I was curious and looked up this claim. Turns out PolitiFact looked into it: http://www.politifact.com/punditfact/statements/2014/sep/09/...

The conclusion:

  Bolling said the United States has "the highest corporate tax rate in the free
  world." He was referring to the statutory rate, meaning the rate before
  deductions. On that score, he’s right: The United States does have the highest
  statutory rate among developed countries. However, the United States’ corporate
  tax rate doesn’t appear to be the highest once deductions and other exclusions
  are taken into account.

I found it an interesting article so I decided to share.

The US effective corporate tax rate tends to be 25% to 27% in normal times, which is still one of the highest effective tax rates in the world. The median S&P 500 effective tax rate is 30%, also one of the highest rates in the world.

You often see 12% or 13% bandied about as the effective rate, but that's intentional intellectual fraud: they refer to 2010 numbers, when the US was coming out of the great recession and corporations had lost a ton of money.

There's also some countries that have relatively "low tax rate" but very high social security costs which are not always counted as tax rates by studies.

And not all those costs can be credited against US taxes on repatriation, so double taxation scenarios exist.

Nice usage of the word 'confiscatory'. My experience with people who use this word in relation to taxation is that they use it in derogatory sense and is used primarily by conservatives and libertarians. I don't know if that is the case for you. What do you consider the optimal corporate tax rate? You said 10% is high enough. Do you think it should be 0%?

If you are in the libertarian and/or conservative branch of U.S. politics why do you look to other countries' tax rates for guidance on what our tax rates ought to be? I have been under the impression that looking to other countries for guidance on our social policy is bad and contrary to the notion of exceptionalism.

The U.S. uniquely, I believe, considers corporations persons. Hence the Citizens United decision. Given this shouldn't the tax rate on these citizens be the same as on other citizens with like earnings?

There is no sense setting up a strawman about a topic, exceptionalism, which the parent did not even raise or mention.

Blaming Citizens United (certainly a harmful decision) on corporate personhood is, while popular, unduly reductive; the actual ruling was more about freedom of association. Even in the context of the debate about corporate personhood, your rhetorical question about tax rate is pure demagogy.

Have you ever heard of someone refer to taxes as confiscatory and it be the case that that person is not a conservative or a libertarian who holds the beliefs mention in my post? I haven't but I did acknowledge that perhaps those beliefs were not shared by the person I responded to. Thus the questions I asked. It was not demagoguery. The argument was quite rational.

People who refer to taxes as confiscatory rather than as being too high are attempting to frame the topic of taxation as it being, necessarily, wrong. It's a ridiculous starting point. These same people almost always scoff at arguments that the U.S. ought to adopt some social policies because all other industrialized nations have them. It is, with this fact in mind, quite rational to ask why looking at the corporate tax rate of other countries is a good argument.

Why is it demagoguery to ask why a person in the form of a corporation should pay less in taxes than a person in the form of a human?

I appreciate you responding to my criticism. The first part - there is definitely an association between believing A and believing B, but I don't think it's fair to assume B when they only talked about A.

As for what I called demagoguery: I mean, corporations are considered legal persons in most countries - that's where the word corporation comes from - which is what allows them to own property, enter into contracts, etc., as well as to violate the law. So then the US has been more uniquely inclined to allow corporations to claim rights originally intended for natural persons (such as free speech, contract rights, property rights, rights of the accused); and there is valid criticism of that idea for various reasons, the most obvious one being that they're very different from actual people, so Congress should have to explicitly decide what privileges corporations should have rather than the judicial system tacking on existing ones. But on the other hand, it's not completely ridiculous to say that since corporations and people have similar sets of abilities in the eyes of the law, the same principles should apply, especially with respect to commerce.

Even in the case of corporate free speech, there are certainly situations where governmental restrictions on a corporation's speech would feel fundamentally wrong - e.g. suppose Congress decided political activism groups, from the EFF to the NRA, were only allowed to use corporate funds to spread their message at all if Congress liked them. Citizens United, as I said, approached this in terms of freedom of association more than corporate personhood, but neither does it seem immediately absurd to try to solve it the latter way. (Incidentally, the need to find, and the partial arbitrariness of, a dividing line between that example on one hand which should have constitutional protection, and super PACs on the other which should not, is why "corporations aren't people" is a bit simplistic as an approach to solving the Citizens United problem. You really don't want to remove protection from the former.)

Anyway, it seems self-evident that corporations and individuals need at least somewhat separate treatment by tax law (e.g. because of the double taxation issue when corporations pay out earnings to shareholders). Given that corporate personhood in general is not fundamentally and irrevocably an evil or unfair idea, merely specific implementations of it, it's not fair to be reductive and say that the person analogy must be taken to absurd extremes.

I agree with corporations who attempt to legally pay as little taxes as possible. That's what I do. If someone doesn't like it, then get the laws changed.

Yeah, why dont the poor and downtrodden just pay their lobbyists to change the law of the land... what?

The corporations have the money and the drive to get the laws changed, who else does?

I was hoping someone would start a popular kickstarter style site for this.

It seems pretty simple to me. If you want your laws changed, pool your money and go lobby the gov't just like every other corporation.

That exists: Mayday PAC. Lawrence Lessig organized it last year. They raised $11 million and tried to influence some key Congressional races, but it didn't really work. Now they're trying some different things:

https://medium.com/@lessig/we-tried-we-learned-we-re-trying-...

Interesting link, but $11 million bucks is probably not enough to buy even a single Senator, even if his district is an extremely cheap media market.

A recent Senate campaign in one of the nation's cheapest media markets (Jon Tester's) was run for ~15 million bucks[0] in coordinated campaign funds, plus probably-larger undisclosed amounts of "independent" campaign funding through PAC's etc.

In the same cheap media market, Senator Max Baucus raised >$5 million[1] for the coordinated campaign in his final Senate race, in which he ran effectively unopposed. Again this $5 million does not account for his pre-existing war chest from thirty five years of Senate campaigns or the (vastly larger) fundraising of his GlacierPAC or other related "independent" political organizations.

So the minimum single-senator campaign cost is probably somewhere between those two bounds. Therefore I don't regard the core idea of Mayday PAC as a failure; instead it seems like they need to scale it before we can decide if it's workable.

[0] http://www.opensecrets.org/politicians/summary.php?cid=n0002...

[1] http://www.opensecrets.org/politicians/summary.php?cid=n0000...

Yeah! None of this one-man-one-vote crap, back to some good old fashioned plutocracy. After all if the top 10-20% own 90% of the wealth, it's only right and proper that they also own an equivalent share of the political power. ;-)

Nobody said it was right, just that it's less bad than having just the rich lobbying.

Do you play board games?

Any rule set can be gamed / broken.

To keep the game going, sometimes players just need to do the right thing, thereby honoring other player's investment in the game.

And law is so much more complicated than a board game.

https://en.wikipedia.org/wiki/Gödel%27s_incompleteness_theor...

Changing the laws requires a sizable investment in lobbyists and bribe money before any ROI can be achieved. Most individuals simply don't have enough taxable income to make the investment worthwhile. Megacorps do. The situation is not morally symmetrical and not practically symmetrical.

How come 10% is high enough for corporations but I pay a lot more than that in income taxes. Shouldn't it be the other way around?

I think it could be either way, but many object to the fact that it is both. In other words, corporate tax is seen as double taxation, since the earnings (after taxes) are then passed on to shareholders, who pay tax on it again.

I could see a coherent tax code that taxes corporations, but not individuals, or one that taxed individuals, but not corporations (Of course with either of these there would no doubt be all sorts of new loopholes to deal with). But taxing both seems odd to me.

I'm not sure how the tax system works in the US, but I was just talking to my accountant about this issue the other day.

In Australia, my company gets taxed at a flat 30% on all profits in a year. If I want to take cash out of the company after that tax has been taken, I pay "top-up" tax that brings the total tax paid to the level of my income tax rate.

For example, if the company earned $10000, after all expenses, then it would pay $3000 in tax, leaving $7000 left that I can take out. If I earned no money in the year, my income tax rate is 0%, so the top-up tax is -$3000 (I.e. I get a tax refund for $3000). If I earned $50000 in the year, then my income tax rate is 32.5%, so I would have to pay top-up tax of $250 (I.e. 2.5% of the original $10000, which has already been taxed 30%).

Double taxation shouldn't happen, and while my company was set up for tax minimisation purposes, international corporations are able to do an insane level of fuckery to avoid almost all taxation.

Isn't double taxation really a choice that the owners make? I.e. an unlimited liability company wouldn't be taxed twice. In essence, corporate tax is a fee for the legal protection given by a corporation/limited liability entity.

By the double tax hypothesis, how come then I have to pay sales tax on things I buy using money I earned from income that's already been taxed.

It's only considered "double taxation" when the tax hits wealthy people[1]

1: http://assets.amuniversal.com/921b06d016420130ff2c001dd8b71c...

Sales taxes are deductible in the US, sort of. You can deduct either state and local sales taxes or state and local income taxes. No idea what the rationale for that is, but if you live in a State with no or very low income tax and deduct your sales taxes, it's kind of like you're not getting taxed twice.

http://www.irs.gov/Individuals/Sales-Tax-Deduction-Calculato...

If there are loopholes allowing corporations to not actually pay their taxes and the capital gains tax rate is a fraction of the income tax rate, is it really fair to call it double taxation?

Corporations are just a straw man. Any profit that a corporation makes is either held as cash, reinvested by the corporation, or returned to the owners of the corporation (i.e. shareholders) as dividends. The profit that's held and reinvested is intended to generate even more profits in the future, which means that eventually, all of a company's profit makes its way back to individual shareholders. Those shareholders, in turn, pay income tax on those dividends. So a corporation's profit is already taxed at the point where it performs the intended purpose of corporate profits--to provide income to the shareholders.

Taxing corporate profits directly at all only accomplishes the following things:

* The profits that are redistributed to shareholders end up being double-taxed; the corporation pays tax on them, and then distributes them to shareholders who pay income tax on them.

* The profits that are reinvested end up being taxed, which reduces the amount that the corporation can reinvest. This directly reduces economic activity, since reinvestment often manifests itself in things like hiring and construction; in other words, increased economic activity. In practice, it might be possible to avoid taxes on these reinvestment activities by accounting for them as expenses and saying, "I guess we didn't make any profit this quarter".

* The profits that are held as cash are taxed, and this isn't actually as big of a deal unless the company is building up a massive stockpile to reinvest later, but in this case it would be fairer to just tax a corporation's cash holdings directly. This would also incentivize corporations to either reinvest their profits or distribute them as dividends, either of which is better for the economy as a whole.

I think in some ways, you have a fiduciary responsibility to your shareholders to use reasonable means to maximize the value of your company. It seems to me that includes both operational efficiency and prudent use of available tax breaks.

I'm uncomfortable with the line of reasoning that we "can't do anything until we change the system," but I do wonder how Wall Street would react to a company that decided for moral reasons to avoid the schemes and pay more taxes.

Except you actually don't and this has been a myth that has continued to plague any type of discussions like this.

Where is the western world has lower tax rates than the US?

Edit: answered above.

US taxes contribute more to violent deaths and unnecessary punishments/imprisonments per dollar than taxes paid in most other countries. The US spends a greater proportion of GDP on "defense" than almost all other Western countries, so a tax dollar paid in the US is more likely to contribute to "defense" and less likely to contribute to education, healthcare or whatnot than a tax dollar paid in e.g. Sweden or Holland. Similarly, the US has 25% of the world's prison population yet only 5% of its total population, so necessarily spends a relatively higher percentage of tax dollars on incarceration.

There are actually people who do everything they can to minimise their tax liability in order to reduce the money spent on things they consider unjust: https://en.wikipedia.org/wiki/Tax_resistance.

Every dollar not paid in US tax is a dollar that won't contribute to blowing up people in the Middle East who have the misfortune of being in proximity to suspected terrorists (tens of thousands of people over the past decade) [1]. Similarly, every dollar not paid in US tax is a dollar that won't be spent putting poor people in prison for smoking a weed that causes less violence in a decade than alcohol causes in a day.

https://en.wikipedia.org/wiki/Civilian_casualties_in_the_war...

I hope the people who are avoiding tax are donating their avoided taxes to their local schools and hospitals.