By Brooks Jackson
Would American households (click here) really see an average income increase of $4,000 a year if President Donald Trump succeeds in cutting the corporate income tax? Don’t count on it. This claim is dubious at best.
Consider this simple arithmetic:
- There were 125,819,000 households in the U.S. last year, according to the Census Bureau. An average increase of $4,000 for each household would amount to a total income gain of more than $503 billion annually.
- But the U.S. collected just $297 billion in corporate income taxes in fiscal year 2017, which ended Sept. 30, according to the U.S. Treasury.
So let’s say that Trump’s proposal to drop the top corporate rate to 20 percent (from the current 35 percent) reduces the corporate tax accordingly by $127 billion. How can that spur an income gain of $500 billion?...
$297 billion - $127 billion = $170 billion in corporate tax to the federal government.
The president’s Council of Economic Advisers (CEA) doesn’t specify exactly how it arrived at the $4,000 per household estimate....
...In its report, the CEA adds, “When we use the more optimistic estimates from the literature, wage boosts are over $9,000 for the average U.S. household.” That would amount to a $1.1 trillion annual income gain from simply reducing a corporate tax burden that is currently only $297 billion.
That $9,000 estimate is wrong, however, according to the very economist whose work the CEA cites. Mihir A. Desai, a professor of finance at Harvard, says his work doesn’t support such a conclusion at all. He told the New York Times that the actual income gain would be $800.
“I’m a believer in corporate tax reform, and I’m a believer in corporate tax cuts, and I believe they would go to workers,” he told the Times. “But I don’t believe those numbers add up.”
It’s true that economists now generally agree that cutting the corporate rate would eventually produce some income gain for individuals, via increased business investment and worker productivity. But exactly how much remains one of the most debated subjects in economics....
Get this. The Individual Income Tax is the largest source of income to the federal treasury.
April 15, 2015 (Under President Obama)
By KP Whaley
Get this. The Individual Income Tax is the largest source of income to the federal treasury.
April 15, 2015 (Under President Obama)
By KP Whaley
It's tax deadline day, (click here) and as many people around Wisconsin file their returns with the Internal Revenue Service, it's worth pointing out that those income taxes amount to a big slice of revenue for the U.S. government — the biggest, in fact.
Lindsay Koshgarian is the research director for the National Priorities Project, a nonpartisan nonprofit group that strives to make the federal budget accessible for members of the public. She said the overall revenues the federal government will bring in this year are likely to amount to about $3.2 trillion, with almost half of that coming from individual income taxes....
For the sake of argument, let's say the INDIVIDUAL income and others are the same as 2015 at $3.2 trillion for 2017. The corporate income tax that closed out the end of September is $297 billion. That would leave the rest of the country to pay $ 2,903,000,000.
$297 billion is 9.3 percent of the income to the federal treasury with a continuing deficit and debt.
The INDIVIDUAL pays through payroll taxes and direct pay to the treasury 79.1 percent of the income received by the US Treasury.
There is a very big IF not accounted for by the author above. He does not discuss the TREND by corporations to invest abroad. Mr. Trump knows corporations are investing abroad and/or simply offshoring funds because he talks about repatriating foreign monies all the time.
So, while there is SPECULATION (otherwise known as gambling) a cut in corporate taxes MIGHT bring about some jobs hence an increase in household income for working harder; it won't make a significant difference in the USA where corporate investment is low.
When corporations invest in the USA where exactly are they investing? They are looking for the guaranteed rate of interest, no different than the average American.
March 28, 2017
By Daniel Kruger
...The Treasury's new rival: corporate America. (click here)
"Facility Executive" (click here)
The INDIVIDUAL also helps pay corporate taxes.
...The nonpartisan Congressional Budget Office — which had previously assumed that stockholders bore the entire burden of the corporate income tax — revised its thinking in 2012 and began assuming workers bear 25 percent.
And the following year, the equally nonpartisan staff of the Joint Committee on Taxation — the in-house tax experts for Congress — also began assuming that workers bear 25 percent of the corporate tax burden.
The nonpartisan Tax Policy Center didn’t go quite as far, but even it began in 2012 to assume that 20 percent of the corporate tax ultimately falls on workers....
Corporations are people too, my friends. So why are they making their employees pay their taxes?
Who Pays Taxes? (click here)
In its analysis, CBO assumed that households bear the economic cost of the taxes they pay directly, such as individual income taxes and the employee’s share of payroll taxes. CBO further assumed—as do most economists—that employers pass on their share of payroll taxes to employees by paying lower wages than they would otherwise pay. Therefore, CBO included the employer’s share of payroll taxes in households’ before tax income and in households’ taxes.
CBO also assumed that the economic cost of excise taxes falls on households according to their consumption of taxed goods (such as tobacco and alcohol). Excise taxes on intermediate goods, which are paid by businesses, were attributed to households in proportion to their overall consumption. CBO assumed that each household spent the same amount on taxed goods as a similar household with comparable income is reported to spend in the Bureau of Labor Statistics’ Consumer Expenditure Survey....
There is no need to lower income tax rates to corporations. As a matter of fact the loopholes need to be closed and the law regarding payment of payroll withholding tax be paid directly from the company while upholding the wages already in place.
UNIONS, UNIONS AND MORE UNIONS. Is there any reason why they are hated?
Corporations in the USA enjoy a great deal of "Corporate Welfare." There are laws currently that, if enforced, would immediately improve the wages of workers. Corporations pass all their costs onto employees and/or consumers. It is "Corporate Welfare" and it should not be tolerated.
So, Trump's assuming if there was a tax cut, corporations would change their methods of taxing the individual to pay their corporate taxes. That is a lie. There are no guarantees corporations will finally pay their own taxes. None. The laws that exist should be enforced to return FULL wages to the employees.
Now, this method of having the employees pay their taxes in lower wages DEFINITELY IS TAXATION WITHOUT REPRESENTATION!
...Finally, a word about the track record of the man behind the $4,000 claim, Kevin Hassett, chairman of Trump’s Council of Economic Advisers.
Hassett is co-author of “Dow 36,000,” which was published in September 1999 when the Dow Jones Industrial Average was hovering below 12,000 after a big run-up during what we now call the dot-com bubble. Rather than tripling in value, as Hassett and co-author James Glassman argued was possible and justified by stock values, the DJIA sank to just above 7,700 three years later, in September 2002. And it didn’t top 12,000 until October 2006, seven years after the book was published.
Now the Dow is over 23,000, but still a long way from 36,000 more than 18 years after Hassett’s book appeared....
For the sake of argument, let's say the INDIVIDUAL income and others are the same as 2015 at $3.2 trillion for 2017. The corporate income tax that closed out the end of September is $297 billion. That would leave the rest of the country to pay $ 2,903,000,000. $297 billion is 9.3 percent of the income to the federal treasury with a continuing deficit and debt.
The INDIVIDUAL pays through payroll taxes and direct pay to the treasury 79.1 percent of the income received by the US Treasury.
There is a very big IF not accounted for by the author above. He does not discuss the TREND by corporations to invest abroad. Mr. Trump knows corporations are investing abroad and/or simply offshoring funds because he talks about repatriating foreign monies all the time.
So, while there is SPECULATION (otherwise known as gambling) a cut in corporate taxes MIGHT bring about some jobs hence an increase in household income for working harder; it won't make a significant difference in the USA where corporate investment is low.
When corporations invest in the USA where exactly are they investing? They are looking for the guaranteed rate of interest, no different than the average American.
March 28, 2017
By Daniel Kruger
...The Treasury's new rival: corporate America. (click here)
Companies including Ford Motor Co., Applied Materials and Rockwell Collins are joining the what has been a record $1.1 trillion rush to the bond market through March 24, according to Bloomberg data. The stampede comes as the European Central Bank's bond purchases are culling a large portion of company debt available in Europe. And, perhaps more importantly, as investors continue to seek opportunities to lock in the highest available yields consistent with relatively low credit risk. It also comes as President Trump is pushing an agenda that includes tax cuts, infrastructure spending and deregulation, which if enacted are expected to boost corporate profits...
It isn't as though corporations are abandoning the USA. That is not the case. There is a reason why unemployment has been low. There is definitely investment in the USA, including the construction sector."Facility Executive" (click here)
The INDIVIDUAL also helps pay corporate taxes.
...The nonpartisan Congressional Budget Office — which had previously assumed that stockholders bore the entire burden of the corporate income tax — revised its thinking in 2012 and began assuming workers bear 25 percent.
And the following year, the equally nonpartisan staff of the Joint Committee on Taxation — the in-house tax experts for Congress — also began assuming that workers bear 25 percent of the corporate tax burden.
The nonpartisan Tax Policy Center didn’t go quite as far, but even it began in 2012 to assume that 20 percent of the corporate tax ultimately falls on workers....
Corporations are people too, my friends. So why are they making their employees pay their taxes?
In its analysis, CBO assumed that households bear the economic cost of the taxes they pay directly, such as individual income taxes and the employee’s share of payroll taxes. CBO further assumed—as do most economists—that employers pass on their share of payroll taxes to employees by paying lower wages than they would otherwise pay. Therefore, CBO included the employer’s share of payroll taxes in households’ before tax income and in households’ taxes.
CBO also assumed that the economic cost of excise taxes falls on households according to their consumption of taxed goods (such as tobacco and alcohol). Excise taxes on intermediate goods, which are paid by businesses, were attributed to households in proportion to their overall consumption. CBO assumed that each household spent the same amount on taxed goods as a similar household with comparable income is reported to spend in the Bureau of Labor Statistics’ Consumer Expenditure Survey....
UNIONS, UNIONS AND MORE UNIONS. Is there any reason why they are hated?
Corporations in the USA enjoy a great deal of "Corporate Welfare." There are laws currently that, if enforced, would immediately improve the wages of workers. Corporations pass all their costs onto employees and/or consumers. It is "Corporate Welfare" and it should not be tolerated.
So, Trump's assuming if there was a tax cut, corporations would change their methods of taxing the individual to pay their corporate taxes. That is a lie. There are no guarantees corporations will finally pay their own taxes. None. The laws that exist should be enforced to return FULL wages to the employees.
Now, this method of having the employees pay their taxes in lower wages DEFINITELY IS TAXATION WITHOUT REPRESENTATION!
...Finally, a word about the track record of the man behind the $4,000 claim, Kevin Hassett, chairman of Trump’s Council of Economic Advisers.
Hassett is co-author of “Dow 36,000,” which was published in September 1999 when the Dow Jones Industrial Average was hovering below 12,000 after a big run-up during what we now call the dot-com bubble. Rather than tripling in value, as Hassett and co-author James Glassman argued was possible and justified by stock values, the DJIA sank to just above 7,700 three years later, in September 2002. And it didn’t top 12,000 until October 2006, seven years after the book was published.
Now the Dow is over 23,000, but still a long way from 36,000 more than 18 years after Hassett’s book appeared....
