Sanders’ Corporate Tax Comparison

Sanders’ Corporate Tax Comparison–16kh.,b32


Sen. Bernie Sanders frequently says corporate income tax receipts have dropped from more than 30 percent of federal revenue in the 1950s to only 11 percent in 2015, leaving the impression that favorable tax policies are the reason. But there are several factors behind that drop.

Since 1953, there has been a rise in payroll taxes — spurred in part by the creation of Medicare — and in recent decades a shift from corporate taxes to pass-through business taxes paid individually by owners, as well as legislative changes to corporate taxation.

On Sanders’ campaign website, on a page about “Making the Wealthy, Wall Street, and Large Corporations Pay their Fair Share,” the Democratic presidential candidate says: “In 1953, the corporate income tax accounted for 32 percent of all federal revenue. Today, despite record-breaking profits, corporate income taxes only bring in 11 percent of total federal revenue.”

Sanders’ claims leave the false impression that corporations’ tax receipts would still amount to about a third of federal revenues if they only weren’t able to take advantage of tax breaks and other favorable taxation policies. But the decline in corporate tax receipts over the past six decades is more complicated than that and can’t be attributed solely to tax avoidance.

Corporate tax receipts haven’t been as high as 30.5 percent of federal tax revenues since 1953. They dropped to 20.3 percent by 1963, and by 1980, they were down to 12.5 percent. (See Table 2.2 on tax receipts from the Office of Management and Budget.) So the decrease happened much faster than Sanders’ statistic indicates.

At the same time, payroll taxes represented a growing percentage of federal tax receipts. In 1953, Medicare didn’t exist yet — it was enacted in 1965. And the payroll tax rates and income thresholds for Social Security and Medicare have gone up over the years. In 1953, payroll taxes were 9.8 percent of federal receipts; a decade later, they were 18.6 percent, and by 1980, they hit 30.5 percent. In 2015, they were 32.8 percent of federal receipts.

Individual income taxes, meanwhile, have been above 40 percent for several decades. Here’s a breakdown of federal tax receipts by source over the years since 1953:

The magnitude of the decrease Sanders cites was evident more than 30 years ago, in 1980, and corporate receipts have continued to be around 10 percent ever since. What happened to corporate taxes from 1953 to 1980?

Corporate taxation changed, as did corporate profits. A 1987 paper by Alan J. Auerbach, then with the National Bureau of Economic Research, and James M. Poterba, with MIT’s economics department, titled “Why Have Corporate Tax Revenues Declined?,” looked at that drop over the previous 25 years, from 1959 to 1985. The authors found that the decline in corporate profits was a bigger factor than legislative changes: “[W]hile legislative changes have been important contributors to the decline of corporate tax revenues, they account for less than half of the change since the mid-1960s. Reduced profitability, which has shrunk the corporate tax base, is the single most important cause of declining corporate taxes,” Auerbach and Poterba wrote.

In the 1950s through 1963, the top corporate tax rate was 52 percent. In the early 1980s, it was 46 percent (and fell further to 35 percent today). Other factors included accelerated depreciation, investment credits and U.S. companies investing overseas. But corporate debt also went up over that time period, Toder said, so there were reduced profits.

And of course, the percentage of federal receipts in payroll taxes went up significantly. A tripling of the percentage of payroll taxes makes the percentage of other receipts look smaller.

Since the 1980s, the percentage of corporate tax receipts hasn’t grown, partly due to a shift from businesses paying corporate taxes to more and more businesses being organized as pass-through entities, in which profits are passed through to the owners or members, who pay taxes on that profit through their individual income tax returns.

When Sanders compares 1953 corporate taxes to today, he’s leaving out information about how businesses paid taxes back in 1953 and how they pay taxes now. A greater percentage are now taxed at the individual level through owners, a trend that has occurred largely since the early 1980s.

Sole proprietorships and other unincorporated businesses have paid taxes at the individual level since the individual income tax was created in 1913, according to a 2012 report on pass-through business income by the nonpartisan Congressional Budget Office. But in 1958, S corporations were created, enabling businesses to have liability protection and pass profits through to their owners. There were certain requirements for businesses to meet to qualify for S corporation status, such as a limit on the number of shareholders, and in the 1980s, the requirements were loosened. This “pass-through” structure is how partnerships and LLCs, which came about largely in the 1990s, are also organized.

From 1980 to 2007, CBO said, the percentage of businesses that were C corporations went from 17 percent to 6 percent. “That change was more than offset,” CBO said, “by the increase in the hybrid forms described earlier — specifically, limited partnerships, S corporations, and LLCs; that set of entities increased from 5 percent to 20 percent of all businesses” during that period. (Sole proprietorships, the most popular form of business, “remained fairly steady” at 70 percent to 75 percent.)

While C corporations made up only 6 percent of businesses in 2007, they still were responsible for most of U.S. business receipts. (C corporations — like publicly traded companies — tend to be larger entities.) But, the percentage of business receipts attributable to C corporations declined from 86 percent in 1980 to 62 percent in 2007, the CBO report said.

And that figure has slipped even further since.

An October 2015 paper by several experts with the Treasury Department and National Bureau of Economic Research  — titled “Business in the United States: Who Owns it and How Much Tax Do They Pay?” — examined this shift in business receipts, finding that C corporations “now account for less than half of business income.”

In 2011, pass-through entities earned the majority of business income — 54.2 percent, that paper found.

Toder, at the Tax Policy Center, cited a few reasons for this change — the rules for S corporations were loosened in the 1980s, and in 1986, the top individual tax rate became lower than the corporate rate, giving businesses incentive to become pass-through entities. CBO also points to the change in the economy from the production of goods to more service-providing industries.

The pro-business Tax Foundation also has chronicled the decline in C corporations, writing in January 2015 that there were 1.6 million C corporations in 2011, according to IRS data, “the lowest number of traditional corporations since 1974 and 1 million fewer than there were at the peak in 1986.” The Tax Foundation says the “main driver of this trend is the country’s poorly structured tax code, specifically its two layers of tax on C corporations,” which pay taxes on corporate income and then their shareholders pay dividend and capital gains taxes on profits that are distributed to them. With pass-throughs, there’s only the individual income taxes paid on profits, whether those profits are distributed to owners/members or not.

The Tax Foundation report, by William McBride, says this trend is troubling for the economy, as C corporations “usually provide the most efficient business structure for large-scale projects and investments.” (The Tax Foundation’s solution is the opposite of Sanders’ — lower corporate taxes and treat “all businesses alike.”)

The growth in pass-throughs since 1980, Toder noted, means that the big drop in the percentage of corporate tax receipts from 1953 through the early 1980s can’t be attributed to this phenomenon. But “it is a reason perhaps corporate receipts haven’t grown … because receipts have gone into S corporations and limited partnerships. … That has raised individual income tax receipts.”

The October 2015 paper estimated the average income tax rates for various types of businesses, finding that the C-corporation sector paid the highest average rates in 2011, at 31.6 percent. The S-corporation sector had an average rate of 24.9 percent; partnership had a rate of 15.9 percent and sole proprietorships were at 13.6 percent. If instead that 2011 business income had been earned as such income was in 1980 (with fewer pass-throughs), that business income would have led to an additional $100 billion in taxes, the paper found.

In fact, Zidar and his coauthors found that the shift to pass-throughs was responsible for “much of the rise in income inequality over the last three decades,” as this type of business income is more likely to flow to the top 1 percent.

The 2012 paper from CBO also determined that business tax receipts would be higher if not for movement to pass-through entities. In 2007, when pass-throughs accounted for 38 percent of business receipts, there would have been an additional $76 million in tax revenues if “S corporations and LLCs had been taxed as C corporations in 2007.” That estimate takes into consideration the tax impact on corporate, individual and payroll taxes.

All of this is to say that there are several factors that have contributed to the decline in corporate tax receipts. Experts we spoke with also cited as having some impact issues of tax avoidance and keeping money overseas where tax rates are lower — one of Sanders’ main targets in his proposals to change the corporate tax laws.

“There’s no doubt that multinational corporations … represent a bigger share of corporate income now than they did” in the past, said Alan J. Auerbach, author of the 1987 paper we cite above and now director of the Robert D. Burch Center for Tax Policy and Public Finance at the University of California, Berkeley. “That is a serious tax policy issue. … But we don’t know to what extent that is eroding the corporate tax base.”

Auerbach told us in a phone interview that “that’s not the big story” in recent decades. Instead, the big story is that other sources of revenue, namely payroll taxes, have been growing and C corporations have been declining as a share of the business sector.

In its most recent report on the budget and economic outlook, the CBO says corporate receipts in 2014 were “1.9 percent of GDP—near the 50-year average.” It expected that percentage to grow in the next few years and then decline to 1.8 percent of GDP in 2025 “largely because profits are projected to decline relative to GDP,” a decrease CBO attributes “primarily” to increased labor costs and interest payments on business debt.


Sanders’ figures are largely correct — the share of federal revenues from corporate taxes did decline from 30.5 percent (he said 32 percent) in 1953 to nearly 11 percent in 2015 — and there’s support for his implication that shifting income overseas has played some role. But there’s a lot more to the story than that. The drop in corporate tax receipts over 60-plus years is also attributable to a decline in corporate profits in earlier decades, a large increase in payroll taxes, and the growth in businesses being organized as pass-through entities, which pay taxes on the individual level.

sources–fact, lori robertson, alan auerbach, eric toder, william mcbride,

Is Your State among the 13 Obama is bringing GITMO Jihadis to?

Is Your State among the 13 Obama is bringing GITMO Jihadis to? 17KH.

Obama told Congress today that it should close the U.S. Guantanamo Bay military detention center in Cuba– “to improve national security,” and that detainees should be brought to U.S. soil. Obama referenced 13 potential locations to transfer GITMO detainees to the U.S., but no specifics.

He failed to reference the fact that of those known, roughly 29 percent return to terrorism.

It’s counterproductive to our fight against terrorists because they use it as propaganda in their efforts to recruit.”

Obama reported that $450 million was spent last year to operate Guantanamo Bay in addition to $200 million that was allocated for “additional costs needed to keep it open going forward for less than 100 detainees.” Closing Guantanamo and transferring detainees is estimated to cost between $290- $475 million. Housing them domestically would cost roughly $85 million less than in Cuba.

Obama argues keeping GITMO open “is contrary to our values. It undermines our standing in the world. It is viewed as a stain on our broader record of upholding the highest standards of rule of law.”

According to the Pentagon, most of the detainees would be transferred to other countries. Those “deemed too dangerous to transfer abroad” would be relocated to the U.S.

Is Obama oblivious to the fact that nearly 200 terrorists released from GITMO returned to committing terrorist attacks worldwide since their release?

Last year, the Director of National Intelligence (DNI) released a report confirming that 116 detainees “transferred” out of Guantanamo Bay engaged in terrorist or insurgent activities upon their release.

The DNI had warned in 2010 that those who had already been “transferred” out of Guantanamo would return to terror and insurgent activity and that any additional released detainees in the future would do the same.

Despite these warnings, DNI reported that between January, 2014 and January, 2015 the government released 33 more Guantanamo detainees.

It stated: “Based on trends identified during the past eleven years, we assess that if additional detainees are transferred without conditions from GTMO, some will reengage in terrorist or insurgent activities. Transfers to countries with ongoing conflicts and internal instability as well as active recruitment by insurgent and terrorist organizations pose a particular problem.”

So far, according to DNI, as of 2015, 647 detainees were “transferred” from Guantanamo. Of these, 116 (17.9 percent) were “confirmed” to have reengaged in terrorist or insurgent activities, and 69 (10.7 percent) were “suspected” to have reengaged.

That equates to a minimum of 185 (28.6 percent) known terrorists, out of the 647 released detainees, who are confirmed or suspected of reengaging in terrorism or insurgent activities.

Among the potential sites the White House has been mulling over are a navy brig in Charleston, South Carolina; the US Justice Department’s Supermax prison in Florence, Colorado; and another two facilities at the Army base in Fort Leavenworth, Kansas – the US Disciplinary Barracks and Midwest Joint Regional Corrections Facility.


source-freedom outpost, bethany blankley, dni, ,

Gun Control: See How Chicago’s Current Homicide Rate Compares With 1 Year Ago…It Might Shock You-

Gun Control: See How Chicago’s Current Homicide Rate Compares With 1 Year Ago…It Might Shock You-80kh.,b12-2

Chicago’s current homicide rate is quite different compared with where it was this time last year. In fact, there are just over twice as many homicides in the Windy City now, compared with one year ago. Chicago’s high homicide rate – coupled with its having some of the strictest gun control laws in the county – are reasons that the city is often cited by gun control opponents as the prime example of where gun control leads.

Chicago’s high homicide rate is due in part to its prevalence of rival gangs, particularly in the South Side of Chicago, as well as neighborhoods such as Englewood – which is right next to the South Side – and Austin on the West Side.

The Chicago Tribune reports on the city’s increasing homicide rate: Four homicides over the weekend and two more Monday morning pushed Chicago’s homicide count so far this year to double the same period last year.

The city has recorded at least 95 homicides since the first of the year, compared to 47 last year, according to data kept by the Tribune. The city has also more than doubled the amount of people shot – about 420 this year compared to 193 last year. 

In addition to those homicides, the Tribune reported that there were a total of 32 people shot in Chicago over the weekend alone, including a three-year-old boy in Englewood, who police say was shot by a stray bullet during a gang fight. The Tribune concluded:

The weekend toll includes one person killed and nine wounded from Friday evening to Saturday morning; three men killed and 14 people wounded from Saturday afternoon to Sunday morning; and six people wounded from Sunday afternoon to Monday morning.

:“Every year Chicago Police recover more illegal guns than officers in any other city, and as more and more illegal guns continue to find their way into our neighborhoods, it is clear we need stronger state and federal gun laws.” What’s abundantly clear is that criminals will not obey laws. As much as that is stating the obvious, it doesn’t seem to be something that is understood by many politicians. Those who favor strict gun control see the cause of Chicago’s high homicide rate as “lax gun laws” in neighboring states such as Indiana.

source-constitution, philip hodges, chicago tribune, anthony guglielmi

Yikes! District Court Demands Obama Administration Unseal Fast & Furious Records!-

Yikes! District Court Demands Obama Administration Unseal Fast & Furious Records!–52KH.,B26

The DC Circuit court has reversed a decision that would have kept certain records sealed about Operation Fast and Furious. Government Watchdog Group Judicial Watch sued the DOJ after Congress found then Attorney General Eric Holder in contempt and after District Judge Amy Jackson ordered the Justice Department to provide certain documents.

A federal judge on Tuesday ruled President Obama cannot use executive privilege to keep records on the “Fast and Furious” gun-tracking program from Congress. U.S. District Court Judge Amy Berman Jackson ordered the administration to release documents that it has been attempting to withhold by asserting executive privilege. The ruling also requires the administration to release to Congress all “segregable portions” of records they are withholding that are considered “attorney-client privileged material, attorney work product, private information, law enforcement sensitive material, or foreign policy sensitive material.”

Now, US District Judge Richard Leon, though saying the evidence led him to grant a ruling in the DOJ’s favor, instead reversed the decision on February 12.

“Judge Jackson’s statement, ‘I don’t want to know,’ clearly bars the parties from divulging the contents of their settlement discussions only to her; a broader bar, if any, would have to be inferred for it is not explicit,” Judge Douglas Ginsburg wrote for a three-judge panel. The statement does not clearly refer to third parties, let alone protect responsive records from a Freedom of Information Act request, the court found.

“The Department offers a good reason Judge Jackson might have wanted to prohibit disclosure to third-parties – because protection from disclosure promotes more open dialogue during settlement – but there is no extrinsic evidence that was what the judge intended; indeed, that concern is nowhere mentioned in the record in this case, and it is equally plausible that Judge Jackson wanted simply to preserve her objectivity in case she ultimately were to preside over a trial,” Ginsburg continued.

On remand, Judge Jackson must clarify what she intended by her statement.

The investigation into Fast and Furious has been met with roadblocks by the Obama administration as they are attempting to hide their crimes. Remember, it was Barack Hussein Obama Soetoro Sobarkah who said, “The only people that don’t want to disclose the truth, are people with something to hide.” It appears, he still has much to hide!

source–the hill, tim brown, amy jackson, richard leon,

Ten Videos Reveal Massive Military Movement Never Reported About Jade Helm-

Ten Videos Reveal Massive Military Movement Never Reported About Jade Helm–51kh.,b50


If there was any doubt about the seriousness and the scope of Obama’s Jade Helm 15 domestic military exercise, several videos document widespread military operations and movements, which many believe evidence a precursor to martial law.

Watch military equipment being shipped via railway in Oroville, California:

Every American should be asking their elected officials, why are thousands of MRAPs (Mine-Resistant Ambush Protected vehicles) and armored personnel cars being transported throughout America?

Watch military equipment being transported along the 1-15 freeway in Corona, California:

Why are Turkish Air Force pilots in uniform at a San Antonio, Texas Walmart?

Why are Marines training to manage civilian “riot control” in Yorktown, Virginia?

Why are military vehicles being moved from Canada to the U.S.? And where are they going? And for what purpose?

Why did a bilateral training event at Fort Bragg, N.C. take place with British Paratroopers? The CJOAX 15-01 was an 82nd Airborne Division-led training event, the largest bilateral training exercise in nearly 20 years.

Why are United Nations ambulances on I-16 East, near Hunter Army Airfield and Ft. Stewart, 3rd Infantry Division base in Georgia?

Why is military equipment being shipped near San Antonio, Texas? And where is its destination?

Why are FEMA buildings blacked-out?

Why are military exercises taking place, practicing to round up civilians?

source-constitution, bethany blankley, corp carl king, rivate bryan munce

Intervention Fail: Back to Libya-

Intervention Fail: Back to Libya–47kh.,b 4

The use of the US military overseas seems to have become so commonplace that the Obama Administration can bomb a country with no Congressional input and very little media interest at all. Such was the case on Friday, when the US military killed some 49 people in a bombing run near Tripoli, Libya.
We were told that the US had to intervene to overthrow Gaddafi so that democracy and human rights could flourish, yet five years after the US-led intervention no one would argue that the country is better off. Instead of bringing Libya democracy, US intervention brought Libya ISIS. So now the US has to go back and bomb Libya some more to take care of ISIS.

Will this work? No. Logic tells us you cannot do more of what caused a problem and expect it to fix the problem.

As Middle East analyst Hillary Mann Leverett observed after Friday’s US attack on Libya, “the problem is, for each one of these targeted killings, what we have seen in the data that at least two more people sign up to join.”

The United States has made a habit of lecturing other countries about the need to follow the rule of law, yet this seems to be a matter of “do as we say, not as we do.” How else can we explain a US attack overseas with no Congressional input? Certainly there was no Congressional authorization for Friday’s bombing. The Administration claimed that its authority came from the 2001 authorization to use military force against al-Qaeda in retaliation for the attacks of 9/11. But ISIS did not even exist on 9/11. How can the 2001 authorization be twisted to include bombing Libya in 2016?

Libya has been in chaos since its 2011 “liberation,” but the country’s interim government strongly objected to Friday’s US bombing, claiming they were not consulted before the US attack. They called US air strikes a violation of Libya’s sovereignty and of international law.

They have a point. But the most important point we must learn from the destruction of Libya – and of Syria, Iraq, Afghanistan, and so on – is that US interventionism has been a complete failure. Hundreds of thousands have been killed in the last 15 years, societies have been broken apart, economies have been destroyed, and property has been flattened. There are no success stories. The neocon plan to remake the Middle East has only succeeded in destroying the Middle East. As a consequence, we are far less safe than before the “war on terror” was launched. ISIS and other terrorist groups have expanded their territory and have even been able to attack in Europe and the US. Our currency has been debased to pay for the trillions of dollars spent in this no-win war. The connected elites have gotten rich while the middle class has gotten poorer.
ron paul, hillary mann leverett

Subject: Hillary in Beaumont, Texas-

Subject: Hillary in Beaumont, Texas–47KH/.,B43

Hillary Clinton made a campaign stop yesterday in Beaumont, Texas. Only six people were there to greet her. Her security detail outnumbered her supporters by quite a bit. She wouldn’t talk, wave to or even acknowledge those there to greet her. As bad as that is, it’s not the real story here. The real story is who she had a private meeting with. After landing, Clinton headed off to a fundraiser in West Beaumont, where she was greeted by around 150-200 Muslims, most of whom were of Pakistani origin. The event was held by Pakistani businessman Tahir Javed.  Hillary raised approximately $500,000 by pandering to Muslims, making it “one of the top five private fundraiser’s Clinton has had in this country.” She’s bought and paid for by them. Spread this far and wide. You will not see it on national news but you may watch it on the local station link below.


source-beaumont tv,