Where your tax dollar goes

What's that zoom sound I hear?  Ah, that would be the point of this article flying over the heads of the liberals in the audience (they'll never 'get it', but it is a highly illustrative article that should be informative to all readers).

As you can see from the stats, the federal government is already very deep into giving money to other individuals.

Even if you ignore social security and medicare which we ostensibly pay into with our payroll taxes, you still have $367 billion in good old fashioned welfare.

There's 300 million Americans in the USA.  That's over $1,000 per American being given out.  Assuming that only 10% of Americans "need" this, it's more like $10,000 per "needy" American per year.  And that doesn't count the $280 billion being spent on "health like Medicaid. This also ignores STATE based programs.

It's pretty hard to see how anyone can rationally argue that the federal government should be doing more.

It's pretty hard to see how anyone can rationally argue that the federal government should be doing more.

Actually it should be hard to argue, but that doesn't stop people like the resident clueless one from doing so.  I still believe he's just here taking advantage of those too stupid to see that they are providing him with free entertainment.

Ah, that would be the point of this article flying over the heads of the liberals in the audience (they'll never 'get it', but it is a highly illustrative article that should be informative to all readers).

you are soooo absorbed in your own bias that you keep repeating this kind of pretentious statement.

Here is what the numbers show (and as they say, the devil is in the details):

Since Defense, Int. Affairs and Other expenses including subsidies (lets call it General Categories) are mostly related to promotion, protection and regulations of major corp. affairs, it is not unreasonable to split the income and expenses of these categories 25% individuals and 75% corp. (remember, if the Corp world acts as they should on their own, there would be no need for EPA, OSHA, and other regulatory and monitoring agencies which consume a lot of gov. expenses. The same goes for the defense since corp interests are essentially what the USA protects overseas).

In 1960 the people paid $ 59.3 B (64.1% ) of the receipts. And the people recieved $ 37.9 B (63.9% of what they paid)
In 2007 the people paid $2024.2 B ( 83.8%) of the receipts. And the people received $1862.0 B (92.0% of what they paid)

In 1960 Corp paid $ 33.2 B (35.9%) and received $ 54.6 (164% of what they paid)
In 2007 Corp paid $$391.7 B (16.2%) and received $ 708.0 (181% of what they paid)

Now look at these numbers !!!!! Corp now pay less and recieve more

The corporations ...... the ones who make fantastic profits and pay their CEO's outrageous salaries are being SUBSIDIZED by the citizens. Just in case you think i am opposed to their profits and salaries .... Far from it. I am glad when they do that and get very upset when they are not doing well since the Citizens need them to work and use their products and services.

However ..... shouldn't they, the Corporations, pull their own weight???? and pay at least as much as they receive?

did you ever think of that? or you just mimic what you been fed?

when you tax a company, you are simply taxing individuals since companies pass on those taxes in the form of higher prices which, in turn, make US companies less competitive in a global market.

Not entirely true, otherwise the corp profits would not have increased by the enormous rate we experienced since the 1980's. Free market and global competion will limit their ability to raise prices. because of low taxes they can raise the prices and still be competitive. that is why their profits sky rocketed.

They didnt lower prices as a result of getting lower taxes. Did they?

It's a different world though. I'm not sure you can fairly compare then to now. Today the US has no real competition in terms of military might. It doesn't need to spend half its income on weaponry, so it can afford to maintain a heavier social security safety net. In times of peace governments are always going to spend more on their people than on other needs - social security offers the greatest voter goodwill for the lowest expenditure.

You may as well wonder why cicadas leave their shells in places where you'll step on them in bare feet. It's just how the world works.

They didnt lower prices as a result of getting lower taxes. Did they?

You are looking at the wrong end of the horse.  Income taxes on corporations are not COGS and so cant result in lower prices.  They do result in increased dividends, which are double taxed (first at the company level, and then at the individual level). And that is the crime on which the point was made.  You can deny it, but then you can deny that the sun rises in the east as well.

Record profits?  Before or after taking into account inflation?  That is the idiocy I hear from the MSM and liebrals in general.  For some odd reason, no company is ever to make more than some arbitrary baseline figure that resides in the minds of the complainers.  Regardless of the value of the money (inflation).

And your "people paid" stats are wrong.  People paid 100% and got 100%.  It is which people got that you are trying to highlight (and not doing well since the information provided is insufficient for that purpose).  A dollar for defense does not go into some sink hole never to be seen again.  It goes for soliders pay and equipment.  Equipment bought from a company that has employees that get paid as well.

But your "received" (by the people) only indicates a bias on your part (not in and of itself bad) that goes to the function of government.  Anyone throwing up numbers like that see the government as the owner of all wealth and therefore responsible for ensuring that the "received" part goes to their perceived priorities of need in the nation, regardless of the wording, or intent of the founding fathers.

One thing the numbers do clearly show, when all the rhetoric is stripped away, is that the national debt, and the interest on it (which may be the only part that does not go the people as most of it is held by foreigners), is not a function of Defense, but of social programs.  It is going up DESPITE the reductions in defense.  And lays bare the lies of the liberal leaders of why we are in debt, and who is at fault (except right now, yes, Bush is clearly one of them).

no but they held the prices longer at the same amount.

This is a good article, Draginol. I was unaware of these numbers and will take this into consideration. While the pie charts certainly appear to speak for themselves, I would like to ask these follow up questions-

1) How much has the population of the U.S changed in the last 47 years?

2) How many retirees and elderly are currently in the U.S today as opposed to 1960?

3) The term "social security" which takes up 23 % of the budget- is this entirely welfare payments, or does this encompass other things as well like food stamps, education assistance etc?

4) As a tie-in to question 3, what is encompassed in the "other" category? Is that where education, police and fire, public libraries, public infrastructure (roads, bridges) fall?

Also as an aside the "national defense" portion is probably a little bigger than listed on these charts. This is due to the fact that many billions of dollars spent on ND get classified as secret and are not listed on the official budget. The amount of money spent on these sensitive programs is known but only by select members of both houses, I do believe?

 

Not entirely true, otherwise the corp profits would not have increased by the enormous rate we experienced since the 1980's. Free market and global competion will limit their ability to raise prices. because of low taxes they can raise the prices and still be competitive. that is why their profits sky rocketed.

If you increase costs to companies, they will find a way to pass on those costs in some manner. This isn't theory. We have a near century of data to know this to be the case. 

I won't even dignify the argument that defense and other programs are there purely to benefit "the corporations" with a response. That's just asanine.

Artysim wrote:

This is a good article, Draginol. I was unaware of these numbers and will take this into consideration. While the pie charts certainly appear to speak for themselves, I would like to ask these follow up questions-

Can't you look this up for yourself? I mean, how hard would it be for you to look up the population growth of the United States on Google?

The budget still reflects "secret" spending, it's still part of the defense or CIA or whatever budget. It just doesn't state what programs they were spent on.

 

regardless of how you you like to spin the facts, people got less than what they paid. I didnt defferentiate between people. ALL people got that amount regardless of category.

Corp on the otherhand got much more than what they paid. they got in in military contracts, protecting their interests worldwide, infrastructure, regulations, ..etc.



what people paid is included in the gov. receipts. and you ignoring the fact that most corp dont pay dividends. so your point is not valid because of these two facts.

You also ignoring the subsidies the corp recieve. specially oil, Agri Busn and Mining ..etc. NO ONE talks about Corp wellfare, but it is as big if not more than the welfare system for the poor. except those corp are not poor at all, they make billions in profits.

btw, again i am not complaining about those subsidies, it gives them incetives to grow , all i am saying is they should pay their dues. As it stands now and from the numbers shown, they are not.

If rich people pay their dues, why cant corp also pay theirs???? only few people in each corp benefit from their low taxes. I would rather see them pay their dues in rder to reduced taxes on the rich and upper middle class. That will benefit more people not just the higher ups in each corp.

of course they will find that way to pass the higher taxes to consumers but that will limit their actions due to competition.

And i did not say defense is only for corp but most of it is for their benefit. The fact that our border's defense doesnt require us to be allover the world as we are now is undeniable. but you can believe what you wish of course.

As in individuals' income there should be a more progressive taxes for corp. A corp that makes few millions in profit is not like a one that makes several Billions even dozens of billions. Small businesses need much more breaks than what they get now but the small taxes on the big ones makes it difficult to do that. I think my tiny, very tiny engineering firm pays more taxes than many corp making billions. they get subsides and pay lower taxes. people and small busn dont get subsidies and pay more taxes. Is that what you think is good for Busn, the country and the economy in general?

And i did not say defense is only for corp but most of it is for their benefit. The fact that our border's defense doesnt require us to be allover the world as we are now is undeniable. but you can believe what you wish of course.

As the owner of a corporation, please enlighten me as to how defense spending disproportionately helps my company.

Incidentally, corporations are already taxed at higher rates than individuals.

You also ignoring the subsidies the corp recieve. specially oil, Agri Busn and Mining ..etc. NO ONE talks about Corp wellfare, but it is as big if not more than the welfare system for the poor. except those corp are not poor at all, they make billions in profits.

Paying less in taxes is hardly welfare.

Welfare is where someone is a net gainer of governmental monies. DO you really want to argue that the industry, that pays billions in taxes, is a welfare recipient?

Are you on welfare if you take advantage of a deduction?

 

All people got 100%. And Paid 100%. That is not spin, that is fact. I merely pointed out that different people got than gave.



No, your point ignores reality. Whether in dividends or re-investment, people got the money. Money not spent by a company is spent (an oxymoron for simplicity sake) on infrastructure or invested (where you get your mortgage from). My point is valid. Companies, while legal entities in some respects, quite simply are just a confederation of people. And in the end, whether the CEO or the line worker, or the supplier or the home buyer, the people ultimately use the money. The difference is that the company - based on decisions by a committee - decide where to spend it, instead of you, or me, or Uncle sam.



Because it is a myth. There is no corporate welfare. There is just a lessenig of the confiscatory taxes. Welfare is when you pay nothing and get something. Show me a corporation that pays NO taxes, and I will show you Chapter 11. That is good for people, right?

our military spending to support our presence allover the world is to protect mutinationals' interests and our presence there enhances our market share in these far and away places. That of course exposes more people to your product and that helps your company. There is nothing wrong with that by the way, all I am saying, multinationals, the ones who are making billions in profits and paying little taxes, should carry more of their own weight.

Small businesses do not benefit much from that, and that is even more reason to make the big ones pay more.

Technically no. and that is my point. multinationals have so many deductions to the point that many of them pay very little even though their profits are dozens of Billions.

But we are not talking technicalities here, we are talking of what are the best policies. I didnt say they are doing something illegal (even though more than few of them are :D). Just change the rules so they pay their fair share.

But most subsidies are surely a form of welfare. Some subsidies are justified, but most of them are not (e.g. oil companies, large Agri Busn. .. etc.)

ok here it is :

"With corporate tax receipts at 20-year low, the GAO takes a look through the books and finds 94% of all U.S. companies paid less than 5% -- and 61% paid nothing at all.

By MSN Money staff and news services

Think about this as you sign that check to Uncle Sam next week: More than 60% of all U.S. companies paid no federal tax at all during the boom years of 1996 to 2000, the General Accounting Office reports.

In 2000 alone, 94% of all U.S. corporations paid less than 5% of their total income in corporate taxes, the GAO said in a report released Friday. Among the largest corporations -- the 1% of all corporations that owns 93% of all corporate assets -- 82% paid less than 5% of their income in taxes."

are you saying 60% of all US comp are in Chap 11.?????!!!!

82% of the top 1% paid just 5% taxes on their income. Those comp own 93% of all corp assets. ..... When are we all, for once, be not biased in our discussion?

It is useless to try to convince the inconvincible.

WWW Link

that was in the year 2000. along with the bush tax cut. business mainly the fortune 500 club have to pay a minimum tax as they did when Reagan was president.

come on people if i know this and i don't pay attention to the news. why don't you people who do pay attention. oh that's right you get your news from the ABN.

No, it's just that it's hard to convince people when you come across like someone who has no idea what they're talking about.

You state facts without understanding the underlying cause.

The reason these companies pay hardly any taxes is because they make sure to pay out as much of their profits as possible to decrease their tax hit.  They do this because the corporate tax rate is much higher than the individual tax rate. 

If you want to see corporate taxes go way up, then lower their tax rates such that they are lower than individual taxes.

If my corporation has a net profit of say $250,000 my tax rate is 39%. But if I take that money and pay it to various S-corporations (which are counted as individual taxes) then the tax rate is closer to 32%.

In addition, what you fail to understand with your factoid is the change in corporate tax law over the past two decades.  Today, most new companies are either LLCs, or S-corporations in which the profits are passed on to the owners of the companies as individuals (individual taxes).

C-corporations, the ones who pay "corporate taxes" are becoming less and less common.

THIS is why you fail to convince people, ThinkAloud. It's because you plainly don't understand these issues you so passionately argue. 

Do you pay the same amount of taxes every year? No? WHy not?

And like all statistics, that is a snapshot in time on only 1 tax, not all taxes. (although for infalmmatory purposes the writer clearly wanted to leave that impression).

When a company loses money, no it pays no income tax (just a lot of other taxes). If it pays NO tax, then chapter 11 is the least of their worries. A long stint in Sing SIng is more likely their worries (it has been done, but the miscreants are almost always caught - unless pardoned by a president while in exile in Switzerland).

But a company cannot lose money every year. I have my own small company. I do not make a profit every year (so I am one of that 64% sometimes), but if I never made a profit one of 2 things would happen - 1 the business would fold, and/or 2, the government would classify the business as a hobby not a business.

Just because GM did not pay INCOME taxes last year does not mean it never did. Or paid NO taxes at all.

Now, gather up the statistics showing ALL the taxes paid by a corporation - any one that is still a viable concern, over the life of the corporation. Then show how much the government gave them in subsidies (hint - 99.9% of them got 0), and subtract the 2. Now show me how you PAY for welfare. What is called Corporate Welfare is nothing more than not taxing them as much as before, but like all Washingtonian New Speak, politicians, especially those of a particular party, call it WELFARE.

WELFARE is not a lessening of taxes. It is the transfer of money from a producing individual to a non-producing one, with no strings attached (as to its repayment).

Comon Dragonil, what is not to understand here. 0.82% of the Corp OWN 93% of the assets of ALL corp and these same big guys only paid 5% taxes on their multibillions of income. and you still say i dont understand the facts. What is not to understand.

Spin it as much as you wish. It is still glaring and obvious.

btw, trust me, I know what I am talking about. I know,first hand,how it works and how they avoid taxes. may be you are the one who are not aware of how they manipulate the numbers. Nothing illegal in all of it.and that is what is absurd about it. S-Corp and small busn in general dont have that same loopholes.

Individuals also pay many more taxes than just the fed taxes. and that is what we are talking about.

you asked for facts, i presented it. Now you are spinning it.

Nothing strange about that. Like I said, it is useless to discuss things if there is an obvious bias.

Well let's see ThinkAloud,  I'm the CEO of a multi-million dollar corporation. What are your credentials?

I think I know a bit more about corporate tax law than you do.  But please feel free to put forth your vast resume on the topic.

Dr Guy also pointed out yet another thing you ignored: When companies lose money, they pay no taxes.

The Big 3 auto makers have massive asssets. But paid nothing in corporate taxes last year -- they lost money.

You also, totally and completely ignored my reply that explained, in detail, why tax revenue from corproations has gone down.

Draginol, this is not a competion. I am sure you know a lot more about corp tax law but what we discussing here doesnt need a brain surgeon to understand.

Of course corp that dont have profits dont pay taxes. That is not what the data is all about. It is about those big guys only paying 5% taxes(as an average of course .... some didnt pay and some paid more than 5%)on their accumulative income.

That general view of what all paid is the point not what each one paid. Rich individuals and small Busn pay more than that, much more than that %, why cant these big guys pay comparable % of their income.

Investment and other justifications are not convincing since it applies to Rich individuals too. In other words, rich corp should pay taxes on a bar with that of rich individuals. that is the main point.

I didnt ignore it. The revenue decline could happen for many reasons. that is not the issue. The issue is and always was Large Profitable corp dont pay their fair share of taxes. That puts the burden on individuals of all income levels.

it is very simple Draginol. In any town in this USA, if there are good profitabe businesses there, the property taxes are generally moderate or low. Go to any town that doesnt have good profitable businesses and you will find the property taxes are generally high. Apply the same to the Nation and you have the same result. taxes from corp help reduce taxes (Fed, State and Local)on individuals. I am sure many of us experienced that when we move from one location to another.

local tax codes, generally, dont contain so many loopholes to escape taxes but the Fed codes contain many of them that is why the effect on local and state taxes is very clear.