truthful politics

According to Peter R. Merrill of Tax Analysts, the Treasury Department released a background paper on the corporate tax system of the U.S.:

• “United States has the second highest combined (federal and state) statutory corporate income tax rate among the 30 member countries of the OECD [Organization for Economic Cooperation and Development].”
• “OECD average corporate tax rate has fallen to 28.4 percent in 2006, almost 11 percentage points below the U.S. tax rate.”
• “United States has the second highest combined statutory corporate tax rate among OECD countries, yet is tied with Hungary in raising the fourth lowest amount of combined corporate income tax revenue relative to GDP in 2004.”
• “A recent study by Alex Brill and Kevin Hassett finds that the revenue- maximizing central government corporate tax rate in the OECD is now about 26 percent. In other words, an increase in the average OECD corporate tax rate above 26 percent would be expected to reduce, rather than increase, total OECD member corporate tax revenue.”
• “the U.S. corporate tax conundrum of high rates combined with relatively low revenue is explained by the unusually high share of U.S. business income earned through passthrough entities, rather than the frequently alleged use of inappropriate corporate tax shelters or tax havens.”

To read the entire article, click on The Corporate Tax Conundrum.

According to Politifact.com, 2% of small businesses make more than $250,000. To read the entire article, click on Most small businesses won’t be subject to Obama’s tax increases.

According to the National Small Business Association:

• Small businesses comprise 99.9 percent of the 26.8 million U.S. businesses.
• 14.7 million are firms whose owners do not have outside employment and who have employees.
• 75 percent of small business reported revenues of less than $1,000,000. According to the Obama campaign, 22% of those revenues on average are taken home as profits. Therefore, if 75% of small businesses earn less than $1,000,000, 75% of small business owners would stay under the $250,000 income threshold.
• Of the 25 percent with revenues in excess of $1,000,000, nearly a third file taxes as a corporation and would therefore not be subject to personal income taxes, or personal income tax increases.
• NSBA found that 13 percent of small and mid-sized businesses have personal incomes above $150,000 annually – “a lower percentage is likely above the $250,000 threshold.”

To read the entire article, click on Presidential Tax Plans’ Small Business Implications.

The Tax Policy Center did an analysis on the tax proposals between Senators John McCain and Barack Obama. On average, if an individual’s after tax income is below $111,000 annually, Senator Obama’s tax proposal will lower their tax burden more. On average, if an individual’s after tax income is above $111,000 annually, Senator McCain’s tax proposal will lower their tax burden more.

To get to the Tax Policy Center, click on www.taxpolicycenter.org.

The Washington Post had an article summarizing the effects of the two candidates tax proposals on their website. The article can be found by clicking on Obama and McCain Tax Proposals.