Big Chunks of Corporate Tax Cuts End Up in Executives’ Pockets

Big Chunks of Corporate Tax Cuts End Up in Executives’ Pockets(theintercept.com)

19 points by seagullz 5 years ago | 4 comments

Federally, the corporate tax rate is 21%. The top marginal rate (which all these executives pay) is over 30%. Every dollar that goes to execs is MORE highly taxed than if it had stayed in the corporation.

If the goal is to maximize total tax collected, this is an argument for the total elimination of corporate taxes, not an increase.

DangitBobby 5 years ago | |

That... Doesn't make sense to me. If "We" (the company) suddenly pay 10% in taxes instead of 20% and we gift 35% of the difference to our execs, the government is now collecting 0.1 + 0.1x0.35x0.3 instead of 0.2. Righ? I mean, even if it was all gifted to execs, it would be at most 0.1 + 0.1x0.3, which is still definitely less than 0.2.

didgeoridoo 5 years ago | | |

Think on the margins. At zero net investment and holding other expenses constant, each marginal revenue dollar can either go to corporate profit and be taxed at 21%, or go to an employee’s pocket and be taxed at their individual marginal rate. For the highest paid employees, this will be 37%, plus additional taxes for FICA/Medicare (“payroll tax”). Even this ignores the fact that corporations are much better at legally avoiding taxes than natural persons are.

DangitBobby 5 years ago |

Be wary, still in peer review.