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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsDear Joe Manchin - Want American Business to Invest in W Virginia? Raise their corporate income tax!
Last edited Thu Apr 8, 2021, 11:18 AM - Edit history (1)
Most Americans, when they hear that President Joe Biden wants to raise the corporate income tax to 28% to pay for his infrastructure plan, think that means that every business in America is suddenly going to be hit with some kind of surcharge.
That couldnt be further from the truth.
Businesses pay corporate income taxes on profits, not on revenue. If a company does $1 billion a year in business, but only makes $1 million in profit, theyre only taxed on that million dollars of profit.
And there are lots and lots of ways to reduce that profit. The main one, that American businesses used throughout the era from the 1930s until the 1980s, when the top corporate tax rate averaged around 50%, was to invest money in new products, build new factories, expand production and pay their workers well.
All of those activities are 100% tax-deductible, along with things like research and development, marketing, and pitching in for the community by building parks or supporting Little League.
While these kinds of investments build and strengthen businesses and their relationship to the places where they do business, they also reduce profits and thus reduce tax liability. If a company doesnt want to pay income tax, all they have to do is not show a profit.
As an added incentive, corporate income tax rates, like personal income tax rates, are progressive. The more profit a company shows on their books, the higher the rate they pay in incremental steps.
In 2002, for example, while the top rate on profits over $18 million was 35%, companies that only showed a $50,000 profit paid corporate income tax at a 15% rate.
Every small business in America knows this, which is why very few small businesses in this country pay anything consequential in income taxes at all.
At the end of the year, small and family-owned businesses take whatevers left over in their checking account that would show as profit-that-could-be-taxable and use that money to invest in tax-deductible new equipment or expand their business.
Having run small businesses for over 50 years, I can tell you that figuring out how youre going to use whats left over to build your business in a tax-deductible way is an annual December tradition from New Hampshire to California. And the companies that sell everything from copy machines to computers to office furniture know it: December is typically their boom month.
The corporate income tax keeps businesses on the straight-and-narrow. Which is why its no coincidence that the time of greatest prosperity for both American business and the American middle-class came when the top corporate income tax rate was at its highest.
A high corporate income tax rate, in fact, produces a pressure on businesses to invest rather than simply pass out money to shareholders and executives (both can be taxable) or squirrel it away offshore. Its an important and necessary pressure that drives businesses to do the right thing whether they want to or not.
Given this simple reality, taking the top corporate tax rate up to 28% when it was around 50% through most of the 40s, 50s, 60s, 70s and early 1980s, and was 35% from Reagans time until 2018, seems downright pathetic.
Even at this rate, the top corporate income tax rate will be lower than it has been at any time since World War II (other than the past three years). We really should be talking about 35% to 50% as a top rate if we want to achieve the kind of corporate growth and wage increases America saw during the years before Reaganomics.
Joe Manchin and a few other corporate-funded Democrats seem fairly hysterical about raising the top corporate tax rate. They should relax.
If they really want American business to invest in America, if they want the factories in West Virginia to expand, the way to encourage that behavior is to give them an incentive to invest in that very expansion.
Raise their corporate income tax rate!
Original post with tax rate graphic and hotlinks to sources: hartmannreport.com
Bristlecone
(10,125 posts)I think paragraph 11 has a typo. Unless text-deductible is a thing I am unaware of.
Towlie
(5,324 posts)
?
Wow, Joe Manchin is actually coming around and sounding like a Democrat?!?
But no, like others here point out, Joe Manchin isn't recommending raising corporate income tax rates, he's being told by Thom Hartmann to do that, as if he expects Joe Manchin to read his article.
I can't tell if there are any comments on his website about his misleading title because no comments at all show up, and if you try to type something with a fully-enabled browser then an offensive window pops up saying to pay up if you want to post something, even though it's not clear that anyone will actually see it.
And what's with the girl on the railroad tracks?
I like his politics, but his website? Not so much.
jaxexpat
(6,815 posts)It changes the meaning of the declaration. Too long have people bought into the notion that punctuation and spelling are elitist and unnecessary. Two, too, too, there, their, they're, your, you're. When you get those confused, constantly, get an education already. If you're absolutely at a punctuational loss use the semicolon, it's usage is debatable and pretty nebulous which makes it good for; everything.
DENVERPOPS
(8,806 posts)THE DEMS NEED TO QUIT USING THE REPUBLICAN TERMS TO DESCRIBE EVERYTHING.
THIS IS NOT A FUCKING "TAX INCREASE", BUT IN FACT, "A REPEAL OF REPUBLICAN TAX CUTS"...........
LaMouffette
(2,021 posts)which was startling, but I soon realized that you were addressing this to Joe Manchin, not quoting him.
I wish I knew why Manchin continues to obstruct. I mean, of course he's trying to retain his Senate seat in a very red state, but I wonder if more is at play.
GB_RN
(2,347 posts)Anymore, especially not to journalists. The grammar, excessive word usage, etc, is just horrible. Clear, concise and to the point is supposed to be THE point.
misplaced modifiers are the absolute worst.................
thomhartmann
(3,979 posts)I changed the headline on my site to a dash instead of a colon, so it hopefully looks more like I'm speaking to him rather than for him.
DENVERPOPS
(8,806 posts)like many (or even most) politicians his ego is in play. There are many ego maniacal asshole politicians, just lurking in the shadows, waiting for something to launch them into a position to have their 15 minutes of fame. Once caught up in it, they will continue to do whatever they did to get them there over and over. The past few years have shown us several of them in the Dem Party.....
Just look at all the self aggrandizement of many politicians for proof. The epitome of which would be either Trump or McConnell.....
and of course the grand master, Ronald Reagan and his bestest of buddies Cheney/Rumsfeld..........
Actually, the list of them is endless.........
Manchin is in a red state, and scrambling to retain his seat? The easiest covert way to do that is become a DINO.
Manchin and other DINO's are the classic definition of selfishness, willing to do anything, and sell their soul, even if their actions/voting could trash a great nation. After these past years, we have come to expect that from RepubliCONs, but it is hard to fathom these two Dem asshole Senators that are walking around flaunting their Elephant badges on their jackets..............
I have seen it many times. A true RepubliCON who runs as a Dem. He gets all the Dems to vote for him or her. He/she also gets a ton of RepubliCONs to vote for them because they know that truly he/she is a Repub.......
We had a really super famous one here in Colorado years ago. She would scream from the rooftops how wonderful she was at working for the Dems. Her followers were true believers, all out worshippers of her. Of course, if you looked at her voting record, which most people never take the time to do, her true self became incredibly evident..........
LaMouffette
(2,021 posts)just to take votes away from the Democratic incumbent.
From the New York Times:
Later that day, former State Senator Frank Artiles, a Republican, asked Alexis Pedro Rodriguez by phone whether he still owned a home in the suburban Miami village of Palmetto Bay. Because in that case, Mr. Artiles wanted something else: to put his friends property and last name to use in the upcoming election.
The incumbent Democrat, State Senator José Javier Rodríguez, was on the ballot. And Mr. Artiles, a crafty political operator with a dubious reputation, had a plan: to plant his friend as a candidate and siphon off votes that could defeat Senator Rodríguez.
The plan worked, setting off one of Floridas most brazen electoral scandals in years even by the heady standards of a state that has long been fertile ground for political scammers. What is still uncertain is how broad the scandal is, whether it had touched other races and whether it was part of an organized effort by Republicans or an interest group to sway legislative races.
Mr. Rodriguez, a machine-parts dealer who had been struggling financially, agreed to help Mr. Artiles, who promised him $50,000 in return. He switched from Republican to no party affiliation and qualified for the ballot as Alex Rodriguez. He did not disclose that he actually lived far from the district, in Boca Raton, or that the money for his candidacy came from Mr. Artiles.
In November, Senator Rodríguez, an effective legislator who had crusaded for Florida to face the climate change crisis, lost to the Republican challenger, Ileana Garcia, by a mere 32 votes out of more than 215,000 that had been cast. Alex Rodriguez had received 6,382 votes and played the spoiler.
It was a devastating loss for Florida Democrats in a year of Republican successes in the state. It was also the result of criminal behavior, prosecutors say.
[link:https://www.nytimes.com/2021/03/19/us/florida-senate-race-fraud.html|
I wonder how this kind of thing can be combatted? By doing it ourselves and running RINO candidates??? Probably better to just expose any such schemes and make the voting public aware of the fact that they are being manipulated.
DENVERPOPS
(8,806 posts)Years ago, former (awesome) Governor Dick Lamm's wife ran for the Senate. In the Dem primary she ran against a Boulder woman named Josie Heath. Dottie Lamm creamed Josie Heath and Dottie was a slam dunk to become the Senate contest winner against the Republican candidate. Everyone knew that Dottie Lamm had forgotten more than Josie Heath or the Republican candidate would ever know.
When Josie Heath lost, she immediately ran as an independent and siphoned enough votes away from Lamm that the Republican won.
It was despicable what Josie Heath did, putting her own self interest ahead of the Dem party, knowing full well she would never have near enough votes to win as an independent. She knew she would only "Split the Vote", and deprive Colorado and the Nation a senator that would have done a fabulous job.
(BTW: I am sure that the Republican Party is horrified right now that Trump may pull the same type of hit job on them in the future....)
There are a lot of people who run for the Dem ticket, who are future 'Dino's. They get the dem vote, and also a ton of Republicans who know damn well they are truly a Republican in disguise.....
I think there are states where a person can vote in the Primary for one party and vote in the election for the other. If that is correct, one party votes for the worst candidate on the other party, and would then votes for their candidate in the election. I can't remember if there are those states still.......
I am appalled that the situation exists, where the Republicans are constantly dreaming up and executing corrupt methods to tilt the elections in their direction. They totally believe, that no matter how corrupt an unethical their behavior that the end justifies the means.
The other thing that appalled me, was when I would ask customers a few weeks before the election if they had figured out who they were going to vote for. I told them I really didn't want to get in any political discussions, I just wondered if they knew which candidate they were going to vote for, and to be sure to vote.
There were an incredible number of people who told me that they hadn't, and would start listening to the TV ads by the candidates to decide. I patiently explained that I tried to research their voting records and thinking so I would truly know where that candidate was coming from, since all candidates lie their asses off, especially in the ads before election.......The other thing that appalled me was the number of Republican wives who clearly stated that they took care of the house and the kids, and the husband did the political stuff.
And that he would tell them how to vote................
And you wonder how our election system got to the place it is in now.........
LaMouffette
(2,021 posts)And you are so right that Republicans will do ANYTHING to win. Lie, cheat, steal, even kill (I'm thinking of Trump et al.'s inaction at the beginning of the pandemic when they stopped their [albeit feeble] efforts to combat Covid once reports came out that suggested the disease was mainly targeting blue states and minorities).
And also so right about how many voters form their opinions entirely based on the commercials they see. Which is why I wish the Dems would go full-on Lincoln Project, call it the "Roosevelt Project," and just plaster ads all over television and social media to tell Americans about all the good things Biden and Harris are accomplishing and all the bad things the Republicans are doing to obstruct them and make it harder to vote. And do it now, and not wait until campaign season. Just regularly pepper the public with feel-good commercials about the Dems and feel-angry commercials about the Repubs.
And yes, it's very appalling that there are still some "Stepford wives" out there who let their husbands tell them how to vote.
DENVERPOPS
(8,806 posts)on the pandemic were definitely: What would Putin do to screw the U.S. and it's people......
That is no different than every single thing that Trump and his Republicans did the entire 4+ years.
They would do or say something totally destructive to the well being of the U.S. or it's people. I have to believe that there was a back channel communication between Trump and Putin, and every day Putin would give Trump his marching orders.....Seriously
LaMouffette
(2,021 posts)Pelosi had it right when she said to Trump: "All roads with you lead to Putin."
DENVERPOPS
(8,806 posts)thru the Senate Repubs...............
Phoenix61
(17,000 posts)understanding this. Expenses are tax deductible which is why companies lease vehicles.
dalton99a
(81,432 posts)Maraya1969
(22,474 posts)Shrek
(3,976 posts)I like your OP but for it to work there has to be buy-in that those deductions are worth it.
FBaggins
(26,727 posts)They aren't.
S-corps can do that... but they aren't impacted by changes to the corporate tax rate.
And when they were progressive (ending about a decade ago), the rate was essentially the same for any income over ~$50-75k... hardly the kind of numbers that matter. The bracket starting at $75k ten years ago was 34% and the bracket for $20 million was 35%. Whoopie. I can really see that corp with $20 million in profits saying "let's build a park in WV and get our profits under $75k so that our tax rate will go down one percent!"
Manchin is arguing that corporate rates shouldn't go up as much and loopholes should be closed... and you're trying to convince him that the loopholes are what he should want?
PatrickforB
(14,569 posts)But the incentive to engage in R & D, good corporate citizenship, and new investment actually spurs innovation, helps create jobs, and may serve to diversify the economy in places like WV. Additionally, though it is in the 2017 tax cut for billionaires and corporations that needs to be repealed, opportunity zones now offer corporations a way to shelter capital gains taxes, and even permanently avoid them through capital investment in designated areas.
dchill
(38,465 posts)AllyCat
(16,174 posts)Thank you.
Wounded Bear
(58,629 posts)calimary
(81,192 posts)Trickle-down is nothing but a cutesy way of rephrasing peed on.
Wounded Bear
(58,629 posts)calimary
(81,192 posts)That glib little talking point fails to address all the boats anchored to the bottom, tied to a dock becoming lost under that rising tide, or boats with leaks or holes in them.
Pepsidog
(6,254 posts)Dustlawyer
(10,495 posts)Get rid of campaign donations, Super PACS, dark money, and the revolving door and have publicly funded elections. Make it a crime to bribe our politicians.
I bet we could legislate a fair tax code after that is done. We could then get real gun reform, climate change legislation...
The media will not speak of this because they get all of the campaign money. That brings us to the other root cause of our problems, big corporate advertisers control our media content. The best example of this is the McDonalds coffee case. National media all portrayed this case as frivolous even though the trial was public record. McDonalds was a huge advertiser so they made it seem like it was a miscarriage of justice. This is why we have so much propaganda in our media. Put a stop to that and we will not have things like Trump cultists in the future.
AwakeAtLast
(14,124 posts)Keep 'em coming!
TomCADem
(17,387 posts)...including so-called moderates like Susan Collins? Why are they getting a free pass?
The best way not to be so reliant on Joe Manchin is to beat one of the many other Republicans who are absolutely crazy.