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Post by PaulKay on Aug 26, 2014 9:24:22 GMT -5
For years it was evident to me the macroeconomic harm that was going to occur by having company after company close down U.S. factories and move their operations to low cost countries like China. Each company acts in their own self-interest to maximize their profits, but once enough companies do it, it starts to have the macroeconomic impact that we now see 10 years into the exodus....far less factory jobs and the hollowing out of the middle class. Much has been written about it now that the macroeconomic effects are clear. But the U.S. did nothing to stop it because we live in a free capitalist system. So be it, but the painful effects of free capitalism is irrefutable.
Now we see companies doing tax inversions by buying up foreign companies and moving their headquarters out of the U.S. to avoid the corporate tax rates. And again it should be clear that if enough of these companies do this, the macroeconomic impact will be a reduction in U.S. tax revenue which will eventually have to be picked up by the regular tax payer (who now increasingly can't find a good paying job due to the previous free market movement).
So what to do. My personal opinion is that we need to revamp the corporate tax code, but not in the way one might think. What I would like to see happen is to replace the corporate income tax with a flat U.S. asset tax. If any company (U.S. based or foreign) has assets in this country (buildings, inventory, capital equipment, and/or the asset value of goods imported into the country), the assets get taxed at a flat rate every year. Say 10%. It doesn't matter how much money they make, or where their corporation is based. If you have assets in this country or import goods to do business in this country, it will all be taxed. Lost money last year...tough, pay the asset tax or sell the assets. Don't pay and the IRS takes the assets and sells them for whatever they can get. Don't pay the tax on imported goods, the imports are either confiscated or banned from import. Pretty much how property taxes work.
Tax inversion become totally irrelevant. Move a factory to China, but import your stuff to sell here, pay taxes on the asset value of the imports.
Corporations can continue to move factories and headquarters, but they won't escape taxes no matter what they do except to stop doing business in the U.S. all together. Good luck telling your shareholders about that idea.
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Post by billhammond on Aug 26, 2014 9:29:57 GMT -5
KUCHARSKI FOR PRESIDENT!
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Post by drlj on Aug 26, 2014 9:32:01 GMT -5
Finally, a vote I can feel good about.
"He will string us along but in a very melodic way."
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Post by Cosmic Wonder on Aug 26, 2014 9:33:34 GMT -5
KUCHARSKI FOR PRESIDENT! +1 Mike
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Post by millring on Aug 26, 2014 9:34:16 GMT -5
because we live in a free capitalist system. So be it, but the painful effects of free capitalism is irrefutable. Actually, that's not exactly what happened. We aren't a free capitalist system, and that's the problem. We protect our work force better than the countries that are competing with us. That's not capitalism that's causing the problem. That's government intervention. It's intervention we WANT, but it is the reason -- not "free" enterprise.
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Post by brucemacneill on Aug 26, 2014 9:39:49 GMT -5
It's an interesting anti-capitalist theory but if you've seen New York's advertisements, in an effort to get companies to move to New York, they're giving a 10 year no-tax deal. Apparently some Democrats, they control New York, realize that that's how you attract business, cut taxes on business.
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Post by millring on Aug 26, 2014 9:40:41 GMT -5
Oh, and Bernie Sanders -- the most quoted politician on facebook -- says that our entire problem lies in the fact that we don't tax our corporations enough. In fact, our rate is the lowest of the industrialized nations.
I'm not sure how he explains the Horton/Burger King thing, but there you have it.
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Post by drlj on Aug 26, 2014 9:43:07 GMT -5
In IL, the only people to get tax breaks are the felon-politicians who are living off the taxpayers while in jail.
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Post by PaulKay on Aug 26, 2014 9:45:43 GMT -5
It's an interesting anti-capitalist theory but if you've seen New York's advertisements, in an effort to get companies to move to New York, they're giving a 10 year no-tax deal. Apparently some Democrats, they control New York, realize that that's how you attract business, cut taxes on business. Somebody would have to run the numbers, but if the rate is set low enough, they may be less than they'd pay under the 35% system. But mostly in pulls it foreign companies that only sell stuff here and normally don't pay any U.S. income tax at all. And all those tax inversions become irrelevant. They are leaving anyway.
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Post by PaulKay on Aug 26, 2014 9:47:03 GMT -5
KUCHARSKI FOR PRESIDENT! No way....I'd have to cut off a leg so I could have a stump speech....
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Post by millring on Aug 26, 2014 9:47:08 GMT -5
In IL, the only people to get tax breaks are the felon-politicians who are living off the taxpayers while in jail. as it should be. Illinois gots it toGETHER.
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Post by millring on Aug 26, 2014 9:49:24 GMT -5
And the party that is outraged that corporations get to participate in the political system -- ridiculing that as treating them like "persons"...
...is the party that believes you can tax them like individuals without adverse repercussions (rather than the reality that the cost will simply shift to the consumer).
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Post by drlj on Aug 26, 2014 9:49:37 GMT -5
With the right hat, you would have an Abe Lincoln look going and the votes would pour in. You should run. "A Guitar in Every Case."
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Post by millring on Aug 26, 2014 9:49:43 GMT -5
not that I don't think we should do something about "inversion".
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Post by PaulKay on Aug 26, 2014 9:50:14 GMT -5
because we live in a free capitalist system. So be it, but the painful effects of free capitalism is irrefutable. Actually, that's not exactly what happened. We aren't a free capitalist system, and that's the problem. We protect our work force better than the countries that are competing with us. That's not capitalism that's causing the problem. That's government intervention. It's intervention we WANT, but it is the reason -- not "free" enterprise. It is probably ONE of the reasons, but wages and unions are the primary reasons. Don't kid yourself.
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Post by PaulKay on Aug 26, 2014 9:52:04 GMT -5
With the right hat, you would have an Abe Lincoln look going and the votes would pour in. You should run. "A Guitar in Every Case." Or for beer lovers... A case with every guitar...
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Post by millring on Aug 26, 2014 10:03:28 GMT -5
Actually, that's not exactly what happened. We aren't a free capitalist system, and that's the problem. We protect our work force better than the countries that are competing with us. That's not capitalism that's causing the problem. That's government intervention. It's intervention we WANT, but it is the reason -- not "free" enterprise. It is probably ONE of the reasons, but wages and unions are the primary reasons. Don't kid yourself. Did you mean to say "aren't"? 'Cause if you meant to say "are", you're agreeing with me.
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Post by Doug on Aug 26, 2014 10:09:23 GMT -5
How about do away with any corporate taxes. Then we can be the place companies are moving too. Remember no corporation pays taxes they just pass them on to the consumer.
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Post by dickt on Aug 26, 2014 10:14:18 GMT -5
Oh, and Bernie Sanders -- the most quoted politician on facebook -- says that our entire problem lies in the fact that we don't tax our corporations enough. In fact, our rate is the lowest of the industrialized nations. I'm not sure how he explains the Horton/Burger King thing, but there you have it. What explains it is that a retail business like Burger King or Walmart is hard to move offshore so they are stuck paying corporate income taxes unlike many other business that have ways to avoid them. All their labor costs are here--you can't order your Whopper from Bangalore. Now service industries and manufacturing are a different story.
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Post by PaulKay on Aug 26, 2014 10:17:32 GMT -5
How about do away with any corporate taxes. Then we can be the place companies are moving too. Remember no corporation pays taxes they just pass them on to the consumer. The issue I have with that idea is that it forgets that corporations are able to make money free of charge all while using the very infrastructure that facilitates their business. Bridges, roads, subway systems, airports, market protection (i.e. patent system), and all the other things that the federal and state governments do to facilitate free commerce. And they don't have to kick in to pay for it? I'm fine with them passing it on to the consumer, but I'd venture to guess that some of it also comes out of the pocket of shareholders who get less dividends.
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