Apple ordered to pay up to 13 billion dollars in back taxes for taxes credits illegally granted by Ireland

[SimpleDon]

I don't know about VAT but sales taxes are considered extremely regressive. If you care at all about income inequality, which you may not I don't know, then this is not the type of tax you should be championing.

http://www.citylab.com/work/2015/01...get-the-poor-and-widen-the-income-gap/384643/

Federal taxes are directly passed onto the consumer, just like sales taxes.

Yes, tariffs are. VAT's would be if the US had any.

Corporate income taxes are a bit more complicated. Neoclassical economics has been trying for a more than a hundred years to establish what is called a regular (mathematically) production function that includes the idea that profit is the cost of capital and a necessary cost of production just like labor and raw material. If you can come up with one then you can say that the corporate tax on profits is passed on to the customer. You also will get an economics' Nobel prize. Unfortunately for this theory an existing firm can operate indefinitely without profits so long as they cover their variable costs.

On to more realistic theories. If you believe that businesses maximize their profits it is hard to say that the tax is passed on to the customers. The business takes everything that they can get. If the corporate income tax is repealed the customers won't see any difference, the business will just pocket what they were paying in taxes. The same is true if you like me believe that profits are what is left after the bills and all paid.

 

[SimpleDon]

This is one of the reasons why I advocate doing away with the corporate income tax entirely and to tax the stockholders on the profits earned as if they are the owners of the company, i.e. on total profits whether distributed or retained, and no matter where the profits are earned.

I don't begin to understand this stuff, but I know that as a major stockholder of a fast-growing small business, I pay taxes on corporate profits, even if those "profits" are reinvested toward growth of the Company. For several years I have paid much more in taxes than I have taken home.
Taxing publicly traded stock holdings would do a number of great things in my relatively naive opinion. It definitely grates on me that Apple can get away with this shit, even though they don't "need" to, while I'm living hand-to-mouth for participating in what is called "the engine of economic growth" (small business). It's a powerful disincentive for anyone considering entrepreneurial enterprise.

Yes, I believe that we need to reduce the advantages that large corporations have over small and middle sized companies. Eliminating the corporate income tax is one way to do it. Large corporations can hire lobbyists and Congressmen to write bills to reduce their tax burden.

I applaud you for having the guts to start and run your business. I never had the guts to do it, even after being invited numerous times. Small businesses are the major sources of not only new jobs but also innovation. My son is a MD and a PhD who does medical research. So far he has started two companies and has sold both to major drug companies for some millions of dollars. He graduated from Georgia Tech with a chemical engineering undergrad degree and did post grad research there after his MD/PhD. He has been the beneficiary of Georgia Tech's innovation support program, The Enterprise Innovation Institute. They fill in the blanks to starting a business and running it for the technical people who have the ideas. My son has good ideas and the medical, drug and computer knowledge to start a business but he is not interested in running a business. So he sells them off before they go into production and sales. Drug companies are now coming to him with projects that their companies couldn't develop, asking him if he can make something of them. (I am proud of my son, as if you couldn't tell)

 

[barbos]

This is bullshit which always get repeated over and over again.
Poor pay same amount of taxes regardless of how it's paid, be it directly through sales tax or through income of Walmart owners which they don't pay anyway, cause they use these tax havens.

I have just realized that I am lagging the discussion by two days and six pages. Forgive me if I repeat points that have already been made.

Sales and VAT taxes are considered to be regressive because they fall disproportionately the poor and the middle class. That is the poor and the middle class pay a higher part of their income on these taxes. The income tax is a progressive tax because it is paid primarily by the well off, the high earners. The higher your income, the higher your tax rate.

The two different types of taxes impact the economy differently. The economy actually needs both types of taxes, in different proportions depending on the status of the economy. The regressive taxes VAT, sales taxes and earnings taxes like FICA taxes, take money out of the economy and suppress demand, they can reduce inflation. The progressive taxes, income and inheritance taxes, don't impact the economy very much because the high earners who pay most of them have a greater propensity to save. Money that is saved doesn't impact the economy either. But we need progressive taxes to redistribute income and wealth back to the poor and the middle class. Without the progressive taxes income and wealth inequality both grow without end. Income and wealth will go into progressively fewer hands over time, increasing social frictions, increasing financial markets instability as they try to absorb the extra savings from the high earners and reducing demand, growth and inflation in the economy. As is happening in our current economy after forty years of decreasing income and inheritance taxes and increasing regressive taxes.

I heard that million times,

 

[Harry Bosch]

Federal taxes are directly passed onto the consumer, just like sales taxes.

Yes, tariffs are. VAT's would be if the US had any.

Corporate income taxes are a bit more complicated. Neoclassical economics has been trying for a more than a hundred years to establish what is called a regular (mathematically) production function that includes the idea that profit is the cost of capital and a necessary cost of production just like labor and raw material. If you can come up with one then you can say that the corporate tax on profits is passed on to the customer. You also will get an economics' Nobel prize. Unfortunately for this theory an existing firm can operate indefinitely without profits so long as they cover their variable costs.

On to more realistic theories. If you believe that businesses maximize their profits it is hard to say that the tax is passed on to the customers. The business takes everything that they can get. If the corporate income tax is repealed the customers won't see any difference, the business will just pocket what they were paying in taxes. The same is true if you like me believe that profits are what is left after the bills and all paid.

One side note: most businesses do not maximize profits. Most maximize shareholder value. But most actually try to reduce profit to minimize taxes.