tag:blogger.com,1999:blog-6399730406480392183.post5509432199726155705..comments2024-03-27T11:18:34.222-03:00Comments on Viable Opposition: Corporate America - Profits and TaxesA Political Junkiehttp://www.blogger.com/profile/03342345936277964422noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6399730406480392183.post-58933570389888064162015-03-05T18:40:10.077-04:002015-03-05T18:40:10.077-04:00I normally enjoy your work and your analysis. Howe...I normally enjoy your work and your analysis. However, I believe that you are misinterpreting data in your desire to show that not enough is being paid in corporate income taxes.<br /><br />First, you state that corporate profits rose by $380 billion between 2007 and 2008 and corporate taxes paid increased by $152 billion over the same period. $152 billion is 40% of $380 billion. What is your point?<br /><br />Another way to look at it is that profits went up from $1.3T to $1.7T (a 29% increase) but taxes paid went from $234 billion to $385 billion (a 65% increase). From this perspective, corp taxes have increased at a much faster pace than profits have risen. <br /><br />Second, as to your point regarding the fact that after-tax corporate profits have grown much faster than corporate revenues. This is the case because U.S corporations have largely expanded globally since 1990 and which has been a significant factor in profitability. For example, GE only had $15 billion out of $53 billion in revenues outside of the U.S. in 1990 (28%). Today, GE has $77 billion in revenues outside of the U.S out of $146 billion (53%). Thus, GE's int'l business has increased 413% while the U.S. business has only increased 82% since 1990. <br /><br />Book profits are higher but a large portion of the profits are overseas.<br /><br />As you know, the U.S. is the only major country in the world that does not use a territorial tax system. Thus, U.S. companies must contend with local taxes overseas and also U.S taxes when profits are repatriated. Tax credits are given but only up to the what was paid overseas. As long as the U.S. marginal rate is higher than other countries, U.S. companies will be very reluctant to remit profits back.<br /><br />The obvious answer is for the U.S to conform its corporate tax system to the rest of the world. It would allow billions of dollars to come back to the U.S where this capital could potentially be productively deployed.<br /><br />Raising the corp tax rate will only make the problem worse. And trying to something like Pres Obama has proposed will do nothing but push more corporations out of the United States in the long term to more attractive tax domiciles. If GE is doing more than half of their business outside of the US, why do they need to be domiciled in the US?BeeLinehttps://www.blogger.com/profile/04065018970505964953noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-38554804587840974402015-03-04T12:55:40.764-04:002015-03-04T12:55:40.764-04:00Here is a true story about yesterday. Covidien a m...Here is a true story about yesterday. Covidien a major medical manufacture wants me to pay for products I have purchased from them. First I have to call to India to get another phone number and a copy of the invoice. This number sends me to the Czech Rep. who then gives me another number to someone in Massachusetts who then takes my Credit card information, where am I New York of course. I spent over 20 minutes in order to pay them(going through prompts, and waiting on hold) whats wrong with that picture?Anonymousnoreply@blogger.com