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by alexeisadeski3 4505 days ago
Corporations literally ARE the government?

That's why the US has the highest corporate tax rate in the OECD?

3 comments

Please stop citing that disingenuous, misinformative fact.

The US has the highest statutory tax rates on corporate investment in the OECD. The effective tax rates on corporate income are vastly lower than that, and often actually zero — especially for those large and powerful enough to have sway over the government.

Ummm... no.

The GAO study you're citing is infamously incorrect.

1. Corporations (and humans) can carry losses forward: if they lose money in 2008 but make money in 2009, they get to even out the two years. This is only fair. Thus they can appear to pay zero tax in a year in which they made money.

2. The "effective rate" counts the aforementioned foreign retained profits as being taxed at zero. Which they're not.

3. An independent analysis found that effective corporate tax rates are "in the mid to upper 20's", and that corporations which operate solely in the US pay 35% corporate income tax:

http://taxprof.typepad.com/files/140tn0197.pdf

TL;DR The US really, really, really does have the highest corporate tax rates in the OECD.

Does that even matter when everyone hides their profits in Ireland?
1. Only profit earned outside of US borders may be deferred in such a manner.

2. That profit isn't "hidden". It's in plain sight. It's not even a loophole. The money is still taxable - but only once it is repatriated.

You do realize companies make sure to game it such that they declare no profits in the US, right? And don't even care that much about repatriating it at all? And do so only when there are "tax amnesty holidays" where money can be repatriated "for free" during a short timespan?

http://en.wikipedia.org/wiki/Double_Irish_arrangement

1. All corporations in all nations game the tax system as much as possible.

2. The US corporations still pay more tax than do corporations in other nations.

3. US corporations with no foreign income tend to pay ~35% after deductions (per "independent" study cited above).

So basically what you're telling me is it's very hard to properly compare the final effective tax rates on corporations in two different countries. The study above doesn't compare to other countries. So you don't actually know if it's really worse in the US.
The effective US rates are higher than foreign statutory rates.

So yes, its easy to tell that US corp tax rates are higher.

Having such tax rate, conversely, is not a sufficient argument to prove the opposite.

Control of the government by corporations is a complex phenomenon, and taxation is only one part of many.

Lobbyists take quite commonly part in the administration, and once they do, they certainly don't start to act against their own interest.