Corporate Tax Rates Fall Again in Europe

[BrentWil]

Sooner or later we in the United States will have to follow suit. Globalization allows capital to move with great freedom. We we do not follow, we will lose a huge competitive advantage. We have to shift more taxes to consumption.


http://www.businessweek.com/globalbiz/content/jun2010/gb20100629_855797.htm

European governments cut corporate taxes in 2010, continuing years of decline in taxation on capital and a shift towards taxes on consumption, and, to a lesser extent, labour.

Across the board, EU states charged an average of 37.5 percent in income tax last year, up slightly from the 37.1 percent they charged in 2009, according to the annual survey of tax rates by Eurostat, the EU's statistical office.

Corporate taxes were down to an EU average of 23.2 percent, a slight drop on 2009's 23.5 percent.

The highest rates on corporate income are in Malta (35%), France (34.4%) and Belgium (34%), and the lowest in Bulgaria and Cyprus (both 10.0%) and Ireland (12.5%).

[burnsei sensei]

1. And what was this austerity

we were talking about?

[BrentWil]

2. THey have to shift the tax burden to consumption...

Business can simply leave, in a globalized economy. Then you have no business tax income at all.

[burnsei sensei]

6. Then globalization is nothing more

than a scam to make governments subordinate to the aims of business.
We are led by men, but ruled by uncivilized wolves in human clothing.

[The2ndWheel]

9. Unless government globalizes

What we have now is a global economy, with regional governments. With the big corporations being global now, they're able to play each individual government against the other. The only reason government has power is because of it's centralized, monopolistic nature. On the world stage, government is anything but. We've got a few hundred governments all acting in their own interests. Whereas corporations are increasingly merging, buying other ones out, etc, whatever the case may be.

Globalize government, and corporations won't have as much power, as they would then have to deal with a single entity. Governments still exist in the 20th century, where lines drawn on maps mean something. Until that changes, there isn't much that can be done.

[BrentWil]

15. Why have one, when if you keep them separate, you can go to the place with the best policies? NT

[ieoeja]

20. When United Airlines maintenance moved from Illinois to Indiana....

Because Indiana exempted them from taxes, then:

Illinois tax basis decreased X+Y where X was the tax basis for UA and Y the tax basis for UA employees and spending.

Indiana tax basis increased only Y.

So combined gov't entities in the United States lost X tax basis. This in turns shifts the tax burden from investors to workers which decreases upward mobility. In fact, it increases downward mobility.

In short, you are promoting a tax scheme designed to create a permanent upper class. There is, of course, a name for that. It is called feudalism.


Seriously. Could you be any more obvious?

[BrentWil]

22. What are you talking about..

I would like to shift the entire tax burden to the rich and upper middle class. Get rid of SS tax, etc. The problem is, how do you do that and stay competitive in the global market.

[ieoeja]

23. From your OP.

"We have to shift more taxes to consumption."


Given that workers, not investors, put a higher percentage of their money into consumption, then you are proposing that workers, not investors, should pay a higher tax rate.

[BrentWil]

30. We do have to shift it towards consumption..

But it has to be done right, so that it hits the right goods (i.e. not food), so that we discourage some of the more wasteful consumption the society does.

[The2ndWheel]

75. That's wasteful, and place is becoming obsolete

Why do we have corporate mergers and buyouts? If we kept the corporations as separate as possible, you could go work for the companies with the best policies. But you can't keep them separate if you don't have a functioning government, and government can only function if it's a monopoly.

That's why at some point in the future, if we have the energy needed to do it, after all the twists and turns, and governments writing laws, and corporations finding loopholes in the regulation, and governments writing laws, and corporations finding loopholes in the regulations, etc, etc, etc, etc, etc, I figure we'll end up with a global corporation, and a global government. Then, in the name of efficiency, those two will merge. Basically what the character of Arthur Jensen said in Network.

[WinkyDink]

43. And THEN the "tin-foilers" predicting the "New World Order" won't seem so nutty, will they?

[The2ndWheel]

68. It's been happening for thousands of years

Sometimes slowly, sometimes a little quicker. A war here, a trade agreement there, even just individual citizens connecting with other people across the world. It's all becoming one system. Diversity isn't very efficient, so. If the energy is cheap enough to put it all together, there isn't much you can do. It's not even a conspiracy. It's really just the nature of organization.

[WinkyDink]

42. It's over. Govts ARE SUBORDINATE ALREADY.

[Oregone]

3. How do they tax capital gains?

Thats the other side of the puzzle when drawing comparisons

[BrentWil]

4. Depends on the country.

http://www.su.lt/bylos/mokslo_leidiniai/ekonomika/7_9/jarve.pdf

Germany 50% of the standard personal income tax rate

France 27%
Netherlands 25%
Greece 5%
Portugal 10%
Sweden 30%
Finland 28%
Ireland 20%
Poland 19%
Hungry 25%
Slovenia 25%
Cyprus 20%

US- 39.6 short term and 20 percent long term. http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States

[Sgent]

44. Just a follow up

corporate capital gains (within the corp) are taxed at the corporate marginal rate, there are no special rates for corps on cap gains.

[Oregone]

48. I was referring to personal

Because it all boils down to what piece of the pie the shareholders get at the end of the day after all the taxes are applied. My original intent was to point out how this single stat was a small piece of the overall cost-of-doing-business. Direct over-the-board comparisons are not constructive because they do not factor in everything else that will get between the shareholder and the money the business generates.

[Commie Pinko Dirtbag]

5. That argument could only become more RW if you added "because life begins at conception" at the end.

[inna]

7. Actuallly, they're following OUR suit - not the other way around.

[MadHound]

8. Actually no, we don't have to follow suit

We could impose tariffs which penalize corporations who try this strategy, in fact we should impose said tariffs already.

But given that we're living under the rule of a government that is run by corporations through their political puppets, you're probably right, this is going to happen.

However the thing is, higher consumption taxes will simply speed the rate of the downfall of the middle class in this country. When the middle class goes, there is no buffer between the rich and the rest of us, no class mechanism that helps stabilize society. Which means it's highly likely we'll be looking at another American revolution again, this time against corporations and the wealthy.

[BrentWil]

13. Our economy is too linked with the globe..

That would cause tremendous economic pain. Trade is a good thing and increases the wealth of mankind.

[MadHound]

19. Yes, but you can't continue to throw the tax burden on the poor and middle class

While the corporate, rich and elite don't pay their fair share. In fact if you look over the course of our history, the biggest economic boom came when taxes for the wealthy were pegged at 70-90% and corporations were similarly taxed.

A consumption tax is the most regressive of taxes, and hits the ordinary person far harder than corporations (who pass it on) and the wealthy. Do we really want to further devastate the people of this country with an increase in consumption taxes? I guess the answer depends on whether you believe this country is for the good of the people or for the good of the corporations?

[BrentWil]

21. What I would suggest is the the poor pay NO taxes..

Get rid of SS tax and give everyone a blanket 50K dollar tax deduction. Set up a flat tax in which all income is treated the same and it is payed by only those that can afford it.

Next, have a consumption tax, but have it only for goods that are not necessities. Th

[MadHound]

26. Wow, you really are into regressive taxes aren't you?

A flat tax? Wow:wow: Sure, you exempt the poor, but the problem is that with a flat tax you will speed many in the middle class on their way to becoming poor. Do you realize that it would take at least a thirty cents on the dollar flat tax to make up for the income tax? More, if you're exempting the poor.

Get rid of FICA? What, no SS for the elderly and disabled?

What is wrong with taxing the rich and the corporate at levels set up by FDR? Oh, yeah, they'd have to pay their fair share:eyes:

[BrentWil]

32. No, I am for the poor and middle class not paying a dime in federal taxes.

FICA funds just go into the general fund anyway. Just give the money when they get old to them. Don't worry about a silly system that is a regressive tax.

I won't a huge exception that would ensure the poor and the middle class don't pay tax. You would only start to pay when you broke into the upper middle class. A basic 50K deduction for a person should do this.

[William Z. Foster]

73. I suppose we will be seeing more and more of this

Now that fewer and fewer are accepting the old trickle down and free market and free trade bullshit, there is a need to make yet more convoluted arguments.

[William Z. Foster]

69. "the wealth of mankind" LOL

Labor produces wealth, not trade. Besides, what is going on is not "trade."

"Cause tremendous economic pain" to whom? You?

"Our economy is linked with the globe." LOL.

[burnsei sensei]

24. True.

You should see how Congressmen bristle up at the back of the neck whenever someone mentions the word "tariff".

[Gormy Cuss]

10. What about the US corporate tax rates?

The EU average is 37.5%. The highest effective tax rate for corporations in the U.S. is 35% (and that's for corporations with income > 18 million,) lowest rate 15%.

At first glance it doesn't appear that "we" need to do anything to be competitive with the EU rates.
http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States

However, since the Business Week article is silent on the topic perhaps someone can find a link with proper comparisons between EU and U.S. rates.

[BrentWil]

17. Yes, and it is clear where the world is going.

If we want business to stay here, we need to be while below the global average. Business can move and our policies need to deal with that.

[Oregone]

28. You honestly think its immensely less profitable to do business in the US based on this one stat?

You think Europe is a walk in the park to do business in? Is this the only factor you are looking at?

Remember, red-tape and instability causes lost profit. Unskilled workers hamper what industries you can move. Resources are not allocated homogeneously. Transportation infrastructure is not all equal.

Here is something else to consider:
http://en.wikipedia.org/wiki/Ease_of_Doing_Business_Index

Sometimes you get what you pay for, and you get a lot in the US. I was just watching a CBC documentary about Alberta oil sands, which featured a Norwegian oil tycoon who had all their fields expropriated by Venezuela (so they were looking to do business in Canada).

Its not all cut and dry. You don't have to race to the bottom.

[BrentWil]

34. There are plenty of reasons that it is better to do business in the United States..

But the world is a highly competitive place now. Look at what many European nations have done with "cutting red tape" in the last few years (i.e. Sweden). We have to keep our policies competitive and this is one area we could do better in.

[Oregone]

36. "this is one area we could do better"

One of many, and there are many areas European countries could do better in.

Being that its one of many, nothing necessitates its particular change above others.

This is all a failed talking point.

[BrentWil]

40. Because it isn't like this is backed up buy multiple studies or anything..

http://econ.ucsd.edu/~rogordon/growth.218.doc

Past theoretical work predicts that higher corporate tax rates should decrease economic growth rates, while the effects of high personal tax rates are less clear. In this paper, we explore how tax policies in fact affect a country’s growth rate, using cross-country data during 1970-1997. We find that statutory corporate tax rates are significantly negatively correlated with cross-sectional differences in average economic growth rates, controlling for various other determinants of economic growth, and other standard tax variables. In fixed-effect regressions, we again find that increases in corporate tax rates lead to lower future growth rates within countries. The coefficient estimates suggest that a cut in the corporate tax rate by ten percentage points will raise the annual growth rate by one to two percentage points.

[Oregone]

45. What economic variable isn't backed up by studies?

Firstly, we are talking about international competitiveness. That article appear to be talking about economic growth. I mean, its a neat canned macro and all, but really, whats your point?

Secondly, I already conceded that the corporate tax rate is a factor in the international cost of doing business, but there are a plethora of other costs investors must consider.You are considering but a single piece of a very large puzzle, and using it to advocate a broad policy change. Its silliness.

Lastly, you can control economic growth much easier than that, by something else backed up by studies: interest rates. The cost of borrowing is another proven factor associated with economic growth and international competitiveness. Why focus on one, and not the other? Wait, I know why. :)

[BrentWil]

53. Lower interest rates will eventually led too high inflation and instability...

It is one factor. You are right. But it is a factor that plays a key importance in decision making of a business.

[Oregone]

59. Lots of things too far out of whack cause problems

Its a merry balancing act, most often driven by politics and the rich.

[Gormy Cuss]

29. So, to recap: our corporate tax rate is already below the new, lower EU average.

[Commie Pinko Dirtbag]

11. Yea, everybody race to the bottom.

Every country that does not become a third-world slave-labor hellhole is doomed, I tells ya, DOOMED!

:eyes:

[BrentWil]

16. How so? How is adjusting your tax code to deal with the current world economic conditions that?

If you take objective measures of mankind (food to eat, etc), life is getting better. Look at China and India, for example. However, in that, the United States needs to find ways to adjust its policies to an ever-changing world in a way that helps people.

[Oregone]

27. So we should also have a VAT too?

And adjust to every single facet of many European nations' tax schemes? Where does the US stop? Why doesn't the US just copy Germany's fuckn code, eh (including business regulations, entitlements, social policies, etc)? Why even have different countries?

You realize you are simply harping on but a single stat of a very, very different code to make a sweeping appeal to reform in the interests of the rich? Comparisons of this nature aren't so simple, and making policy changes to adjust to an increasing 'cost of doing business' is also not cut and dry.

[BrentWil]

37. It is certainly not cut and dry. However, that doesn't mean that should stop us from trying to look

at US tax structure and how it effects the inflow of capital into our society.

[Oregone]

38. You should never stop looking at anything

But you don't seem to be "looking". You seem to be promoting this policy. Funny that

[BrentWil]

41. Yeah, the crazy conservative notion of...

Taxing the rich and discouraging excess consumption. I must be a conservative.

[Oregone]

46. The rich already spend a lower percentage of their disposable income on consumption

Otherwise, they'd never be able to save a penny and continue to increase wealth disparity.

Look, all your super magic flat tax essentially does is create one big massive legal loophole to have un-taxable income: don't spend. Fortunately, its the rich who most often have the luxury of doing so, and who exercise it most often.

[BrentWil]

54. As I said, tax luxury items and place the income tax

only on them by giving everyone a large deduction and taxing everything above that at the same rate and treating all income the same. Eliminate FICA and other forms of tax.

It does provide non-taxable income. However, it also removes the poor and middle class from taxation and ensures that the rich are the ones that are hit with it.

[Oregone]

61. "However, it also removes the poor and middle class from taxation..."

Which can also be done with marginal rates, but you'd rather throw the baby out with the bathwater and carry the standard for the largest right-wing tax movement going today.

[BrentWil]

65. I don't think the "right wing" would support what I am talking about...

But when it comes to a regressive tax such as FICA, I do say lets throw it out. Lets ensure that the middle class and poor don't pay federal income tax.

[Oregone]

67. Right-wing loves national consumption tax

They call it fair tax or flat tax.

[UndertheOcean]

12. Maybe I understand corporate taxation wrong , but a corporation pays taxes on profit only ?

But the corporation is not a person , and when the profit is divided up between the shareholders , they have to pay income taxes ? doesn't that imply taxing the same money twice ?

[BrentWil]

14. Yes the money is taxed twice NT

[ieoeja]

18. And when they spend the money it is taxed again.

And when that person spends the money it is taxed again.

Pure, rightist bullshit.

[William Z. Foster]

74. LOL

This gets better and better.

All money is taxed many, many times.

[Oregone]

25. There are taxes galore between capital gains, consumption taxes and corporate taxes

And add to that, obligatory expenses (such as, what benefits the government mandates businesses must provide for their employees).

You add all that up, you can figure out what the cost of doing business in a certain country is

Looking at the corporate tax rate is foolish. Its a simple piece of the pie that doesn't tell the whole story. Many EU countries have alien tax & business policies that simply cannot be compared straight across the board. Thats why this OP is a bit silly.

To infer the US must do anything based on a single statistic is either being willfully ignorant or just plain short-sighted. It also ignores variables such as local work force skills, resources, transit, subsidies, proximity of partnerships, etc.

Silly, silly OP.

[BrentWil]

31. Certainly there are other costs to do business, but that doesn't mean that there are not better ways

to structure our tax code in order to make the United States more competitive in the global economy.

[Oregone]

33. Being that there are other costs, the US is already competitive with the current tax code

You cannot admit on one hand that your short-sighted analysis is insufficient at determining the true cost-of-doing-business, but then continue to insist on the other that the US is not a competitive environment to do business in for investors (based on this stat). Thats foolish.

Even if the US was suffering dramatically on the internationally stage, there are a plethora of areas to improve upon. Nothing necessitates adjusting the tax rate on corporations.

[BrentWil]

55. How would you suggest we improve our business environment to ensure economic growth here?

Or is that really your objective?

[Oregone]

58. Stop racing to the bottom

Instead of just trying to be the low cost leader and focus on the bottom line, the nation can instead make sure infrastructure, skilled workers, and stable markets exist. Also, by focusing on improving the efficiency of entitlements (by socializing those) it encourages entrepenuership and relieves that burden from the private sector.

You get what you pay for. If a corporation wants to set up shot in Sudan or Liberia, good for them. Perhaps North America could focus on being a place that a company can save money by not getting robbed, by having stable markets to sell in, by not making them invest in their own optic lines or road ways, by providing a somewhat trained workforce, etc.

The cost of doing business isn't just summed up by the corporate tax rate. You can greatly mitigate external costs by simply building a nation up.

Crazy concept.

[BrentWil]

63. There are plenty of places that have infrastructure and a killed labor force..

The rule of law is something that is also required for business to invest. While I would agree that education needs to improve, most of what you suggest is a given in the developed or the developing world. The question is how we make the United States look better then the other places who also have the rule of law, infrastructure and a skilled work force.

[Oregone]

66. To varying degrees

The point is to make sure the US is on the cutting edge then, ahead of everyone in industrial transportation, stability, fiber optic lines, etc. There is a ton of room to improve. You suggest racing to the bottom, rather than the alternative of continually making a nice country to do business in. Its absurd.

And US lacks hard in socialized entitlements...another reason Canada, for example, does better with internationally competitiveness.

[BrentWil]

70. It is not a "race to the bottom"

It is a restructuring to understand the capital can flow very freely in todays world.

Do you have any evidence that "Canada, for example, does better with internationally competitiveness."

[Oregone]

72. Sounds like it

Lower taxes results in less government revenue, which hampers government spending on infrastructure and entitlements.

Regarding Canada, got it from a G&M article I read a few months ago. Go search there. Im tired.

[William Z. Foster]

35. aggressive promotion of Reaganomics

You are aggressively promoting Reaganomics and the right wing economic program. That thinking caused the crisis. That thinking was thoroughly rejected by the voters here in the last two elections. That thinking is 100% in opposition to the stance of the Democratic party for the last 80 years on the one issue that more than any other separates the political left from the political right.

I welcome any and all attempts at denying what I said in the previous paragraph.

If as you say "we" - Democrats - should or will now be supporting this economic program, then it is undeniable that there can no longer be any pretense about the rightward drift of the party. There is no such thing as a political left that embraces Reaganomics - it is a contradiction in terms - and if the Democratic party is not left then it is, or soon will be, no different whatsoever than the Republican party on the most important and defining political issue.

[BrentWil]

39. As I have stated..

I support getting rid of all tax on the poor and middle class. FICA is the only truly regressive tax in the United States. Shift the burden to the upper middle class and the rich.

With that being said, we also have to look at how the world currently works and how to ensure an American competitive advantage. Sorry if that offends you.

[William Z. Foster]

49. "sorry if that offends you"

ROFL.

Yes, this is the "New Democrat" approach.

"I favor (insert left wing position) but reality dictates that we will have to support (insert right wing position.)"

Good grief, it was bad enough when people who objected to racism were characterized as "being offended." Now anyone objecting to any right wing position is told they are merely "offended." This is a way to demean the other person, by making their argument sound like some petty personal and emotional complaint, and trivializes their argument.

[BrentWil]

56. What about shifting the tax burden off the poor and ensuring job growth is "right wing" ? NT

[William Z. Foster]

60. right

That is what I said.

"I favor (insert left wing position) but reality forces us to support (insert right wing position.)"

To make it work you have to have both a left wing and a right wing position. But the left wing half of your equation was missing from your OP. The left wing part only comes up when you are challenged, and then is still coupled with the right wing position.

"Don't get me wrong I agree with you (on the left wing position) BUT because of this that or the other we must support (the right wing position.)"

Your OP says we need to cut taxes on the wealthy and shift taxation to consumption (standard right wing regressive taxation idea.) Now you throw in "shifting the tax burden off the poor." But your OP recommended shifting the tax burden off the wealthy and onto the poor.

[Tierra_y_Libertad]

47. That bulge in the CEO's pockets isn't money, it's politicians.

[blindpig]

50. How about we ditch capitalism instead?

It is past the point where we can tolerate it's depredations. It is driving the working class into poverty, raping the commons, negating the future. There is no practical alternative to killing Capitalism.

[BrentWil]

57. Two points..

It has been a tremendous help to the poor and has had a tremendous positive impact on poverty. China is a key example.

http://www.undp.org.cn/modules.php?op=modload&name=News&file=article&catid=10&sid=10

China’s rapid economic development in the past two decades has generated the most rapid decline in absolute poverty ever witnessed.
Both national and international indicators show that China has already achieved the goal of halving the number of people in extreme poverty by 2015 set by the UN as one of eight Millennium Development Goals.

Also, there are several innovative solutions that can solve the tragedy of the commons. One is catch share, where the yearly catch is treated like a percentage of stock to be brought and sold.http://www.edf.org/page.cfm?tagID=69

[Oregone]

62. Fuck capitalism

[AnArmyVeteran]

76. Well Said! We need to end that evil system that rewards the lazy and feeds off the poor.

[blindpig]

77. So, they are just beset by garden variety poverty now?

Capitalism does not alleviate poverty, it increases it. As a minute portion of China's population prospers the disparity of wealth increases. And out there on the edge, in Africa and elsewhere, poverty increases as subsistence farmers are driven of the land for capitalists programs, as usual. Gulf fisherfolks are driven off the sea. Small farmers are driven off the land in this country.

[Lydia Leftcoast]

51. Corporate tax cuts benefit no one except the investor class

Corporations pay for employee wages and benefits, R&D, leases or mortgages for buildings, equipment, shipping, utilities, business travel, business entertainment, and all other legitimate business expenses with PRE-TAX MONEY.

Hiring people and researching new products actually LOWER a company's taxes.

I find that most people don't know this.

"We have to cut taxes to bring about prosperity!" is a lie promulgated by the fat cats who both own the major media and have mega investments in the corporate world.

Japan used to have some of the highest corporate taxes in the world. The result was that companies had no incentive to declare a profit, and so they poured most of their earnings into R&D. This was true during their period of greatest prosperity.

[BrentWil]

52. It gives them a reason to stay put and invest their capital in the United States instead of taking

it elsewhere.

[Oregone]

64. LOL. Can't have em "Go Galt"

What's in your iPad?

:rofl:

[Lydia Leftcoast]

71. And what good is that if they continually urge management to cut back

on employment and service and product quality?

America as a whole would be better of with fewer but better shareholders.

[blindpig]

80. Ohh, I can feel that golden shower coming.....

You appear to be of the mistaken notion that the capitalist make the world go round. But who actually makes things? It is labor, the capitalists are worthless parasites. Why do you carry water for them?

[Odin2005]

78. Fuck that Corporatist noise!

[inna]

79. Do you have any idea how ridiculously low the US corporate taxes are??

I didn't read this thread, but... Do you have any idea how obscenely low the corporate tax rate is the US?

Or are you just mindlessly parroting reactionary, neoliberal talking points?