Problem is not tax rate. The problem is tax loop holes and the way 401k's work in America. Take Amazon, they paid zero in Federal Taxes in 2018. They also paid no dividends. Result... no taxes to the Fed's. Since most of the gains are tax protected in 401k's, even the cash out goes largely untaxed. Most companies push increases in value over paying out dividends. They reinvest profits in ways to grow and avoid paying taxes. The sheep only see the increase in total value on their 401K and get excited.
Again, the current incentive is to take all profits, convert them in to tax free growth and expansion. This cuts the taxes payable. allowing the money to be invested tax free, showing higher the corporate value to growth. Multiply this over years, and this will show a much higher growth rate than the companies that show a profit and payout dividends. Since very few are getting the cash dividends in their pocket, the long term growth is more acceptable, as long as the company or economy doesn't crash.
This whole scenario, of course, creates huge wealth potential to those who can take advantage of the short term swings in value. Hence, a motive to drive stocks up and down by the very rich and powerful. Those who have the knowledge and ability to play the market make billions off the masses stuck in managed portfolios.
Drop corporate taxes to nothing, take away loopholes, require corporations to spend a percentage of total profit in dividends, before reinvestment, require 401k's to pay these dividends out in real time, and then tax them at a capital gains rate. Allow startups time to get established, say 5 years, before requiring the dividends, and allow different rates for some industries. Give Bio techs, perhaps, a lower payout then banks, since the requirement to reinvest in development is different.
Just crying about how corporations need a higher tax rate, which seems to the main liberal talking point, shows a lack of understanding.
Previous Topic
Index
