One of the
videos that seemed to interesting me was when the author said that even though
the effective corporate tax rate goes down the government's tax revenue stays
more or less constant. The aspect of that argument coming to my attention is
that not income taxes are also paid by individuals, so corporations being taxed
less does not mean individual tax rates are any lower than they previously
were. This may cause the total tax revenue to remain fairly constant. Also, it
was very interesting to learn that the implicit marginal tax rates means people
who earn $20,000 per year are no worse or better off than people earning
$45,000 per year. To me, that means there is little incentive for people to
actually get promotions or higher paying jobs that can be more demanding or
difficult. In another sense it may be a good thing that people who earn less
are just as well off as those who earn well. Also, since corporations don't pay
taxes and rather the workers, consumers, or investors pay those corporate taxes
it raises the question of who corporations really are. I want to say that
corporations are not specific individuals and are rather entities, so saying
that they don't pay taxes seems to be assuming that corporations are some sorts
of individuals. I do not understand the argument that corporations do not pay
taxes because corporations are a group of people authorized to act as a single
entity and legally recognized as such, so when those individuals pay the taxes,
to me, it is the same thing as the corporation paying the tax. Furthermore, if
a corporation did not have to pay any taxes whatsoever it would likely be far
better off because it earnings would increase and that would drive its market
value up, so in a sense they do indeed pay a tax. I am not an expert on
taxation, so it's hard for me to understand how exactly effective tax rates are
calculated for corporations. Still, I don't think saying that corporations
don't pay taxes is entirely true when people make up the corporations.
If the fed tax rate goes down, there is more incentive on the market side. This could help account for little change in revenue. Esp business rates, as pointed out- they collect lots of tax money. Give them more incentive to be in business and you could possibly make more with lower taxes.
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