On Obama's tax proposal: why not just propose a MINIMUM tax corporations must pay?

[yurbud]

Regardless of deductions, credits, and so on?

Then let REPUBLICANS bring up lowering the the upper end, and haggle to a little of both?

[NoOneMan]

1. What about small corps?

Like two guys working together to do landscaping and really not making any profit after paying themselves?

Long time ago I used to do S-corp, and pass through profits as wages (so wages were taxed at normal rates). S-corp paid no taxes from that. Seems reasonable. I think if this was situation, I would of setup a Sole Proprietorship to avoid the extra tax, but then that leaves you vulnerable to liability issues.

[FBaggins]

2. It need not be a minimum dollar amount

a minimum rate would suffice.

A corporate alternative minimum tax.

[NoOneMan]

3. Rate on what?

Gross or profit? Profit normally makes sense, which is why focusing on deductions helps fix that issue

[FBaggins]

5. Either could work

Or on sales

[LonePirate]

9. Gross. Far too many Hollywood movie studio accounting tricks exist to show no profit.

[NoOneMan]

10. Well, if your talking about reform, seems like those tricks arent a bad place to get started

But anyway. DOA

[yurbud]

4. set a minimum size for the minimum tax like they do with the estate tax

[NoOneMan]

6. Yeah, thats an idea

Or a slider

[Travis_0004]

7. You could still set up a LLC if you wanted to have corporate income taxes.

If you don't want S corp tax structure, then you can set up your business like a C corp, and make it a LLC. Of course this brings up issues like retained earnings, and double taxation etc, as well as a more complicated taxes.

I think if you are an S corp, then your corporate tax rate should be 0 (which it is), and you should pay your taxes like you normally do.

I disagree with the OP. Minimum taxes are a horrible idea. What about businesses that show a loss? Are you going to require them to pay taxes? What needs to happen is to eliminate dedications that allow businesses to pay 0 tax.

[cthulu2016]

8. Because that would be a FEE

If a corporation loses money *for real* there's no reason for it to pay taxes.

Tightening loopholes can prevent a profitable company from being unprofitable on paper for tax purposes, but some companies do actually lose money or make very little, and they should not be taxed merely for existing.

[Motown_Johnny]

11. It could be on profits.. even the first $100,000 could be tax free

so that smaller businesses have a chance to grow and reinvest.



But a 5% minimum on net above $100,000 isn't unreasonable.

[B Calm]

12. They would scream bloody murder. They'll send jobs overseas, blah, blah, blah

Truth is they don't pay taxes and don't plan to.

[KharmaTrain]

13. Minimum Tax = Flat Tax...

...and always hurts the small business that is struggling to keep going while a large corporate will always find loopholes and other ways to pay the bare minimum and then find even further holes to pay even less. Taxing earnings rather than profit..a big difference...earnings are what is left over after all the bills are paid and go to the stockholders...those should always be taxed and a "floor" can be set (15%). If revenues/profits aren't taxed as hard then money can be re-invested and passed along to employees rather than in some fat cat's bank account...