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15
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Debate Score:27
Arguments:27
Total Votes:30
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JaxsonRaine(54) pic



U.S. Corporate Tax Rates Should Be Lowered

Are corporate tax rates in the U.S. too high, just right, or too low? What effect does the tax rate have on the U.S. jobs situation?

 

Pro

Side Score: 12
VS.

Con

Side Score: 15
0 points

The U.S. has the highest marginal corporate tax rate among all developed countries[1]. Not only that, but the U.S. has one of the highest effective corporate tax rates among all developed countries, ranking in the top 5[2]. Companies have to pay more of their profits here than in other countries, and this is a factor when people and corporations decide where to invest their money.

The average effective tax rate among other nations is 20%, where the US's is 27%. From another perspective, the tax on new investment is 30%, which is 7.5% higher than international averages[2].

In other words, if a wealthy person is considering investing in a company, they will have to pay 7.5% higher taxes if they invest in a U.S. based company than a foreign company, and in some countries they can pay a tax rate as much as 17.8% lower than the U.S. tax rate.[3]

If you were a business person, and your goal were to maximize return on your investment, would you rather be taxed on your profits at 30% or at 12.2%?

This is why the US is struggling with jobs. We aren't competitive on an international level. Investors can keep more of their profits by investing outside of the US.

[1]http://www.taxfoundation.org/news/show/28081.html

[2]http://www.taxfoundation.org/news/show/27609.html

[3]http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/Competitive-Alternatives-2010-Focus-on-Tax.pdf

Side: Pro

True, it is sad that the freest people in the world now have the highest marginal corporate tax rate in the world among developed nations.

Side: Pro
2 points

US corporate profits are at an all time high. Although the US has the highest corporate tax rate, this rate is rarely paid, as there are arguably more loopholes than any other tax system. Between these loopholes, and flat out tax breaks, the US effective corporate tax rate is significantly below 39.1%, at around 13.4%.

All that considered, I have no problem with the US (or any other country) lowering their corporate tax rate, as long as they close the loopholes, and reduce tax breaks that cost tens of billions of dollars a year. However, that is unlikely to happen, so I support maintaining the tax rates at their 'high' level.

Side: Con
JaxsonRaine(54) Disputed
1 point

I would like to point out that ThinkProgress is not a tax group, and does not specialize in taxes. Their sources are buried in linked stories.

The 13.4% figure cited is a combination of corporate income tax and corporate investment tax. A simple average of the two doesn't provide the correct picture, as corporate investment income is a small fraction of total corporate income. My sources linked at the tax foundation examine hypothetical corporations in different industries, as the tax rates change from industry to industry.

An interesting note for you Ben, Mitt Romney closed corporate tax loopholes as governor of Massachusetts.

Side: Pro
BenWalters(1513) Clarified
2 points

I would like to point out that ThinkProgress is not a tax group, and does not specialize in taxes. Their sources are buried in linked stories.

I realized. I tried to find the data that they'd used, but somewhat gave up. If the data was anomalous, I wouldn't have posted it, yet as I found similar claims (without the international comparison) I decided it was relevant enough.

The 13.4% figure cited is a combination of corporate income tax and corporate investment tax. A simple average of the two doesn't provide the correct picture, as corporate investment income is a small fraction of total corporate income. My sources linked at the tax foundation examine hypothetical corporations in different industries, as the tax rates change from industry to industry.

I hadn't looked through it before. Your sources don't give the same figures (obviously, as you said they're not on the same thing), but the picture it paints is not one where the US is an outlier, but middle of the ground - exactly what my sources were saying. Considering that I have no real expertise in the quantitative comparisons of taxation, and haven't looked into econometrics to a great extent, I feel that this is reason enough to say that tax rates should not be lowered.

An interesting note for you Ben, Mitt Romney closed corporate tax loopholes as governor of Massachusetts.

I think Mitt Romney, if he stood up for himself, would be much better than the manipulated puppet that he is now. He's spoken in favour of homosexuals, in favour of abortions, and done some things that are good for the economy. He now speaks against all of them. If I could mix and match his various opinions over time, I'm sure I could find someone that I support in the end.

Side: Pro
GeneralLee(134) Disputed
1 point

BenWalters-"and reduce tax breaks that cost tens of billions of dollars a year"

Are you serious? You're acting like the government somehow deserves that money. You're acting like it's a bad thing to keep private money in the private sector. Remember, the government can't create jobs. Only private businesses can.

The government makes the majority of it's money through taxes (over 95% of government income is taxes). That means hardly any of the government "jobs" that exist are profit making. Therefore, a government "job" is not really a job because there is not profit made through the work that the government employee does. It's just money spent and lost.

That means the higher the government taxes businesses, the less money that business has for employees. And as there are fewer and fewer people employed, that means there is less money for the government to bring in with taxes. The smaller the amount of money the government brings in, the more it has to cut spending from it's budget. And since we all know the government doesn't like to cut spending, it usually just prints money which causes inflation. Now, the higher the inflation rate, the higher the prices soar. Since wages have never kept up with inflation, people usually become more poor as a result.

And that's why I hate this stupid class war. People don't realize they are only making themselves poor. They aren't helping anything, just hurting themselves.

Side: Pro
Conro(767) Disputed
1 point

"That means hardly any of the government "jobs" that exist are profit making."

In a perfect world, no government jobs would be profit making. The amount the government takes in from taxes would equal the wages and expenditures it legislates and administrates. But to go on to say that a job isn't a job because there is no profit motive is ridiculous. A job is a job if something is produced (either immaterial or material, in the case of say educating children in school or grants for cancer research), not whether or not there is a profit behind it.

"That means the higher the government taxes businesses, the less money that business has for employees."

You assume here that all money that businesses remains within circulation for the business, when really, many times executives (particularly of large corporations) may begin to hoard the cash rather than use it to invest in personnel, maintenance, etc. Essentially what your argument here boils down to is a slippery slope; if you have taxes, businesses won't hire, people won't have jobs, government can't tax, government doesn't cut spending, government prints money, inflation and prices soar, and people are wham, bam, thank you ma'am, people are poorer. Because of taxes. Mhm, totally reasonable progression.

Side: Con
BenWalters(1513) Disputed
1 point

Are you serious? You're acting like the government somehow deserves that money.

I do not believe that the wealthy and the rich deserve tax breaks, lower tax rates, and to pay less for the same goods, compared to poor people. This corporatism only encourages the divide between the rich and the poor, which strongly correlates with a whole range of social issues, and I do not feel it helps anyone - but the rich themselves.

You're acting like it's a bad thing to keep private money in the private sector.

I do not think that anyone should be exempt from paying what they should pay for. Be that VAT tax on the poor, 30% tax on the mega rich, people who inherit all their money, or corporate tax. So yes, I think it's definitely a bad thing that certain people are given exemptions.

Remember, the government can't create jobs. Only private businesses can.

Patently untrue statement. Not only could I prove that wrong through your own country, I'm going to abolish it through a country that I live in. In Qatar, there's huge amounts of oil, natural gas, and petroleum reserves. The biggest company in the country, Qatar Petroleum, is a state owned & ran firm, which extracts this, and ships it to the West. It brings billions into the economy, investing at cheap rates, giving huge positive externalities to the people. It creates thousands of jobs. Your right wing mantra is idiotic.

That means hardly any of the government "jobs" that exist are profit making.

Good. If there's profit making jobs available, they should (in most circumstances) be left to the market - I agree that it is more efficient than the sector. But, do you think a government should only exist to make a profit, that there is no possible good where there is no profit? If you do not see the value in anything the government does, then we differ too much for us to have a debate on equal terms.

That means the higher the government taxes businesses, the less money that business has for employees. And as there are fewer and fewer people employed, that means there is less money for the government to bring in with taxes. The smaller the amount of money the government brings in, the more it has to cut spending from it's budget. And since we all know the government doesn't like to cut spending, it usually just prints money which causes inflation. Now, the higher the inflation rate, the higher the prices soar. Since wages have never kept up with inflation, people usually become more poor as a result.

Have you heard of the Laffer Curve? In America, you are on the left side, so your trail of logic is false. So, I would rather see tax rates followed properly, by income taxes & corporate taxes, by the poor & the rich, to reduce the printing of money, to reduce inflation, and whilst allowing the government to maintain their current services.

And that's why I hate this stupid class war. People don't realize they are only making themselves poor. They aren't helping anything, just hurting themselves.

Yes, while those massive firms that lobby for billions of dollars in lowered taxes are the real heroes!

Side: Con
1 point

No, these greedy fucks have had breaks for years and things get worse. Better to ask if these corporations and their lobbyists should be investigated for treason.

Side: Con
GeneralLee(134) Disputed
1 point

Oh, and you're not just as greedy? Tell me, how much money will make you happy? Go on tell me. You can't. I bet you have a cell phone, 50" TV, and a car or two. I bet your place of residence has both heating and air conditioning. The funny thing is that the very thing that you accuse the rich of being is the very thing you are. You are greedy. You are the reason things have gotten worse. You want to know who to blame for the economical situation, you need to look no further than in a mirror.

Side: Pro

A year or two ago, corporations were paying 0% of this countries taxes.

...

Free the middle class. Trickle down economics don't work. There is a multitude of things I could say but I just can't. I've said them too many times. Corporatism is the cause for all problems in this country, and the fact that they've convinced some people that they're a good thing is frankly depressing.

Side: Con
GeneralLee(134) Disputed
1 point

"Corporatism is the cause for all problems in this country, and the fact that they've convinced some people that they're a good thing is frankly depressing."

Socialism is the cause for all problems in this country, and the fact that they've convinced some people that they're a good thing is frankly depressing. Remember, an argument works both ways.

Side: Pro
chatturgha(1630) Disputed
1 point

Socialism is the cause for all problems in this country, and the fact that they've convinced some people that they're a good thing is frankly depressing. Remember, an argument works both ways.

Ah, but can you somehow explain that socialism is the cause of all this country's problems? Because I can explain why corporatism is the cause for generally everyone's suffering in free world.

But I've done it so many times in the past I'm just tired of repeating myself. Only reason I didn't open my statement with it, ugh.

Side: Con

They already pay next to 0% of the taxes. If they start having negative percentages, does that mean the government should be paying them money instead of the other way around?

What a site to see that would be. If that wouldn't affirm that this country isn't a democracy and instead a corporate oligarchy, I don't know what would.

Side: Con

They should not be lowered because the corporations need to pay their fair share.

Side: Con