Monday, March 02, 2009

Corporate Income Tax = $3,190 Per Household



Washington, DC- Today, The Tax Foundation started running a 30 second television ad (click the arrow above) and a 60 second radio ad in the Washington, D.C. market to educate Americans about the burden that American families bear from the corporate income tax.

Most people think that corporate income taxes are paid by wealthy, anonymous companies," said Scott Hodge, President of the Tax Foundation. "But as economists have been teaching for years, people bear the burden of corporate taxes, not companies."

Research from the Congressional Budget Office shows that in a global economy where capital is highly mobile but workers can't easily move abroad, workers end up bearing the brunt of corporate taxes. In 2007, Economist William Randolph found that 70% of corporate tax burdens fall on employees through lower wages and productivity, while the remaining 30% fall on company shareholders. A recent Tax Foundation study shows the federal corporate income tax alone collected $370 billion in 2007. That's an average household burden of $3,190 per year - more than the average household spends on restaurant food, gasoline or home electricity in a year.

"Typically, the argument for cutting the U.S. corporate tax rate centers on improving the ability of American companies to compete globally," said Hodge. "While true, those arguments overlook the fact that individual households bear the corporate tax burden, and their pocketbooks will benefit most from reform."

15 Comments:

At 3/02/2009 5:22 PM, Anonymous Anonymous said...

The Russian bride bit near the end won't influence friends and win folks over!

 
At 3/02/2009 5:50 PM, Blogger Trevre said...

It doesn't really matter where taxes are taken from, at the end of the day it comes out of taxpayers' pockets. Although as you have noted in previous posts the top 5% percent of the highest income earners in America pay 60 percent of the total tax revenue collected by the federal government. It is likely that this is also true with corporate taxes (i.e., the top 5 percent of the highest income earners pay a majority of this corporate tax).

At the end of the day I don't care how much tax I must pay as long as the government can justify to me that it is money well spent (good luck). Hopefully Obama's line by line look through the budget can improve the portion of my tax dollars that are well spent and if possible reduce the total taxes we all have to pay.

 
At 3/02/2009 6:36 PM, Blogger OA said...

I agree, why take a completely reasonable ad and throw in the Russian Bride thing?

That's as creative as they could get? Why not 80 barrels of oil or 1,200 gallons of gas?

 
At 3/02/2009 11:26 PM, Anonymous Annonymous 4:26 AM said...

I thought the russian bride was hilarious.

 
At 3/03/2009 12:38 AM, Anonymous t jefferson said...

Corporation have a social resonsibility to the the communities they reside in. I really doubt if Corporate taxes went away that the workers would see any benefit. The less you consume the less the burden you will have.

 
At 3/03/2009 2:46 AM, Anonymous Anonymous said...

Nothing says, "I'm a naive goober!" more than "Hopefully Obama's line by line look through the budget..." If you really think that the Marxist-in-Thief is going to veto any spending on liberal wet-dream programs, you are living in an alternative universe. Or did you not take notice of his deleterious budget proposal? It is your brand of "progressive" ignorance that will ruin this once-great nation.

 
At 3/03/2009 4:28 AM, Blogger randian said...

Corporation have a social resonsibility to the communities they reside in.

No they don't. Their only responsibility is to refrain from harming others.

 
At 3/03/2009 9:49 AM, Anonymous Anonymous said...

Obama is running out of people to blame:

So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter.

What is new is the unveiling of Mr. Obama's agenda and his approach to governance. Every new President has a finite stock of capital -- financial and political -- to deploy, and amid recession Mr. Obama has more than most. But one negative revelation has been the way he has chosen to spend his scarce resources on income transfers rather than growth promotion. Most of his "stimulus" spending was devoted to social programs, rather than public works, and nearly all of the tax cuts were devoted to income maintenance rather than to improving incentives to work or invest.

Link

 
At 3/03/2009 9:53 AM, Anonymous Anonymous said...

Upper-Income Taxpayers Look for Ways to Sidestep Obama Tax-Hike Plan‏

Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., said that she too is trying to figure out ways to get out of paying the taxes proposed in Obama's plan.

"I've put thought into how to get under $250,000," said Poczatek. "It would mean working fewer days which means having fewer employees, seeing fewer patients and taking time off."

"Generally it means being less productive," she said.

"The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make," said Poczatek. "But if I'm going to be working just to give it back to the government -- it's de-motivating and demoralizing."

Link

Not to worry, I'm sure that the leftists who post here will be only to willing to step up and provide employment and pay more taxes.

 
At 3/03/2009 10:04 AM, Anonymous Anonymous said...

I really doubt if Corporate taxes went away that the workers would see any benefit.

It's amazing how this line of ignorant, leftist drivel has penetrated and infested the weak minded.

Workers in capitalist, free market economies have ALWAYS done better than those who have slaved under the socialist boot.

You need to get your head out of your liberal arts professors ass and start reading history. And I don't mean Chomsky and Zinn.

 
At 3/03/2009 4:20 PM, Blogger 1 said...

Applause to Craig Kirchoff for coming up with the Russian bride bit...

Hilarious!

"The Russian bride bit near the end won't influence friends and win folks over!"...

Must be Obama voters you are talking about...

They're a lost cause anyway...

 
At 3/03/2009 4:36 PM, Anonymous Jed said...

Trevre nailed it. I got my whopping $600 payment a while back - and being a good guy, I invested it and now have about $350 to show for it for unexplained reasons. Meanwhile my property taxes go up 10% every year supposedly because the fed is cutting funding to the states. Everybody’s sales tax is up from 20 years ago. Where does it stop?

Now we’re throwing money at financial wizards who have lost billions. Since we don’t want to tax corporations, we’ll just dump all of the burden on Joe Schmo? The taxes are never going away as long as we have a deficit, a condition headed for permanence when we are handing cash to those who shouldn’t get it.

Mortgage deadbeats, Detroit, Wall street, whoever. You made your choices – live with them.

 
At 3/04/2009 12:03 AM, Anonymous t jefferson said...

To Anonymous

The local cement plant got all kinds a local tax breaks. A year and a half later my property taxes went up to make up the short fall and the workers haven't seen any wage increases. Take your books and stuff em! I am living reality.

 
At 3/04/2009 1:16 AM, Anonymous Anonymous said...

Your local tax problem is between you and your local government T Jeff.

It has nothing to do with the fact that corporate taxes are paid by the consumer. Raise them and consumers pay more or jobs are lost. Lower them and consumers benefit and/or jobs are created.

More jobs, better pay, and cheaper products are good, right?

Then lower taxes and watch the economy grow.

Both Reagan and JFK understood this and implemented it.

Reality, I'd like you to meet T Jeff. T Jeff, meet reality.

I have a hunch you two won't get along though.

 
At 3/13/2009 9:03 PM, Anonymous DougV said...

"It has nothing to do with the fact that corporate taxes are paid by the consumer. Raise them and consumers pay more or jobs are lost. Lower them and consumers benefit and/or jobs are created."

Gosh, Anonymous. I suppose that you are correct. There MUST be only two possible outcomes when corporate taxes are lowered - a benefit to consumers (presumably through lower prices) or the creation of more jobs.

Correct me if I'm wrong, but (ostensibly) corporations are taxed only on their profits at the federal level. Create more jobs -> pay more people -> have less profit -> pay less taxes - REGARDLESS OF THE TAX RATE.

Or, an oligarchy of incredibly wealthy individuals could, instead of paying more people a reasonable/decent wage, just provide exorbitant compensation packages to other oligarchs positioned as top executives.

Average CEO salary-to-minimum wage ration in 1965: 51:1; in 1992: 319:1; in 2005: 821:1

"...lower taxes and watch the economy grow."

Indeed.

 

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