Economy & Policy

A chart for the corporation-bashers among you

By wpcomimportuser1 | May 21, 2008 | +

You request. I deliver. Here’s the chart that commenter Brew asked for:

corporate_personal_taxes2.gif
GRAPHIC BY FEILDING CAGE/TIME.COM


There’s a bunch of caveats I feel compelled to throw out: Corporate income is taxed twice–once as corporate income and once as either capital gains or dividend income, which are both counted under personal taxes. Also, economists teach that corporations are often able to pass on much of their tax burden to employees and/or customers. It could even be that relatively high corporate tax rates in the U.S. are incentivizing corporations to find all sorts of sneaky ways to run their profits through lower-tax jurisdictions abroad–that is, we’re on the wrong side of the Laffer curve and we could squeeze more tax revenue out of corporations if we lowered the rates. And in the end, corporations are just legal constructs owned and operated by people who, for the most part, pay taxes.

But still, it’s pretty stinkin’ amazing, no?

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  • buttmonkee

    In the end and ultimately, individual people will pay the taxes whether corporations pay high rates or not. They just pass the taxes along in higher prices for products and services and also will hire fewer individuals to work for them. Taxes are called taxes for a reason….

  • That Anonymous Dude

    I need to incorporate!

  • Brew

    Thanks for the graph. The periods, 1941-1945 and 1950-1955 look interesting don’t they?

  • SamCVG

    Actually, even this (distorted?) graph is only of interest and excitement to those who believe that corporations have substantial and independent existence — the anti-corporate mentality.
    Say several dudes and dudistas form a business partnership and incorporate: why should this organization of interest be taxed at all? They will be taxed as individuals. Why tax their collective efforts? I have to wonder at the foundational ideas that claim that the state has some interest in the collective efforts of partners in a business. ( It smells suspiciously of a fear of collective orders and their threat to the power of the state. Constitutionally suspect, I believe.)
    What would make an interesting chart series would be the percentage of the American public involved in compliance issues. (Go to college so that you can spend your life in compliance regulation! A sort of perverse variation on the Join the Navy marketing campaign.)

  • SamCVG

    Excuse me for posting again, but …I skipped out of this page to this one:http://www.nytimes.com/2008/05/23/business/23runway.html?_r=1&partner=rssnyt&emc=rss&oref=slogin
    Sometimes I wonder about the current presuppositions of …everyone. The Gov is going to spend billions on the problem of crap on the landing field. Cool. Why not hire a couple of guys to walk around the field and look for stuff? 90% of the cost of the way-cool tech for this product will be absorbed by compliance issues. Cheaper to send a couple of guys out there — even when landing path sleuth James gets sucked up into the jets of a Delta take-off.
    ( I can read the news stories now: local legal group, the Wanker Company at Law, has filed a class-action suit against .. for ..claiming .. that …new tech sucks .. or sucks not enough.) Yes, I realize that the death of the hypothetical “James” will involve litigation; but this is an established area of law. And, in all likelihood, James, et. al., will steer clear of the jets.
    But then again, being a rather crappy job, James will come in unshaven and scruffy one day and the tourist group from Retarded, USA , aboard Flight 666 to Ever-Better Vacations Resort will go ballistic/hysteric when they look out the window and see James thinking about his stupid son and what he is going to do with his sorry ass and meanwhile rubbing his scruffy chin — and in effect looking like a bomber dude with some bizarro agenda!!
    Maybe it is better to replace all people with machines. When the Wanker Legal Firm gets a piece of this — Hell, maybe the managing partner will get a seat in the house of reps.
    (And maybe James’ son, a slacker anyway, will get a huge settlement and waste it all on whatever — maybe he will get drunk and run over a tourist who will hire the Wanker firm ….) Yes, it is better that we run machines and observe compliance — calling Sarah Connor.

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