Taxing “evil corporations” 100% would only pay 2 months of deficit

by Robert Canfield

Spending, not corporate jets, causing US debt problems

President Obama and the Democrats in Congress continue to insist that U.S. corporations need to “pay their fair share” in order to resolve our national debt problems. They want more revenue, a.k.a more TAXES, from those “evil corporations”. And that leads us to the big question: Is our national debt a spending problem or a revenue problem?

Democrats want U.S. companies to pay their “fair share” to close the deficit gap. Ok! Let’s give it the old Democrat try. Let’s really STICK IT to those evil corporations and their Lear jets, tax breaks for the rich, etc. Are you ready? Here we go!

Let’s target the largest U.S. corporations, those with annual gross revenues of over $40 billion per year. There are over 60 of these giant corporations in the U.S. Let’s not beat around the Bush. Let’s go all the way. Let’s tax their annual net profits at 100%. That’s the kind of fair share that any Democrat would be happy with. How much would a 100% tax on the annual net profit of these largest companies raise? A whopping $204.8 BILLION dollars!!!

Wow, you’re thinking. $204.8 billion additional corporate tax dollars every year would shoot down those corporate Lear jets and those tax breaks for the rich! It seems like those new corporate tax dollars would make a big dent in our national debt! That’s what I’d call a fair share, wouldn’t you?

There’s just one little problem. Currently, U.S. Government spending outpaces revenues by $118 BILLION per month. That’s right. The U.S. spends $1.4 TRILLION per year more than it receives in revenue. Even if Congress taxed 100% of the annual net profits of every U.S. company with over $40 billion in annual gross revenue, it would pay for less than TWO MONTHS of our monthly deficit of $118 billion per month. Think about that.

Clearly, we have a spending problem. Obama and the Democrats are barking up the wrong tree. There will never be enough additional “fair share” tax revenue to solve our national debt problems.

Robert Canfield is a communications consultant and former Troutdale City Councilor and budget committee member.

 

(Sources: http://en.wikipedia.org/wiki/List_of_companies_by_revenue, http://money.cnn.com/magazines/fortune/global500/2010/full_list/, http://money.cnn.com/2011/05/16/news/economy/debt_ceiling_deadline/index.htm )

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Posted by at 05:00 | Posted in Federal Budget, President Obama, Taxes | 35 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Rupert in Springfield

    You know I have gotten into this exact point with my liberal friends on more than a few occasions over the years.

    Tax the rich 100%? Corporations 100%?

    “Yeah Yeah…I mean they deserve it for all they have gotten away with” Is usually the response I get. Generally with tongue hanging out the enthusiasm for this approach becomes unbounded.

    The problem is, and I notice the same mistake is made in the article, if you do that there becomes no such thing as annual profits for the corporation. There becomes no such thing as annual income for the rich. Why? Because you only get to tax at 100% once. After that the person or corporation stops working.

    And thats the central problem with the entire leftist theory that after 100 years of trying it no one has been able to solve – You can’t get other people to work for you and provide for your needs for no compensation.

    The central problem of socialism is its impossible to get people to aspire to slavery.

    And yes, you can quote me on that.

    • Founding Fathers

      The problem with this post is that it’s a straw man argument. Nobody is arguing that taxing corporations will solve all of the budget problems.

  • Founding Fathers

    And STILL nothing on Oregon Catalyst about the scandal enveloping the owner of the right’s favorite news source.

    • Rupert in Springfield

      Probably because at this stage the story is largely dead over here. Let’s face it, when you have the left cheering on Wiki Leaks and the New York Times publishing it – it gets real hard to get excited about phone hacking some celebrity phones.

      I have more than a few friends on the left who are convinced this story will bring down Fox news. It won’t. People are simply concerned with more important things than this sort of nonsense.

      • Founding Fathers

        “The story is largely dead over here.”

        Hmmm, from TODAY’S New York Times:

        http://www.nytimes.com/2011/07/29/world/europe/29hacking.html?_r=2

        “LONDON — Britain was awash in a new surge of outrage over the phone hacking scandal
        on Thursday, as news emerged that Scotland Yard had added to the list
        of probable victims a woman whose 8-year-old daughter was murdered by a
        repeat sex offender in 2000.”

        Remember, Rebekah Brooks, who has been arrested in Britain over her role in the hacking, was the chief executive of News International, not some flunky. She has been directly implicated in this scandal.

        Imagine the uproar on the right if organizations owned by George Soros had done something similar.

        • Rupert in Springfield

          >Imagine the uproar on the right if organizations owned by George Soros had done something similar.

          Check and mate. I knew you would say something like this, so that’s why I set it up.

          There was. Back in the ninety’s Democratic party operatives John and Alice Martin hacked into Newt Gingriches phone calls and recorded one “by accident”. The couple just oddly happened to be driving around with a police scanner, oddly happened to be close enough to tap Newt’s phone and weirdly enough had a police scanner modified to receive cell phone calls (yes, they had to be modified to do so, I checked at the time) and even more oddly, happened to have a tape recorder hooked up to the scanner and recorded the call. They then sent the recording along to WA rep. Jim McDermott. Oddly, a Democrat. The story died in a week or so and McDermott retains his seat.

          Trust me. There will still be Fox news for years to come. No one is going to get too worked up about hacking celebrity phones for some dopey story. It’s simply not a big concern to most people, merely a big concern to little people who go zany about anything having to do with Fox.

          Call it good and move on. The American people have.

          • Founding Fathers

            This was one instance, and McDermott received a formal rebuke nine years later.

          • 3H

            He’s also on the hook for 1.5 million dollars in interest, costs and fees (including his own lawyer’s fees).

            There is of course, some major differences.  It wasn’t a matter of policy like it was with News Corp. And, of course, it wasn’t just celebrities either.  Ask the parents of Milly Dowler.  Can you imagine?  Deleting the voice messages of a missing girl so that you can hack in to more messages?   Yet, there are people who are willing to ignore this and pretend that the McDermott and News Corp issues are somehow comparable. 

          • Founding Fathers

            Yes, 3H.

            It’s the difference between bad behavior (McDermott and the Martins) and evil behavior (News Corp. employees deleting messages from the phone of a missing girl, creating false hope).

            Also, with McDermott it happened once, as far as we know, and he didn’t instigate it. News Corp. employees instigated the phone hacking.

            What’s telling here is OC’s deafening silence. They truly are afraid of what this could mean.

    • bulletoney

      hog bosch

  • 3H

    Democrats have been willing to both ask for more taxes on Corporations (and the rich)and reduce spending.  They have been willing to discuss Trillions in spending reductions.  A point that Mr. Canfield ignores.   Up until recently (I haven’t been following the whole debt ceiling issue – I can take only so much of the circus) the only Republican plan that has resonated with their rank and file has been spending cuts – and no tax increases at all.  Republican leadership has attempted to come up with a plan that includes tax increases and spending cuts.  They have run into resistance to any sort of compromise from their delegation in the House.  Perhaps their view is as simplistic as the author’s.  

    What will help the debt is a combination of improving the economy, cutting wasteful spending (and I acknowledge there is a wide gulf in what we all consider wasteful) and increasing taxes. 

    Mr. Canfield, in my opinion, has set up a straw man: that Liberals believe that only taxing corporations will end the deficit issue.  Most thoughtful Liberals (insert joke about no thoughtful Liberals here) are not that simplistic in their thinking.  Once you realize that his premise is wrong, his whole argument falls to pieces.  Nothing more than partisan hyperbole that contributes more to the problem than it does to come to some sort of resolution. 

    Your little intellectual exercise of taxing Corporations and the rich at %100 is just silly, and anyone who uses that in an argument against Liberals is playing the fool.  No one has asked for a %100 tax rate on Corporations and the rich, and no one who is a serious Liberal has even pretended that raising taxes alone will address the deficit issue at this time.  I’m sure there are some partisan Liberals who do – but they are playing the fool as well.

    • Rupert in Springfield

      >Democrats have been willing to both ask for more taxes on Corporations
      (and the rich)and reduce spending.  They have been willing to discuss
      Trillions in spending reductions.

      And that’s why its not a serious proposal. One congress cannot bind over another. The result? The tax increases stay in place and the spending cuts, if they are multi year, never take place.

      What’s happening this time around is people have wised up to this tactic. We went through it with Reagan and TEFRA.

      At this stage it is reasonable to try a different approach and ask for only spending cuts.

      >I’m sure there are some partisan Liberals who do – but they are playing the fool as well.

      That’s probably why no on is really listening to Obama right now. People know this problem is a little more serious than a man who would still prattle on about tax breaks for corporate jet  seems to be able to comprehend.

      • the real valley person

        A present Congress can’t bind a future Congress, but it can pass a law that changes spending formulas that impact future budgets unless that future Congress changes the law. Witness the Bush tax cuts and the Bush Medicare Part D that both helped create the current deficit, and that affect future deficits unless Congress changes these.

        Boehner was handed an opportunity by Obama to change the formulas for Medicare and SSI that would have reduced future outlays for these programs in exchange for a small token tax increase through closing of a few loopholes that benefit a very few. He walked away from that deal, proving the Republican whining over future deficits is a load of BS.

  • There’s no such thing as corporate (or business) taxes. They are taxes on people, meaning that they are paid by the employees or the customer. You do no service to Americans (or any other nation for that matter) by taxing “evil” corporations.

    • 3H

      It depends.   If they pass along too much of the cost to consumers, consumers may simply decide to not buy their product (and probably depends upon whether the product is considered a luxury or a necessity). 

      Higher income taxes on the rich — they will have a more difficult time passing that tax on to the rest of the population.

      • Rupert in Springfield

        >It depends.   If they pass along too much of the cost to consumers, consumers may simply decide to not buy their product

        And this is how jobs are shipped overseas.

        >Higher income taxes on the rich — they will have a more difficult time passing that tax on to the rest of the population.

        Actually its the exact opposite. The pass along from the rich is instantaneous, whereas from a corporation it takes time.

        When corporate taxes are raised, most corporations will still try and struggle for a while before that time comes if and when they decide to move the job overseas or close up shops.

        When taxes are raised on the rich, the money is not available to them as soon as the tax increase takes effect. Investments in new equipment, new hires for the business, or new purchase of stock is instantly curtailed.

    • Founding Fathers

      Uh, Mike, for a pro-business guy, you appear to have a complete lack of understanding how business works.

      Income taxes on businesses are based on profit, and thus are not an operating expense that can be passed on to consumers. Even if they were an expense, look at how the airlines have been behaving with the lapse of the FAA tax–several of them have increased fares in order to take convert the tax money to revenue for themselves.

      And that’s the thing–if a business is already operating in a way to maximize their profits (and, according to conservative dogma, they should all be operating that way), then increasing their prices is not going to increase their profits, since that will decrease their sales.

  • HBguy

    So because you can prove that a 100% tax on the 60 largest corporation in the US will not solve our deficit problem, therefore getting rid of arbitrary tax breaks for “special” businesses will not help solve anything?
    That makes perfectly good sense to me. 

  • Yonnieyonsta

    Would it be possible for the writer to get more absurd?

  • Yonnieyonsta

    Please show an example of where and when “Trickle-down” has ever worked.

    True or false: Are taxes on the rich and corporations the lowest in history right now?

    True or false: Does every import represent a lost US job?

    True or false: Do tax loopholes make it profitable for corporations to ship jobs overseas?

    True or false: Is the national debt a revenue problem or a spending problem?  False!!!  The answer is Neither, as it is a both problem.  The US does not tax enough and the US spends too much.  Both issues need to be addressed.

    Right or wrong: Should Entitlements (programs we the taxpayers have already paid for) be attacked?  (let Grandma starve, kick the disabled Veteran out into the street?)

  • Yonnieyonsta

    The lack of revenue issue could easily be turned around if Congress would simply place tariffs on imports and use those tariffs to pay Entitlements.  This would free-up revenue to cover other expenses.

    Imports are stolen jobs and lost revenue from payroll taxes.  Taxes that would have covered SSI, Medicare and Medicaid.  Imports are usually far cheaper in cost to similar competing US-made goods, it’s only fair that imports should help pay for the jobs and taxes that they displace.

    The same should be applied to off-shore services such as call-centers.  How many times do you need help with your Microsoft product and you end up talking to tech-support and can’t understand a damn thing they’re saying?  Or with your Telephone company?  These used to be American jobs, now they are displaced jobs and revenue sources not taxed anymore.  The list goes on.

    • Rupert in Springfield

      >Please show an example of where and when “Trickle-down” has ever worked.

      Kennedy and Reagan do spring to mind. Both faced recessions. Both cut taxes and the economy sprang to life. Higher income tax revenues were the result.

      >True or false: Are taxes on the rich and corporations the lowest in history right now?

      False – America has the most progressive income tax system in the world. The rich shoulder a bigger share of income taxes than in other countries. Under the Bush tax cuts, the lowest income earners were not only removed from the tax roles, they got back money in the form of tax credits.

      >True or false: Does every import represent a lost US job?

      False – Every import represents the result of wage growth and tax policy. Lost jobs are a consequence of that.

      >True or false: Do tax loopholes make it profitable for corporations to ship jobs overseas?

      False – Wage growth, tax policy and regulation are what cause it to make more sense to ship jobs overseas than keep them here. The fact that other countries have lower wages, less regulation and lower taxes is not a “loophole”. China’s pro growth policies are not a “loophole”.

      >The lack of revenue issue could easily be turned around if Congress
      would simply place tariffs on imports and use those tariffs to pay
      Entitlements.

      For the first half of this countries history, thats how things worked. It worked well because the government didn’t do a whole lot. There were no entitlements. Now that there are, tariffs would have to be quite high.

      What do you think will happen when we institute those tariffs?

      That’s right, other countries will retaliate. There goes your export market.

      We have tried this one before. It was called Smoot Hawley. It is generally agreed upon to be the single biggest cause of the Great Depression.

      • Founding Fathers

        “Kennedy and Reagan do spring to mind. Both faced recessions. Both cut
        taxes and the economy sprang to life. Higher income tax revenues were
        the result.”

        Actually, when the tax cut bill was signed by Reagan in August of 1981, the unemployment rate was 7.4%. Six months later it was 8.9%, a year later 9.8%, and eighteen months later 10.4%.

        The “Kennedy tax cuts” weren’t passed until February 1964, when unemployment had already come down to 5.4% from the 6.6% at the time Kennedy was inaugurated. Yes, unemployment continued to drift down (there was the escalation of a war over in Southeast Asia–war has tended to be good for the economy, except when the President’s name is “Bush”), but it’s a huge stretch that it was caused by the tax cuts.

      • Founding Fathers

        By the way, when Jimmy Carter took office, unemployment was at 7.5%. A year later it was at 6.4%, two years later 5.9%, and three years later 6.3%. It went up in his last year, and when Reagan took office the unemployment rate was …

        7.5%. A year later it was 8.6%, two years later 10.4%, and three years later 8.0%. You’ll notice that a year, two years, and three years into Reagan’s term unemployment was significantly higher than in the corresponding years of Carter’s term.

        There was no gas crisis in Reagan’s fourth year, though, so unemployment fell to 7.3% at the time of his second inaugural, a mere 0.2% lower than when he took office, and throughout his first term it was mostly much higher than in Carter’s Presidency.

        Even five and six years into Reagan’s Presidency, though, the unemployment rate was higher than at the end of the 1st, 2nd and 3rd years of Carter’s Presidency.

        Here’s the source of my information: http://data.bls.gov/pdq/SurveyOutputServlet

      • Ardbeg

          And how much did the national debt increase under RR?  What were the tax codes during the 60’s, 70’s and early 80’s when the US economy did show great growth?  Find the answer yourself and see if it was trickle-down.  Trickle-down has shown some positives in the short term, it’s NOT a policy for the long term. How did Bush’s tax cuts work out?  Where are all those jobs?  How the national debt do under Bush?  You happy with that?
          I hear the term “Job Creators” constantly.  What a joke.  Get a fair and balanced tax system (that’s easy to follow and isn’t 1000 pages) People who make more-pay more.  Get the government out of the “Job creation” business, when did it become the governments job to create jobs?  Isn’t this a democracy?  Don’t we have an economic system that’s market based (capitalism) Cut taxes and spend more=GOP, raise taxes and spend more=Dems.  Both options are bad.  You have picked a side to defend, but you can’t! 

    • 3H

      Certainly taking a protectionist stance would not help our economy at this time, and could help worsen the economy.  In order to fund entitlement programs, the tariffs would have to be draconian in scale.

      However, no matter what you may hear, it is not generally agreed that Smoot-Hawley was the “single biggest cause of the Depression.”  In fact, it would appear that many consider it to have been a minor cause.

      “Most economists at the time and since agree that it had a negative effect on the economy. However, since foreign trade represented less than 5% of GDP, most economists (including liberals and conservative) feel it was only a minor cause of the Great Depression.”

      http://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act

      It’s a cautionary tale – many people who think they know history, really have a very poor grasp of it.

  • Founding Fathers

    This pretty well says it all:

    http://www.washingtonpost.com/blogs/ezra-klein/post/obamas-and-bushs-effect-on-the-deficit-in-one-graph/2011/07/25/gIQAELOrYI_blog.html

    Where were you, Mr. Canfield, when a Republican President was racking up huge debt?

    • Rupert in Springfield

      >Where were you, Mr. Canfield, when a Republican President was racking up huge debt?

      So your argument is that Republicans racking up debt justifies a Democrat racking up way more debt. Don’t think that one will fly with anyone but the HuffPo’s

      Look, this has been pointed out to you endlessly. When Bush was racking up debt conservatives complained loudly. Rush went on about it for weeks during the Prescription Drug Plan debate. National Review was against the Mid East wars very early on.

      Your attitude that pretending something never happened if you are ignorant about it neither proves your point or makes you look at all informed. Id give up this tactic if I were you.

      • Founding Fathers

         Rupert, did you click on the link. The point is that Bush has caused way more debt than Obama.

        • Phewey!

          Yo shrubwhacker, we’ll all be taking a FOUNDING FATHERS at the MOON if the BO in the White House is allowed a second term to stink US up with New World Odorances.

          • Founding Fathers

            Uh, I think you’re past due for your meds.

          • bulletoney

            and you, slur, have slummed so far left, your quatrains lie mired sum where in the vicinity of Nikumaroro Island.   Selah.

      • the real valley person

        Conservatives complained about Bush loudly? That is rich. Yes, there were grumblings about Medicare Part D, but no complaints about the Iraq war. You are taking a few token gripes from those who helped elect and re-elect Bush and are trying to turn them into something substantive.

        Bush did basically 4 things that turned the federal budget from surplus as far as the eye could see to monster deficits. Lets start with the fact that the budget was in surplus when Bush took office. What did he do over 2 terms?

        1) His 2 large tax cuts took $1.8 trillion out of revenue over their first 10 years, and will cost another $4 trillion over the next 10 if they stay in place.

        2) The Iraq war (I’ll let the Afghan war go since this was clearly supported by 95% of the American people and nearly all of Congress) cost about $1 trillion in appropriated funds to date, and the cost is continuing while we still have over 40,000 troops there. He raised not a dime in taxes to cover these costs.

        3)   Medicare Part D cost about $550 billion to date. No taxes to pay for this.

        4) The estimated total cost of the financial crisis and subsequent recession is $4 trillion, which includes lost tax revenue, automatic expenditure increases (unemployment, Food stamps, etc) and the stimulus spending, which would have been unnecessary has there been no crisis, which happened under Bush.

        So bottom line, Bush cost the US government $7.5 trillion in accumulated debt, not counting the long term costs of his war of choice.

        Yet “conservatives” are blaming Obama. How about taking responsibility for having foisted Bush on us in the first place? Can we get an “oops our bad” on this?

  • Boo Hoo Peggy Sue

    The Federal Government needs to STOP wasting the taxpayer’s dollars on nonsense such as “does a shark have teeth?”  Believe it or not, cutting out all of the silly studies would balance the budget!

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