U.S. corporate tax code is out of whack with the world

  • Article by: ANDY BREHM
  • Updated: October 12, 2012 - 7:58 PM

The antiquated method Washington uses to tax American corporations is seriously hampering our country's global competitiveness and economic growth.

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eman2001Oct. 12, 12 9:47 PM

Add our terribly inefficient health care system and we got real problems competing with the rest of the world.

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hobie2Oct. 12, 1210:50 PM

It's never the tax rate, it's the tax paid that counts... A 90% rate with so many deductions that you pay 5% of profits beats a 25% rate with no deductions - every day of the week.

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luzhishenOct. 12, 1211:43 PM

Andy forgot about the VAT that everyone else pays. Andy - you are a corporate propogandist.

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MN's loneliest REPOct. 13, 12 6:20 AM

For an admitted "corporate tax novice", this article was very helpful in providing some background on the issue of Corp Taxes and why they make the US uncompetitive. This seems like it should be a bigger issue during the presidential campaign....it makes me wonder why we're not hearing more about it.

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obamafone4meOct. 13, 12 7:47 AM

The US tax code is a monstrosity created by both parties to buy votes and obtain campaign contributions. The personal income tax code is just as out of whack as the corporate code. It is too complex, too long and unfair.

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rms316Oct. 13, 12 7:54 AM

I would be very satisfied if Corporations actually paid 22% tax without any deductions. Of course, there still would be those whose goal would be to pay zero tax.

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elind56Oct. 13, 12 8:39 AM

Nice, straight-forward commentary that addresses a basic, unbreakable rule of economics. Corporate taxes are just another cost of doing business that has to be passed on to the consumer. Company 'A' that pays a 35% rate will, of course, have to price their product higher than company 'B' that pays, say, a 20% rate, resulting in severely reduced demand for their more expensive product or, perhaps, zero demand. In this day and age that means that company 'A' is simply never even formed in the locale with the higher tax rate. Idealogues from the left feel that the wealthy principles (investors, CEO's, etc.) involved in corporate expansion or start-ups should, out of a sense of 'patriotism' or some other emotional motivator, keep their prices competitive and personally absorb the extra tax burden that their competitors don't have, resulting in a form of wealth redistribution. Human nature dictates that this will not happen but they keep hoping and businesses and jobs keep leaving.

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pitythefoolsOct. 13, 12 8:44 AM

elind56: "In this day and age that means that company 'A' is simply never even formed in the locale with the higher tax rate."

And they don't stay in the locale with the higher tax rate. IBM's HQ is 16,000 sq ft in Armonk. It could locate anywhere on earth. But it's in the US. Apple is in the US. Facebook is in the US. Says something about how low the EFFECTIVE tax rates in the US are, doesn't it?

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chuckdancerOct. 13, 1211:07 AM

Again it is brought to our attention that capitalists act in their own interests; forget about some hoky "patrio"t angle. There once was a world in which countries had businesses and those businesses were considered for example, "American". That world doesn't exist anymore. If you take that as true, then I don't believe that giving capitalists anything can result in anything that is permanent. If the capitalist is always going to take the "best' deal available it is a race to the bottom for the rest of us as dictated by the capitalist. I wouldn't give the capitlists anything not tied to strict results. The capitalist must be brought to heel; the world can not revolve around them.

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jdlellis1Oct. 13, 1211:16 AM

After WWII, the U.S. alone had approximately 65% of the world's manufacturing capacity. As expertise has been shared, the U.S. now finds itself having to compete globally. Take medical devices the U.S. in general and Minnesota specifically today has a huge lead in innovation, technology and manufacturing. Now with Obama care, a new tax has been levied on medical device manufacturers. Seimens (German), Omron (Japan), Phillips (Netherlands) and other manufacturers are now laughing their _ _ _ _ _ off now that they are more price competitive and will increase their market share against U.S. manufactures (e.g., Medtronic, Boston Scientific, St. Jude, etc.).

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