Saturday, May 6, 2017

Timely Tax Topic: Trump's Troublesome Tax Tricks

Trump's View of America

From Hoover to Obama
(Show this to Mr. Trump, Mr. Mnuchin)
[Click image for larger view]

Part of the “Trump Tax Plan” the biggest in American history he is boasting already here from NPR and from CNBC.

Part of all that may become reality since we have an all-GOP government across the board, and once again we still hear their chatter, the same old, same old GOP BS tax line: “Corporate taxes are too high.”

1.  Fact: The top federal tax rate on businesses currently it set at 35%.

2.  Fact: Donald J. Trump wants to slash that number to 15%.

The reality as the late great Paul Harvey used to say: “Now, the rest of the story” is these few tidbits:

1.  A tax cut of that magnitude would be a huge boon for profits and stocks for sure,

2.  It would also swell the national debt by billions, if not trillions – and that debt now exceeds some $20 trillion.

3.  Congress along the way to helping Trump get what he wants for big business will surely feel pressure to close many loopholes that let many companies whittle their tax bill down to single-digits. (Which I might add: We have heard it all before).

Now, the real story – for starters: The U.S. effective corporate tax rates are not the 354% burden GOPers claim it is:

1.  The U.S. top statutory tax rate of 35% is in fact somewhat higher than that of 30 of the 35 current OECD countries, but the average effective tax rate — that is: the actual rate paid after deductions and credits — is slightly lower than our competitors, according to the Congressional Research Service (CRS).

2.  Several studies have found that U.S. corporations pay a similar or lower effective tax rate — the rate actually paid — than corporations in other countries.

Four Examples:

1.  The U.S. average effective tax rate is 27.1% compared with 27.7% for the other OECD countries (CRS report).
2.  Profitable corporations paid U.S. income taxes amounting to just 12.6% of worldwide income in 2010 (GAO report).

3.  A survey of 288 corporations, which included most of the Fortune 500 corporations that were profitable each year from 2008 through 2012, found that they paid an average effective federal tax rate of just 19.4% over that period (CTJ survey).

4.  Of 125 corporations in that study that had significant foreign profits, 82 (two-thirds) paid a higher effective rate to foreign governments than they paid to the U.S. (CTJ report).

Irony: Some U.S. Corporations pay nothing in taxes

1.  General Electric, Boeing,, Verizon, and some 22 other profitable Fortune 500 firms paid no federal income taxes from 2008 through 2012 (CTJ report).

2.  Also, 111 profitable Fortune 500 firms paid zero federal taxes in at least one of those same five years.

Double Irony: General Electric, one of the most notorious corporate tax dodgers, actually got a $3.1 billion refund on their $27.5 billion in profits from 2008 to 2012 (Note: That means they paid less in federal income taxes in five years than a single American family pays in one year).

GOP Myth “Lower tax rates boost growth and jobs” (Hint: No, they do not)

A cut in the statutory rate from 35% to 25% would increase economic output by less than two-tenths of one percent, (CRS report).

Economic growth over the past 60 years has actually been stronger when corporate tax rates were higher, (EPI data).

U.S. corporate tax rates also are not hurting profits — before-tax and after-tax corporate profits as a percentage of national income are at post–World War II highs.

The real Myth Kicker: There is no relationship between cutting corporate tax rates and job growth (The Center for Effective Government).
Two facts:

1.  Twenty-two of the 30 profitable Fortune 500 companies that paid the highest tax rates (30% or more) from 2008 to 2010 created almost 200,000 jobs between 2008 and 2012.

2.  The 30 profitable corporations that paid little or no taxes over those same three years collectively shed 51,289 jobs between 2008 and 2012.

Yeah, vote GOP, right? Help keep the tax BS train rolling along while blaming everyone except your side, um, right. You betcha’…

Thanks for stopping by and sharing their BS – make sure your mask is tight and the filters are new.

Main source for the info I gathered for this post from here. (A great link I might add).

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