Companies That Pay High Tax Rates Create More Jobs Than Tax Evaders

[Redfairen]

Source: Think Progress

Paying high tax rates doesn’t stifle job creation at the country’s biggest, most profitable companies and low tax rates seem to be more correlated with job losses, according to a new report from the Center for Effective Government.

The 30 Fortune 500 companies that paid the highest tax rates from 2008 to 2010 created about 200,000 jobs from 2008 to 2012, the researchers found. By contrast, the 30 companies with the lowest actual tax rates in that time frame shed a collective 51,289 jobs.

The report compared tax data compiled by Citizens for Tax Justice with employment data from corporate filings with the Securities and Exchange Commission. The tax data include only companies that turned a profit in each of the three years in question. The 30 high-tax companies each paid at least a 33 percent tax rate over the time frame in question, and only eight of them saw a net decrease in employees. In the low-tax grouping, just two of the 30 profitable companies paid any federal taxes, and a full 15 of them cut their payrolls. Many of the companies report their employment data on a global basis, so the jobs figures are not necessarily representative of solely American job creation.

Despite that fuzziness, the report’s findings align with previous research on the linkage between corporate tax rates and economic success. There is no association between lower rates and higher growth. Making corporations pay higher tax rates makes the overall tax code more progressive, which is good for the poor and working-class.


Read more: http://thinkprogress.org/economy/2013/12/04/3017571/corporate-taxes-jobs/

[sakabatou]

1. That's pretty obvious

[valerief]

2. But what does that have to do with CEO salaries, which are the most important thing

in the world?

[Laelth]

3. k&r for the truth. n/t

-Laelth

[melm00se]

4. interesting report

I zipped thru this so I apologize if what I am about to say was covered in the report:

One thing that didn't appear to be covered was the profitability of the companies. Was there a correlation between the profitability of each company on either side of the ledger?

[Paulie]

6. You need profits to be able to pay taxes.

If you have a profit of a dollar but pay 33 cents in taxes you're still profitable.

So the goal should be to pay lots of taxes it means you have lots of profits.

[grahamhgreen]

7. It's a well known fact the only way to make a profit is with slave labor.

[unblock]

5. people forget that labor costs are deductible. so high tax rates = big subsidy for hiring.

the rhetoric that high tax rates are a disincentive to hiring is simple and wrong.

the reality is that when a worker produces a profit for the company, high taxes reduce the advantage of hiring, but a profit is a profit and the company will still hire, even if they won't be as excited about it.

when a worker doesn't produce a profit, a high tax rate is a big subsidy, lowering the cost.


in practice, new hires are often loss for the company at first, due to training and orientation and extra equipment needed and so on. to the extent the new hires are losses at first, particularly if they're in something like research and development, then the higher taxes are a big incentive.


the reality is that high taxes are very rarely a disincentive to hiring. usually they make hiring safer and more desirable.

republicans *say* that high taxes discourage hiring because their benefactors don't like the lowered take-home profits, but they can't say *that*.