Big Chunks of Corporate Tax Cuts End Up in Executives’ Pockets (opens in new tab)

(theintercept.com)

19 pointsseagullz4y ago4 comments

4 comments

Federally, the corporate tax rate is 21%. The top marginal rate (which all these executives pay) is over 30%. Every dollar that goes to execs is MORE highly taxed than if it had stayed in the corporation.

If the goal is to maximize total tax collected, this is an argument for the total elimination of corporate taxes, not an increase.

DangitBobby4y ago

That... Doesn't make sense to me. If "We" (the company) suddenly pay 10% in taxes instead of 20% and we gift 35% of the difference to our execs, the government is now collecting 0.1 + 0.1x0.35x0.3 instead of 0.2. Righ? I mean, even if it was all gifted to execs, it would be at most 0.1 + 0.1x0.3, which is still definitely less than 0.2.

didgeoridoo4y ago

Think on the margins. At zero net investment and holding other expenses constant, each marginal revenue dollar can either go to corporate profit and be taxed at 21%, or go to an employee’s pocket and be taxed at their individual marginal rate. For the highest paid employees, this will be 37%, plus additional taxes for FICA/Medicare (“payroll tax”). Even this ignores the fact that corporations are much better at legally avoiding taxes than natural persons are.

DangitBobby4y ago

Be wary, still in peer review.

j / k navigate · click thread line to collapse

4 comments

didgeoridoo4y ago

If the goal is to maximize total tax collected, this is an argument for the total elimination of corporate taxes, not an increase.

DangitBobby4y ago

didgeoridoo4y ago

DangitBobby4y ago

Be wary, still in peer review.

j / k navigate · click thread line to collapse