 3rd one especially because the language is all partisan and the other stories it links to are clickbait
[QUOTE=ultra_bright;48520570]Unlike people, over taxing a corporation will eventually kill it. Think about sales tax, you may think %13 is not a lot but when you're doing a $100,000 dollar sale, adding $13,000 onto the bill can really turn customers off the deal. If you absorb the cost your profit margins go from lets say %30 for a small business down to %17. And that's just the sales tax on that one deal. It makes it extremely difficult for start ups and small business to expand which leads to a lot of places doing things under the table or moving their business headquarters out of the country for lower tax rates which hurts tax revenue in the end.[/QUOTE] I don't think the argument about start-ups and small businesses is relevant, after all those incorporated businesses only start paying corporate tax at 15% and then 25% before they reach the higher marginal rates, so they do get a good deal. However yes there is a problem with the 34-35% rates when American corporations do business offshore (agreeing with you). At the moment they can indefinitely defer the IRS portion of those offshore tax liabilities which is a very understandable thing for them to do considering the U.S. uses a worldwide tax system which, without the indefinite offshore deferral, would seriously harm the competitiveness of U.S. corporations offshore. Indefinite offshore deferral should end so that the offshore profits can flow back onshore, as either dividends or as new investments within America, but if the highest marginal tax rate isn't dropped to at least the 20-25% range that will seriously harm competitiveness, and the taxable profits, of those corporations. [editline]23rd August 2015[/editline] Anyways it's kinda interesting to see so much tax revenue derived from various income taxes (personal, payroll and corporate), you'd think there would be a more-diverse approach. Although I do suppose consumption and land taxes are handled at the state level.
[QUOTE=RocketSnail;48520308] The future of all americans does not solely exist in college...[/QUOTE] And bombing brown people in the sand is the sole future of all Americans? Yeah no thanks.
[QUOTE=draugur;48520738]And bombing brown people in the sand is the sole future of all Americans? Yeah no thanks.[/QUOTE] Because not going to college = military... yeah...
Who's paying? That's simple. When you get offered a 100k/year job, and realize you'll only see about 70k of that if you're lucky, you learn real quick who is paying....
[QUOTE=Silence I Kill You;48520862]Who's paying? That's simple. When you get offered a 100k/year job, and realize you'll only see about 70k of that if you're lucky, you learn real quick who is paying....[/QUOTE] Pff, probably closer to 50k once you take into account everything: federal taxes, state taxes, local taxes, sales tax, property tax, gas tax, car registration fees, phone bill fees, dog license fee, etc. etc. etc. [editline]22nd August 2015[/editline] Also, I've never even understood corporate taxes. All they really are are indirect taxes on real people that are difficult to quantify. They either take the form of an extra income tax, an extra capital gains tax, or an extra sales tax because the cost is always transferred to the employees, the investors, and the customers. Why not just get rid of it entirely and add it to the other taxes. That would simplify the system with no difference to what's actually happening.
[QUOTE=sgman91;48520907]Also, I've never even understood corporate taxes. All they really are are indirect taxes on a segment of the population. The cost is always transferred to either the employees, the investors, or the consumers. Why not just increase those taxes and get rid of it all together?[/QUOTE] Corporate taxes exist because historically it was easier to tax the income of a few thousand incorporated entities than a few million citizens. Today there are still reasons for it existing rather than being eliminated, for reasons such as some corporations rarely issue dividends and therefore those profits would otherwise not be taxed, and that not all corporate shareholders reside in that corporation's home country, and so otherwise those profits if released as dividends would instead be taxed by another country's tax office. There is the whole issue around double taxation of corporate profits, first when the corporation pays tax and then when the dividends are issued and the shareholders pay tax on those. However there are steps to mitigate that. The U.S. has qualified dividends, however this still leads to dividends being taxed at around 50% as the double taxation is not completely eliminated. The U.S. also has S Corporations but those are the exception, not the norm. Here in Australia we use full dividend imputation, so shareholders either pay a reduced rate on dividends or even receive a rebate, with the effect being that company profits always being taxed at the shareholder's marginal rate. Example: Company has one shareholder. Company makes $100 taxable profit. Company tax rate is 30%, so they pay $30 tax. A full dividend, of the remainder $70 plus 30 franking credits (equal to the company tax paid), is released to the shareholder. Shareholder pays income tax at the marginal rate of 40%. When shareholder does their tax returns, they report income of $100 (their proportion of the company's profits before company tax). Shareholder has a $40 tax liability. Shareholder offsets this with the 30 franking credits, reducing their tax liability to $10. The final effect is the tax office gets $40, where without dividend imputation they get $58; 58% tax.
[QUOTE=Antdawg;48520988]Corporate taxes exist because historically it was easier to tax the income of a few thousand incorporated entities than a few million citizens. Today there are still reasons for it existing rather than being eliminated, for reasons such as some corporations rarely issue dividends and therefore those profits would otherwise not be taxed, and that not all corporate shareholders reside in that corporation's home country, and so otherwise those profits if released as dividends would instead be taxed by another country's tax office.[/QUOTE] All profits are taxed through the paying of employees and reinvestment. It's not like the profit goes into a black hole never to be seen again. My biggest issue is that people talk about corporate taxes as if they aren't just indirect taxes on real people, when in reality real people are paying corporate tax just like they pay income tax or capital gain tax. Take away all corporate taxes tomorrow and you'll either see bigger dividends, lower prices, or higher wages. The money will still go out and still be taxed through normal means. Just make foreign investors dividends still get taxed in the US and every cent will still be taxed.
[QUOTE=sgman91;48521011]All profits are taxed through the paying of employees and reinvestment. It's not like the profit goes into a black hole never to be seen again. My biggest issue is that people talk about corporate taxes as if they aren't just indirect taxes on real people, when in reality real people are paying corporate tax just like they pay income tax or capital gain tax. Take away all corporate taxes tomorrow and you'll either see bigger dividends, lower prices, or higher wages. The money will still go out and still be taxed through normal means. Just make foreign investors dividends still get taxed in the US and every cent will still be taxed.[/QUOTE] Employee compensation in the form of wages and salaries is not derived from profits, it's derived from a contract between the employee and the organisation. And no those profits aren't necessarily re-invested for the purpose of financing the corporation's operations (although it would be great if they were if not posted as dividends); look at Apple's war chest. Corporate taxes are derived from taxable profits (important: not sales or gross profit) and do not directly affect the prices or employee compensation that the corporation sets. You would not necessarily see wage increases or price drops. You would see more dividends being declared yes, just about the same amount if corporate taxes existed alongside dividend imputation. [editline]23rd August 2015[/editline] If you want to see wage increases and price drops, cut other taxes like the FICA (Social Security and Medicare) taxes. That would increase real take-home pay of employees (employee-side FICA cut) without penalising the employer and reduce the cost of labour to employers (employer-side FICA cut). For someone on the full-time minimum wage, it's like $20 more per week that they take home. Would have much better of an effect than any indirect effect of completely eliminating corporate tax.
[QUOTE=Antdawg;48521076]Employee compensation in the form of wages and salaries is not derived from profits, it's derived from a contract between the employee and the organisation. And no those profits aren't necessarily re-invested for the purpose of financing the corporation's operations (although it would be great if they were if not posted as dividends); look at Apple's war chest. Corporate taxes are derived from taxable profits (important: not sales or gross profit) and do not directly affect the prices or employee compensation that the corporation sets. You would not necessarily see wage increases or price drops. You would see more dividends being declared yes, just about the same amount if corporate taxes existed alongside dividend imputation. [editline]23rd August 2015[/editline] If you want to see wage increases and price drops, cut other taxes like the FICA (Social Security and Medicare) taxes. That would increase real take-home pay of employees without penalising the employer and reduce the cost of labour to employers. For someone on the full-time minimum wage, it's like $20 more per week that they take home. Would have much better of an effect than any indirect effect of completely eliminating corporate tax.[/QUOTE] It's still a direct cost on the corporation. In the end, that 30% is a cost and must be treated as such. You take away a cost, and you won't just see a direct increase in profit. It doesn't work like that. Also, Apple is an oddity, and even they will spend it when the opportunity comes along.
[QUOTE=sgman91;48521132]It's still a direct cost on the corporation. In the end, that 30% is a cost and must be treated as such. You take away a cost, and you won't just see a direct increase in profit. It doesn't work like that. Also, Apple is an oddity, and even they will spend it when the opportunity comes along.[/QUOTE] Corporate tax is a cost that comes after materials, comes after labour and comes after overhead costs. If a corporation is in the shitter it's entirely possible they don't make a taxable profit and therefore don't pay tax, but any corporate tax paid previously didn't put them in the shitter in the first place because again, corporate tax comes after all other expenses and is only paid when a profit is made. All other expenses have to be accounted for first before corporate tax can be determined. Don't get me wrong, I'm for lower corporate tax rates, eliminating the double taxation of corporate profits, less red tape rather than more, I study to be an accountant, I identify centre-right and I'm not on the Bernie bandwagon. But corporate tax still has reasons for existing.
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