U.S. Cuts Top Corporate Tax Rate to 0%Wednesday, September 17th, 2014
WASHINGTON – The IRS today announced that it was cutting the top U.S. corporate income tax rate from 35% to 0% for qualifying companies, effective 1 January 2015.
IRS spokesman John Mendacio stated that: “This more favorable tax rate for the largest corporations is clearly an attempt to stem the tide of departing–but otherwise loyal–U.S. companies seeking lower corporate tax rates abroad.”
Mendacio explained: “We are happy to announce tax relief for qualifying companies, including companies with more than $18,333,333 in taxable income, as well as those deemed vital for national security–including qualifying CIA cut-out companies–operating here and abroad.”
Companies with less than $18,333,333 in income still have to pay between 15% and 38% percent.
The IRS continued: “Corporate persons generate far more jobs than unincorporated persons (so-called ‘individuals’), and thus are far more important to the economy.”
“Corporate persons also have higher life expectancy than unincorporated persons. Individuals still work for merely forty-five years. Both before and after their working years, they are usually a net drain on productivity. Corporations, however, can live forever, and thus are a better long-term societal investment than transient individuals.”
While this 0% corporate tax rate is considered by many to be business-friendly, some corporate spokesmen sounded less than impressed with 0%, and hoped the IRS could do better to stimulate the sagging U.S. economy.
Sir John Mephisto, senior tax advisor for an undisclosed multinational, stated: “Because we have enjoyed a negative effective tax rate [tax refunds] for many years now, the new 0% tax rate is not really a tax incentive from our perspective. We may still have to leave the U.S. to get better tax treatment. We actually fare better under the current nominal corporate tax rate of 35% than the new 0% tax rate, which will inexplicably eliminate some of our most beloved and profitable loopholes.”
“Our transfer pricing team has performed miracles. To my knowledge, we have never been officially profitable in any particular country, even if we have been extremely profitable over all,” explained Mephisto. “We think the IRS could do a bit more to reward complicated international tax structures that have taken years to develop and nurture.”
IRS spokesman John Mendacio suggested future income tax rate hikes on individuals to offset the 0% top corporate rate.
“It may be inevitable that the tax rate on unincorporated persons (formerly ‘individuals’) may have to rise to help offset the expected decline in revenue.”
Mendacio believes this is fair: “Most unincorporated tax persons clearly meet or exceed any ‘ability to pay’ standard of fairness, because these persons frequently spend discretionary income on non-essential items, such as cell phones, cable television, and dining out. They clearly can afford to pay to help their country in this time of eternal and perpetual warfare.”
Qualifying companies still are required to file corporate tax returns and must now file their financial statements in XBRL format, which is understood only by a tiny priesthood of elite accountants and XML developers. This will ensure that millions of well-paid jobs in corporate tax law are not eliminated by the 0% tax rate.
“A 0% or future negative tax rate on qualifying companies just doesn’t pay for itself,” concluded IRS spokesman Mendacio. “Unincorporated persons will have to pay their fair share.”
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