Business Taxes, What am I missing?

[G-Man]

Hugh "discussion" with someone on FB regarding corporate/business taxes.

I kept repeating that businesses don't pay taxes, they raise their prices of the goods and services to offset the increase in their overhead.  I likened and increase in a business' taxes to other business expenses such as rent, labor, insurance, legal, regulations, healthcare, etc.  If the business get an increase in any of them, prices have to be raised to meet that increase. 

He couldn't disagree with this but ranted and raved in capital letters that they "should have to pay something", that they won't lower their prices if their taxes are lower, and then somehow twisted the above paragraph into me being OK with slavery if it kept prices down.

Well, he won the argument as I called him a fool for saying such a thing and ended my part in the "discussion".

Am I missing something on this topic?  I know it's straight down party lines on this one, BUT,  then why is the most Leftist state on the east side of the country offering deals of low and no taxes if companies come to NY.   The ads I hear (which costs millions to NY tax payers) says that low and no taxes makes a good atmosphere for growth and opportunity which is supposed to have good effects for the surrounding areas in the way of residential and commercial. 

So which is it?  Are corporate taxes good, bad, why?  Who pays, why?

Be civil please.

[Sorcerer]

I beleave that what state you live in makes a difference. Your sparing partner may live in such a place. I conquer with your position in that a company/ business builds into there business model, a profit that they want , need , to make some sort of profit. That profit my be reinvested to grow the business, or put into the owners pocket. Also stock holders and bank lones need to be satisfied and those will be part of the business model. What you are hearing on TV is what my be called "tax increments". Corporate tax is not collected for a predetermined time, then income taxs and property taxs kicks back in.

[Robert]

Actually you both are correct minus the rant. The short of it is you can only raise prices so far and then you loose business. Competition is a great thing, the other side of the coin is businesses need to pay taxes at a fair rate. Apple is a good example they went to Ireland to stiff the US of taxes and agree with Ireland at a lower rate. The EU stepped in and said Apple still needs to pay 14 billion in taxes to the EU.

  Some corporations pay almost nothing and this hurts the US. The other side is Ma and Pa businesses dont have the breaks that big businesses have and therefore pay more in taxes. Business have many regulations and pay for so much that it sucks the life out of the business in some cases. Taxes, healthcare, workers comp, accounting fees, equipment fees, insurance all comes out of the bottom line.

  People will only pay so much before they go somewhere else and wouldn't it be nice if the public gets a break also. I dont know if you have noticed lately but where you may have gotten say 16oz of a product now they cut back and you get 12 maybe. All business are different also and yet pretty much have the same taxes to pay. So the battle between corp responsibility and excess taxes becomes a balancing act. Some say business pay nothing and are pissed because they think all businesses have an indefinite supply of income. Some businesses say we are already paying to much in taxes and other associated costs how can we survive. Both are true in a general nature and both are false in a general nature. It would have to be business by business to access a fair amount to pay. But that wouldn't be American to tax one business higher than another so we have to find a system that works for both. Eliminating certain tax breaks and offshore banking accounts and addresses would go a long way in bringing in more money to the US. But as with Harley you change one law and it can have an adverse effect on some companies.

Multinational corporations with accounting and legal departments pay them just to structure their company so as not to pay taxes. To me this is wrong, it hurts other business that dont have the resources that these big corps do. It hurts the US because people have to kick in more, and it hurt US prices since they unfairly keep prices lower since they pay less in taxes. This is what your friend is talking about.

But a bigger drain on the US economy is the Federal Reserve. We could wipe out debt in America if we could just get rid of these leeches. The standard of living would go up the taxes would be almost non existent and welfare programs and public programs wouldn't know what to do with themselves with the extra supply of money available.

[Moonshot_1]

Echo Robert's view on this.

Simply add there are a number of dynamics that have to be considered. For example in agriculture/farming, your income is set by market prices. You don't get to raise your price to make up added expenses. Ultimately, as Robert said, Business have a responsibility to pay a fair tax rate. Particularly at the local level as they share roads, bridges, and various utilities.

The rates depends on how competitive your community wishes to be in attracting and holding on to business and maintaining a vibrant economy. While a 0% Corporate business tax rate may seem silly, if it increases business and employment you have more houses sold, more property taxes, more extended business like restaurants and hair dressers, and the like.

Enter what Robert said here ------>   
 
I do like to see capital remain in the private sector as much as possible.

The End.

[RDAbull]

The CPA in me knows that all taxes in this country are paid by the consumer of the products or services that they represent.  Taxes are nothing more than a cost of doing business.  To prove my point just look at any income statement of a publicly traded corporation,  Taxes are listed just like cost of good sold and general and selling expenses.  It's just accounting.
If the tax costs are not passed to the consumer through pricing of the goods the firm/person/service provides the supplier will simply go out of business.  The firms are nothing but a conduit for the consumers funds. It does not matter whether it is income tax, property tax, employment tax, the whole list, if not priced into the goods and collected from the consumer the provider is done. 
If there was 0 tax on corporations we would each just have to make more money because our personal tax rates would be twice what they are now. The government will collect XXXX in taxes and spend XXXXX.  Corporate profits would be about the same because it is competition that actually sets the market prices.  Raise the tax on Exxon the price of gas goes up, raise the tax on P&G the price of Ivory and Pampers go up.  Lower them and prices go down.  Simple as that.

[ridingron]

...   Lower them and prices go down.  Simple as that. 

Not sure I can buy into those 2  statements.

[Willow]

The CPA in me knows that all taxes in this country are paid by the consumer ... 
If there was 0 tax on corporations we would each just have to make more money because our personal tax rates would be twice what they are now. ...

I might disagree on that our personal tax rates would be twice what they are.  They would just be more honest.  We are the ones paying the corporate taxes anyway.

There is an acceptable argument for corporate taxes.  Since the corporate consumer pays that tax it is distributed among who is doing business with the particular corporations.  Thus the ones that spend more pay more.  Wait!  That's what sales tax does.  Isn't it about what income tax does?  

Well, I'm sure with some thought one could come up with a legitimate reason to funnel the taxes through corporate (or private) businesses.  

[CajunRider]

Business/Corporate taxes are nothing more than smoke & mirrors.  It's a way for the gov. to hide the fact that they are taxing you, in hopes that you vote for them again in the next round of elections. 

Basically, the gov. claims they are raising taxes on businesses instead of individuals... and most voters are stupid enough to think that it won't affect them, but only the "business". 

Problem is... that business then raises prices (or lowers pay), which means individuals end up paying the tax in the end. 

Bait/switch. 

And those on the far left will cheer every time the gov. makes them pay more taxes through that "Evil" corporation...

[RDAbull]

...   Lower them and prices go down.  Simple as that. 

Not sure I can buy into those 2  statements.

As an extreme example:  look at gas prices back in August of 2008 when crude oil was selling in the $120. range.  Gas was $3.70 at the pump, now that oil is in the $53 range it is running at around $2.25 here.  If Exxon was still priced at $3.+, they wouldn't be selling much.  Competition sets the price, not perfect but pretty good in a generalist way.
Signed,
Capitalist Pig
(in by best HubcapSC mode)

[hubcapsc]

...   Lower them and prices go down.  Simple as that. 

Not sure I can buy into those 2  statements.

As an extreme example:  look at gas prices back in August of 2008 when crude oil was selling in the $120. range.  Gas was $3.70 at the pump, now that oil is in the $53 range it is running at around $2.25 here.  If Exxon was still priced at $3.+, they wouldn't be selling much.  Competition sets the price, not perfect but pretty good in a generalist way.
Signed,
Capitalist Pig
(in by best HubcapSC mode)

You have to put it in quotes next to your name...

-Mike "but I'm convinced Roger knows a lot about taxes!"

[RDAbull]

Sorry Gary, but I forgot to answer your first question":
Why is it good business for NY to lower its tax rate to attract new business?
If you look at the fine print, they are only lowering the property taxes and a few of the employment taxes for a set number of years.  They do not lower the personal income taxes that the employees will pay nor do they lower the property taxes on the personal residences that the employees will live in.  Add to that the amount that the amount of dollar roll-over that each new dollar of payroll creates and the taxes that that will generate from the employees spending.   After the set-aside years the other taxes will raise to the normal level and the state is pretty sure that the companies will not go to the expense to move again to a more favorable tax situation.  That part has yet to be seen.
Does it make sense for the state in the long run:  Yes, assuming that they can really keep the new companies in place.  Like all competition, if all of the states would stop the practice it would level the playing field.  Not likely to happen.