Comments on: McCain Calls For Irish Tax Rates http://wonkroom.thinkprogress.org/2008/09/29/irish-tax/ Thu, 26 Nov 2009 16:42:01 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: Chris http://wonkroom.thinkprogress.org/2008/09/29/irish-tax/comment-page-1/#comment-2580 Chris Tue, 30 Sep 2008 11:32:05 +0000 http://wonkroom.thinkprogress.org/2008/09/29/irish-tax/#comment-2580 I have to agree with <em>fletc3her</em> when he says that the <strong>Two-Thirds Of Corporations Did Not Pay Taxes</strong> claim is misleading. Pass through accounting courtesy of S-Corporations presumably accounts for much of this, although the tax code is still riddled with loopholes that lower the tax rate for corporations. Just take Hewlett-Packard as an example (Carly Fiorina's old haunt), whilst the marginal rate is 35%, thanks to <a href="http://www.democrats.org/page/content/VPFiorina" rel="nofollow">loopholes and keeping profits off-shore</a> HP only pays an effective rate of 12%. I distinctly remember when <a href="http://wonkroom.thinkprogress.org/2008/05/12/fiorina-stumped/" rel="nofollow">Carly Fiorina was stumped by George Stephanopoulos</a> back in May. She was making a diatribe about corporations being forced to keep profits offshore, and using this as the excuse to bring the corporate tax rate down at home. George made the very intuitive point that this wouldn't make them bring the profits back, because they can still pay 0% offshore? Until we crack down on this loophole, McCain's tax rate spiel is futile. I have to agree with fletc3her when he says that the Two-Thirds Of Corporations Did Not Pay Taxes claim is misleading.

Pass through accounting courtesy of S-Corporations presumably accounts for much of this, although the tax code is still riddled with loopholes that lower the tax rate for corporations.

Just take Hewlett-Packard as an example (Carly Fiorina’s old haunt), whilst the marginal rate is 35%, thanks to loopholes and keeping profits off-shore HP only pays an effective rate of 12%.

I distinctly remember when Carly Fiorina was stumped by George Stephanopoulos back in May. She was making a diatribe about corporations being forced to keep profits offshore, and using this as the excuse to bring the corporate tax rate down at home. George made the very intuitive point that this wouldn’t make them bring the profits back, because they can still pay 0% offshore?

Until we crack down on this loophole, McCain’s tax rate spiel is futile.

]]> By: fletc3her http://wonkroom.thinkprogress.org/2008/09/29/irish-tax/comment-page-1/#comment-2564 fletc3her Mon, 29 Sep 2008 15:57:55 +0000 http://wonkroom.thinkprogress.org/2008/09/29/irish-tax/#comment-2564 I do wish you'd stop repeating the bogus assertion that two thirds of U.S. corporations do not pay taxes. A large percentage of these corporations use pass through accounting so they do pay taxes on corporate earnings, but those taxes appear on the individual tax returns of the shareholders of the corporation. This does reduce the effective tax rate from 35% to the tax bracket of each shareholder, but is hardly a loop hole that results in paying zero taxes. I do wish you’d stop repeating the bogus assertion that two thirds of U.S. corporations do not pay taxes. A large percentage of these corporations use pass through accounting so they do pay taxes on corporate earnings, but those taxes appear on the individual tax returns of the shareholders of the corporation. This does reduce the effective tax rate from 35% to the tax bracket of each shareholder, but is hardly a loop hole that results in paying zero taxes.

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