Thread: Corporate Taxpayers & Corporate Tax Dodgers 2008-10

Originally Posted by LAM

http://www.ctj.org/corporatetaxdodge...gersReport.pdf

wow, these are some HUGE corps too.

Simplify the tax code, close loopholes & subsidies, and a competitive 25% corp tax rate would be steps in the right direction. 25% may sound low. But, 25% > 17.5%, and even greater than zero or subzero effective rates.

Originally Posted by GearsMcGilf

Simplify the tax code, close loopholes & subsidies, and a competitive 25% corp tax rate would be steps in the right direction.

steps in the right direction towards? the US is the least taxed wealthy industrialized country in the world.

Towards reducing the deficit and possibly using some of the revenues for investment on the home front. Closing the loopholes, as well as a few of the 700+ military bases around the globe just might move us toward a balanced budget.

Closing loopholes would amount to "raising taxes" which the repubs have made a vow to not do. This is the problem

Originally Posted by exphysiologist88

Closing loopholes would amount to "raising taxes" which the repubs have made a vow to not do. This is the problem

No shit, that "Tax Pledge" isn't a pledge to not raise taxes, it's a pledge to not raise revenue. You are allowed to raise taxes as long as you cut them by an equal amount somewhere else. Imagine if I owed a relatively equal amount of debt on a loan and I told the bank that I am looking for ways to pay it back. Oh, by the way, me getting a higher paying job or taking a second job is a nonstarter, and if I do I have to spend that money somewhere else.

to many Americans have very short memory's and far too many only know the US and barely that as much of their info is gained through televised media. I can't believe how many people have bought into the anti-government bs. wasn't it the US government that built the the infrastructure before they were privatized? pretty sure it was the US gov that designed and built US highways in the 50's. China finally woke up and decided they didn't want to be poor anymore and have used government for 30 years to build the fastest growing economy in the world. Singapore, Korea, Canada, Germany are just a couple to name that have grew substantially from government involvement in the markets. some people however like to forget history and act as if things today have always been that way.

with a global economy you have to look outside the US and see what are the best practices in use that can be applied to our economy. people that don't really understand economics do not realize the full realm of implications that globalization brings. there is also a positive correlation between the size of government and and a country's economic exposure to international trade. the relationship between openness and government size is strongest when terms-of-trade risk is highest.



What is the economic outlook for OECD countries?
An interim assessment
Paris, 8 September 2011
11h00 Paris time Pier Carlo
http://www.oecd.org/dataoecd/42/17/47985038.pdf

Originally Posted by LAM

people that don't really understand economics do not realize the full realm of implications that globalization brings. there is also a positive correlation between the size of government and and a country's economic exposure to international trade. the relationship between openness and government size is strongest when terms-of-trade risk is highest

Governments are not the same throughout the world. Explain to someone 40+ years old, in China, how having the govt looking over your shoulder and controlling every aspect of life, exposed the country to international trade. That's an absurd postulate. China began to prosper once the govt got out of the way and began to allow private capital and private ownership in what were formerly state owned enterprises. It is less govt and more personal freedom that has lifted some 400B people out of poverty in China.

Originally Posted by GearsMcGilf

Governments are not the same throughout the world. Explain to someone 40+ years old, in China, how having the govt looking over your shoulder and controlling every aspect of life, exposed the country to international trade. That's an absurd postulate. China began to prosper once the govt got out of the way and began to allow private capital and private ownership in what were formerly state owned enterprises. It is less govt and more personal freedom that has lifted some 400B people out of poverty in China.

I did not say it was perfect, it was simply a statement based on the real world in the present and the past as to what governments can do and have done. as with any bureaucracy they function as they are directed to from above.

the US gov is deeply entrenched into the markets, more so than just about any other country. but since the invasion of lobbyists in DC during the 70's and the injection of private monies into US politics it mainly functions only to serve the markets and capital at this point. it was not always this way, it has only been since the 80's.

Originally Posted by LAM

pretty sure it was the US gov that designed and built US highways in the 50's. China finally woke up and decided they didn't want to be poor anymore and have used government for 30 years to build the fastest growing economy in the world. Singapore, Korea, Canada, Germany are just a couple to name that have grew substantially from government involvement in the markets. some people however like to forget history and act as if things today have always been that way.

The U.S. great interstate system was mainly built in the 70's with the first stretch having been completed in 1974. Yes it was funded by the federal government; it's still managed by the federal government.

I can't speak for Singapore, Korea or Germany, but Canada's infrastructure was not built by the federal government, Provinces and municipalities have been responsible for the vast majority. This is why you have varying quality of the same HWY from coast to coast. Sure the Canadian government has provided some stimulus monies to municipalities as a result of the global financial crisis, but in ordinary times, each level of government, Federal, Provincial and municipal have their own mandates and infrastructure is not on the Feds agenda. This said, the rich provinces do make equalization payments to poor provinces and this is managed by the federal government. 10 years ago, Ontario was a payer, today it's a recipient. Some of these monies make their way into infrastructure, but the Province has the final say as to what to do with the money. No one should confuse Canada as a county with a successful proactive government. If it were not for the resource sector and banking laws that would have likely become more liberal, we would be in the same boat as our cousins to the south.

All this said, Governments should stick to law making, equalization payments in Canada is a law that the Provinces have agreed to. The reason why Canada has been so successful over the last 10 years is because of cooperation between all levels of governments and good law making.

China's economy may be on fire today and will likely continue to do well over the next 10 years, but I will not envy them once they are fully industrialized. Every dollar the government adds to infrastructure is like an extra stick of dynamite; when the bundle explodes, it will not be pretty.

India is on the complete opposite side of the spectrum; they've adopted a more Americanesque type capital system, based on British law; only the government is even less involved. Housing is not in a bubble and they have the fastest growing middle class in the world. They will eventually have recessions down the road, but they will pale in comparison to China. Between 2012 and 2017, India will be building its great interstate systems at a cost of 17 trillion; 85% will be privately funded. They are building a sustainable economy. I only hope the Federal government does not become ambitious.

Governments do not build economies that last, people do. Now all the people who believed the government would provide jobs are protesting in every city across North America asking where the jobs are and blaming Wall Street for the economies destruction. Municipalities are wasting money cleaning up their shit and providing security; that money could be better spent. Governments who are entrenched in its county’s economy produce lazy unresourceful people. The original idea of government was to provide a level playing field for the residents of its community, to make laws to protect property rights; not manipulate its markets and/or create industry. Poor people were better served in the U.S. when rich people and churches provided charity, today the burden is placed on the U.S. Government. The same goes for Canada...

Originally Posted by vancouver

Governments do not build economies that last, people do. Now all the people who believed the government would provide jobs are protesting in every city across North America asking where the jobs are and blaming Wall Street for the economies destruction. Municipalities are wasting money cleaning up their shit and providing security; that money could be better spent. Governments who are entrenched in its county’s economy produce lazy unresourceful people. The original idea of government was to provide a level playing field for the residents of its community, to make laws to protect property rights; not manipulate its markets and/or create industry. Poor people were better served in the U.S. when rich people and churches provided charity, today the burden is placed on the U.S. Government. The same goes for Canada...[/FONT][/COLOR]

I never stated that all those countries had their infrastructures built but just about all in the OECD have.

as all countries grow and open up trade so does the size of their government this is an occurrence across all countries in the OECD. this is what all the reports from the ILO, Harvard, Princeton and the LSE among others from political economics have shown.

as trade is "liberalized" more economic risk is assumed by the government. the US at 300M people contains roughly 1/4 of the population of the OECD which stands at 1.2B. once you factor in that the US also has the lowest rate of unionization this further exposes US workers from external shocks of trade liberalization, large firms downsizing for profits, etc.

since 1984 there are less jobs to go back to after each recession in the US, I posted a report on this the other day and there are plenty out there on the topic. during the 2007 recession 50% of the job loss in the OECD occurred in the US alone, yet the US GDP did not decrease and US large firms reported profit increases of 10%+ in 2011 while large firms in the other wealthy OECD countries are reporting losses of 10% or greater. natural occurrences of change in economies are seen across many countries, this is specifically isolated to the US.

the US has 40 years of recent data showing what the private sector is concerned about, their profits and not full employment of the US labor force.

economics is a hard science people make it out to be much more complex than it really is and you have to look at the global economy and make comparisons between the US and the other wealthy industrialized country's in the OECD.

OK, I finally see where you are coming from LAM and I think I finally understand what you believe is the solution. Yes, US companies and the wealthy do pay less tax (or no tax). You only pay tax on 15% of your capital gains whereas Canadians pay 50% and other OECD countries also pay more. I definitely agree that tax reform is needed. I disagree that big government or greater government participation in the economy is needed for a heathy economy, or perhaps you were not saying this. Other OECD counties do have greater revenue per capita and clearly these moneis can be used to grow employment or the middle class. I just don't think it's sustainable. The entitlement burden of these countries is way higher then in the U.S. Just wait until countries like France and Italy have to pay pensions to 50% of the population. Just look at Greece.

The U.S. is in the dumps, but the fact that unemployement and wages are low and the entitlement burden will be much less for the government, will simply make you the champion of manufacturing again. The US holds more technology patents than all other counties in the world combined. Most of the commerce in the world is as a result of U.S. invented products and services. A free and greedy capital market system is what created it. Had your government taxed businesses the way other OECD countries have for decades and spent a ton of money on infrustructure that might not be needed depending on your business cycle, you'd just be another Greece.

I agree tax reform is needed, but small government will make the U.S. number 1 again (you still are actually). The middle class is a complete phenomenom, it only existed to make rich people richer and the government did what it did to make it bigger. Today, the middle class believe they are equal to the rich. 80% of today's U.S. millionaires are self-made, they create 80% of the jobs in the U.S. The middle class will be equal to the rich when they risk it all, live like crapp and go bankrupt several times before making it. They'll be equal when they create jobs. They'll be equal when they spill the same blood, sweat and tears.

I will not say the same for the over paid Executives though, but even if they were paid less, the rich would just pocket the difference...

The difference between today Nobles and peasents is that we live in a free society. Any peasent can become wealthy and there is no better place to do it than in the USA.

Originally Posted by vancouver

I agree tax reform is needed, but small government will make the U.S. number 1 again (you still are actually). The middle class is a complete phenomenom, it only existed to make rich people richer and the government did what it did to make it bigger. Today, the middle class believe they are equal to the rich. 80% of today's U.S. millionaires are self-made, they create 80% of the jobs in the U.S. The middle class will be equal to the rich when they risk it all, live like crapp and go bankrupt several times before making it. They'll be equal when they create jobs. They'll be equal when they spill the same blood, sweat and tears.

the middle class is a function of economics it is not a phenomenon, it exists in every single non-communist country in the world. it is simply the class below the capitalists and above the poor by definition. it has existed in the US for over 200 years but it now rapidly shrinking mainly due to economic policy.

there is not one single paper out of academia anywhere in the world that supports "small government" with liberalized trade in the OECD. There is a positive and robust partial correlation between openness, as measured by the share of trade in GDP, and the scope of government, as measured by the share of government expenditure in GDP this is a characteristic of every wealthy country in the OECD. the US is on the low end of spending in terms of a percentage of GDP at around 17-18% in 2011, the lowest in about 50 years. all of the other open country's in the OECD are spending about 30-40% GDP. IMF & World Bank data also shows the relationship between openness and disaggregated categories of government spending. The evidence shows that openness has a statistically significant association with most types of government spending, including general public services, education, health, housing and community amenities, and economic affairs and services.

your assessment is not based on real world data but on an delusional assumption that the country can progress again by going backwards in time, when the conditions are not even remotely the same; middle class income is down, unemployment is high and the workforce is older, taxes are low, and interest rates are at 0%, and many large firms that function for profit have replaced many small firms and union participation is at an all time low and public utilities have all been privatized.

if a rapidly shrinking middle class was a natural function of economics in country's where trade is liberalized it would be seen across other country's in the OECD and it is not, it is specific to the US. the middle class is slowing shrinking in some larger countries but it is mainly due to income inequality, which is actually a basic function of mathematics. and in those country's it can be traced back to the 80's when neo-liberalism spread from the US to other OECD country's and to Japan. the US has the greatest income inequality in the OECD and the least progressive tax structure and the least protected workforce so it's middle class is shrinking rapidly along with the fact that the US has highly liberalized it's trade while other OECD country's have but not to the same level as the US. The US gov does not protect it's workers like other country's do.

* just about all of the problems in the US can be traced back to the late 70's and early 80's with the decline in unionization, less progressive tax structure and the liberalizing of trade. the US is the only country in the world that allows lobbying to dictate economic policy, it is not allowed in most country's.

Why Do More Open Economies Have Bigger Governments?

Dani Rodrik
Harvard University
JFK School of Government
1996

http://www.hks.harvard.edu/fs/drodri...apers/last.pdf

OECD DEVELOPMENT CENTRE
THE EMERGING MIDDLE CLASS IN DEVELOPING COUNTRIES
by Homi Kharas
Research area: Global Development Outlook
January 2010
Working Paper No. 285
http://www.oecd.org/dataoecd/12/52/44457738.pdf

A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075
A 125-Year Picture of the Federal Government's Share of the Economy, 1950 to 2075

* on a personal note I suggest if you truly want to understand this subject you have to read economic papers from inside the US, outside the country and from the OECD along with the current US account balances. People forget that economics is a hard science while "capitalism" is merely an economic system.

I could call you just as delusional, especially for wrapping your head around so much academia, the same academia that is funded by big government. I won't call you delusional because you do make some good points and I agree with some of them.

We absolutely need to take a step back to move forward, but this does not mean the irradiation of the middle class. There has not been a significant middle class for 200 years; it has existed for less than 100 years. Before that there was the rich, professional class and poor. There is no way a person pushing a button at GM with no education should be making $40/hr. Just like CEO's should not be making 100X the average wage (unless of course they own the business).

I'll be significantly more respectful of your opinion, but just realize there are many respected academic lunatics like myself in North America who would side with me. Since we've not fixed the income gap, perhaps all of your academics are wrong or not considering human nature.

All that I'm saying is that a large middle class is not sustainable...not in a free market society where employees work just hard enough not to get fired and employers pay just enough for them not to quite...

The middle class we see today was formed from the late 1930's to the late 1970’s; this was the greatest period of industrialization the U.S. ever experienced. It's also a period when tax increased significantly, so you are right in that big governments grow middle classes, I'm just say the middle class of today is not natural, it was manufactured by government, not society. Don't suggest I don't know what I'm talking about and I won't suggest you're clueless either.

Originally Posted by vancouver

[COLOR=black][FONT=Verdana]I could call you just as delusional as well, especially for wrapping your head around so much academia, the same academia that is funded by big government.

Harvard is not directly funded by the federal Gov, neither are the economists at the OECD, World Bank or the FRB and all of their reports say the same thing. not paying attention to real economists and not the ones with hidden ideological agendas is what got the US into trouble to begin with. like I stated you need to look at data that is analyzed by independent 3rd party's and collected from inside and outside the US as I do. I'm just trying to help you out, I'm years past the small gov BS but then again I do not watch or read televised news media.

Government Size and Intersectoral Income Fluctuation: An International Panel
Analysis
Daehaeng Kim and Chul-In Lee
http://www.imf.org/external/pubs/ft/wp/2007/wp0793.pdf

ADJUSTING TO TRADE LIBERALIZATION THE ROLE OF POLICY, INSTITUTIONS AND WTO DISCIPLINES
http://www.wto.org/english/res_e/boo..._study_7_e.pdf


Does Trade Liberalization Affect the Composition of Government Spending
in Developing Nations ?

Michael MOORE
Maurizio ZANARDI
http://www.ecore.be/DPs/dp_1268906413.pdf

Alesina, Alberto et al., 1996, Political Instability and Economic Growth. Journal of Economic
Growth, 1(2): 189-211.
http://www2.warwick.ac.uk/fac/soc/ph...on/alesina.pdf

Inequality Does Cause Underdevelopment: New Evidence William Easterly
New York University - Department of Economics
June 1, 2002
Center for Global Development Working Paper No. 1

Inequality Does Cause Underdevelopment: New Evidence by William Easterly :: SSRN

Originally Posted by LAM

I did not say it was perfect, it was simply a statement based on the real world in the present and the past as to what governments can do and have done. as with any bureaucracy they function as they are directed to from above.

the US gov is deeply entrenched into the markets, more so than just about any other country. but since the invasion of lobbyists in DC during the 70's and the injection of private monies into US politics it mainly functions only to serve the markets and capital at this point. it was not always this way, it has only been since the 80's.

Werd. I'd definitely have to agree that good govt with sound policies, as opposed to politicians who've been bought and paid for by lobbyists, can do a lot more for the country. As for China, it is the fastest growing econ right now, but corruption and bribery are so pervasive, at all levels of society and govt, that it could make Bernie Madoff jealous. You can get just about anything done over here if you have deep pockets and can pay off the right people - govt grants, subsidies, business permits, etc. This is the sort of thing that brings down giant corps and govts. It makes me wonder if it can continue to grow under such circumstances, or if the bubble is going to pop in a few more years.

Originally Posted by GearsMcGilf

Werd. I'd definitely have to agree that good govt with sound policies, as opposed to politicians who've been bought and paid for by lobbyists, can do a lot more for the country. As for China, it is the fastest growing econ right now, but corruption and bribery are so pervasive, at all levels of society and govt, that it could make Bernie Madoff jealous. You can get just about anything done over here if you have deep pockets and can pay off the right people - govt grants, subsidies, business permits, etc. This is the sort of thing that brings down giant corps and govts. It makes me wonder if it can continue to grow under such circumstances, or if the bubble is going to pop in a few more years.

with this new global economy comparative economics is making a comeback. in order to understand how these global economy's work today you have to not only have the classic economic theory behind you have to make unbiased comparative analysis between reality (which is broken down into various sets of social phenomena) and how various economy's of similar country's have changed over time.

far to many are locked into classical economic frameworks and labels (capitalism, socialism, etc.) and can not look objectively at the various economic systems independently.

this is why the standard tricks do not apply to the US economy. personal taxes and corporate taxes and capital are at 50 year lows. the capitalists have an excess of capital but the working class has a lack of income and high unemployment, the federal funds rate is at 0% and inflation is relatively low. up until 2000 the US had decreased fed gov spending to a 40-50 year low as a percentage of GDP. none of these things helped to spur job creation in the past decade so employing them "harder" in the future given the current economic conditions will not have a positive effect on job creation or GDP growth since gov stimulus was not crowding out the private sector.

mark my words unless the US starts some capital projects in the near future on a large scale unemployment will remain high through the end of the decade.