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July 30, 2010


I think Pawlenty gave the right answer on taxes:

when we contacted Pawlenty's camp, a spokesman cited the high rates of corporate taxes in the U.S. "This unacceptably high corporate tax rate makes the U.S. less competitive by encouraging companies to shift investment to nations with lower corporate tax rates," said spokesman Alex Conant.

...Corporate taxes are comparatively high in the U.S., and that's a worry for businesses and, indirectly, for their employees and customers.

I have read that US corporate tax rates are the highest in the world. Because it's easier than ever for businesses to move overseas, the corporate tax rate is key.

I'm amused by the way PoliFact downplayed this point. They observed that high corporate tax rates harm only those who own stock, work for corporations or buy goods from corporations. That includes everyone.

In fact, that's not even the full toll. If corporations move to other countries, federal, state, and local tax revenues will fall, putting pressure on government employees as well. States and localities understand this principle. Not infrequently, they will give a special tax break to encourage a large business to move there or to discourage them from moving away.

Did Fox News really repeatedly ask whether people who don't pay taxes should be allowed to vote? According to the cite, Steve Doocy asked the question twice -- once in the teaser to his show and once more on the show itself.

Twice isn't "repeatedly". That words is defined as done, made, or said again and again; continual or incessant.

Three times - once by Doocy in the teaser then twice in a two minute segment by Bolling; I'd call that "repeatedly." Watch the videos that are linked off the MM page.

Added an update on Pawlenty above.

Interesting idea -- no representation without taxation. As for corporate taxes,you have to distinguish between tax rates on the books and tax rates actually paid. GE had an income of $10 billion last year and paid $0 (zero) in taxes. Why doesn't Fox ask whether corporations that pay no taxes should be allowed to pay for political ads?

"Repeatedly" is an ambiguous word. Perhaps it could mean as few as three times, but it also means continually or incessantly. I think many readers would assume the latter meaning. Try re-writing Brendan's tweet substituting three times for repeatedly and see how much less punch the more accurate version has.

However, Brendan behaved no worse than Fox News. Fox used an outrageous question to stimulate viewers of their program; Brendan used outrageous exaggeration to stimulate viewers of his blog.

Three times in one minute is "repeatedly," in my book...

Brendan provided a link for his comment:
the effective corporate tax burden (rather than the statutory rate) is actually relatively low in the US.

However, his link doesn't adress the effective corporate tax burden, although it does say that "corporate taxes only accounted for 12 percent of federal tax revenues in 2008."

In fact, the effective federal corporate tax rate will be around 35% for corporations with significant profits. In addition, corporations may pay state income tax, which is a flat 8.84% in CA (highest in the west.)

This means that a corporation earning $100 million in CA after tax would earn $178 million in tax-free Bermuda. That's why, in my field, Bermuda is home to lots of reinsurance companies while California has none AFAIK.

I must admit that some publications consider US conporate tax rates to be more comparable to other G7 countries because of differences in depriciation rules. See http://www.cbo.gov/ftpdocs/69xx/doc6902/11-28-CorporateTax.pdf

Depreciation is insignificant for insurance companies. In this industry, US federal + state corporate tax rates are indeed the highest in the world. However, depreciation would matter for some other industries.

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