Posts filed under “Taxes and Policy”

Corporate vs Personal Income Taxes

The Sunday NYTimes has an interesting commentary from Harvard prof Greg Mankiw on Corporate taxes:

Compared with other ways of funding the government, the corporate
tax is particularly hard on economic growth. A C.B.O. report in 2005
concluded that the “distortions that the corporate income tax induces
are large compared with the revenues that the tax generates.” Reducing
these distortions would lead to better-paying jobs.

Of course, a corporate tax cut would affect the federal budget.
And any change in tax policy has to be made against a background of a
looming fiscal crisis, which threatens to unfold as baby boomers retire
and start collecting Social Security and Medicare.
In 2007, corporate taxes brought in $370 billion, representing 14
percent of federal revenue. Cutting the rate to 25 percent would seem
to cost the Treasury about $100 billion a year.

Part of that
revenue loss, however, would be recouped through other taxes. To the
extent that shareholders would benefit, they would pay higher taxes on
dividends, capital gains and withdrawals from their retirement
accounts. To the extent that workers would benefit, they would pay
higher payroll and income taxes. Increased economic growth would tend
to raise tax revenue from all sources.

Mankiw suggests dropping the corporate tax rate, and making up the revenue short fall with a Pigou tax of 40 cents a gallon on gasoline. That has precisely zero chance of passing.

To give it some context, consider this excellent chart assembled by Time’s Justin Fox:



Justin adds some caveats:

-Corporate income is taxed
twice — once as corporate income and once as either capital gains or
dividend income (which are both counted under personal taxes)

-Economists teach that corporations are often able to pass on much of their tax burden
to employees and/or customers.

-Relatively high
corporate tax rates incentivize corporations to find ways to run their profits through lower-tax

-Corporations are just legal constructs owned
and operated by people who, for the most part, pay taxes.


A chart for the corporation-bashers among you
Justin Fox
Time, May 21, 2008 9:09

The Problem With the Corporate Tax
NYT, June 1, 2008

Category: Corporate Management, Dividends, Taxes and Policy

The Costanza Energy Policy: 25 Ways to Drive Oil to $150

Category: Energy, Politics, Taxes and Policy

States and Cities Impact On GDP

Category: Data Analysis, Economy, Taxes and Policy, Wages & Income

State Gas Taxes

Category: Energy, Taxes and Policy

Quote of the Day: US Energy Policy

Category: Energy, Taxes and Policy

Untapped Resources?

Category: Energy, Taxes and Policy

Another good Friday on CNBC — excellent guests, discussing real issues, and in great detail.

Like the interview two weeks ago with David Einhorn and William Ackman, this shows how good finacial television can be when a smart guest discusses weighty topics with sufficient time to go into details beyond bumper sticker.

I don’t know much about David Walker, but I was very impressed with him. Here’s info on the Peterson Foundation.

I don’t think the videos have as much Walker as they did on TV . . . 


Private Equity With Pete Peterson
click for video

Discussing the state of private equity, with Pete Peterson, The
Blackstone Group chairman/co-founder and David Walker former U.S.


Wall Street Star
click for video

Perspectives on the economy, with Pete Peterson, The Blackstone
Group chairman/co-founder and David Walker former U.S. Comptroller



Video: David Einhorn, Greenlight Capital, William Ackman, Pershing Square Capital

Category: Economy, Energy, Taxes and Policy, Video

Currency for the Blind

Category: Currency, Economy, Taxes and Policy

Researchers Wanted

Category: Taxes and Policy

Researchers Wanted

Category: Taxes and Policy