Obama: I lowered corporate taxes before I raised them
No, Obama didn’t actually say that. But I wonder how many people will read past the headlines—“Obama proposes lowering corporate tax rate to 28 percent”—and see that the tax paid by corporations will go up, not down:
The plan would lower the nation’s corporate tax rate to 28 percent. At the same time, Obama wants to boost overall revenue from corporate taxation by banning numerous deductions and loopholes that save companies tens of billions of dollars a year on their tax bills.
In other words, the corporate tax rate will go down as the total amount of tax gleaned from corporations will go up (theoretically, anyway). Now, if Obama and the Democrats want to do that, it’s certainly well within their right to do so, if they have the votes to do it. Nor am I suggesting there is anything deceptive about it. I just wonder whether it’s clear to most people what it’s about.
For example, there’s the phrase “deductions and loopholes.” Somehow it always sounds as if there’s something shady about them, even though they’re perfectly legal, and tend to be put into the tax code in the first place to encourage some sort of result that’s deemed good at the time, either to the country or society or the economy or business as a whole. Some of them no doubt can be dispensed with without negative consequences, but I don’t have a clue which ones they are, and I wonder whether Tim Geithner knows either:
The president’s plan targets oil and gas companies for tax increases while promising special breaks for manufacturing companies.
And in a slap at U.S. multinational corporations that shelter profits overseas, Obama wants those firms to pay a minimum tax on their foreign earnings. He also wants to end tax breaks for companies that outsource and give new tax incentives to firms that move jobs back home.
Marguerite Higgins of the conservative Heritage Foundation argued that such a tax would hurt competition.
“Once again, Obama is going in precisely the wrong direction,” Higgins said in a statement. “Rather than in-sourcing jobs, he would outsource the headquarters and top management of U.S. multinational companies.”
The article also mentions this little tidbit [emphasis mine]:
Obama has not offered a detailed blueprint for overhauling the personal income tax code ”” also full of loopholes and deductions ”” other than calling for higher taxes on the wealthiest Americans. Such a blueprint is not expected to come before the November presidential election.
Here’s an example of the sort of thing that may be in store—the dividend tax:
Of course, the White House wants everyone to know that this new [higher dividend tax] rate would apply only to those filthy rich individuals who make $200,000 a year, or $250,000 if you’re a greedy couple. We’re all supposed to believe that no one would be hurt other than rich folks who can afford it.
The truth is that the plan gives new meaning to the term collateral damage, because shareholders of all incomes will share the pain. Here’s why. Historical experience indicates that corporate dividend payouts are highly sensitive to the dividend tax. Dividends fell out of favor in the 1990s when the dividend tax rate was roughly twice the rate of capital gains.
When the rate fell to 15% on January 1, 2003, dividends reported on tax returns nearly doubled to $196 billion from $103 billion the year before the tax cut. By 2006 dividend income had grown to nearly $337 billion, more than three times the pre-tax cut level…
Who would get hurt? IRS data show that retirees and near-retirees who depend on dividend income would be hit especially hard. Almost three of four dividend payments go to those over the age of 55, and more than half go to those older than 65, according to IRS data.
But all American shareholders would lose. Higher dividend and capital gains taxes make stocks less valuable. A share of stock is worth the discounted present value of the future earnings stream after taxes. Stock prices would fall over time to adjust to the new after-tax rate of return. And if investors become convinced later this year that dividend and capital gains taxes are going way up on January 1, some investors are likely to sell shares ahead of paying these higher rates.
The law of unintended consequences—it’s a bitch.
Speaking of which—take a look at what’s happening in Britain with a higher corporate tax rate. Tax revenues are going down. Quelle surprise!
Quelle
I feel like punching someone
in Washington, D.C.
Why do we parse Obama’s words for truth? He has no truck with truth, saying whatever he and his handlers think will best enlist support from his audience. It’s a sad thing to say, but I believe it with every fiber of my body. And his second most abundant personality characteristic is projection. When he is about to break the law or game the system, he first starts by accusing his opponents of doing exactly what he is about to do. F
Absolutely true, F. The way to know what Obama is about to do is to record what he is blaming Republicans or rich people for doing. The other technique is merely to assume the opposite of what Obama says, a technique which surely works when he rattles of his accomplishments.
There is only one event or practice which I need to know which seals the deal for me that Obama is evil: his use of Ericksonian hypnosis during his speeches. Just like Jack Cashill has deconstructed Obama (and received no media even from the conservative media for it) so do psychologists who practice therapeutic hypnosis know that Obama’s speeches are unmistakably filled with pacing, leading, stacking, etc. and masterfully employ the mass hypnosis technique to bypass the critical filtering factor and record a truth in someone’s subconscious. This is the use of deception and highly immoral and used to be considered witchcraft or sorcery. Call it what you want. It’s evil. If you feel like punching someone, bad h, you are not alone in that sentiment and highly justified.
Because all of Obama’s promises (and policies) come with an expiration date, it is unlikely that thinking people or businesses would incorporate them into their investment plans. Obama makes eelskin look like a fantastic material for tire treads.
You have to feel sorry for leftists. (Sort of.)
They’re continually surprised by developments that grownups anticipated from the get-go (e.g., raising taxes can reduce revenues and slows the economy; expanding welfare undermines the work ethic), always trying to kick the football that Lucy has promised she really will hold this time (this time communism will work! It will!), and like someone predicted the end of the earth, always having to make excuses for why their predictions weren’t borne out (most notably Marx’s prediction of capitalism’s crisis, with Lenin’s kick save that that crisis would have occurred but for exploitation of the Third World, which merely postponed it. Nice save. Vladimir.)
No wonder they’re tetchy.
Here is a great description of Obama’s decision making processes:
http://www.americanthinker.com/2012/02/how_obama_makes_decisions.html
Generally the article indicates that Obama is winging it, as has been suggested here before. What it comes down to is that none of his decisions should be taken any more seriously than any other amateur’s.
The gimme generation deserves someone like Obama.
Bob from Virginia:
The multiple choice memos are probably where he gets his “Some say…Others say” strawman rhetorical divice.
OK, two errors.
Should have read “Some say…Others say…I say”.
And device. Sheesh.
“the corporate tax rate will go down as the total amount of tax gleaned from corporations will go up”
For the record: that is exactly what neo-classical economics says is optimal. Broaden the base, lower the rate.
My wish for today (aside from wishing that all incumbent politicians should go to hell) is that Obama and his fat cat contributor buddies should immediately be forced to live the rest of their lives without oil. I visualize them scritch scratching for food with sticks.
The problem with taxing corporations is that they are not ground. They all pass it on. We the people are the ground.
But Alex’es point is valid and isn’t that part of what Reagan did. I think so.
I’m not sure exactly how much my first point is true. Often true in principle but other consequences are involved. I do know that raising the amount of taxes a corporation pays means it will look elsewhere to do its business.
One other point to be noted asbout taxing those evil dividends; dividends are actually taxed twice. First, they are taxed as corporate profit (at 35%) then, when they are distributed to shareholders, the shareholder also pays tax on them as ordinary income.
This is not unlike paying tax on social security which is a” pension” generated by payments of premiums that you already paid income tax on.
T, the problem is that our sinistral friends view that as a feature, not as a bug.
As Curtis notes, taxes on corporations are figured into the cost of the goods and services they offer. Ultimately, the consumer of said goods/services pays the tax. But given that there will be taxes on corporations paid by consumers; I favor Mexico as a very business friendly nation.
PS – It is not necessary to note that every word from BHO’s mouth is a lie and a damn lie at that. Its akin to saying the sun rotates around the earth from east to west
http://www.libertynews.com/2012/02/22/obamas-authoritarian-dreams/
Obama, you hear me, stay away from America you tinned up piece of Muslim Kenyan wanna be Chavez banana dictator.
http://www.youtube.com/watch?v=RDqTwSO1DDc
Sinistral is left sided. I read that Mark Knofler is left handed but plays the guitar right handed.
In my Christian upbringing, left hand of fellowship was the kiss off: If I see you never it will be too soon.
Left handers were discriminated against and yet have a higher creative capacity than right handers. Or do they? Is that another liberal narrative? I’ve heard the same thing about red heads.
Curtis,odd you should mention Chavez. Election night 2008 ,I had a friend from Colombia ,give me a kiss and say “baby,I feel so sorry for you and country;you’ve just elected Hugo Chavez.”
Speaking of eeevil Big Oil, for each gallon gas sold, a company makes about 3 cents profit; state tax varies, but averages about 20-25 cents per gallon, and the Feds get 40 cents.
Big Oil profit margins are about the same as supermarkets. Lots of nominal “non-profits” drop more to their bottom lines, which they reinvest or piss away, since they are “non-profits,” exempt from income tax.
The taxers of course had nothing to do with the costs of exploration, production, refining and transportation of the gas. The taxers add the cost of regulation of the whole process too.
We are lucky to be able to buy gas at all. But Hussein will fix that just as soon as he’s able.
Don Carlos, that is an excellent fact to begin.
“Some of them no doubt can be dispensed with without negative consequences, but I don’t have a clue which ones they are, and I wonder whether Tim Geithner knows either:”
Neo: I can assure you that Turbo Tim doesn’t know diddly squat about the effects of changes in the tax code.
“My wish for today (aside from wishing that all incumbent politicians should go to hell) is that Obama and his fat cat contributor buddies should immediately be forced to live the rest of their lives without oil. I visualize them scritch scratching for food with sticks.”
Promethea: I saw a bumper sticker the other day that read “DON’T REELECT ANYBODY”.
So many I know think corporations should pay more in taxes. Too many don’t understand that corporations NEVER pay taxes, even when they do. Fact is those “taxes” get factored in to the cost of goods and services and YOU and I pay those taxes. End of story.
Sinistral is left sided.
Yep, it means “of the left.” I used it instead of “sinister” because that would almost inevitably be misunderstood (although arguably “sinister” would be an appropriate characterization in all of its senses).
Left handers were discriminated against and yet have a higher creative capacity than right handers.
But their eyes roll when they laugh, and they love watermelon. Oops. Wrong stereotype.
Full disclosure: I’m left-handed myself.
So many I know think corporations should pay more in taxes. Too many don’t understand that corporations NEVER pay taxes, even when they do. Fact is those “taxes” get factored in to the cost of goods and services and YOU and I pay those taxes. End of story.
True. In effect, lefties want corporations to collect taxes for them, thereby shielding themselves from opprobrium.
“End of story” may not, however, be appropriate. I suspect that, like rent control, lefties will eventually push for price controls so that tax hikes will squeeze corporations. All steps toward state ownership of the means of production.
Occam’s Beard: I’m left-handed, too. And if you follow the link and read the post, you’ll find that it’s not really a stereotype—according to research, anyway.
neo, fellow southpaw!
Baseball guys have all sorts of ridiculous generalizations about lefties (e.g., “all left-handed pitchers have good curveballs, but they’re flaky;” “left-handed hitters crush pitches down and in on them”). Tim McCarver is full of … well, this sort of dugout lore.
I have to admit, however, that both of the generalizations above apply to me (not the flaky one, I hope), which only annoys me even more.
Wildly off-topic: have you seen that the nuclear physics experiment apparently showing neutrinos traveling faster than the speed of light has been shown to be wrong – the result of a loose cable?
So putting this one alongside the “arsenic-based life forms” one begins to see why experienced researchers default to extreme skepticism about extraordinary results? Or why we require extraordinary results to be supported by extraordinary data?
And these two come from nuclear physics and molecular biology. Place credence in results from climatology models? You’ve got to be kidding.
Raising taxes on oil companies is a really bad idea during a price spike. I can only hope that Obama will be hoist on his own petard as gasoline prices rise and piss off lots of voters. I’m cheering for $5 gas in September.
I’m cheering for $5 gas in September.
$4.29 here in SoCal. Ouch.
Occam…”I suspect that, like rent control, lefties will eventually push for price controls so that tax hikes will squeeze corporations. All steps toward state ownership of the means of production.”
Agree that they’re likely to push for price controls; disagree that they’re aiming for formal state control of industries…If the government owns, say, the oil companies, then the government gets blamed for prices, spills, etc. Much better from their point of view to leave the companies theoretically independent while completely hog-tying them.
The Obamaites are not classical socialists, but rather economic fascists.
David, good point. I should have said “state control” of the means of production.
In this respect, their model is more the War Socialism of Hindenburg and Ludendorff during WWI than the classical Marxist prescription.
Dear Infantile Majesty: I lowered my expectations of you before I flushed them.