Sorry, my post with … was a mistake. I started to write something, then deleted it, then apparently accidentally clicked “Post Comment”…
Don’t you remember many mergers a year or two ago in a scheme to move headquarters? It was on the news just about everyday. I am sure one can find stats somewhere. I am assuming it a big problem since everyone was talking about it, both Dems and GOP. The only thing they agree on. Obama adm was talking about it, too, how we need to lower corporate tax. Yes, I believe it has to be fairly big to pay corporate tax. Small businesses don’t pay corporate tax. They pay some other tax. I don’t think moving headquarters makes much difference as far as business goes. You still pay payroll tax in the location you do business. It’s not like you fire everyone here and hire replacements over there. I am sure it’s a bit more complicated than just changing addresses but basically the same in spirit. A bit like individuals parking their wealth in Caymen island to evade tax. I am sure someone here knows more about that. Hopefully, they will step in and illuminate.
About companies not moving to lower state from CA, NY or other higher tax states , I know some do. For most, compared to federal tax, state tax differential may not be enough to bother. I would think companies wouldn’t move overseas either if the US tax is only a bit higher by 1-2% or maybe even 3%. There must be a breaking point. I assume we are way over the breaking point since they were moving in droves, enough to be a problem.
There may be a better solution in the fuure but for now it seems to be choice between lose 3% in revenue by lowering corporate tax to 20% or not lower the tax and lose 10% in the near future.
I just looked up. The highest corporate tax is not in CA or NY. The highest is IA followed by PA. CA and NY doesn’t make it to the top. CA 9th, NY lower than LA! Maybe that’s why they are staying put 
To drive my points on deductions, that it benefits the rich. It’s like someone at 10% bracket goes to grocery store and pay $5.40 for $6 milk discounted 10%. Someone at 39.6% rate will pay for $3.60 for the same milk. Not just that. At 39.6% bracket, they have more to deduct. So the poor guy gets milk at $5.40 and a lot of bread $2.70. Having used up is money after buying bread and milk, he leaves. 39.6%er stays on, goes to meat counter pay $6 for a piece of $10 meat and organic kale $1.80 discounted from $3 until he fills up the cart. Did someone mention oligarch? Is this any different from being an oligarch?
Toyota moved its corporate headquarters from California to Texas. Friends who made the move love it. Lower housing costs and no income taxes. So its a raise for them.
My first google hit was this map showing the states/corporate tax. https://www.google.com/imgres?imgurl=https://files.taxfoundation.org/legacy/docs/CITmap.png&imgrefurl=https://taxfoundation.org/state-corporate-income-tax-rates-and-brackets-2016/&h=757&w=850&tbnid=Zyj9LVKkhmpPyM:&tbnh=160&tbnw=179&usg=__evvUauqsD8IunPsWkED-Ph4gvc0%3D&vet=10ahUKEwid2dil6s_XAhVKjVQKHc9_Bf8Q9QEIKjAA…i&docid=qa0GrRf3hog_fM&client=safari&sa=X&ved=0ahUKEwid2dil6s_XAhVKjVQKHc9_Bf8Q9QEIKjAA
I live in one of the highest corporate tax states and we have income tax as well.
Probably we all believe our individual states could do better but I think my state functions pretty well- schools, roads, health, etc
We have a good life. My husband is the Horatio Algers type - poor minority kid from the rough side of town makes good with help (transportation, scholarships, free summer camps) from strangers who donated to organizations. We pay it forward.
I do understand the emotion around the companies that purchase a European company and then move their global headquarters abroad. We had a case here a few years ago involving the local company Medtronic that “moved” HQ to Ireland despite all the leadership staying in Minnesota. They have saved a lot of taxes. I don’t think that the additional hiring they did in the US would have offset that? Here is an overview of how that has shaken out.
http://www.startribune.com/medtronic-now-based-in-ireland-still-reaps-u-s-benefits/392895471/
What you are leaving out is that to get the $6 to buy milk, someone in the 10% bracket only has to earn $6.67. Someone in the 39.6% bracket has to earn $9.93.
What most people can’t seem to grasp is that the “rich” pay most of the taxes. If you have a tax cut, it pretty much is guaranteed to benefit the rich, you can’t cut the taxes of people who don’t pay any. The top 1% pays almost 40% of all income tax. The top 1% pays more in income tax than the bottom 90% combined. The bottom 50% pay less than 3% of all income tax. We could change the system so that the bottom 50% pay nothing, and it would barely more the needle.
Now you could argue that this is messed up for various reasons, but that’s the reality.
In the US, it’s not necessary to actually move. You just create a subsidiary in a low tax state. Apple, for example, runs all of its US revenue through a subsidiary in Nevada, which has a 0% corporate tax rate. But by doing their R+D in California, they get CA tax credits.
There was a spate of companies doing reverse mergers, where a giant company takes over a small company in another country and makes the small country the survivor. That makes you a foreign company without having to move a single thing. This was clamped down on.
This article from 2014 talks about the old political saw “small businesses are the backbone of the American economy” and gives some data that dates to 2010.
https://www.inc.com/jared-hecht/are-small-businesses-really-the-backbone-of-the-economy.html
…As of the 2010 Census, there were 27.9 million small businesses registered in the United States, compared to just 18,500 companies of 500 employees or more. Included in that total figure are sole proprietorships (73.2 percent), corporations (19.5 percent), and franchises (2 percent). 52 percent of small businesses are home-based. The most important thing to note? 99.7 percent of U.S. employer firms are small businesses. …
I am not real happy with that line because it doesn’t give absolute data in terms of employment.
What you are leaving out is that to get the $6 to buy milk, someone in the 10% bracket only has to earn $6.67. Someone in the 39.6% bracket has to earn $9.93.
What most people can’t seem to grasp is that the “rich” pay most of the taxes. If you have a tax cut, it pretty much is guaranteed to benefit the rich, you can’t cut the taxes of people who don’t pay any. The top 1% pays almost 40% of all income tax. The top 1% pays more in income tax than the bottom 90% combined. The bottom 50% pay less than 3% of all income tax. We could change the system so that the bottom 50% pay nothing, and it would barely move the needle.
Now you could argue that this is messed up for various reasons, but that’s the reality.
In the US, it’s not necessary to actually move. You just create a subsidiary in a low tax state. Apple, for example, runs all of its US revenue through a subsidiary in Nevada, which has a 0% corporate tax rate. But by doing their R+D in California, they get CA tax credits.
There was a spate of companies doing reverse mergers, where a giant company takes over a small company in another country and makes the small company the survivor. That makes you a foreign company without having to move a single thing. This was clamped down on.
What you know but are not acknowledging is, that’s because they have most of the money.
They also benefit people who choose to live in high tax states.
Why should I subsidize you because you’ve chosen to live someplace with crazy property taxes or high state income tax?
There are lots of different ways to spin this @notrichenough
Some of us in high tax states do not get back from the government what we put in, either https://people.howstuffworks.com/which-states-give-the-most-the-federal-government-which-get-the-most.htm
But that is ok. I want lower income people to have food benefits, etc. We have to look at the benefit to the country as a whole, not just our pockets or region. I do not want to see poverty expanding.
Top 1% has about 20% of all income, but pays 40% of all the taxes.
How much is fair for the top 1% to pay? 50%? 75%?
Breaking: We’ve got a progressive income tax. Film at 11.
This is true. For example, many southern states, which are currently red, seem to receive an out-sized share of Federal spending. However, for much of the 20th century these states were actually blue, with congressmen and senators who piled up huge seniority who were able to bring home the federal pork.
Money from the feds lets some states have an artificially low tax rate. The deductibility of SALT lets some states have artificially high taxes IMO.
You didn’t answer my question.
What %age of tax revenues is it fair to get from the top 1% or the top 5%, and from the bottom 50%?
Be careful when just looking at marginal rates, igloo. While the top rate is important, so is what they tax and what the allow for deductions. Iowa, for example allows an offset against federal income taxes. California and Illinois require a unitary return, i.e., have to consolidate ops from other states.
I don’t think it works to say what percentage the top 1% should be paying, as that just lumps people into the same group. You could have someone making billions, yet paying a very small percentage of their income, because of all the special deals and scams written into the tax code. Then you have the tax donkeys who pay the highest rates with far less income, with no power to influence.
Certainly if you are going to lower rates across the board, higher income earners will receive more of their money back. However, don’t have the highest group reducing their taxes by 7% and the lowest reducing it less than 1% (or paying more). And while you’re at it, get rid of the special deals like carried interest.
Regarding Boeing moving to Chicago: The city and state offered major tax breaks (60 million $$) to Boeing if it moved out of Seattle. So you can’t just compare the tax structure across the board.
Talk about giveaways to the rich: California routinely offers tax breaks for filming in this state. There’s an article today that Quentin Tarantino’s new movie is getting $18 million. I question whether that money generates more money in the form of jobs and goods and services bought due to the in state filming or whether it’s just a gift from cronies in the legislature.