Obama Administration proposes corporate tax overhaulFollow

There's a zero-point-zero percent chance that any significant change to the tax code will occur during an election cycle for numerous reasons both political and practical. But everyone else is going to flash their tax proposals around as an election tactic so there's no reason why Obama should be exempt.

Well, it puts more investments in that hazy region where risk/reward borderlines are shaky. Which is exceedingly good for banking firms, as they float their rates based on that risk. Biz plans that are safe or solidly in the positive reward/risk end of the spectrum will be unaffected, or actually benefit from the tax rework as their finance dept will need to do less 'creative' things.

On the other hand, if Obama takes out all of the loopholes, a few friends will have to shift into less lucrative careers. I doubt this will be the case.

The talking point brochure hasn't arrived in the mail yet.

Yeah, he did. I'm not clear on the details.

Used the n-word one too many times, I believe.

The quality of the boards improved slightly with his departure.

Edited, Feb 26th 2012 4:08pm by Belkira

It puts more investments everywhere. All investments carry an element of risk. I think it's foolish to think that by making investment more expensive, it'll just ensure that people take fewer risks. It wont. At best, it'll just make all investment more expensive, which means that to gain similar returns, investments will have to focus to those things in which they can pass that higher cost on to the consumers. It may affect the types of investments, but probably not in the ways you expect or desire.

You'll get fewer of the "Let's open a mom'n'pop grocery store" type of investment and more "Let's invest in a racehorse and hope we win!" type. Why? Because the latter is faster, with a bigger return in a shorter period of time (if it works). If it fails, the investor writes it off, the bank makes up the loss by charging a bit more in other areas, and everyone (mostly) walks away clean. If it succeeds, the investor gets his investment back quickly, thus paying interest on the loan for a shorter period of time, thus being less impacted by a lack of a tax break on said loan.


I really think you're not considering the full implications of such a change.



Of course they'll be affected. Any interest on the money they borrowed to start up that business, no matter how "safe", will no longer be tax deductible. That will affect them. And as I pointed out earlier, it may just shift people into *more* risky investments, since now a loss is still deductible, but the interest on a longer slower "safer" plan isn't.



Doubtful. First off, Obama isn't taking out "all the loopholes". He's doing the worst thing possible and targeting them based pretty much entirely on political perception and not on sound economic principles. What we'll end out with is a set of loopholes that are even less sensible than the set we have now.

If he were flattening taxes and eliminating *all* deductions/loopholes/whatever, that would be one thing. But he's not, is he? He's eliminating loopholes that his political "side" wants eliminated, while leaving in the ones they like. It's a terribly bad way to conduct economic policy, but he's more interested in getting the throngs of idiots who salivate when he says something like "eliminating subsidies for oil and gas companies" to support him than he is in actually coming up with a good sound economic plan.

First off, I'm not sure how that constitutes a valid response to the statement you quoted. I was talking about how Obama isn't eliminating all loopholes, but just selective ones that help him politically. Secondly, you're mixing two very different things. One is what a "reasonable" amount of taxes is, and the second is about social programs. An argument that we need more spending for social programs is different than one about how we structure our taxes and determine who bears the greatest burden of the taxes used to pay for those things.

Do you think that corporate investors don't pay reasonable tax rates? Why not focus on just one part? Connecting it directly to social spending is avoiding the question.

And on top of that, I happen to believe that social spending hardly props the country up. I think it tears the country down. We spend way too much on social programs already, and the argument for raising taxes isn't about "cutting" those programs, but about enabling our government to spend even more money on them. You're playing the reverse-direction game, where failing to raise taxes to allow for greater social spending becomes cutting social spending in favor of the rich. That's dishonest at the very least, and certainly deceptive.



And? You're stating a fact (a questionable one, but whatever). What does that mean though? What negatives do you think occur because of this? Just repeating a statement doesn't constitute an argument. Tell me why that condition is bad. Can you do that?



If the cost of making sure the rich can't get richer is that no one else can get rich in the first place, isn't the cost too high? You're allowing yourself to be focused on just one thing you view as negative, while failing to see the whole picture. Who cares if some rich guy gets richer? Don't most people care the most about their own chances of becoming wealthy and making their own lives better for themselves and their children? This is one of those meaningless things that liberals love to spout, but never seem to be able to take a step further. Why is that bad?


I don't care how much more money the CEO of the company I work for makes relative to me. I care about how much *I* make relative to the cost of living in the area I live in. You're working hard to make people care about something that doesn't affect them, while downplaying the more important economic facts of the issue. Most wage earners (people working for others, and not owning their own businesses, which is obviously "most people") will earn a higher salary working for someone "rich" then not. And in most cases, the richer the person they work for, the higher their salary. I doubt a whole lot of people, if given the choice between working for a small business with a middle class boss and a big business with a billionaire CEO at the helm would have a hard time choosing. Would they?

Edited, Feb 27th 2012 4:26pm by gbaji

And? Again with no argument being made. What does a high national debt have to do with insisting that our corporate tax system is screwed up? You keep doing this. Do you even realize it? Why do you think those things are relevant to the position you're trying to support? You presumably support Obama's plan. Why not say *why*?


And for the record, we had the same exact tax rates during a time period when our debt% was shrinking. Clearly, our national debt being "retarded" today has nothing to do with changing tax rates. So why think that changing them will fix the problem?




Dumb like someone who thinks that even though tax rates were not lowered between the time period when our debt was managed and stable and today when it's neither the solution to our debt is to raise taxes? Dumb like someone who thinks that even though spending went through the roof during that same period of time, that "cutting spending" should not only not be part of our solution, but that we need to spend more money.

To me, that's a hell of a lot more dumb. Wouldn't you agree? Our tax rates didn't change between 2007 and 2010. Our spending did (massively). If you want to argue that we should be raising taxes instead of cutting spending in order to get out debt in control, you'll need to make one hell of a good argument for that position. But you haven't even made an argument, let alone a good one.

And that's ignoring that before you switched to talking about debt, you first argued for the need to raise taxes to pay for more social spending (well, you implied that failing to raise taxes meant less social spending, but close enough). You only changed to reducing the debt *after* I challenged your first statement. So which is it? We need to raise taxes so we can spend more on social programs? Or we need to raise taxes so that we can pay down our debt?


Silly me, I think that you wouldn't know a good reason for raising or lowering taxes if it walked up and hit you in the head. I think that you've bought into the "big government" argument, and accept any claim that you hear in support of that. You know that increased social spending is "good". You don't know why, and can't argue why, but you believe it without reservation. And you know that "raising taxes on the rich" is good as well. Again, you don't know why, and certainly can't argue why, but you believe it. And frankly, I don't think you care about the national debt, except to the point that it allows you to make broadly stated claims in support of those things you already think are "good".

If you really cared about the national debt, you'd have been right with us conservatives opposing the stimulus bill(s) when Obama proposed them. But you didn't (US citizen or not). You cheered them on, didn't you? So forgive me if I find your sudden switch to deficit hawk less then convincing.

Edited, Feb 27th 2012 5:01pm by gbaji

Ok. But that's backwards thinking. You brought up the debt when I asked what was wrong with our current corporate tax system. So, by implication, you're saying that our high debt is a result of the corporate tax system, and by extension, that by fixing said corporate tax system, we can fix the debt. I think it's very valid to point out both that the corporate tax system didn't cause our deficit, or the resulting debt, and thus it seems unfair to correct that problem by changing said taxes.

Also, your argument assumes that a greater total amount of taxes will be collected as a result of the corporate tax changes. Otherwise, why mention the high debt as a reason to change the taxes?

So you're not fixing it because of something broken about it (or at least your not making that point), but because there's some other problem, caused by something else, that you want to pay for by making corporations pay more taxes. Is that about it? So we can chuck the whole "fair and reasonable" parts of your posts out the window, right?



I think our social programs have long since gone past the "help people in dire need who would starve to death otherwise" and have moved into the "not worth spending money on" and "mostly used to buy people's votes" category. I think that increasing that spending is a horrible idea. You're not saving anyone. You're just shifting money from those who earn it to those who don't, and hurting both groups in the process.



No, they don't. They provide health care, food, and shelter to their families. They don't actually give those people the "ability" to do anything. Not taxing the money for those programs from the productive parts of the economy in the first place, would actually increase the ability of those families to obtain those things themselves. The problem is that you can't see how many people are poor or struggling working class *because* of the cost of those programs.



And without the drain on the economy those programs create, many people would earn enough not to have to rely on government assistance in the first place. See how that works?



Nope. They would be more likely to be able to earn a living sufficient to buy those things themselves. Also, the absence of government "free money" spending in those industries would drive greater competition, meaning they'd be more affordable to more people even absent income increases. Why do you suppose that the costs of things in areas unsubsidized by government dollars continually goes down and the quality goes up, while those in those areas stay expensive (or become more so)?

I usually drop analogies about flat screen TVs, home computers, music players, etc when I make this point, but I recently heard someone make an even better point. Why is it that the cost to get a MRI has increased relatively speaking since the introduction of the technology, but the cost (and quality) of laser eye surgery has decreased over the same period of time (massively so in fact). One is covered by government funded health care (and all private health insurers who wish to participate), and the other is considered elective and is not.

Can you imagine how much less health care would cost if we got the government out of the business? I know it's a novel concept and a hard one for most people indoctrinated into the "we must provide these services for the poor", but try to stretch your mind a bit here. The pattern of cost is pretty clear.



That's not really true though. He's targeting a whole set of loopholes, some of which are investment related, but many of which (most of which) are corporate tax related. What he's doing is attempting to buy his discriminatory tax loophole policy, designed to benefit businesses and industries his supporters like, while penalizing those they don't like, by hiding it within a "but I'm lowering rates across the board" burrito.

Put another way. Company A is in an industry which Obama doesn't like. Company B is in one he does. Both companies take advantage of tax deductions which affect their respective industries. Obama proposes lowering the tax rate on both companies, but eliminates the loopholes which apply to company A's industry, while keeping those for company B intact. What has he just done? He's taken money from company A and given it to company B.


That's all this is about. If it were truly about tax reform, he'd propose a much lower tax (like 15%) and eliminate *all* corporate deductions and loopholes. But that's not what he's doing. He's selectively targeting just the industries he and his political supporters don't like. So let's stop pretending this is some sort of altruistic plan, much less even a valid economic plan. It's political favoritism. He knows it. And he knows the GOP knows it. So he knows that they'll oppose it. Nothing shocking here at all.



OMG that is completely backwards. Cutting spending will not hurt the economy of the US at all. What it will do is hurt the special interests who rely on that funding and who (mostly) support the Democrats. Taxing the people will hurt the US economy. So if the choice is between cutting spending and raising taxes, we need to cut spending.


And again, you miss the bigger point here. Our tax rates have no changed since before our deficit went out of control. Thus, tax rate changes didn't create the deficit. Raising the taxes in order to pay for the deficit is the wrong answer. You're hiding the real action here. What's happening is that the Dems want to increase spending and then raise taxes to pay for it. But they know people will oppose that plan, so they instead increase spending (by using a crisis as an excuse), and then when deficits skyrocket and our debt goes out of control, they use the need to eliminate that problem as an excuse to raise taxes.

It's dishonest to disconnect the cause of the increased debt from the action you propose to solve it. The debt isn't a separate problem. It's the result of too much spending. The solution then is to decrease spending to levels before we had this problem.



Uh... No. That's cute little projection, but completely false.



Wait? So you want to target taxes at welfare recipients? You do get that failing to tax people as much isn't the same as giving them money, right? I know that liberals love to play this whole "Big business gets the most benefit from government spending game", but that's simply not the truth. If the government were to tomorrow eliminate every single dollar of domestic spending *and* eliminate all tax deductions, you know who would benefit the most? The rich and big businesses. They are paying massively more than what they gain from the government.



So you understand why the rich might be a bit peeved that they pay so much in taxes, and it's spent handing benefits out to people who didn't earn it? Nah, that's too much to expect.

Hot?

Like day-old tapioca, baby.

In Germany almost the entire business-world funds asset investment (and R&D) on retained earnings alone. In the 1980's, 90's and early 2000's German businesses had international banks continuously offering them financing loans, which they knocked back time and time again. During this period "conservative" German business practices became the laughingstock of the financial world, even though German businesses were not merely solvent, they were in general wildly successful, in many cases making 10s to 100s of millions of profit a year.

Then the GFC happened, and so many European nations became insolvent. Germany HAS the funds to bail them all out, (and indeed the GFC has not much affected German business profitability) but individual Germans are bitterly resentful that their careful and clever money making practices are being asked to fund several nations that have collapsed under the burden of collective debt. They want iron-clad guarantees that if they bail-out places like Greece, that their money WILL be repaid back to them. For Greece and other insolvent European nations to engineer successful repayments, even long term, from the starting point of where they are, public spending has to halve, throwing millions out of work, halving the pay-checks of the rest, and reducing pensioners, students and the unemployed to such depths of poverty they will all have to move if paying rent, and stop buying anything but food. Hence rioting in Greece, and continual government turn-over and bail-out delay, as the Greek citizenry refuse the needed austerity measures to get them solvent.

More to it, you have control over a store as the owner or an investor. Betting on a horse (for example) puts it out of your hands aside from guessing at the odds.

Two completely different things.