Bill Gross: "Of Course" the Wealthy Should Pay Higher Taxes, Corporations Too

FYI
Pimco dumped all of their Treasuries

From wonkroom.thinkprogress
"With that in mind, it’s worth looking at how corporations use this deferral to avoid paying taxes. And courtesy of the Wall Street Journal, we have the amount by which some corporations lowered their effective tax rate in 2008 thanks to the current law:
Corporation Percentage taxes lowered
General Electric 26.9%
Pfizer 20.2%
Hewlett-Packard 16.9%
Cisco 16.1%
Coca-Cola 14.3%
Johnson & Johnson 12.4%
Merck and Co. 11.7%
Remember, the statutory rate that the right-wing is always up-in-arms about — but which few corporations actually pay — is 35 percent. But General Electric was actually able to lower its effective rate all the way down to 5.5 percent, due to its use of deferrals, tax havens, and other intricacies of the corporate tax code.
According to a report from the U.S. PIRG Education Fund, a $100 billion annual tax burden is shifted to US-based individuals and companies thanks to corporations stowing their profits offshore:
Over ten years, an estimated $1 trillion in revenues is lost due to the use of tax havens and the government must make up for this shortfall. This diversion ends up being shouldered by other companies and taxpayers and is transferred as higher debt for future generations. The recent Senate Budget resolution concluded that the problem of offshore tax havens “means that honest taxpayers face a higher burden.”
And the Oxford University Centre for Business Taxation has found that corporations allowed to defer taxation on offshore profits will leave that money offshore regardless of their home nation’s tax rate. Indeed, when given the opportunity to bring this money back to America at a lower tax rate in 2004, corporations used most of the money “to buy back stock from shareholders, not to invest in domestic operations.”

From ThinkProgress:
Mother Jones’ Adam Weinstein notes that, despite benefiting from corporate welfare in the U.S., Exxon complains about paying high taxes, claiming that it threatens energy innovation research. Pat Garofalo at the Wonk Room notes that big corporations’ tax shelter practices similar to Exxon’s shift a $100 billion annual tax burden onto U.S. taxpayers. In fact, in 2008, the Government Accountability Office found that “two out of every three United States corporations paid no federal income taxes from 1998 through 2005F

"I think high-income earners would work well into the 50% tax rate."

For every person that makes a statement like this, I wish just one of them would step out and serve as a model. There are any number of ways to donate to the federal government. One way is to write a check payable to the Bureau of the Public Debt and mail it to:

Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

But in the end, Gross isn't so interested in paying more taxes as making other people pay more taxes; otherwise, he would just do it.

Also, his lack of knowledge regarding corporate taxes is astonishing given that the US has the 2nd highest corporate tax rate in the developed world (behind Japan).

Virtually everything Gross says is self serving. Ultimately, he wants the government's balance sheet to look as good as possible so that the bonds his company (PIMCO) holds maintain their value. Gross makes his living on the backs of taxpayers.

continued

, hitting 2.7 percent in 2006 and 2007, according to the Office of Management and Budget. That was the highest share since the late 1970s.
The GAO report also found that foreign-owned corporations were somewhat more likely to report no income than domestic corporations. There are several possible reasons for that. Foreign corporations may be younger, and startups are more likely to have no net income after expenses. They may also be in industries with lower profit margins.
Another possibility could be the use of transfer pricing, which companies use to account for transactions between subsidiaries in different countries. Creative, rule-stretching use of transfer pricing can allow companies to push their profits into lower-taxed jurisdictions. The report does not attempt to examine whether illegal transfer-pricing caused the difference between foreign and domestic companies.
But companies looking for lower-taxed jurisdictions often take profits out of the United States. The country's 35 percent top rate on corporate income is among the highest in the industrialized world.
Many tax experts and lawmakers from both parties, including Ways and Means Chairman Charles B. Rangel , D-N.Y., and presidential candidate Sen. John McCain , R-Ariz., have called for lowering the corporate tax rate. Lawmakers are likely to differ on what revenue-raising measures, if any, should be paired with a corporate rate cut.
In addition, Levin, Finance Chairman Max Baucus , D-Mont., and other senators have been trying to close the "tax gap," the difference between taxes owed and taxes collected.
In a statement, Baucus said, "I'm committed to finding ways to improve compliance and reduce taxpayer burden so that we begin to bridge the tax gap, which accounts for $345 billion in legally owed but uncollected federal revenues each year."
He said the GAO report "shows yet again the need for full-fledged [tax] reform next year...."
"We are constantly reviewing the tax code to find ways to crack down on those who are trying to avoid paying their fair share, without placing undue compliance or reporting burdens on honest taxpayers. As part of this on-going effort, we are reviewing the GAO report to see what it might suggest about where to target tax gap efforts," Baucus said.

Wow, both the Bond King and Stock King (Buffet) are now calling for higher taxes on the rich.

The prosperous 1950's had a top rate of 92% on any income over $3 million (inflaton adjusted).

And most jobs come from small business men anyway taxed at a much lower rate.

Microsoft, Nike, Apple and thousands of other successful companies were started when the top rate was at leat twice as high as today. So this "incentive tax level " fear is bogus.

Indeed, its America's very large and strong middle class that has given us our entrepeneurial creativity, NOT the filthy rich.

So Buffet is right. We dont want to kill the Golden Goose (the middle class) that keeps laying the Golden Eggs.

Almost 50% of US household own stocks in one form or another. Raising the tax on corporations will only raise the tax burden on these folks. And remember, corporate profits get taxed twice already.- On their initial income and then on the stock price appreciation. Why don't we spend more time on how people can find gainful employment and new businesses can be started and grow.

Taxes are an expense for corporations and like any other expense it is included in the cost of goods sold and effects the selling price of the item or service, so in reality a tax on a corporation is a tax on the consumer that uses their product or service. Mr Gross should understand that and realize that higher taxes will make US corporations uncompetitive in the world marketplace and cost more jobs here at home.

Bill Gross is right "ON THE BUTTON". Here we are chasing a few lousy bucks arguing on the topic of expenditures for really worthwhile programs. This is chump change! Let's attack the revenue line instead.

Since Reagan's tax cuts in the early 80's the real wages of the middle class are FLAT, while the wages of the top 5% income folks have soared out of sight. Equally important, our annual deficits keep soaring and soaring. Let's get smart and cut out the waste, and more importantly, get a FAIR TAX INCREASE on the top 5%. Then we have a shot at eventually balancing the budget, as Bill Gross so intelligently points out.

BILL GROSS IS A GENIUS, and our congress needs to heed his advice.

Matt