NCAAbbs

http://news.yahoo.com/s/ap/20080812/ap_o...income_tax

Now, why should we lower the tax rates when 67% of corporations don't pay a dime?

I understand that corporations are attracted to lower tax rates, but that's a moot point if they are avoiding paying anything where they currently are.

This article is today's Exhibit A in my case that Joe Namath was right (if you don't know what I'm talking about, ask).

First, if 67% aren't paying any taxes, what difference does it make what THEIR rates are?

Second, if one of the tools used to avoid taxes is transfer pricing schemes that move profits from high-tax jurisdictions to low-tax jurisdictions, wouldn't it be useful for us to become one of those low-tax jurisdictions so that corporations would be reporting and paying taxes on MORE profits here? By the way, the standard liberal answer here is that we'll just change the transfer-pricing rules to force them to pay more tax here. Small problem, you do that and you start running afoul of GATT and WTO. Whatever country is on the other side of the transfer will scream foul becuase we are eating into their tax revenues. And we usually lose those cases, just to let you know. Are you saying that we shoud pull out of all international treaties and compacts?

Third, the article itself indicates that about half of all corporate income (generated by presumably more than half of the number of corporations, since this group is skewed toward more smaller corporations) is earned in S Corporations and LLLC's. In these cases the taxes on corporate income are paid by the owners personally and not the corpporation itself; the corporation pays nothing but the individual owners/shareholders are taxed for 100% of their portion of the corporation profits (instead of just what is returned to them as dividends). It is not clear whether these were excluded from the calculation or not, but the comment would suggest that they were not. If not, this alone would account for pretty much the entire 67%, and that would render the 67% totally meaningless.

Fourth, some significant portion of those companies must have incurred substantial losses due to this failing economy that the democrats keep telling us about. They would pay no income taxes under our tax scheme or any other that I'm aware of--except a Value Added Tax (which I've been pushing for). I find it interesting that they freely quote statistics about gross sales or total assets (which have nothing to do with our present tax system) but not information about net income. Are they going to argue for a VAT?

Fifth, with the second-highest corporate tax rates in the developed world, US companies are at a tremendous disadvantage competing internationally. To try to improve their lot, many of them have paid lobbyists to influence congressmen to enact special breaks (corporate welfare) so that they can compete. These corporate welfare programs typically take the form of tax breaks, which are easier for congressmen to hide from public view. A lot of the companies that are paying no tax are doing so because they are the beneficiaries of corporate welfare to enable them to compete with foreign companies from low-tax jurisdictions on the world market. What we are doing is overtaxing everyone except the favored few, giving congressmen and bureaucrats enormous power to decide who are the winners and losers in our economy; bad way to run an economy, but a great way to enhance your power base if you're a congressman or a bureaucrat.

Sixth, exactly what do you expect them to do? If a tax break is there, do you expect them not to use it?

As a tax practitioner, I see a few other holes in the logic behind the article, and presumably behind the statements by Sens. Dorgan and Levin. My guess is that the GAO study is probably pretty objective, and as such would be forthcoming about the points I made above, so that a read of the full study could lead to a different conclusion than that being parroted by Sens. Dorgan and Levin and the author of the article.

If Sens. Dorgan and Levin were more interested in being honest than in scoring political points, they would have told the whole truth instead of just part of it. But they are Senators, and as with all senators, scoring political points is far more important to them than being honest.

I'm wondering whether the republicans are going to challenge the obvious flaws in Sens. Dorgan's and Levin's comements, or allow them to go unchallenged the way they did with Rep. Rahall's. I don't know whom to fault more on these deals, the democrats for putting out these misleading statements or the republicans for letting them.

Bingo!

I saw the headline, and I knew it was political hack crap. If politicians didn't have a "less than educated" populus and journalists, half of them would never be elected.

I am among those on the generational threshold where I can't remember anything about Joe Namath before the pantyhose commercials. As a consequence, nothing he ever said mattered very much to me, so you have to explain that reference.

Ok now that I've thought more about this story today and found this follow-up to this article (http://news.yahoo.com/s/usnw/20080812/pl...income_tax), I'm starting to wonder about these senators' sanity.

I think that some corporations still use clever tactics to avoid paying taxes, but there is substantial reason why some didn't pay taxes (losses, S-corp, etc.).

I still want to shift away from this moronic income tax structure and towards a consumption tax to eliminate these clever tactics that both some corporations and the wealthy exploit.

When Joe left the University of Alabama and signed his rookie contract for the then-unheard-of amount of $400,000 (how times have changed), the Jets arranged a news conference to introduce him to the New York press. Joe was actually a pretty bright guy, but he was no diligent student. One of the writers asked him something to the effect of, "Joe, is it true that you had to major in something like underwater basket weaving at Alabama in order to stay eligible?"

Joe responded, "That's sort of true but not completely. I started out in underwater basket weaving, but I was having so much trouble making my grades that I had to change my major to journalism."

Every time I see some pretty/handsome but clueless talking head, I think, "Joe was right."

We are in total agreement there.

And the open mind is greatly appreciated. We'd do much better on here and in the real world if more people had that.

I'm sorry, but it's gotten to the point with me that any time a news article quotes a senator or congressperson, I immediately start trying to figure out where the lies are. What's worse is how easy it is to find them.

But where would the fun be if everyone had an open mind?

At least we're doubly screwed because it's both parties that pander, lie, and cheat. Might as well have a uniformity about it.

I've enjoyed the various debates with you, Peruna.

We don't always agree, and I'm guessing from your handle that we won't be agreeing on August 29, but you and Mach and a few others know how to disagree without being disagreeable. And that is very much appreciated.

Not to be annoying...but only individuals pay taxes anyway.

I, too, have enjoyed the debates with you. If August 29 is anything like the last two SMU-Rice games, I will have had a stroke.

I've never felt a need to be disagreeable when I disagree with someone. It only makes one, and consequently one's cause or beliefs, look foolish. No need to make enemies with everyone you disagree with; that will only leave you lonely and angry.

....as you should. With ALL of them.

Hell yeah!

....but don't stop at business owners. Politicians ALSO have to be thrown into the mix, probably more so. Politicians use the current tax system like a damn chess board.

I worry more about their honesty and integrity.

I support businesses evading governmental theft. Since these taxes are included in the overhead of the businesses and passed on to the consumer, we also get to evade the governmental theft and benefit from lower cost goods and services.

defense:Rice-v-SMU :: honesty:congress

What honesty and integrity?...Just a gang of theives to me.

Oh, COME ON...

I honestly don't know which group you think I've slandered unfairly...

Harumph. I WISH it was slander. I object to your blatant and unrepentant truth-telling.