There’s a new 600 page tax proposal. Has anyone even read it? I bet Biden hasn't . . .

Photo above - 4 years ago China gave us 100 different brands of bogus, ineffective masks (Amazon). US labs gave us covid 19 vaccines. Raise your hand if you want to disallow tax deductions for medical research.

Okay – at first glance, this seems to make sense: A minimum tax on “America’s 100 biggest companies”. A nice round number that can appear in campaign ads. If anyone needs clarification, it’s companies earning $1 billion a year. (Inflation alert - $1 billion today would be just $50 million when Biden was born. But a billion dollars today doesn’t even buy a single B2 bomber. And the Fed is going to announce this week that inflation has been cured).

Some of those "100 big companies" pay close to zero in taxes.

Okay, so far I’m in. Let's go get 'em. Those cheating bastards! Then I read the simple 2-page overview (link below) of this proposal. It should scare anyone with an attention span long enough to read 2 pages.

Why do companies earning $1 billion a year pay so little in taxes? Because . . . (drumroll) they can deduct their research and development expenses. Like when they build labs to invent new medicines, batteries, solar panels, and chips. Do you see the problem now?

If we DON’T want companies to go through the arduous decade long FDA process of getting new medicines tested and approved, we can just disallow all that investment. Problem solved. Those medicines will be pioneered – if at all – in places like China. Same with batteries and chips. This is a tax proposal written by children, not serious economists. It's a campaign stunt.

Why isn’t everyone applauding? This is the big tax reform reveal we’ve been promised all year. Disallow GAAP (generally accepted accounting practices) which are in effect throughout most of the developed world. Those rules have led to Tesla cars, iPhones, the internet, and vaccines like the Covid 19.

If the White House wants to part ways with Europe, Canada, Australia, Japan, South Korea and all the other places where good stuff is made, they should just come right out and say so. Not release a 600 page document (nearly the size of Tolstoy's "War and Peace") which even Washington Post reporters admit is too long and complex to be understood.

I’m just sayin’ . . .

Biden administration releases plans for new minimum tax on large companies (msn.com)

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PicturesOfABetterTomorrow · 41-45, M

It would depend on the specifics of the tax deductions. The reality of medical research in the US today is the actual research and R&D is done by publicly funded labs and universities. Something on the order of 80%.

The pharma companies then take them and essentially develop a marketing campaign to sell the end product.

I don't think billion dollar companies that spend most of their time making 20 versions of Tylenol so they can extend patents forever and market the work of public labs and universities should get a tax break for basically taking credit for other people's work.

Crazywaterspring · 61-69, M

@PicturesOfABetterTomorrow "Socialism" American style. Nationalize the costs privatize the profits. Tell me why many name brand drugs are seriously cheaper in other industrialized countries.

beckyromero · 36-40, F

If we DON’T want companies to go through the arduous decade long FDA process of getting new medicines tested and approved, we can just disallow all that investment. Problem solved. Those medicines will be pioneered – if at all – in places like China. Same with batteries and chips

How many medicines did Nike develope in 2020?

FedEx?

The Dish Network?

First Energy?

Voya Financial?

Xcel Energy?

They are among 55 profitable companies that, according to the Institute on Taxation and Economic Policy, paid no federal income tax in 2020. More than a dozen of them wrote off executive stock options to help wipe out any federal tax they may have owed.

Meanwhile, a single person working full-time at the federal minimum wag, taking only the standard federal deduction, would still owe $480 in federal income taxes.

That's $480 more than those 55 companies combined.

SusanInFlorida · 31-35, F

@beckyromero ok, to sum up. only companies that sell medicine should be allowed to deduct their expenses. but not companies that make chips, cars, smartphones, lithium batteries, fuel efficient rail service, disease resistant plant seeds, solar panels, wind turbines, etc.

good to know.

let's put it to a vote, and let the public decide

beckyromero · 36-40, F

@SusanInFlorida

As you know, that's not what I said.

But how about stock options?

Should companies be allowed to write off unlimited executive stock options?

Persephonee · 22-25, F

The solution to any question like this really is "how was it taxed in the 1950s?"

The world is very different now (in lots of good ways as well as less-good ones), and the US had a relative economic power then which it simply doesn't today and could never have kept anyway - but it was also a world when there were incredible advances in essentially all areas of the economy along with sound underpinnings supporting a growing middle class (in the American use of the term), but also compared to today much higher marginal tax rates include on companies.

It worked then, anyway. 🤷‍♀

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tindrummer · M

@ToddpicogramakaSatan hope you're trolling otherwise you're a sad case

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