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Joel, get your head out of your ass, if that is possible Tom Send a noteboard - 25/02/2012 07:02:34 PM
Company A makes $1 million in profit. Let's have a 35% tax rate plus, say, an 8% state tax rate, that means that in Year 1 Company A is paying $420,000 in taxes (42%).

If in Year 2 it makes $1 million in profit but subtracts the $80,000 in state taxes from the previous year, that means its net profit is $920,000, on which it will still pay 42% or $386,400, but on the slightly smaller amount. However, this is still $36,400 more than if it had not paid the state taxes. On average, the deduction has only halved the effective state tax rate.

Also, because that benefit is for the PREVIOUS year's state tax, rather than the CURRENT year's state tax, it can lead to fluctuations. For example, let's say that Year 2 profit was $0. The state tax deduction is only good to the extent the corporation can roll it forward. If it has several bad years in a row, chances are it won't be able to, so it will pay the full 8% extra for its boom year.

Also, your statement

US companies build FACTORIES in Third World despotisms; they do NOT incorporate there, because the kind of governments willing to grant low corporate income tax rates tend to be the kind who simply seize corporate income if it becomes large enough to warrant the effort.


shows how little you know about how business is actually conducted. US companies are forced to incorporate domestic entities in most jurisdictions or have a "branch office", which is usually taxed the same way and has the same legal effect. Where an entity is incorporated is irrelevant, because the ability to nationalize a company also depends on the nationalizing government's ability to extend its fiat beyond its borders.
Political correctness is the pettiest form of casuistry.

ἡ δὲ κἀκ τριῶν τρυπημάτων ἐργαζομένη ἐνεκάλει τῇ φύσει, δυσφορουμένη, ὅτι δὴ μὴ καὶ τοὺς τιτθοὺς αὐτῇ εὐρύτερον ἢ νῦν εἰσι τρυπώη, ὅπως καὶ ἄλλην ἐνταῦθα μίξιν ἐπιτεχνᾶσθαι δυνατὴ εἴη. – Procopius

Ummaka qinnassa nīk!

*MySmiley*
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Why Joel is CRAZY - Nearly Half of All Americans Don't Pay Federal Income Taxes - 23/02/2012 04:43:15 AM 1407 Views
A not so hypothetical situation... - 23/02/2012 05:46:44 AM 832 Views
Your paying more money now than then. Lower rate but more money *NM* - 23/02/2012 07:52:51 AM 508 Views
Accurate statement, but not a justification *NM* - 23/02/2012 03:44:55 PM 397 Views
Re: A not so hypothetical situation... - 23/02/2012 02:39:43 PM 938 Views
I don't know much about that. - 23/02/2012 03:53:27 PM 774 Views
Why the heck do you think the current tax system is skewed to the rich? - 23/02/2012 03:18:43 PM 972 Views
That's a fair question - 23/02/2012 03:52:08 PM 861 Views
You're operating under the same fallacy he does - that people should pay income taxes. - 23/02/2012 12:05:52 PM 1030 Views
In much the same way - 23/02/2012 01:40:58 PM 983 Views
Same argument re: fallacies - 24/02/2012 02:52:17 PM 813 Views
Was meant as a joke reply - 02/03/2012 06:30:15 PM 1000 Views
Joel is crazy, but I highly doubt that this is "why" - 23/02/2012 01:36:37 PM 1021 Views
HA! HA! Very well played! *NM* - 23/02/2012 03:49:35 PM 354 Views
I see your point, but not how it changes much in the conversation where we discussed that - 25/02/2012 01:49:29 AM 805 Views
Joel, get your head out of your ass, if that is possible - 25/02/2012 07:02:34 PM 852 Views
You kiss your momma with that ad hominem? - 27/02/2012 09:11:33 AM 1006 Views
You mention this statistic all the time. - 23/02/2012 02:16:47 PM 708 Views
Obviously, we are talking about the bottom 50%..... - 23/02/2012 03:22:43 PM 742 Views
How do you account for retired folks? - 23/02/2012 04:18:59 PM 957 Views
social security isn't taxable either *NM* - 24/02/2012 04:21:21 AM 412 Views
Easy... he doesn't. - 25/02/2012 02:56:05 AM 692 Views
I wonder how much of that statistic is students - 23/02/2012 02:22:58 PM 967 Views
Federal taxes - 23/02/2012 04:18:22 PM 831 Views
Your figures are fairly unrealistic - 23/02/2012 04:54:44 PM 1030 Views
Not entirely. - 23/02/2012 06:30:18 PM 779 Views
On exempting SS income: - 25/02/2012 02:30:43 AM 782 Views
Is there any reason why one should exclude the other? - 23/02/2012 07:32:09 PM 830 Views

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