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LJWorld.com weblogs autie

Corporate Welfare

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I recently read my local legislators newsletter and he makes references to some of the current bills and money saving strategies. One of them is this idea of elminating corporate income tax. I'm not an economist. So can somebody explain to me how cutting revenue will help the bottom line of the state?

I would be of the opinion that when corporate income tax is done away with it will only result in the revenue enhancement of the corporate owners or shareholders. Where is the leverage that says this windfall of asset will be reinvested to create new jobs? What says that this money won't be converted to a new Cobalt boat or a trip to the Caymans? Corporate welfare is truly the march of folly.

Comments

itwasthedukes 3 years, 1 month ago

Do I smell class warfare? All corporations are run by fat cats? Some how the corporation pays taxes? People pay taxes! Do you think the corp doesn't pass on the tax to the consumer? This is why America is failing. Poorly educated people that just want something for nothing.

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QuinnSutore 3 years, 1 month ago

Interesting - when corporations get welfare they make jobs, and when people get welfare they punch out more babies.

So it's nice to see we're investing our money in areas that will have a return and not more liability.

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georgeofwesternkansas 3 years, 1 month ago

Autie calls it corporate welfare, I call it a jobs program.

Pay taxes or reduce the number of employees. What do you wand Autie? Can't have it both ways, unless the government makes a law that you have to buy my product.

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notajayhawk 3 years, 1 month ago

" I'm not an economist. So can somebody explain to me how cutting revenue will help the bottom line of the state?"

After the Bush tax cuts, autie, did corporate tax revenues increase, or decrease?

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ibroke 3 years, 1 month ago

tomato- you should have said the corporations are using their tax hikes to move jobs out of the country, if i owned a corporation thats what i would do

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tbaker 3 years, 1 month ago

I think it was sometime during the 8th grade I learned governments do not create jobs. They do not create wealth and capitol. They take it. The willingness of entrepreneurs (or corporations) to invest their capital, combined with consumer demand for goods and services creates jobs. The government plays with the cost of doing business. It subsidizes some industries it likes, and jacks up costs for others it dislikes.

Right now, depending on the research you want to believe, there is $13-15B in US-held capitol currently off-shore in more tax-friendly economies due in very large part to the fact the US is tied with Japan for having the highest effective rates of taxation in the world. Now I believe taxing any form of income is both immoral and stupid, but if we eliminated just one form - corporate taxes - the US would become the most business-friendly place on earth with the stroke of a pen. Instead of leaving, business would move to the US. This would create jobs. Remember, "corporate" taxation is not a burden born by some rich fat cat in a mahogany paneled corner office, it is a cost of doing business spread across all the stockholders , (people's 401K, IRAs, Granny's mutual fund, teacher pension funds, etc) It hits employees through lower wages and consumers with higher prices. Corporate taxation hurts everyone across the entire income spectrum.

To answer the author's question, when jobs are created, all the other forms of tax revenue all the different echelons of government collect are increased such that whatever net revenue is lost by the elimination of the corporate tax is more than made up by the increase in every other tax. President Obama's Council of Economic Advisor's recently reported that a corporate tax reduction has a 1 : 3 effect. For every dollar corporations save in taxes, the economy at large (GDP) increases by three. Instead of one person paying state sales tax, personal property tax, realestate tax, state income tax, federal income tax, payroll withholding tax, social security and medicare tax, etc, etc, - now you have three.

No brainer...

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autie 3 years, 1 month ago

scott3460 (anonymous) says… "These are the values inspiring those brave workers in Poland ... They remind us that where free unions and collective bargaining are forbidden, freedom is lost. " ronald reagan, Labor Day Address at Liberty State Park, 1980

Great timing. After yesterday's debacle in the CheeseHead State. Works unite..to the barricades.

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riverdrifter 3 years, 1 month ago

Mike Murphy was a great guy. He had so many friends that I'm sure they'll need uninformed guards at his funeral. I'll miss him.

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Liberty_One 3 years, 1 month ago

Starve the beast. Any cut in taxes is a good thing.

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true_patriot 3 years, 1 month ago

That figure is way low. Depending on how it gets defined, somewhere between 20 to 40 percent of national spending is corporate welfare. Even at the low side of 20% it utterly dwarfs social safety net spending and is generally not the most efficient way to spend tax dollars, having a much lower return on the dollar than targeted projects that create jobs while putting America ahead in terms of new technologies, manufacturing, or education.

Even spending it on extended unemployment benefits to help states out right now returns $1.40 per dollar spent (a fantastic return on investment) vs less than a dollar return on corporate welfare and only 40 cents on the dollar for tax cuts for the wealthy (a rotten return on investment).

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RoeDapple 3 years, 1 month ago

In other news, radio legend Mike Murphy died today . . .

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The_Original_Bob 3 years, 1 month ago

This post needs more cuzins, rednecks shooting at golf balls and accidentally hitting kayaks in the Kaw, and biscuits.

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scott3460 3 years, 1 month ago

"These are the values inspiring those brave workers in Poland ... They remind us that where free unions and collective bargaining are forbidden, freedom is lost. " RONALD REAGAN, Labor Day Address at Liberty State Park, 1980

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Scott Morgan 3 years, 1 month ago

The business of America is business. Cutting corporate taxes, or better yet going to a flat corporate tax will only stimulate the economy. It's very very simple. Who hires? The Government and private sector.

Put money in the hands of people who create non-government jobs.

Government workers suck tax money, even the silly comments from some government employees of late stating "they pay taxes too." No, you pay money to the government so they can pay you. Might as well not tax government employees.

Private sector jobs generate tax dollars. Corporations employ private sector employees. Simple isn't it.

Lawrence is a great example of a small city which is far far too dependent on tax dollars. KU and the public schools are by far the largest employers. Just think of all the private sector real dollars it takes to keep Lawrence, well for lack of better words, Lawrence.

It's a shame our president isn't letting us know how socialist nations, especially European socialist nations are failing.

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scott3460 3 years, 1 month ago

Tonight's cynical and shameful action in Wisconsin shows how pervasive the corporate corruption of our government has become. So now employee rights are further diminished. What will the vultures want next? Shame on all who support the destruction of our once great Middle Class. Shame!

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jhawkinsf 3 years, 1 month ago

Corporations, as I understand them, provide goods and/or services. Whether or not you agree with whatever tax structure employed, I think the appropriate terminology should be corporate "workfare". Much in the same way that as a condition of public assistance, work is required, that is "workfare". As long as corporations are providing goods or services, the tax breaks should be called corporate workfare.

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autie 3 years, 1 month ago

That was just a manner of speaking, lets not get religion. I'd lose my heathen status.

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George Lippencott 3 years, 1 month ago

Could this have anything to do with the competitive nature of business? Our corporate taxes are among the highest in the world (for those who pay them). That means our corporations are at a competitive disadvantage with other international corporation based elsewhere. Just maybe they would sell more if they could reduce the costs. Maybe that would lead to more jobs here.

There is an article that suggests that much of the alleged "cash" in our corporations is in fact off shore. They keep it there to avoid taxes here. Taxes have consequences just AS ELECTIONS DO

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autie 3 years, 1 month ago

Damn Bea! Not that it was merited, just what TOB says. So you're saying it all goes back to the candidate that got elected with support from said corporations so they improve their bottom line and folks can buy colbalt boats and go to the Caymans on the weekend? yes. So in our case, the new guy Brokeback got elected with Koch/tea bagger money so he owes them....quid pro quo?

Now,// LoveThsLife, it is a good theory...I'll believe it when I see it, yeah..they want to come to the state with huge education cuts, art got abolished and Phred Pruns Prampant through the countryside. Can I get an amen?

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deec 3 years, 1 month ago

Why not cut out the middle man and just tax the corporations?

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LoveThsLife 3 years, 1 month ago

I think there is a theory that if they cut taxes for corporations then corporations will view Kansas as a business friendly state and move here thus creating jobs which provide Kansas with more income tax.

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beatrice 3 years, 1 month ago

The belief (a false belief, in my opinion) is that more corporations will relocate to a place with low are zero taxes. The more companies there are, the more jobs. The taxes come from employed individuals. It is pure Trickle Down Economics.

However, it doesn't work. Nevada has zero percent corporate income tax, and they have an unemployment and foreclosure rate far higher than almost anywhere else in the country.

Corporations are where the big, big money is. Follow the money, and which company is supporting which candidates, and you will almost certainly find out the true answer you seek.

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autie 3 years, 1 month ago

Where is the benefit to the state? How does that work? Come on budget gurus....How will no tax for corporations make jobs in Kansas? How will that increase state revenues? Sounds like alchemy to me.

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ivalueamerica 3 years, 1 month ago

Our government spends on average 1%-2% of it´s annual budget on Social welfare and between 6%-8% on Corporate Welfare.

Up to 61% of corporations do not pay taxes and 100% of the fortune 500 companies receive tax breaks and subsidies.

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bobberboy 3 years, 1 month ago

P.S. We are ready learned that the trickle down theory does'nt work ! So by all means let's spend more money to figure it out again !

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bobberboy 3 years, 1 month ago

This bill puts money into the hands of corporate america and takes it out of the hands of the poor.

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LadyJ 3 years, 1 month ago

I forsee thousands of new corporations. In fact I know a family that just did that.

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