April 29, 2021 • 48 mins
There are lots of reasons to tax corporations: as a check on their power, to help pay for infrastructure, as a wealth tax. But the biggest reason economists cite for why they've stuck around is that everyday people think companies should have to pay them too.
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Episode Transcript
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Speaker 1 (00:01):
Welcome to stuff you should know, a production of I
Heart Radio. Hey, and welcome to the podcast. I'm Josh Clark,
and there's Charles W. Chuckers Bryant over there, looking magnificent
and marvelous as always, at least in my head your vision, Chuck. Yeah,
(00:25):
we're going to see each other next week. I know,
how excited are you? I am pretty on fire. I'm
excited to it's it's been well over a year. I
don't remember the last time we recorded together, but it
was definitely I would say February probably of the last
(00:45):
nuts we we isolated pre pandemic. We saw it coming, yeah,
we did. We probably should have warned everybody, but well
we didn't want to, cause, you know, a stir right,
We don't like to make waves, so we knew some
people would just not believe us. Um. So we're talking today,
(01:06):
Chuck about corporate income tax, and I'm sure some people
just said, well, goodbye and must stop. But I feel
bad for those people, because it turns out that corporate
income tax is less eye bleedingly boring than it seems
on its surface. I think, yeah, I mean, I think
so too. I think a lot of I mean economics,
(01:26):
as you know, is tough for me. Uh, And there
is a part everyone it's been many years since I've
had to do this, but there's a part where Josh
is gonna have to teach me because I read that
section four times and I told Josh it sounded like
physics to me. I'm I'm with you though, like, And
there's a reason that I figured out all these years
of us doing economics um episodes, I figured out why
(01:50):
it's so hard to understand because a lot of it
is just straight up who we like, economists are wrong
about a lot of stuff, and um, they know it too,
So I'm not exactly sure what they're doing to reinvent
their field, but there's a I mean, it's taken a
beating in the last few decades for sure. So I
(02:12):
think one of the reasons why it's so hard to
understand because it doesn't make a lot of sense in
a lot of ways to Yeah, and there's economics is
one of those things where you can have two very knowledgeable,
well respected economists saying completely opposite things and saying that
they are they are each correct, You're wrong, I'm right,
(02:35):
And it's not like this philosophical sort of political stuff
that can easily be disagreed on. It's just like no,
they're they're like, no, I'm right about this economically speaking,
and the other person's like, no, you're dead wrong. It's
really this and then guys like us are like, I
don't even know who to believe, right, And then agreeing
to disagree solves nothing. It basically just punts it down
(02:59):
the road. Yeah, don't you think that indicates that there's
a fatal flaw in that science if there you know,
if no one knows who's right. Well, that's like a
really good point because that really comes to the surface
with corporate income tax because there's a lot of people
out there, typically liberal economists, who tend to think that
corporate income taxes are a very very good thing and
(03:20):
we need them, and that average American typically agrees with
those liberal economists, even people who are not liberal in
any way, shape or form, because the average everyday American
tends to think that corporations should pay taxes as well. Um.
And then there's conservative economists who say, no, this stuff
is stifling business. It has all sorts of other pernicious
(03:42):
effects that will get into um, we should do away
with them alltogether, And the fact of the matter is,
no one is sure who's right. Do we need corporate Texas,
do they actually harm things? They don't even agree on
who actually ends up paying corporate taxes. It is so
um there's a lot to like kind of dig into here,
(04:03):
which is one reason why I like it so much. Yeah,
I mean, I guess we'll go ahead and get some
stats on the board out of the gate. I think
at ten of the countries in the world, only ten
don't have some kind of corporate income tax, and here
in the United States. And we'll get to how it's
been over the years, but I think in twenty nineteen
(04:26):
we've brought in about two thirty billion in corporate tax
compared to one point seven to trillion from you know,
people like you and I and uh now, it's about
six percent of the total take, whereas in the nineteen
sixties it was forty of like all taxes were paid
(04:47):
by corporations. Yeah, and like, I mean, corporations were paying
for a lot of the functioning of America at that time.
What's weird is corporate profits were also higher during that
time too. And I couldn't see anything any smoking gun
where some economists was saying like this is the reason why,
um that you know, a decline in corporate tax rates
(05:10):
has actually led somehow to decline in profits. But I
don't think there's anything in economics, especially when we're talking
about huge, sweeping macroeconomics that make up one of the
world's largest economies, if not the largest economy, America's. Um,
it's never just one thing. There's never you don't just
push one button and then it just has its one effect.
(05:32):
You know, it's a whole bunch of buttons that are
creating this one larger effect, and they're really hard to disentangle. Yeah,
and Congress has been taking uh, corporate income tax since
nineteen o nine when they said, quote, Congress shall have
power to lay in collect taxes on incomes from whatever
source derived without uh what is that apportionment? Okay, how
(05:54):
I read the the oh, and the I switched in
my mind apportionment among several states and without regard to
any census or enumeration, right, which is a kind of
a different thing like it used to be where if
you taxed one group you had to text everybody equally,
regardless of say, like if West Virginia the same population
(06:15):
as California, but California had a lot more income. Well,
West Virginia had to pay the same amount, not not percentage,
amount of income tax that all the wealthy people in
California had to pay, and so that kept income taxes
away for a while. Which, by the way, we've done
an episode on income taxes, and we also did that
chapter in the book on it too. We apparently can't
(06:35):
get enough of income taxes. Yeah, and we did a
an episode on corporate personhood many years ago too, right, Yeah,
which really kind of plays into this. It's the reason
why a lot of people say corporations should pay their
fair share. They're treated as people under the law, and
people under the law have to pay taxes in the
United States. That's kind of a big, a big reason
why people want to see it. But yeah, it wasn't
(06:57):
until nine nine, and I think, um, it was like
you said, the sixties where that was like the heyday
of corporate taxation, where the tax rates for for corporate
income tax reached almost fifty three percent in the United States.
It is apparently, um, the UK had a similar peak,
but there's came later in two and then Australia's peak
(07:21):
came in nine six at fort So that and that
actually kind of points out something that I came across, Chuck,
because there's a lot of like, um, one country will
change its tax code to kind of attract foreign money
to kind of get dumped into it. And which makes
a lot of sense because when you dump billions or
(07:44):
hundreds of billions of dollars from all these businesses who
find your tax codes attractive, that money is now in
your economy, like your financial institutions can go out and
invest it, and you can do all sorts of amazing
stuff with it. That's why countries have different tax codes
at different times to a tracked foreign investment basically, right,
which we'll get into that. I mean that's foreign investment
(08:05):
is one name for it. Um hiding money another way
to say it. Jackie channing, Uh, I don't get that.
What did you do? Remember the Panama papers they revealed this,
this Panama's attack haveing. The only person who was basically
publicly pilloried for it was poor Jackie chan. Somehow Jackie
(08:26):
chan ended up the face of that thing. That's terrible. Um,
So you mentioned conservative and liberals. It's a little counterintuitive,
but under Ronald Reagan actually um the He actually went
after corporate taxes to try and increase the corporate tax
amount so he could decrease US paying taxes a little bit.
(08:48):
And in eighties, I think that was with a Tax
Reform Act, they cut the rate from forty to thirty four,
closed a lot of loopholes, and I think the end
the end result of that was the percentage went from
five percent to ten percent starting in the eighties until
(09:09):
Bill Clinton came along. Yeah, and then Bill Clinton topped
it off at thirty five percent, and there it stayed.
He's just added a percentage point and there it stayed
for quite a while, actually until I think two thousand
and seventeen when it got slashed to one UM. And
for from about to two thousand seventeen, the US had
(09:31):
one of the higher tax rates in the world. Because
it seems like there's there's always an outlier, like the
the United Arab Emirates I think has Camorros in Africa
has fifty, and then usually it drops down into the thirties.
And there's a handful of countries in the in the
mid to low thirties UM, which is where the United
(09:51):
States was for a while until two thousand seventeen. So
it looks like, if I'm reading this right, the since
of the nineteen eighties, the person image of federal revenue
from corporate taxes has been under ten percent. Yes, yes,
which is historically low. I think it got down to
one percent of g d P, which is another way
(10:13):
to measure it. Um uh, for the first time since
the very early eighties when Reagan first came in. Because
Reagan slash taxes across the board in and I think
he overstepped it so far that Congress is like, we're
reforming corporate taxes in six there, Like you want to paycheck,
right exactly, fellow congress person. Right, Uh, maybe we should
(10:37):
take a break after that set up, you think, I
think so. Yeah, it's a little early, but now we
can really get into the really fun stuff. Prepare for
the eye bleeding, all right, We'll be right back, okay. So, um,
(11:16):
when it comes to corporate income tax, it's a little
different than individual income tax in the US. Right. With
individual income text, there are a few things that are
kind of removed from your taxable income, right, like you're um,
health spending account contributions, just a little stuff like that.
But for the most part, you're paying like on your
(11:36):
gross income, which makes sense because you don't have like
profit and loss necessarily, although I guess if you think
about it, you could just tax people on just what
they have left over. They're they're, um, what's it called
your something income? You know, you're you're well, yeah, you're
net but income expendable income, right, Yeah, they could totally
(12:00):
just text everybody after like housing, after healthcare, after groceries,
all that stuff, just like a business. They hadn't occurred
to me, but that's totally how you could do it,
And they don't do it that way. I'd be great,
But they do it for for corporations. Uh they do
because corporations get do get text on their net and uh,
you know, this is actual corporations, where if you're a
(12:23):
sole proprietorship or if you're a partnership like an scorp
or yeah, like you know that's that's not the same thing.
This is only for corporations. Uh. It says here that
you know, if you're like my wife's business, for example,
is not a corporation. It's a small business and she
(12:43):
pays personal income tax, so that's like sort of the
pass through situation. Yeah, her companies have passed through entity. Right,
so like all of the profits and all that stuff
just comes right to her your individual income tax. But
with the corporation, it's a its own entity. Again, it's
like in the United States. I'm sure not everybody out
(13:03):
there understands this, but the Supreme Court, starting in the
nineteenth century and a few times over the course of
the last hundred or two hundred fifty years, has affirmed
that corporations are artificial people. They have the same rights
and everything is as everyday Americans. It's nuts, it's totally wrong,
and it's created all sorts of horrible problems. But one
(13:26):
of the things that that amounts to is that you
can tax a corporation. They're treated, uh, in that sense
under the law as a person, but a person with
special privileges. Right, And he talked about moving money around.
The reason that happens is because here in the United States,
they are taxed on money that they make in the
United States. So if you're I don't know, like Apple
(13:49):
or Microsoft, let's say, or any you know, not any
or every big corporation, but many big corporations of them,
you might want to say, hey, let's, uh, let's find,
like you mentioned earlier, a country with a really friendly
tax code. It's called tax in version, and let's just
confuse everybody by uh using what's called transfer pricing, which
(14:11):
is basically creating they're not fake transactions, but their transactions
between subsidiaries all over the world just to move profits around. Basically, yeah,
using more biblical terms, it's like robbing Peter to pay Paul. Basically,
it's all like moving goods from one division to another
within the same company. There's no reason that the company
(14:33):
has to charge that division or the other division or
providing a service. Like let's say you bring your marketing
team into launch a new podcast. You could have the
podcast division charge or the marketing division charge the podcast
division front and it's all as far as the company's concerned.
It's all internal money. It's all kept in the family.
But all of that is just kind of right exactly.
(14:56):
And then you're like this, I really needed that money, um,
But the as far as like um, multinational corporations are concerned.
When you do that and it crosses international borders, that's
a really good way to move money from say the
United States to say the Cayman Islands, where there's no
income tax. It's one of those ten countries, And so
(15:16):
all of a sudden, that money that you just moved
from the U S to the Caymans doesn't count as
profit that America can tax any longer. That's that's transfer pricing,
which is a form of tax and version. There's other
stuff you can do too. You can move your headquarters
to another country with um a lower tax, which really,
from what I can tell, basically amounts to changing the
(15:38):
address on your letter head um and maybe some legal documents,
like I think Burger King did that when they bought
Tim Horton's. They basically used Tim Horton's headquarters as the
new corporate headquarters for Burger King. So Burger Prince could
go to school in the right district exactly right, except
in this case rather than going to school districts is
(15:58):
saving billion and billions of dollars in taxes, even though
it's kind of a joke because Tim Horton's is just
dwarfed by the size of Burger King. So the idea
of this giant company, Burger King, transferring its headquarters to
you know, relatively smaller Tim Horton's headquarters. It seems a
little disingenuous, because that's the thing. Everybody knows that corporations
(16:21):
try to get out of paying their taxes. They're just
famous for it, especially in the United States. But when
you come down to it, that is deeply un American
and really immoral. And businesses are not supposed to be
doing that. They're supposed to be paying their taxes and
being upstanding corporate citizens, but they don't do that, and
(16:43):
so every once a while they get called out on it.
And one of the reasons why we still have corporate taxes,
as we'll see, is because the average American, like you know, me, thinks, heck, yah,
corporations should be paying their taxes just like us. Yeah,
And these tax havens they cost governments a lot of
money all over the world, between five hundred and six
hundred billion dollars, which you know that that puts a
(17:05):
dent on us here in the United States, but if
you're a developing nation or a low income economy, it
makes a real big dentu If you're losing, you know,
a couple of hundred billion dollars, it's going to be
a real hit to your g d P. And you
know when Apple moves thirty billion dollars to Ireland over
the course of four years and employees and nobody over there,
(17:29):
and their TAXI rate of two percent, that does hit
the United States, but not like it would in some
other countries. Right, But again you can understand why why
Ireland would be like, I think they actually made a
sweetheart deal with Apple for that. Because Ireland's corporate tax
is normally twelve point five percent, they knocked ten percent
off for Apple. So um, but I looked at Ireland's
(17:52):
GDP that thirty billion dollars was twelve percent of the
value of Ireland's GDP in two thousand So I Land,
that was an enormous influx of cash and worth whatever
effort they were going to make to get it into
their borders. Plus they got to make some money off
of it in taxes in addition to having it invested
(18:12):
into their economy. Um. An, Apple, like they got pilloried
and kind of called out in two thousand thirteen for
that that kind of transfer pricing or tax in version technique,
right because they didn't have any any employees in Ireland
at the time, and they got called out for it.
But if you compare Apple to a lot of the
(18:32):
other fortune five hundred companies, they are they might as
well be we blows for goodness sake. As far as
like paying taxes is concerned, they are ned flanders, um,
just to the tea. As far as paying taxes goes
compared to like companies like Amazon, it's just astounding. They
should not be ever be picked on at all in
(18:54):
that respect, just by comparison. Yeah, I mean, let's talk
about Amazon. You know, they've been criticized a lot and
called out a lot, especially over the past couple of years. Uh.
In two thousand, seventeen and eighteen, they paid zero dollars
in taxes. Uh, and they made big profits three billion
dollars in profits. This isn't the gross. This is that
(19:17):
that net profit that we were talking about that they're
supposed to get taxed on. Uh. In seventeen, I think
it was I'm sorry, in eighteen it was eleven point
two billion dollars in profits from three billion. Yeah, they
paid zero dollars in tax of both years. And not
only that, check they got refunds those two years. Yeah,
hundred and twenty nine million dollars and a hundred and
(19:38):
thirty seven million dollars respectively over those two years, and
then finally a couple of years ago in twenty nineteen,
they were like, we'll pay some taxes. So they paid
a hundred and sixty two million on the profit of
thirteen point nine billion for a whopping percentage rate of one. Yeah,
so in Amazon deserves to get it, you know, UM
(20:01):
publicly berated for it. And I also have the impression
that they paid those taxes in two thousand nineteen just
because politically it was getting bad, like the press for
it was getting kind of ridiculous. So they're like, all right,
we'll pay a hundred and sixty two million. It's not
even the combined refunds that we got the last two years,
but at least we're paying something. Um. There are there
(20:21):
plenty of other corporate tax sodgers. Chevron, Haliburt and IBM
also paid zero dollars and taxes, and I think two
thousand eighteen UM and there was a two thousand two
eighteen study UM that found that of three hundred and
seventy nine of the Fortune five hundred companies that turned
a profit in two thousand and eighteen, ninety one of
(20:43):
them paid zero dollars in taxes um. And I think
altogether those three d seventy nine paid something like eighty
six billion, when really, had they paid just the one
percent that lower twenty one percent effective rate, it would
have been a hundred and sixty one billion. So you
can make a really good case that the corporations in
(21:04):
America are really really good at getting out of paying
taxes for the most part, even though not all of
them do. And going back to Apple, Apple paid sixteen
billion in taxes in two thousand nineteen compared to Amazon's
hundred and sixty two million in in that same year, right,
And you could also make the case that the UH
(21:26):
tax reduction for corporations and leaving open of the loopholes
did not in fact boost federal corporate tax revenue like
they said it would, which never made sense to begin
with anyway, exactly now it was all just a big scam, UH.
You mentioned earlier though, like we still can't agree on
who actually pays this. So you hear Amazon or whoever
(21:48):
pays a hundred and twenty six what they pay a
hundred six million dollars, I don't know, hundred and sixty
two million, Like who actually you know, Jeff Bezos, right,
a check to the federal governed want for that? How
does that work? And economists don't even really agree on
who ends up like taking this financial burden on. I
(22:08):
think even in the seventeen I'm sorry, sixteen hundreds, there
was an economist named William Petty, Sir William Petty, and
he said, you know, kind of like what a lot
of people probably think, which is it's just gonna be
passed onto the consumer as higher prices. They're gonna just
raise the price of their goods. Other people say, well,
that can't be true, because if you're already charging prices
(22:32):
where you've maximized your profits, you can't there's there's a cap.
You can't just keep raising your prices over and over
and over to cover yourself because eventually people are gonna
be like, I'm not gonna buy that, right. Yeah, When
you raise prices, it makes people think like, oh, can
I actually afford that? And you start you start actually
shooting yourself in the foot. And that's generally the understanding
(22:53):
among economists today. You know, hundreds of years after Sir
William Petty um that he was wrong and there that
idea is actually born out. Among the different states in
the US, some of them have zero taxes on corporate income,
others have, you know, relatively high taxes on it. And
yet if you go from one state to another state,
(23:14):
when you buy a pack of Hubble Bubba bubble gum,
it's probably gonna be exactly the same price before before
you pay sales tax on it um, which goes to
show like, you know, they're not going to charge a
different price because they're having to pay corporate taxes. That
just isn't the way it is. And Plus, also, corporations
aren't the only ones who sell Hubba bubba, right. You know,
(23:36):
if Emily wanted to, she could become a distributor of
Hubba Bubba bubblegum. And I wouldn't blame her if she was,
because it's about as good as bubble gum has ever
been produced. I was a hubble Bubba kid. I was
not bubblicious. I I didn't like bubblicious either, but ultimately
I was bubble Yumm. And I think there are a
couple of things that represent the pinnacle of human endeavor.
(23:57):
One of them is um lemon lime bubble yum. Remember
it was the green outside in the yellow center. Oh yeah, yeah, yeah, Um.
I think I've mentioned it before. Rambo bubble gum. It
was BlackBerry flavored big League chew with Rambo holding a
missile launcher on the I've definitely never heard that. That's amazing.
(24:17):
And then lastly et peanut butter flavored cereal. Uh well,
I'm a Captain crunch guy, as you know, but uh
on the gum. Hubble Bubba to me always produced, It
always yielded the best bubbles. Yeah, and if you were
a champion bubble blower and sometimes bubble within bubble blower
like myself, then you reach for the hubble Bubba. You
(24:40):
need to. You need to make a video of yourself
doing that. Man. Bubble gum was good too, though, but
just bubble you Almo was good too, But you're absolutely
right there was hubble bubble was as good as it
gets with the bubbles, for sure, don't. I don't chew
gum anymore, but if I was going to, I would
get a pack of bubblegum like that. I think hubble
Bubba is basically unchanged bubble yams a little weird. Now,
(25:04):
it's a little different the current state bubba. I've tried
it once in a while. Yeah, I mean if you
want to go get transported back to your youth, like
get some get some real bubble gum, and I'm going
to do that. Where were we? Okay, where we are?
So states? Uh yeah, states don't charge different prices. Like
it's not like let me go to Florida and stuck
(25:25):
up on that gum because it's you know, six cents cheaper. Um.
So then, ohh I know where we were. Really we
were talking about Emily becoming um Hubba Bubba distribution. She
doesn't have to pay corporate text, so she could sell
Hubba Bubba way cheaper than say, General Electric could sell
Hubba Bubba. If they ever wanted to, she could undercut them.
(25:45):
General Electric wouldn't be selling Hubba Bubba any longer because
it would be hamstrung by those corporate taxes. Emily is
not hamstrung by the right. So we're still left without
an answer on who's paying um. Usually these days modern
economists say, well, here's what's going on is the burden
is going to fall on the owners. But what that
(26:07):
really means is it's divided among shareholders of that corporation.
And what it really is happening is employees are being
paid less, and so they're all kind of taking in
on the chin. Yeah, because as far as the economists
are concerned, if if the government is coming in and
taxing somebody, then there's three entities that could possibly be
paying for it. Capital, the business owners, the people who
(26:30):
like own the machinery, own the money that's invested into businesses, capital, employers, labor,
you know, the workers employees, and then customers. And if
we've already decided that it's not being passed on to customers,
you've got capital and labor left. And so yeah, it
makes sense that it would be capital who's paying the
tax in the form of lower dividends than they would
(26:52):
otherwise be getting if the pot that the dividends were
coming out of was greater because the tax hadn't been taken.
But economists still say that's not the end of it.
We think it's probably ultimately divided somewhat, probably not evenly,
but somewhat between capital and labor, and that labor helps
bear the cost of these corporate taxes by getting paid
(27:14):
lower wages. There's just less capital stock involved, and so
when you have less money, um, you know, you can't
get like a goose plucking machine. That that that means
you're gonna pluck this goose. You know you you can
do ten gooses an hour rather than two. That just
little Samuel, the ten year old boy with the full
(27:34):
chin beard, can pluck by himself with just his hands.
Even though Samuel saying, you get this goose plucking machine,
I'm going to oversee it and we're really going to
make some money. You don't have the money to buy
the goose plucking machine, so all you can do is
just keep employing Samuel. Maybe his cousin Ezekiel every once
in a while comes in on weekends, but you don't
(27:55):
have that money. They're less productive, so you're making less
money in the market, which means you have less money
to pay Samuel and Ezekiel, even though they're doing harder
labor than the otherwise would be. If you weren't such
a tight wad and would buy the goose plucking machine,
right and do you get his fire Samuel, to be honest,
you probably would. Well, yeah, he has been talking back
(28:18):
quite a bit lately. I mean someone could turn on
that machine and push push goo. Ezekiel could at a
lower rate than Samuel. Oh yeah, he has zero loyalty
to anybody, including his cousin. Let's take a break here
and then we'll talk about arguments against in than four
after that. How's that? Okay? So arguments against taxing corporations
(29:04):
some people, and this is sort of the thing you
hear all the time is is the economy referred to
as an engine and this motor that's got a home
along and people that say you should not text corporations
are people that are saying, listen, this is what is
keeping that engine humming. Is they're employing people, they're generating money. Uh,
(29:25):
they're selling things there. I mean, this is the economy basically,
And if you just get rid of corporate taxes, then
they're gonna they're gonna reinvest that stuff. They're gonna pay
their employees more, Your prices are gonna drop, they're gonna
it's gonna trickle down to you, and that engine is
just gonna hum right. I mean, that's that's ultimately what
all of the arguments against corporate taxation amount to. Because
(29:50):
and you are already taxing those individuals and those shareholders
on their personal income taxes. So like your double taxicum
to cut it out right. So, yes, the corporation itself
has to pay income taxes theoretically where they actually, like
you said, Jeff Bezos, cuts a Skexias from the dark
crystals check to the federal government for a hundred and
(30:12):
sixty two million dollars or whatever um. And then on
top of that, after they pay their taxes, this post
tax amount, the the corporation sends out dividends quarterly annually. However,
to the shareholders. The shareholders are in some way shape
or form and oftentimes very literally owners of the company.
(30:33):
But if you own shares in a company, you are
part owner of that company, and so you're getting dividends,
you're getting a part of the profits. Right. So when
you get those dividends given to you, um, at the
end of the year, you have to declare those on
your income taxes and then you have to pay personal
text and that. So it's like you said, it's double taxation.
And so the government saying we'll take a little bit
(30:56):
of this capital out of the economy for ourselves. Oh
and by the way, we'll take out of your your
little wealth pot too, um. And not all of a sudden,
there's just that much less money to be reinvested into business.
That's a huge argument against corporate income taxes that's been
around for a very long time. But there's also like
a lot more nuanced ones too. Um. One of the
(31:17):
big ones is that, like it's a tax on entrepreneurship
where if you are a company and you need some
money to keep it, say expand your business right, um,
and you're you've got your profits and everything like that,
but you really want to take it up to the
next level and you need a lot more money than
you have in the bank, you can issue shares more
(31:40):
shares of your your company. UM. That's called equity financing,
where you're releasing equity shares, which your current investors don't
really like because all of a sudden there are way
more shares on the market, um, and their shares are
suddenly worth a little bit less. Even though they didn't
do anything and your business is doing fine, they don't
like you very much. Then there's another way to do
(32:01):
It's called debt financing, and that is instead of issuing
shares of ownership to your company, you're saying, hey, I
need I need to borrow money from you. I'm going
to issue you the certificate, I'll pay this back in
X number of years with with interest. Right, they're called
corporate bonds. You have to be a massive company to
issue debt securities to raise money like that. You just
(32:22):
have to have that kind of established business and trust
with the public to issue debt securities. But the reason
that businesses do that is because you you can deduct
the interest that you pay those investors for lending you
that money. You can't deduct dividends. So if you're a
little startup, all you can do is um issue shares.
(32:44):
Nobody trusts to enough to buy debt securities. I mean,
you're an unproven business, but they will buy shares in
your company because they think you probably are going to
be able to make it. They're just not sure. So
you can issue shares and then put out dividends, but
you can't deduct the dividends. Your competitors, the bigger guys,
can do that, or they can issue death securities and
(33:05):
then they can deduct the interest. So there's actually a
tax is corporate tax. Um is actually at tax on
entrepreneurship in that sense, which again it's really nuance and
it's really wonky. But once you start to like enter
the world of like high finance and new innovative technology.
This is a big deal to you, you know what
(33:25):
I mean. Yeah, And you know there are people that
say that the disparity between the taxation between those interest
in dividend payments is why we're getting all these stock
buy backs happening, which you know, if you're if you
paid attention at all to the news in the United States,
when tax laws change for corporations, you heard a lot
(33:46):
about stock buy backs, which is the idea that a
company is going to use their profits to buy its
own stock off the market instead of doing the thing
that they said it would do, which is, hey, they're
going to reinvest these these profits that they're they're making
back into the company. They're gonna get new equipment, they're
gonna hire more people, everyone's gonna get a raise or
R and D is gonna pick up. And what really
(34:07):
happens a lot of times is they just buy stock
by box. They just say, hey, we got this extra money, now,
why don't we buy back a bunch of our own
stock and consolidate even more control and more power and
more money. Uh. And it's you know, insert doctor evil laughing, right,
at this point. Basically yeah, because allegedly you're theoretically, the
(34:29):
stock buy backs only come when this company is so
flush with cash it can't spend all of it, so
it just does these buybacks. But they happen even when
a company doesn't have a bunch of cash, because it
raises the share price a lot more. Too. It also
lowers their their non deductible dividend payments as well. So
the the the idea that you that deductibles are not
(34:52):
or dividends are not deductible. Um, but interest is it's
it's a it's it's also laying the foundation for those
stist buy backs, like you were saying, right, and then
you add in just the complex plate of spaghetti that
is the U. S. Tax code, and it's just it's
really complex. And some people say, if companies weren't having
(35:14):
to kind of sift through this tax code and it
was a lot simpler, or maybe if they didn't have
to pay them at all, then maybe they would uh
reinvest some and not have stock buybacks. Yeah. Not to
mention the critics of of corporate taxation say, like, we
don't even know who's paying this at this point. It's
(35:36):
possible that wages could go up if we didn't have this.
So when you take all of these reasons together, there's
some pretty good arguments um against corporate taxation, and um
you can take them all together, put them into a
pile and say, hey, every day, Joe American, what do
you think of this? And watch them urinate on all
(35:57):
of your reasons that you just neatly piled together. O
there reasons for uh corporate taxation? The people say, no,
we definitely should. One of the big reasons is just
kind of what we've been talking about is just public
perception of your average American is, yeah, why do I
gotta pay taxes? And Amazon doesn't? Uh, So that's one
big reason. Another is is people that say, hey, look,
(36:20):
the government is basically providing the infrastructure for which these
companies are getting rich. The bridges and the waterways and
everything that we're maintaining and subsidizing as tax paying citizens,
the roads. Even these corporations are are utilizing that stuff.
So they need to pay their fair share just to
(36:41):
support that that infrastructure. And the government is really the
engine because they take care of all this stuff. In theory,
it's dude, it is just such a smoke screen too,
that the government is portrayed as just this, this spend
thrift pickpocket that just steps on innovation and and takes
the rev out of the engine of the economy by
(37:02):
taxing business like there's an entirely different way of looking
at it, and that by maintaining those bridges in these
waterways and and um, the infrastructure that businesses used to
hum along. The government itself is a wealth creating engine two.
And the government is mandated to use that money as
soon as it gets it right. A business is not
(37:23):
necessarily mandated there, There is no mandate. The board of
directors and the shareholders might want the business to spend
its money rather than sitting on it, but it doesn't
have to. And plenty of businesses might just be sitting
on a big pot of money. Well. Another argument in
favor of corporate taxation is that the government says, you
can't do that, at least not with this percentage. Is
twenty one percent of that money that you made this year,
(37:45):
because we're gonna take it and we're gonna put it
back in those roads and everything. And yes, agreed, the
government is not like a uh an efficient machine by
any stretch of the imagination, and plenty of that money
also ends up going into other things that I consider
very important, like social programs that keep people from starving
to death, that kind of stuff that don't necessarily have
(38:06):
anything to do with business unless you zoom out enough
and then realize that if you want a worker to
show up to work um alive, they need to eat food.
And so if you're not paying them enough, the government's
actually taking that money from you and making sure that
that worker is fed so they can show up at
work the next day. If you zoom out far enough,
it all has to do with business, and it all
(38:28):
connects like that. It's just some people argue that that
it's it should just be just on its face about business,
that anything that isn't obviously overtly on its face about
business should just go away and and be and not
have anything to do with business and let business deal
with business. Yeah, how's that working? Yeah, real well, real well,
(38:53):
thanks for asking. Another reason you might want to argue
for corporate taxation is is merely took to put these
companies in check and these corporations in check, and to
make them tap the brakes every once in a while,
because with that kind of money yields great power, especially
in the wake of the Citizens United Decision, when now
(39:13):
corporations and companies can spend whatever they want to get
involved in politics and to woo politicians through lobbying efforts.
And you know, some might say that if you at least,
you know, smash their head with attacks a little bit,
maybe that shouldn't be so violent. If you levy attacks
(39:35):
on their corporation, if you tickle their ear with a
feather a metaphor for taxation, then that at least keeps
their power and influence a little bit more in check.
I'm not sure how much that's that's working, but that's
the thought. I think it's working a lot. Actually, yeah,
And I think and it's weird to think of and
I didn't think of it before, but researching this, it
(39:56):
seems to be. Um, you know, it's two sides of
this same coin. Some people say, well, a good way
to keep government power and check is to reduce its
ability to tax things because it depends on that money.
It's like a vampire that just sucks money right out
of everybody. Um, So it's two sides of the same coin.
I think that that is the give and take that
we see when it comes to the tax code is
(40:17):
you know, whatever group thinks that the government is a
blood sucker um if they're in charge, then taxes go down.
If somebody thinks that that businesses need to be kept
in check, taxes tend to go up. And that's that
kind of seesaw effect that we see. But I think
ultimately it does have at least some impact. It's not perfect,
but I think it's enough that it's it's worth doing
just for that that point as well. Right, You also
(40:41):
might say that it provides a backstop basically two personal
income tax for the wealthy. Here in the United States,
nine tenths of corporate stock are owned by the top
tenth of the income distribution, So it's you know, the
wealthy are uh, they're the ones that are running these
(41:03):
corporations obviously, and if we didn't text the corporations, they're
also getting away with tax loopholes and tax shelters, and
these individuals might not be paying any tax at all
as people and as corporations. Yeah, they might actually form
shell corporations themselves and say, oh no, all of this
is corporate income. It's not taxable. If there's no corporate tax,
(41:25):
and I read that that's one reason why most countries
have a corporate income taxes too, because it's ultimately a
tax on the wealthy, because the wealthy are the largest
shareholders in the corporations around the world. And I hadn't
really thought about it before. But once you see corporate
taxes a tax on the wealthy, like, the picture becomes
much clearer of what, you know, what the battle lines
(41:47):
are in that that argument and debate over the existence
of corporate taxes. Right, so it's here to stay. It's
not gonna go away. They're not going to completely do
away with it. The tax code is a big jumble
play a spaghetti. Like I said, it's a big mess.
And there are some people that say, well, you know,
if we want to kind of fix this corporate problem
(42:09):
that we have, maybe and I think these were a
couple of Rutgers professors, and there are there are some
different ideas will govern, But they had an idea I
thought was interesting, which is, let's not rewrite the tax
code again. It just gets more confusing and offers more
opportunities for loopholes. Let's just lock that in, but then
offer a wealth tax on top of everything for these corporations.
(42:31):
They said, how about five percent of the actual growth
of the company for that year. So maybe the federal government,
here's what you should do. Subtract the end of the
year's share price from that share price that uh where
it was at the beginning of the year, multiplied by
the number of outstanding shares on each date, and then
tax him on that amount over and above the regular
(42:53):
corporate tax rate. Yeah, and then that captures everything that
captures the actual growth in the company's well that year,
not just necessarily their profits from revenue. And it also says, hey,
keep it up, keep going. You can find all these
loopholes and all these tax hodges that you figured out.
This is again like a like like, uh, corporate taxes
(43:13):
a backstop to wealth and income tax for the wealthy.
This is like a backstop for corporate corporations getting out
of paying corporate income tax. It's it's just kind of
clomped on in addition to it. I don't know if
it's going to go anywhere, but it's a it seems
like a pretty good idea. Uh. Some people say, another
way we can fix it is to basically treat these
corporations like they are partnerships and you know, just let
(43:39):
the money flow through and then tax the shareholders individually. Yeah.
The problem with that that I saw is that you
then would be taxed on your individual income on all
the profit that the corporation made that year, even though
you didn't see that amount in dividends necessarily. Let's say
you saw twenty or dividend that year for your one share,
(44:02):
but really your your share of that profit was two
hundred dollars, but you might be text on the two
hundred dollars rather than the twenty dividend, and that, I mean,
that would just chase people away from investing in companies.
So that's probably a generally bad idea, agreed. But yeah,
it's it's like you said, it's not it's not going
anywhere at all. It's it's here to stay, just at
(44:23):
the very least, because the everyday American is like, yeah,
corporations should pay taxes. Yeah. Um, the none or the
everyday Americans that are saying let's just get rid of
it are not every Dame Marian's right there, like Mr
Burns and disguise sort of wearing a bowling shirt or something.
You got anything else, I've got nothing else. I'm taking
(44:44):
off my ice skates. Finally, you did great. Man. You
didn't seem like you were hanging by your fingernails at
any point in time either. I don't think fooled you again. Uh. Well,
since Chuck said he fooled us again, I think then
everybody is time for a listener mate. Yeah, boy, this
is a good one. Uh, I need to said this
(45:06):
one up. Remember we did. I don't want to bring
this up. I know it's a matter of a past
trauma for both of us. But remember when we did
our Feral Children Live show at south By south Befests.
Just so you folks know, you might not have heard
the story. We did our Feral Children Live show at
a bar in south By Southwest where there was a
(45:29):
big sort of DJ event before and after I think,
and then we were squeering in the enter. We were
squeezed in between and this was a bar with they
were probably I don't know, let's just ballpark it and
say four dred people in there and about fifteen of them.
We're stuff. You should know listeners that wanted to hear
what we were having to say. Let's not exaggerate, Chuck
(45:50):
it is probably like eighteen or nineteen. I just remember
you and I locking eyes at a certain point very
early on and and literally mind reading each other of
we're agreeing right now to skip this material, right, And
we did, Yeah, we did, And it was it was
like we just kind of knew what parts we were
(46:11):
going to skip and all that too. It was pretty
amazing that. The saddest thing about all this is that
a lot of stuff, you should know, listeners were left
out in the hot sun on the sidewalk and couldn't
get in, which we had nothing to do within our
still apologizing for it. So that's the setup. Uh, this morning,
I was listening, Hey guys, I was listening to our
Feral Children real and you started the episode by lamenting
(46:33):
how terrible your first attempt was when you did it
live in Austin In Like, we didn't even release that
it was unreleasable. Uh no, it wasn't even close. Like
we re recorded it, if I'm correct, right, Um, yeah,
we recorded it as like a regular studio exactly after
we got over the trauma. I just want to let
(46:53):
you know that at least one great thing came from
that show. See, I was in the audience that day
with an old friend that I hadn't talked to and ages.
We were both fans of the show and we're excited
for the chance to see you live. We ended up
having a great time decided to hang out again a
few weeks later. Long story short, we're now married with
an eighteen month old. That's awesome. How awesome is that
(47:15):
you guys would continue to play a huge partner lives
and have kept his company during countless road trips and commutes,
including to cross country moves. Our daughter now starts dancing
when she hears the theme song and we jokingly refer
to you guys as Uncle Josh and Uncle Chuck. I
think that's only right. Yes, thanks for all you do,
and please come back to Austin. Uh. And that is
(47:36):
Jenny And I told Jenny. I was like, this is amazing.
I'm gonna read this. And I'm a little mad at
you for not sending a picture of this baby that
we're partially responsible for. I want to see this kid.
I bet Jennielsen the picture. I'll bet you will too. Um. Well,
thanks to Jenny, thanks to the kid, thanks to the husband,
and thanks to all of the terrible bar patrons at
(47:58):
that episode that we record at that time but never released.
But thanks especially to all this Stuff you Should Know
listeners who were turning around and telling the people at
the bar to sh Do you remember that it didn't work? No,
it didn't work, But I was like, hats off to
all of you guys trying to shush the people at
the bar who've never heard of stuff you should Oh boy,
(48:20):
that was terrible. Yeah, but that's great news, Jenny, And
thanks again. And if you want to get in touch
with this, like Jenny and take one of our terrible
memories and dust it off and make it shine and
show it in a different light. We love that kind
of stuff. You can send us an email to stuff
Podcast at iHeart radio dot com. Stuff you Should Know
(48:42):
is a production of I Heart Radio. For more podcasts
my heart Radio, visit the i heart Radio app, Apple Podcasts,
or wherever you listen to your favorite shows.
Welcome to stuff you should know, a production of I
Heart Radio. Hey, and welcome to the podcast. I'm Josh Clark,
and there's Charles W. Chuckers Bryant over there, looking magnificent
and marvelous as always, at least in my head your vision, Chuck. Yeah,
(00:25):
we're going to see each other next week. I know,
how excited are you? I am pretty on fire. I'm
excited to it's it's been well over a year. I
don't remember the last time we recorded together, but it
was definitely I would say February probably of the last
(00:45):
nuts we we isolated pre pandemic. We saw it coming, yeah,
we did. We probably should have warned everybody, but well
we didn't want to, cause, you know, a stir right,
We don't like to make waves, so we knew some
people would just not believe us. Um. So we're talking today,
(01:06):
Chuck about corporate income tax, and I'm sure some people
just said, well, goodbye and must stop. But I feel
bad for those people, because it turns out that corporate
income tax is less eye bleedingly boring than it seems
on its surface. I think, yeah, I mean, I think
so too. I think a lot of I mean economics,
(01:26):
as you know, is tough for me. Uh, And there
is a part everyone it's been many years since I've
had to do this, but there's a part where Josh
is gonna have to teach me because I read that
section four times and I told Josh it sounded like
physics to me. I'm I'm with you though, like, And
there's a reason that I figured out all these years
of us doing economics um episodes, I figured out why
(01:50):
it's so hard to understand because a lot of it
is just straight up who we like, economists are wrong
about a lot of stuff, and um, they know it too,
So I'm not exactly sure what they're doing to reinvent
their field, but there's a I mean, it's taken a
beating in the last few decades for sure. So I
(02:12):
think one of the reasons why it's so hard to
understand because it doesn't make a lot of sense in
a lot of ways to Yeah, and there's economics is
one of those things where you can have two very knowledgeable,
well respected economists saying completely opposite things and saying that
they are they are each correct, You're wrong, I'm right,
(02:35):
And it's not like this philosophical sort of political stuff
that can easily be disagreed on. It's just like no,
they're they're like, no, I'm right about this economically speaking,
and the other person's like, no, you're dead wrong. It's
really this and then guys like us are like, I
don't even know who to believe, right, And then agreeing
to disagree solves nothing. It basically just punts it down
(02:59):
the road. Yeah, don't you think that indicates that there's
a fatal flaw in that science if there you know,
if no one knows who's right. Well, that's like a
really good point because that really comes to the surface
with corporate income tax because there's a lot of people
out there, typically liberal economists, who tend to think that
corporate income taxes are a very very good thing and
(03:20):
we need them, and that average American typically agrees with
those liberal economists, even people who are not liberal in
any way, shape or form, because the average everyday American
tends to think that corporations should pay taxes as well. Um.
And then there's conservative economists who say, no, this stuff
is stifling business. It has all sorts of other pernicious
(03:42):
effects that will get into um, we should do away
with them alltogether, And the fact of the matter is,
no one is sure who's right. Do we need corporate Texas,
do they actually harm things? They don't even agree on
who actually ends up paying corporate taxes. It is so
um there's a lot to like kind of dig into here,
(04:03):
which is one reason why I like it so much. Yeah,
I mean, I guess we'll go ahead and get some
stats on the board out of the gate. I think
at ten of the countries in the world, only ten
don't have some kind of corporate income tax, and here
in the United States. And we'll get to how it's
been over the years, but I think in twenty nineteen
(04:26):
we've brought in about two thirty billion in corporate tax
compared to one point seven to trillion from you know,
people like you and I and uh now, it's about
six percent of the total take, whereas in the nineteen
sixties it was forty of like all taxes were paid
(04:47):
by corporations. Yeah, and like, I mean, corporations were paying
for a lot of the functioning of America at that time.
What's weird is corporate profits were also higher during that
time too. And I couldn't see anything any smoking gun
where some economists was saying like this is the reason why,
um that you know, a decline in corporate tax rates
(05:10):
has actually led somehow to decline in profits. But I
don't think there's anything in economics, especially when we're talking
about huge, sweeping macroeconomics that make up one of the
world's largest economies, if not the largest economy, America's. Um,
it's never just one thing. There's never you don't just
push one button and then it just has its one effect.
(05:32):
You know, it's a whole bunch of buttons that are
creating this one larger effect, and they're really hard to disentangle. Yeah,
and Congress has been taking uh, corporate income tax since
nineteen o nine when they said, quote, Congress shall have
power to lay in collect taxes on incomes from whatever
source derived without uh what is that apportionment? Okay, how
(05:54):
I read the the oh, and the I switched in
my mind apportionment among several states and without regard to
any census or enumeration, right, which is a kind of
a different thing like it used to be where if
you taxed one group you had to text everybody equally,
regardless of say, like if West Virginia the same population
(06:15):
as California, but California had a lot more income. Well,
West Virginia had to pay the same amount, not not percentage,
amount of income tax that all the wealthy people in
California had to pay, and so that kept income taxes
away for a while. Which, by the way, we've done
an episode on income taxes, and we also did that
chapter in the book on it too. We apparently can't
(06:35):
get enough of income taxes. Yeah, and we did a
an episode on corporate personhood many years ago too, right, Yeah,
which really kind of plays into this. It's the reason
why a lot of people say corporations should pay their
fair share. They're treated as people under the law, and
people under the law have to pay taxes in the
United States. That's kind of a big, a big reason
why people want to see it. But yeah, it wasn't
(06:57):
until nine nine, and I think, um, it was like
you said, the sixties where that was like the heyday
of corporate taxation, where the tax rates for for corporate
income tax reached almost fifty three percent in the United States.
It is apparently, um, the UK had a similar peak,
but there's came later in two and then Australia's peak
(07:21):
came in nine six at fort So that and that
actually kind of points out something that I came across, Chuck,
because there's a lot of like, um, one country will
change its tax code to kind of attract foreign money
to kind of get dumped into it. And which makes
a lot of sense because when you dump billions or
(07:44):
hundreds of billions of dollars from all these businesses who
find your tax codes attractive, that money is now in
your economy, like your financial institutions can go out and
invest it, and you can do all sorts of amazing
stuff with it. That's why countries have different tax codes
at different times to a tracked foreign investment basically, right,
which we'll get into that. I mean that's foreign investment
(08:05):
is one name for it. Um hiding money another way
to say it. Jackie channing, Uh, I don't get that.
What did you do? Remember the Panama papers they revealed this,
this Panama's attack haveing. The only person who was basically
publicly pilloried for it was poor Jackie chan. Somehow Jackie
(08:26):
chan ended up the face of that thing. That's terrible. Um,
So you mentioned conservative and liberals. It's a little counterintuitive,
but under Ronald Reagan actually um the He actually went
after corporate taxes to try and increase the corporate tax
amount so he could decrease US paying taxes a little bit.
(08:48):
And in eighties, I think that was with a Tax
Reform Act, they cut the rate from forty to thirty four,
closed a lot of loopholes, and I think the end
the end result of that was the percentage went from
five percent to ten percent starting in the eighties until
(09:09):
Bill Clinton came along. Yeah, and then Bill Clinton topped
it off at thirty five percent, and there it stayed.
He's just added a percentage point and there it stayed
for quite a while, actually until I think two thousand
and seventeen when it got slashed to one UM. And
for from about to two thousand seventeen, the US had
(09:31):
one of the higher tax rates in the world. Because
it seems like there's there's always an outlier, like the
the United Arab Emirates I think has Camorros in Africa
has fifty, and then usually it drops down into the thirties.
And there's a handful of countries in the in the
mid to low thirties UM, which is where the United
(09:51):
States was for a while until two thousand seventeen. So
it looks like, if I'm reading this right, the since
of the nineteen eighties, the person image of federal revenue
from corporate taxes has been under ten percent. Yes, yes,
which is historically low. I think it got down to
one percent of g d P, which is another way
(10:13):
to measure it. Um uh, for the first time since
the very early eighties when Reagan first came in. Because
Reagan slash taxes across the board in and I think
he overstepped it so far that Congress is like, we're
reforming corporate taxes in six there, Like you want to paycheck,
right exactly, fellow congress person. Right, Uh, maybe we should
(10:37):
take a break after that set up, you think, I
think so. Yeah, it's a little early, but now we
can really get into the really fun stuff. Prepare for
the eye bleeding, all right, We'll be right back, okay. So, um,
(11:16):
when it comes to corporate income tax, it's a little
different than individual income tax in the US. Right. With
individual income text, there are a few things that are
kind of removed from your taxable income, right, like you're um,
health spending account contributions, just a little stuff like that.
But for the most part, you're paying like on your
(11:36):
gross income, which makes sense because you don't have like
profit and loss necessarily, although I guess if you think
about it, you could just tax people on just what
they have left over. They're they're, um, what's it called
your something income? You know, you're you're well, yeah, you're
net but income expendable income, right, Yeah, they could totally
(12:00):
just text everybody after like housing, after healthcare, after groceries,
all that stuff, just like a business. They hadn't occurred
to me, but that's totally how you could do it,
And they don't do it that way. I'd be great,
But they do it for for corporations. Uh they do
because corporations get do get text on their net and uh,
you know, this is actual corporations, where if you're a
(12:23):
sole proprietorship or if you're a partnership like an scorp
or yeah, like you know that's that's not the same thing.
This is only for corporations. Uh. It says here that
you know, if you're like my wife's business, for example,
is not a corporation. It's a small business and she
(12:43):
pays personal income tax, so that's like sort of the
pass through situation. Yeah, her companies have passed through entity. Right,
so like all of the profits and all that stuff
just comes right to her your individual income tax. But
with the corporation, it's a its own entity. Again, it's
like in the United States. I'm sure not everybody out
(13:03):
there understands this, but the Supreme Court, starting in the
nineteenth century and a few times over the course of
the last hundred or two hundred fifty years, has affirmed
that corporations are artificial people. They have the same rights
and everything is as everyday Americans. It's nuts, it's totally wrong,
and it's created all sorts of horrible problems. But one
(13:26):
of the things that that amounts to is that you
can tax a corporation. They're treated, uh, in that sense
under the law as a person, but a person with
special privileges. Right, And he talked about moving money around.
The reason that happens is because here in the United States,
they are taxed on money that they make in the
United States. So if you're I don't know, like Apple
(13:49):
or Microsoft, let's say, or any you know, not any
or every big corporation, but many big corporations of them,
you might want to say, hey, let's, uh, let's find,
like you mentioned earlier, a country with a really friendly
tax code. It's called tax in version, and let's just
confuse everybody by uh using what's called transfer pricing, which
(14:11):
is basically creating they're not fake transactions, but their transactions
between subsidiaries all over the world just to move profits around. Basically, yeah,
using more biblical terms, it's like robbing Peter to pay Paul. Basically,
it's all like moving goods from one division to another
within the same company. There's no reason that the company
(14:33):
has to charge that division or the other division or
providing a service. Like let's say you bring your marketing
team into launch a new podcast. You could have the
podcast division charge or the marketing division charge the podcast
division front and it's all as far as the company's concerned.
It's all internal money. It's all kept in the family.
But all of that is just kind of right exactly.
(14:56):
And then you're like this, I really needed that money, um,
But the as far as like um, multinational corporations are concerned.
When you do that and it crosses international borders, that's
a really good way to move money from say the
United States to say the Cayman Islands, where there's no
income tax. It's one of those ten countries, And so
(15:16):
all of a sudden, that money that you just moved
from the U S to the Caymans doesn't count as
profit that America can tax any longer. That's that's transfer pricing,
which is a form of tax and version. There's other
stuff you can do too. You can move your headquarters
to another country with um a lower tax, which really,
from what I can tell, basically amounts to changing the
(15:38):
address on your letter head um and maybe some legal documents,
like I think Burger King did that when they bought
Tim Horton's. They basically used Tim Horton's headquarters as the
new corporate headquarters for Burger King. So Burger Prince could
go to school in the right district exactly right, except
in this case rather than going to school districts is
(15:58):
saving billion and billions of dollars in taxes, even though
it's kind of a joke because Tim Horton's is just
dwarfed by the size of Burger King. So the idea
of this giant company, Burger King, transferring its headquarters to
you know, relatively smaller Tim Horton's headquarters. It seems a
little disingenuous, because that's the thing. Everybody knows that corporations
(16:21):
try to get out of paying their taxes. They're just
famous for it, especially in the United States. But when
you come down to it, that is deeply un American
and really immoral. And businesses are not supposed to be
doing that. They're supposed to be paying their taxes and
being upstanding corporate citizens, but they don't do that, and
(16:43):
so every once a while they get called out on it.
And one of the reasons why we still have corporate taxes,
as we'll see, is because the average American, like you know, me, thinks, heck, yah,
corporations should be paying their taxes just like us. Yeah,
And these tax havens they cost governments a lot of
money all over the world, between five hundred and six
hundred billion dollars, which you know that that puts a
(17:05):
dent on us here in the United States, but if
you're a developing nation or a low income economy, it
makes a real big dentu If you're losing, you know,
a couple of hundred billion dollars, it's going to be
a real hit to your g d P. And you
know when Apple moves thirty billion dollars to Ireland over
the course of four years and employees and nobody over there,
(17:29):
and their TAXI rate of two percent, that does hit
the United States, but not like it would in some
other countries. Right, But again you can understand why why
Ireland would be like, I think they actually made a
sweetheart deal with Apple for that. Because Ireland's corporate tax
is normally twelve point five percent, they knocked ten percent
off for Apple. So um, but I looked at Ireland's
(17:52):
GDP that thirty billion dollars was twelve percent of the
value of Ireland's GDP in two thousand So I Land,
that was an enormous influx of cash and worth whatever
effort they were going to make to get it into
their borders. Plus they got to make some money off
of it in taxes in addition to having it invested
(18:12):
into their economy. Um. An, Apple, like they got pilloried
and kind of called out in two thousand thirteen for
that that kind of transfer pricing or tax in version technique,
right because they didn't have any any employees in Ireland
at the time, and they got called out for it.
But if you compare Apple to a lot of the
(18:32):
other fortune five hundred companies, they are they might as
well be we blows for goodness sake. As far as
like paying taxes is concerned, they are ned flanders, um,
just to the tea. As far as paying taxes goes
compared to like companies like Amazon, it's just astounding. They
should not be ever be picked on at all in
(18:54):
that respect, just by comparison. Yeah, I mean, let's talk
about Amazon. You know, they've been criticized a lot and
called out a lot, especially over the past couple of years. Uh.
In two thousand, seventeen and eighteen, they paid zero dollars
in taxes. Uh, and they made big profits three billion
dollars in profits. This isn't the gross. This is that
(19:17):
that net profit that we were talking about that they're
supposed to get taxed on. Uh. In seventeen, I think
it was I'm sorry, in eighteen it was eleven point
two billion dollars in profits from three billion. Yeah, they
paid zero dollars in tax of both years. And not
only that, check they got refunds those two years. Yeah,
hundred and twenty nine million dollars and a hundred and
(19:38):
thirty seven million dollars respectively over those two years, and
then finally a couple of years ago in twenty nineteen,
they were like, we'll pay some taxes. So they paid
a hundred and sixty two million on the profit of
thirteen point nine billion for a whopping percentage rate of one. Yeah,
so in Amazon deserves to get it, you know, UM
(20:01):
publicly berated for it. And I also have the impression
that they paid those taxes in two thousand nineteen just
because politically it was getting bad, like the press for
it was getting kind of ridiculous. So they're like, all right,
we'll pay a hundred and sixty two million. It's not
even the combined refunds that we got the last two years,
but at least we're paying something. Um. There are there
(20:21):
plenty of other corporate tax sodgers. Chevron, Haliburt and IBM
also paid zero dollars and taxes, and I think two
thousand eighteen UM and there was a two thousand two
eighteen study UM that found that of three hundred and
seventy nine of the Fortune five hundred companies that turned
a profit in two thousand and eighteen, ninety one of
(20:43):
them paid zero dollars in taxes um. And I think
altogether those three d seventy nine paid something like eighty
six billion, when really, had they paid just the one
percent that lower twenty one percent effective rate, it would
have been a hundred and sixty one billion. So you
can make a really good case that the corporations in
(21:04):
America are really really good at getting out of paying
taxes for the most part, even though not all of
them do. And going back to Apple, Apple paid sixteen
billion in taxes in two thousand nineteen compared to Amazon's
hundred and sixty two million in in that same year, right,
And you could also make the case that the UH
(21:26):
tax reduction for corporations and leaving open of the loopholes
did not in fact boost federal corporate tax revenue like
they said it would, which never made sense to begin
with anyway, exactly now it was all just a big scam, UH.
You mentioned earlier though, like we still can't agree on
who actually pays this. So you hear Amazon or whoever
(21:48):
pays a hundred and twenty six what they pay a
hundred six million dollars, I don't know, hundred and sixty
two million, Like who actually you know, Jeff Bezos, right,
a check to the federal governed want for that? How
does that work? And economists don't even really agree on
who ends up like taking this financial burden on. I
(22:08):
think even in the seventeen I'm sorry, sixteen hundreds, there
was an economist named William Petty, Sir William Petty, and
he said, you know, kind of like what a lot
of people probably think, which is it's just gonna be
passed onto the consumer as higher prices. They're gonna just
raise the price of their goods. Other people say, well,
that can't be true, because if you're already charging prices
(22:32):
where you've maximized your profits, you can't there's there's a cap.
You can't just keep raising your prices over and over
and over to cover yourself because eventually people are gonna
be like, I'm not gonna buy that, right. Yeah, When
you raise prices, it makes people think like, oh, can
I actually afford that? And you start you start actually
shooting yourself in the foot. And that's generally the understanding
(22:53):
among economists today. You know, hundreds of years after Sir
William Petty um that he was wrong and there that
idea is actually born out. Among the different states in
the US, some of them have zero taxes on corporate income,
others have, you know, relatively high taxes on it. And
yet if you go from one state to another state,
(23:14):
when you buy a pack of Hubble Bubba bubble gum,
it's probably gonna be exactly the same price before before
you pay sales tax on it um, which goes to
show like, you know, they're not going to charge a
different price because they're having to pay corporate taxes. That
just isn't the way it is. And Plus, also, corporations
aren't the only ones who sell Hubba bubba, right. You know,
(23:36):
if Emily wanted to, she could become a distributor of
Hubba Bubba bubblegum. And I wouldn't blame her if she was,
because it's about as good as bubble gum has ever
been produced. I was a hubble Bubba kid. I was
not bubblicious. I I didn't like bubblicious either, but ultimately
I was bubble Yumm. And I think there are a
couple of things that represent the pinnacle of human endeavor.
(23:57):
One of them is um lemon lime bubble yum. Remember
it was the green outside in the yellow center. Oh yeah, yeah, yeah, Um.
I think I've mentioned it before. Rambo bubble gum. It
was BlackBerry flavored big League chew with Rambo holding a
missile launcher on the I've definitely never heard that. That's amazing.
(24:17):
And then lastly et peanut butter flavored cereal. Uh well,
I'm a Captain crunch guy, as you know, but uh
on the gum. Hubble Bubba to me always produced, It
always yielded the best bubbles. Yeah, and if you were
a champion bubble blower and sometimes bubble within bubble blower
like myself, then you reach for the hubble Bubba. You
(24:40):
need to. You need to make a video of yourself
doing that. Man. Bubble gum was good too, though, but
just bubble you Almo was good too, But you're absolutely
right there was hubble bubble was as good as it
gets with the bubbles, for sure, don't. I don't chew
gum anymore, but if I was going to, I would
get a pack of bubblegum like that. I think hubble
Bubba is basically unchanged bubble yams a little weird. Now,
(25:04):
it's a little different the current state bubba. I've tried
it once in a while. Yeah, I mean if you
want to go get transported back to your youth, like
get some get some real bubble gum, and I'm going
to do that. Where were we? Okay, where we are?
So states? Uh yeah, states don't charge different prices. Like
it's not like let me go to Florida and stuck
(25:25):
up on that gum because it's you know, six cents cheaper. Um.
So then, ohh I know where we were. Really we
were talking about Emily becoming um Hubba Bubba distribution. She
doesn't have to pay corporate text, so she could sell
Hubba Bubba way cheaper than say, General Electric could sell
Hubba Bubba. If they ever wanted to, she could undercut them.
(25:45):
General Electric wouldn't be selling Hubba Bubba any longer because
it would be hamstrung by those corporate taxes. Emily is
not hamstrung by the right. So we're still left without
an answer on who's paying um. Usually these days modern
economists say, well, here's what's going on is the burden
is going to fall on the owners. But what that
(26:07):
really means is it's divided among shareholders of that corporation.
And what it really is happening is employees are being
paid less, and so they're all kind of taking in
on the chin. Yeah, because as far as the economists
are concerned, if if the government is coming in and
taxing somebody, then there's three entities that could possibly be
paying for it. Capital, the business owners, the people who
(26:30):
like own the machinery, own the money that's invested into businesses, capital, employers, labor,
you know, the workers employees, and then customers. And if
we've already decided that it's not being passed on to customers,
you've got capital and labor left. And so yeah, it
makes sense that it would be capital who's paying the
tax in the form of lower dividends than they would
(26:52):
otherwise be getting if the pot that the dividends were
coming out of was greater because the tax hadn't been taken.
But economists still say that's not the end of it.
We think it's probably ultimately divided somewhat, probably not evenly,
but somewhat between capital and labor, and that labor helps
bear the cost of these corporate taxes by getting paid
(27:14):
lower wages. There's just less capital stock involved, and so
when you have less money, um, you know, you can't
get like a goose plucking machine. That that that means
you're gonna pluck this goose. You know you you can
do ten gooses an hour rather than two. That just
little Samuel, the ten year old boy with the full
(27:34):
chin beard, can pluck by himself with just his hands.
Even though Samuel saying, you get this goose plucking machine,
I'm going to oversee it and we're really going to
make some money. You don't have the money to buy
the goose plucking machine, so all you can do is
just keep employing Samuel. Maybe his cousin Ezekiel every once
in a while comes in on weekends, but you don't
(27:55):
have that money. They're less productive, so you're making less
money in the market, which means you have less money
to pay Samuel and Ezekiel, even though they're doing harder
labor than the otherwise would be. If you weren't such
a tight wad and would buy the goose plucking machine,
right and do you get his fire Samuel, to be honest,
you probably would. Well, yeah, he has been talking back
(28:18):
quite a bit lately. I mean someone could turn on
that machine and push push goo. Ezekiel could at a
lower rate than Samuel. Oh yeah, he has zero loyalty
to anybody, including his cousin. Let's take a break here
and then we'll talk about arguments against in than four
after that. How's that? Okay? So arguments against taxing corporations
(29:04):
some people, and this is sort of the thing you
hear all the time is is the economy referred to
as an engine and this motor that's got a home
along and people that say you should not text corporations
are people that are saying, listen, this is what is
keeping that engine humming. Is they're employing people, they're generating money. Uh,
(29:25):
they're selling things there. I mean, this is the economy basically,
And if you just get rid of corporate taxes, then
they're gonna they're gonna reinvest that stuff. They're gonna pay
their employees more, Your prices are gonna drop, they're gonna
it's gonna trickle down to you, and that engine is
just gonna hum right. I mean, that's that's ultimately what
all of the arguments against corporate taxation amount to. Because
(29:50):
and you are already taxing those individuals and those shareholders
on their personal income taxes. So like your double taxicum
to cut it out right. So, yes, the corporation itself
has to pay income taxes theoretically where they actually, like
you said, Jeff Bezos, cuts a Skexias from the dark
crystals check to the federal government for a hundred and
(30:12):
sixty two million dollars or whatever um. And then on
top of that, after they pay their taxes, this post
tax amount, the the corporation sends out dividends quarterly annually. However,
to the shareholders. The shareholders are in some way shape
or form and oftentimes very literally owners of the company.
(30:33):
But if you own shares in a company, you are
part owner of that company, and so you're getting dividends,
you're getting a part of the profits. Right. So when
you get those dividends given to you, um, at the
end of the year, you have to declare those on
your income taxes and then you have to pay personal
text and that. So it's like you said, it's double taxation.
And so the government saying we'll take a little bit
(30:56):
of this capital out of the economy for ourselves. Oh
and by the way, we'll take out of your your
little wealth pot too, um. And not all of a sudden,
there's just that much less money to be reinvested into business.
That's a huge argument against corporate income taxes that's been
around for a very long time. But there's also like
a lot more nuanced ones too. Um. One of the
(31:17):
big ones is that, like it's a tax on entrepreneurship
where if you are a company and you need some
money to keep it, say expand your business right, um,
and you're you've got your profits and everything like that,
but you really want to take it up to the
next level and you need a lot more money than
you have in the bank, you can issue shares more
(31:40):
shares of your your company. UM. That's called equity financing,
where you're releasing equity shares, which your current investors don't
really like because all of a sudden there are way
more shares on the market, um, and their shares are
suddenly worth a little bit less. Even though they didn't
do anything and your business is doing fine, they don't
like you very much. Then there's another way to do
(32:01):
It's called debt financing, and that is instead of issuing
shares of ownership to your company, you're saying, hey, I
need I need to borrow money from you. I'm going
to issue you the certificate, I'll pay this back in
X number of years with with interest. Right, they're called
corporate bonds. You have to be a massive company to
issue debt securities to raise money like that. You just
(32:22):
have to have that kind of established business and trust
with the public to issue debt securities. But the reason
that businesses do that is because you you can deduct
the interest that you pay those investors for lending you
that money. You can't deduct dividends. So if you're a
little startup, all you can do is um issue shares.
(32:44):
Nobody trusts to enough to buy debt securities. I mean,
you're an unproven business, but they will buy shares in
your company because they think you probably are going to
be able to make it. They're just not sure. So
you can issue shares and then put out dividends, but
you can't deduct the dividends. Your competitors, the bigger guys,
can do that, or they can issue death securities and
(33:05):
then they can deduct the interest. So there's actually a
tax is corporate tax. Um is actually at tax on
entrepreneurship in that sense, which again it's really nuance and
it's really wonky. But once you start to like enter
the world of like high finance and new innovative technology.
This is a big deal to you, you know what
(33:25):
I mean. Yeah, And you know there are people that
say that the disparity between the taxation between those interest
in dividend payments is why we're getting all these stock
buy backs happening, which you know, if you're if you
paid attention at all to the news in the United States,
when tax laws change for corporations, you heard a lot
(33:46):
about stock buy backs, which is the idea that a
company is going to use their profits to buy its
own stock off the market instead of doing the thing
that they said it would do, which is, hey, they're
going to reinvest these these profits that they're they're making
back into the company. They're gonna get new equipment, they're
gonna hire more people, everyone's gonna get a raise or
R and D is gonna pick up. And what really
(34:07):
happens a lot of times is they just buy stock
by box. They just say, hey, we got this extra money, now,
why don't we buy back a bunch of our own
stock and consolidate even more control and more power and
more money. Uh. And it's you know, insert doctor evil laughing, right,
at this point. Basically yeah, because allegedly you're theoretically, the
(34:29):
stock buy backs only come when this company is so
flush with cash it can't spend all of it, so
it just does these buybacks. But they happen even when
a company doesn't have a bunch of cash, because it
raises the share price a lot more. Too. It also
lowers their their non deductible dividend payments as well. So
the the the idea that you that deductibles are not
(34:52):
or dividends are not deductible. Um, but interest is it's
it's a it's it's also laying the foundation for those
stist buy backs, like you were saying, right, and then
you add in just the complex plate of spaghetti that
is the U. S. Tax code, and it's just it's
really complex. And some people say, if companies weren't having
(35:14):
to kind of sift through this tax code and it
was a lot simpler, or maybe if they didn't have
to pay them at all, then maybe they would uh
reinvest some and not have stock buybacks. Yeah. Not to
mention the critics of of corporate taxation say, like, we
don't even know who's paying this at this point. It's
(35:36):
possible that wages could go up if we didn't have this.
So when you take all of these reasons together, there's
some pretty good arguments um against corporate taxation, and um
you can take them all together, put them into a
pile and say, hey, every day, Joe American, what do
you think of this? And watch them urinate on all
(35:57):
of your reasons that you just neatly piled together. O
there reasons for uh corporate taxation? The people say, no,
we definitely should. One of the big reasons is just
kind of what we've been talking about is just public
perception of your average American is, yeah, why do I
gotta pay taxes? And Amazon doesn't? Uh, So that's one
big reason. Another is is people that say, hey, look,
(36:20):
the government is basically providing the infrastructure for which these
companies are getting rich. The bridges and the waterways and
everything that we're maintaining and subsidizing as tax paying citizens,
the roads. Even these corporations are are utilizing that stuff.
So they need to pay their fair share just to
(36:41):
support that that infrastructure. And the government is really the
engine because they take care of all this stuff. In theory,
it's dude, it is just such a smoke screen too,
that the government is portrayed as just this, this spend
thrift pickpocket that just steps on innovation and and takes
the rev out of the engine of the economy by
(37:02):
taxing business like there's an entirely different way of looking
at it, and that by maintaining those bridges in these
waterways and and um, the infrastructure that businesses used to
hum along. The government itself is a wealth creating engine two.
And the government is mandated to use that money as
soon as it gets it right. A business is not
(37:23):
necessarily mandated there, There is no mandate. The board of
directors and the shareholders might want the business to spend
its money rather than sitting on it, but it doesn't
have to. And plenty of businesses might just be sitting
on a big pot of money. Well. Another argument in
favor of corporate taxation is that the government says, you
can't do that, at least not with this percentage. Is
twenty one percent of that money that you made this year,
(37:45):
because we're gonna take it and we're gonna put it
back in those roads and everything. And yes, agreed, the
government is not like a uh an efficient machine by
any stretch of the imagination, and plenty of that money
also ends up going into other things that I consider
very important, like social programs that keep people from starving
to death, that kind of stuff that don't necessarily have
(38:06):
anything to do with business unless you zoom out enough
and then realize that if you want a worker to
show up to work um alive, they need to eat food.
And so if you're not paying them enough, the government's
actually taking that money from you and making sure that
that worker is fed so they can show up at
work the next day. If you zoom out far enough,
it all has to do with business, and it all
(38:28):
connects like that. It's just some people argue that that
it's it should just be just on its face about business,
that anything that isn't obviously overtly on its face about
business should just go away and and be and not
have anything to do with business and let business deal
with business. Yeah, how's that working? Yeah, real well, real well,
(38:53):
thanks for asking. Another reason you might want to argue
for corporate taxation is is merely took to put these
companies in check and these corporations in check, and to
make them tap the brakes every once in a while,
because with that kind of money yields great power, especially
in the wake of the Citizens United Decision, when now
(39:13):
corporations and companies can spend whatever they want to get
involved in politics and to woo politicians through lobbying efforts.
And you know, some might say that if you at least,
you know, smash their head with attacks a little bit,
maybe that shouldn't be so violent. If you levy attacks
(39:35):
on their corporation, if you tickle their ear with a
feather a metaphor for taxation, then that at least keeps
their power and influence a little bit more in check.
I'm not sure how much that's that's working, but that's
the thought. I think it's working a lot. Actually, yeah,
And I think and it's weird to think of and
I didn't think of it before, but researching this, it
(39:56):
seems to be. Um, you know, it's two sides of
this same coin. Some people say, well, a good way
to keep government power and check is to reduce its
ability to tax things because it depends on that money.
It's like a vampire that just sucks money right out
of everybody. Um, So it's two sides of the same coin.
I think that that is the give and take that
we see when it comes to the tax code is
(40:17):
you know, whatever group thinks that the government is a
blood sucker um if they're in charge, then taxes go down.
If somebody thinks that that businesses need to be kept
in check, taxes tend to go up. And that's that
kind of seesaw effect that we see. But I think
ultimately it does have at least some impact. It's not perfect,
but I think it's enough that it's it's worth doing
just for that that point as well. Right, You also
(40:41):
might say that it provides a backstop basically two personal
income tax for the wealthy. Here in the United States,
nine tenths of corporate stock are owned by the top
tenth of the income distribution, So it's you know, the
wealthy are uh, they're the ones that are running these
(41:03):
corporations obviously, and if we didn't text the corporations, they're
also getting away with tax loopholes and tax shelters, and
these individuals might not be paying any tax at all
as people and as corporations. Yeah, they might actually form
shell corporations themselves and say, oh no, all of this
is corporate income. It's not taxable. If there's no corporate tax,
(41:25):
and I read that that's one reason why most countries
have a corporate income taxes too, because it's ultimately a
tax on the wealthy, because the wealthy are the largest
shareholders in the corporations around the world. And I hadn't
really thought about it before. But once you see corporate
taxes a tax on the wealthy, like, the picture becomes
much clearer of what, you know, what the battle lines
(41:47):
are in that that argument and debate over the existence
of corporate taxes. Right, so it's here to stay. It's
not gonna go away. They're not going to completely do
away with it. The tax code is a big jumble
play a spaghetti. Like I said, it's a big mess.
And there are some people that say, well, you know,
if we want to kind of fix this corporate problem
(42:09):
that we have, maybe and I think these were a
couple of Rutgers professors, and there are there are some
different ideas will govern, But they had an idea I
thought was interesting, which is, let's not rewrite the tax
code again. It just gets more confusing and offers more
opportunities for loopholes. Let's just lock that in, but then
offer a wealth tax on top of everything for these corporations.
(42:31):
They said, how about five percent of the actual growth
of the company for that year. So maybe the federal government,
here's what you should do. Subtract the end of the
year's share price from that share price that uh where
it was at the beginning of the year, multiplied by
the number of outstanding shares on each date, and then
tax him on that amount over and above the regular
(42:53):
corporate tax rate. Yeah, and then that captures everything that
captures the actual growth in the company's well that year,
not just necessarily their profits from revenue. And it also says, hey,
keep it up, keep going. You can find all these
loopholes and all these tax hodges that you figured out.
This is again like a like like, uh, corporate taxes
(43:13):
a backstop to wealth and income tax for the wealthy.
This is like a backstop for corporate corporations getting out
of paying corporate income tax. It's it's just kind of
clomped on in addition to it. I don't know if
it's going to go anywhere, but it's a it seems
like a pretty good idea. Uh. Some people say, another
way we can fix it is to basically treat these
corporations like they are partnerships and you know, just let
(43:39):
the money flow through and then tax the shareholders individually. Yeah.
The problem with that that I saw is that you
then would be taxed on your individual income on all
the profit that the corporation made that year, even though
you didn't see that amount in dividends necessarily. Let's say
you saw twenty or dividend that year for your one share,
(44:02):
but really your your share of that profit was two
hundred dollars, but you might be text on the two
hundred dollars rather than the twenty dividend, and that, I mean,
that would just chase people away from investing in companies.
So that's probably a generally bad idea, agreed. But yeah,
it's it's like you said, it's not it's not going
anywhere at all. It's it's here to stay, just at
(44:23):
the very least, because the everyday American is like, yeah,
corporations should pay taxes. Yeah. Um, the none or the
everyday Americans that are saying let's just get rid of
it are not every Dame Marian's right there, like Mr
Burns and disguise sort of wearing a bowling shirt or something.
You got anything else, I've got nothing else. I'm taking
(44:44):
off my ice skates. Finally, you did great. Man. You
didn't seem like you were hanging by your fingernails at
any point in time either. I don't think fooled you again. Uh. Well,
since Chuck said he fooled us again, I think then
everybody is time for a listener mate. Yeah, boy, this
is a good one. Uh, I need to said this
(45:06):
one up. Remember we did. I don't want to bring
this up. I know it's a matter of a past
trauma for both of us. But remember when we did
our Feral Children Live show at south By south Befests.
Just so you folks know, you might not have heard
the story. We did our Feral Children Live show at
a bar in south By Southwest where there was a
(45:29):
big sort of DJ event before and after I think,
and then we were squeering in the enter. We were
squeezed in between and this was a bar with they
were probably I don't know, let's just ballpark it and
say four dred people in there and about fifteen of them.
We're stuff. You should know listeners that wanted to hear
what we were having to say. Let's not exaggerate, Chuck
(45:50):
it is probably like eighteen or nineteen. I just remember
you and I locking eyes at a certain point very
early on and and literally mind reading each other of
we're agreeing right now to skip this material, right, And
we did, Yeah, we did, And it was it was
like we just kind of knew what parts we were
(46:11):
going to skip and all that too. It was pretty
amazing that. The saddest thing about all this is that
a lot of stuff, you should know, listeners were left
out in the hot sun on the sidewalk and couldn't
get in, which we had nothing to do within our
still apologizing for it. So that's the setup. Uh, this morning,
I was listening, Hey guys, I was listening to our
Feral Children real and you started the episode by lamenting
(46:33):
how terrible your first attempt was when you did it
live in Austin In Like, we didn't even release that
it was unreleasable. Uh no, it wasn't even close. Like
we re recorded it, if I'm correct, right, Um, yeah,
we recorded it as like a regular studio exactly after
we got over the trauma. I just want to let
(46:53):
you know that at least one great thing came from
that show. See, I was in the audience that day
with an old friend that I hadn't talked to and ages.
We were both fans of the show and we're excited
for the chance to see you live. We ended up
having a great time decided to hang out again a
few weeks later. Long story short, we're now married with
an eighteen month old. That's awesome. How awesome is that
(47:15):
you guys would continue to play a huge partner lives
and have kept his company during countless road trips and commutes,
including to cross country moves. Our daughter now starts dancing
when she hears the theme song and we jokingly refer
to you guys as Uncle Josh and Uncle Chuck. I
think that's only right. Yes, thanks for all you do,
and please come back to Austin. Uh. And that is
(47:36):
Jenny And I told Jenny. I was like, this is amazing.
I'm gonna read this. And I'm a little mad at
you for not sending a picture of this baby that
we're partially responsible for. I want to see this kid.
I bet Jennielsen the picture. I'll bet you will too. Um. Well,
thanks to Jenny, thanks to the kid, thanks to the husband,
and thanks to all of the terrible bar patrons at
(47:58):
that episode that we record at that time but never released.
But thanks especially to all this Stuff you Should Know
listeners who were turning around and telling the people at
the bar to sh Do you remember that it didn't work? No,
it didn't work, But I was like, hats off to
all of you guys trying to shush the people at
the bar who've never heard of stuff you should Oh boy,
(48:20):
that was terrible. Yeah, but that's great news, Jenny, And
thanks again. And if you want to get in touch
with this, like Jenny and take one of our terrible
memories and dust it off and make it shine and
show it in a different light. We love that kind
of stuff. You can send us an email to stuff
Podcast at iHeart radio dot com. Stuff you Should Know
(48:42):
is a production of I Heart Radio. For more podcasts
my heart Radio, visit the i heart Radio app, Apple Podcasts,
or wherever you listen to your favorite shows.
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Hosts And Creators
Chuck Bryant
Josh Clark
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