Posted in Big Government, Deficit, Election 2012, Local Politics, Mainstream Media, News, The Economy, Those Kooky Conservatives!, Wisconsin, Wisconsin Politics

Is He Lying or Stupid?

   July 8, 2011

Paul Ryan (R- Wall St.) likes to tell anyone who will listen that we have the highest (or second highest) corporate tax rate in the world.

H/T Bob Cesca:

The United States actually has the second LOWEST corporate tax rate in the world.

Ryan may actually be telling the truth, if it weren’t for the countless number of loopholes corporations use to avoid paying the majority of their taxes or, in some cases, pay no taxes at all. The only way people like America’s account Paul Ryan says they will agree to closing some of those loopholes is if they are offset by tax-cuts in other areas. This is what he calls being \"revenue neutral\".

So the question I have is when Paul Ryan goes on TV and says what he says is he lying or just has not done the research to find out the truth. If he is lying, will he end up with the same fate as Anthony Weiner or Roger Clemens?

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38 thoughts on “Is He Lying or Stupid?”

    1. Since bond markets came up, you should all read this. I know… it’s not HuffPost, NY Times, or “Progressive” something… but it’s what intelligent bond fund managers are thinking:

      [Druckenmiller] contemplates the possibilities for bond investors if a drawn-out negotiation in Washington creates a short-term problem in servicing the debt but ultimately reduces spending:

      “Here are your two options: piece of paper number one—let’s just call it a 10-year Treasury. So I own this piece of paper. I get an income stream obviously over 10 years . . . and one of my interest payments is going to be delayed, I don’t know, six days, eight days, 15 days, but I know I’m going to get it. There’s not a doubt in my mind that it’s not going to pay, but it’s going to be delayed. But in exchange for that, let’s suppose I know I’m going to get massive cuts in entitlements and the government is going to get their house in order so my payments seven, eight, nine, 10 years out are much more assured,” he says.

      Then there’s “piece of paper number two,” he says, under a scenario in which the debt limit is quickly raised to avoid any possible disruption in payments. “I don’t have to wait six, eight, or 10 days for one of my many payments over 10 years. I get it on time. But we’re going to continue to pile up trillions of dollars of debt and I may have a Greek situation on my hands in six or seven years. Now as an owner, which piece of paper do I want to own? To me it’s a no-brainer. It’s piece of paper number one.”

      http://online.wsj.com/article/SB10001424052748703864204576317612323790964.html

      Keep this in mind when you’re talking about closing the deficit.

      Also keep in mind that raising corporate tax rates (effective or nominal) is probably going to lead to lower aggregate federal tax revenues while individual income suffers as a consequence of smothered economic activity.

        1. Perhaps you missed the part where this guy famously outsmarted the market in 1992 (and ever since then)… read the article.

      2. Oh…You mean it’s from the Rupert Murdoch-not-progressive-pro-teabag-“newspaper”. Sure. I believe it.

  2. He is stupid to lie about an obvious fact.

    “WE HAVE NOW SUNK TO A DEPTH AT WHICH RE-STATEMENT OF THE OBVIOUS IS THE FIRST DUTY OF INTELLIGENT MEN.”- GEORGE ORWELL

  4. econ read the story…..we know that we have a 35% corporate tax rate, we also know that the vast majority do not pay that and that 2/3 pay a 0% rate.

  5. econ101- a 35% tax rate does not mean corporate tax payments to the United States are 35% of corporate income
    Have you ever looked at a corporate deductions ledger?

  6. I realize that corporations don’t pay 35%… I’m just trying to figure out why you are lashing out at Ryan for highlighting the high rate.

    I see that rate and two things occur to me… why would a corporation ever bring back profits made abroad… and why wouldn’t corporations doe everything in their power to avoid the tax?

    There is a huge opportunity cost associated with not exploiting the tax code when a tax rate is high. Lower the rate and more income gets reported because the cost of hiding the income is no longer worth it. It’s a pretty simple concept.

    Having said that, corporate tax revenues probably shouldn’t account for much more of the pie… unless you want to nuke the economy.

    Every dollar a corporation saves in dodging taxes is a dollar that corporation can use for reinvestment and hiring. Granted… with a 35% tax rate hanging over the US… there isn’t much incentive to keep those funds at home (what happens if lawmakers actually close loopholes?), and there certainly isn’t any incentive to bring profits home from abroad (since they have to pay the difference).

    So… I’m just confused as to what your point is. Corporations and businesses are evil? Let’s tax ourselves back into the stoneage?

    1. Econ101, if Ryan said that, you would have a point, perhaps. But what he sady, baldy, is that corporations are taxed the second most in the world here, implying heavily that this is bad for business. The fact remains that they are taxed second least in the world. Thus what he is saying is either a lie or he is stupid. There’s really only one conclusion to make, and that is that ryan is lying and thinks we’re as stupid as the Republicans who defend Ryan.

      1. Sure, revenues to GDP is low, but you are ignoring the effects a high tax rate can cause (effective or not)… most all being “bad for business”.

        To name a few:

        1 – Lower repatriation rates of foreign made profits.
        2 – Higher uncertainty of effective tax rates (restraining reinvestment and hiring rates).
        3 – Larger incentive to move expensive manufacturing processes overseas (fewer taxes levied along the way from raw materials to finished products)
        4 – Punishment of small corporations (who can’t afford the magical lawyers and accountants of larger firms)

        Regardless of the effective rate, a high nominal rate will breed behaviors that aim to avoid taxation. Can you name a few possible effects that are good for business?

        1. I’m happy to see you agree that a gap between effective and nominal rate is bad. Paul Ryan speaks as if there is no gap, either that or he’s intentionally trying to fool the public. He won’t answer which it is. Of course you could be him. . . in which case, you are evil, as is he.

          1. Here is the deal.

            Clearly no one has bothered to watch this video, because Ryan never even mentions corporate taxes. He’s speaking in terms of aggregate tax levels. In fact, he notes that they would like to remove loopholes for high income entities while lowering overall rates to keep general revenues unchanged. Correct me if I’m wrong… but isn’t that exactly what you’re all whining about? What’s so evil about that?

        2. Easy enough for that i would end #3 instantly, Not having time to do the research I would impose not only major tax increases on any company that leaves the US and I would also raise tariffs to match that other countries charge us.

          I actually agree with you, I am all for giving small corporation who are based in the US, and do not send profits overseas.

          1. Raising tariffs is awful economic policy. It just boosts domestic price levels (inflation) while increasing deadweight loss.

            Protectionist economic policies only hurt. Beating up firms that want to outsource work will have a similar effect. Job growth might increase, but inflationary pressures and stagnant wages will negate any positive benefits at the aggregate level.

        3. o yea I can also name some things that are good for business. Updated and quality infrastructure, world class schools, stronger communities….

          1. Yes. A slightly smoother road, cleaner classrooms with equally obstinate children, and “stronger communities” will cause GDP to skyrocket. Nailed it.

    3. Let’s tax ourselves back into the stoneage?

      Nope. Just back to prosperity for us peons.

      Funny thing is, earlier I was going to comment that you can’t talk to these people, because they’ll just stammer, think hard, then continue jumping up and down screaming about some non-existent hard rate. Then Econ proved it for me.

      Econ, you’re so adorable. Your voodoo economic theories were made up out of whole cloth to rhetorically benefit a political party 30 years ago, and they’ve all long since been thoroughly debunked, including by many who pulled them out of their made them up.

      Frankly it’s simple: we constantly cite data for you (you know…those pesky facts that have such a liberal bias!). I’ve never once seen you cite data (not anecdotal stories…data). Cite data to back up your theories.

      But hey, you want anecdotes from bond vigilantes? We’ve got those, too. Try one of the biggest bond investors in the milky way. See, mines bigger than yours.

      1. Paul Krugman wrote both the introductory macro and micro text books we used in college.

        I’m arguing economic theory of the past decade… all drawn up by Keynsians.

        The drivel you push is from 100 years ago.

    4. “Let’s tax ourselves back into the stoneage?”

      Nope…let’s just tax ourselves back to the 1950s when the top tax rate was 90%, the middle class was growing and the economy was booming.

      1. Betsy, Econ doesn’t deal in facts. They’re too pesky. He prefers anecdotal whine-fests from Galtians telling us they’re gonna take their ball and go home if they don’t get their Gulf Stream upgrade (who are toooootally looking out for our interests!).

        2. I disagree.

          I don’t live in land of delusion where “fiscal stimulus” is a realistic policy position.

          You can’t quote Paul Krugman to claim it works. The man has sat on every side of that issue, his credibility is a bit lacking these days.

  7. econ101 said: … why would a corporation ever bring back profits made abroad… and why wouldn’t corporations doe everything in their power to avoid the tax?

    answer: because the human beings who manage the corporation understand morality (with or without the treatise of religion) and recognize a responsibility for the common good of American society;
    because their CEO’s and Boards are patriotic and care for their community- America.

    1. because the human beings who manage the corporation understand morality

      Actually, that’s wrong. Corporations, by law, are amoral. The first, last, and only thing they can consider is the return they produce for investors. Any ostensible act of morality (good or bad) by them is just based on a calculation that it will increase returns. Nothing wrong with that – it is what it is and has it’s role in society.

      But that’s exactly why we need a strong government that can act with the common good as it’s first priority, and why I will never vote for a person who says they want to run gov’t like a business.

      1. JGG said: Actually, that is wrong.
        But I meant IT IS WRONG
        IT: The whole idea that decisions should be made on quarterly returns which don’t measure the actual costs of a corporate action. In fact, it is deliberately ignorate, immoral, & inhumane

        Like soldiers in war, [corporate] humans are being trained to use limited short-range, selfish thinking that discounts and denies the sad “unintended consequences” of the [corporate] dis-consideration of the real world. (And corporations reward this ignorant behavior.)

        1. Wow. Just wow. So I’m assuming that you live on a plot of land unconnected to the rest of society… ya know… so that those evil, amoral, bogeymen laden corporations who provide valuable (and quality of life enhancing) goods and services to the world can’t get you, right?

  8. Nonsense. He’s a genius. He knows by saying it long enough, there are people who will believe it.

  9. We need to start talking about a public enterprise to raise money for public programs. There’s nothing in the constitution that says capitalism is the law of the land. We need an American Energy Company, and American Mining Company, etc.

    Where is it written that we have to live at the mercy of corporations?

  14. He’s lying and thinks the average person is too stupid to question him. What do I win?

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