And we want to know who the profits belong to? According to some who visit this blog, we are not wise enough to determine at this point, but we do believe the profits after fair taxes paid to the US Government, should accrue to the corporations. Let us see what Big Government via Ben Shapiro has to say:
As usual, the left is wondering whether corporations pay their “fair share.” This time, it seems they may have a point. As Time magazine reported yesterday, a recent Wall Street Journal study of Congressional Budget Office statistics showed that American corporations paid an effective tax rate of 12.1% last year. That’s the lowest number in four decades, despite a nominal tax rate that runs 35%, second only to Japan’s 39.5%; if you include state corporate taxes, America is now number one in the world.
Now, focus your eyes on the last link in the above quoted paragraph. Click on the link, read the material and then come back. Perhaps it was not what you expected; perhaps you were already well versed on the information found in the linked article. How about this then from Shapiro’s article:
So why the low effective tax rate? According to both the Journal and Time, it’s due to a corporate tax break set into the stimulus package, which allowed corporations to use an accounting trick: they could take write-offs on capital investments all at once rather than over time. Typically, you take a tax write-off as the value of a good depreciates – if you buy a computer, it loses value over time, and you write that in your tax returns. Under the stimulus package, you were allowed to basically write off the whole purchase. The result was huge write-offs for corporations.
Now, normally, this wouldn’t be a bad thing.
We’d expect corporations to take that money and dump it back into the economy by hiring and producing new products. But that hasn’t happened – largely because this is a tax break rather than a permanent tax situation. In other words, at some point, we’re going to go back to the old system, taxes are going to hike, and the corporations are saving up for a rainy day.
Pay attention to a few key phrases or words in the two paragraphs above:
- stimulus write-offs
- all at once
- result was huge write-offs
- all at once
- normally not a bad thing
- we would expect corporations to dump the money back into economy by hiring and producing new products
- that hasn’t happened because this was a tax break
- at some point, we’re going back to the old system, taxes will hike, and the corporations are saving up for a rainy day
Got that? Yes I know, the short clipped phrases sound or look like a bunch of Occupiers following their cheerleaders while making silly little hand-signals. Nevertheless, you get the idea. I could quote the rest of the article, but then you’d be depending on me to bring the gist of the article to you. I’d much rather have you read it for yourself. The link is just below … enjoy.
- The Corporate Tax Rate Is Lowest in Decades; Is Business Paying It’s Fair Share? (business.time.com)
- Data in New World Bank Report Shows that Large Public Sectors Reduce Economic Growth (forbes.com)
- Obama vs. “fairness” (steveprestegard.com)
- Big Government Over All… (gunnyg.wordpress.com)
- The Poor in America and China (smallthoughtsfromasmallmind.wordpress.com)