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View Diary: Analysis: Dow 30 companies show what a joke calling corporate tax burden 'heavy' has become (70 comments)

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  •  public companies, by and large, must be (1+ / 0-)
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    c corps subject to double taxation.  so if we're talking about the big companies, they don't have a choice.

    •  and c-corps have the most flexible (1+ / 0-)
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      capital structures and are overwhelmingly preferred by investors (as you could imagine, vclib could speak to this point much more intelligently than me, and I'd love to hear his take, frankly, on choice of entity)

    •  The dual-taxation meme (0+ / 0-)


      So enough, please, of this idea that if corporate profits are taxed once, at the corporate level, then that means they should never be taxed again when they show up as individual income. That income is unearned: if anything, it should be taxed at a higher rate than earned income, because we want to encourage people to create value by working, rather than just living parasitically on the labor of others. If you want to make an argument that unearned income should be taxed at a lower rate, go right ahead. But don’t give me the dual-taxation argument. Because the same argument can be applied to just about any tax you like.
       - emphasis added
      A group called Citizens for Tax Justice has more reasons (PDF) why the dual-taxation meme is silly. A few:
      First, about two thirds of personal dividends paid by taxable corporations go to tax-exempt entities such as retirement plans and university endowments. In all likelihood, a similar percentage of capital gains on corporate stock are also tax-exempt.

      Second, taxes on capital gains earned outside of tax-exempt plans are not imposed until shareholders sell their corporate stock at a profit. This means that those taxes can be deferred indefinitely. And even if individual shareholders do report taxable capital gains, they often will offset such gains with capital losses (by selling stocks that did poorly at the same time).

      Third, even personal dividends and capital gains that show up on tax returns are not subject to the Social Security tax of 12.4 percent that applies to the earnings that make up most or all of the income of middle-class taxpayers.
       - emphasis added

      I don't know about all the ins & outs of tax law but guess I'm just tired of labor being taxed more than capital - it's not fair imo
      •  here's a fat load of horseshit. (0+ / 0-)

        the notion that 2/3 of dividends go to charity is totally fucking stupid.  its laughable.  and follow their links, it goes to a CTJ "study" where they crunch their own numbers in dubious fashion.  they completely ignore that most stock is owned by ETFs and mutual funds, which pass through their dividends to shareholders. (which explains their bizarre non sequitur about s-corps.  they probably saw "pass through" and were too dumb to understand that it meant RICs)

        I have no qualms with the gist of what you write, just wanted to note that when Public Citizen is right its usually an accident.

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