Tag: Tax Breaks

How Many Corporations Pay Their Taxes?

Riddle me that…….

(sorry this is a bit longer than most of my posts….but it needs to be said….)

I know that some of my more conservative readers will not want to hear these proposals…..I believe that if the middle class must suffer and sacrifice then so should the others……I believe in shared sacrifice…..in action not in the idle words of politicians…….

For years conservs have been rattling on about the high corporate taxes in the US…..but they seemingly leave out the part that they get enormous tax breaks and tax cuts almost yearly….and in some states, mine to be exact, the conserv legislature is trying to eliminate corporate income tax, even though they pay very little as compared to what the working stiffs pay……

Think not?  This from Politifact Ohio……..

To back up her assertion, Fudge’s office cites media reports about particular companies – like General Electric and Bank of America — that did not pay 2009 taxes as well as a July 2008 report from Congress’ Government Accountability Office that showed it’s relatively common for big companies to pay no taxes.

Between 1998 to 2005, GAO found that about 72 percent of large foreign controlled companies and 55 percent of large U.S. controlled companies reported zero tax liability for at least one year. About 57 percent of foreign controlled large companies and 42 percent of U.S. large companies paid no taxes in two or more years, and a third of the foreign companies and one quarter of their U.S. counterparts paid no taxes for at least four of those years. Just 45 percent of large U.S. companies and 28 percent of foreign companies reported a tax liability for each of the eight years. The report defined large companies as those with at least $250 million in assets, or at least $50 million in receipts

I say if I pay a 30% tax then corporations pay the same….a shared sacrifice….that they all keep going on about……and there are other ways that corporations can be more socially involved…….I read a piece in the UK’s Guardian by Nicholas Shaxson and I say it is worth considering…..

1) Corporate profits depend on tax-financed public goods: healthy and educated workforces; good infrastructure; publicly enforced respect for contracts and property rights, and so on. When corporations avoid or evade tax, legally or illegally, they free ride on the backs of the rest of us. Stop taxing them, and you savagely undermine political community.

2) Corporation taxes are an essential backstop to personal income tax. Cut them to zero, and wealthy individuals will increasingly reclassify their earnings as corporate income, typically using offshore corporate structures, and escape tax. Gauke’s arguments about employees footing the corporate tax bill are irrelevant.

3) Gauke’s claim of a “consensus among economists” that the burden of corporation taxes falls on employees and not on capital owners, is false. The US Congressional Budget Office said last week that it was “unclear” how much of the corporation tax burden fell on employees; earlier, it said that capital bore most or all of the corporate tax burden. The Institute for Taxation and Economic Policy (ITEP) in Washington said this month that the incidence of corporate tax fell mostly on capital owners, not employees. It added that corporate income tax was among the most progressive taxes, because stock ownership was heavily concentrated among the wealthiest taxpayers. This is an especially precious tax.

4) When Gauke talks about “employees”, who does he mean? Goldman Sachs employees earned $430,700 on average last year. To the extent that the burden falls on them, taxing such firms makes the tax system more progressive. It would also cut into excessive bank remuneration, which has been a big factor in the recent financial crisis. Taxing financial corporations also curbs the “too big to fail” problem where large banks can hold governments hostage and shift losses on to taxpayers.

5) If corporation taxes didn’t fall on the owners of capital, as Gauke claims, then corporations, responding to shareholders’ wishes, shouldn’t mind being taxed. So why do they spend so much time and money designing tax avoidance strategies?

6) Limited liability companies are separate legal persons, greater than the sum of their parts. So they should be taxed separately: this is not “double taxation”. Limited liability lets shareholders dump costs on to society when things go wrong. Corporations must pay for this privilege.

7) Many corporations earn what economists call rents. These – like oil money that flows effortlessly into Saudi or Kuwaiti coffers – are earnings that arise not from hard work and real innovation but from accidents of nature or good fortune. Adair Turner recently explained how banks in the City of London are particularly adept at earning rents, such as from exploiting insider knowledge and expertise; from natural oligopolies in market-making and other activities; and from “valueless” trading activity. Economists since Adam Smith – including Turner – have advocated taxing rents especially hard.

8) Corporate tax avoidance, despite hiding behind weasel words such as “tax efficiency”, is unproductive and inefficient. When corporate managers pursue tax avoidance they take their eye off what they do best – producing better or cheaper goods or services – and focus instead on engineering transfers of wealth from taxpayers to corporations. Clamp down on it, hard, to make markets more efficient.

9) It matters where company owners and business activities are. Take a US mining company digging gold in Zambia. If Zambia raises corporation taxes, wealth will flow from wealthy US stockholders to ordinary African taxpayers. The investor will stay, because that’s where the gold is – and even if it goes, another will take its place. That basic formula works for profitable opportunities in general. Tax corporations, within reason, and they may bluff and bluster – but they will stay.

10) The “Laffer argument” that corporation tax cuts pay for themselves has been thoroughly debunked. Even Greg Mankiw, formerly chairman of George W Bush’s Council of Economic Advisers, calls Laffer’s adherents “charlatans and cranks”.

Good stuff and excellent proposal……it will NEVER come about……special interests are in control….they have almost always been in control…….but what about shared sacrifice?

So, There Is No Class War?

Tax cuts!  Spending cuts!  Who gets what?  Who will smile?  And who gets depression?

I found this graphic when I visited the blog of one of my newest readers,  a good blog that deserves a look. runawaylawyer.wordpress.com…….

I have heard a lot of conserv commentators say that there is NO class war being waged in the US……..I know people do NOT want to hear it…..but I am sorry….but I cannot think of another term to use to describe what is being done to the working majority of this country……..how about the fight in Wisconsin?  How about the labor wars in other “rust belt” states?…..check out the graphic….and then tell me what it is called!

runawaylawyer.wordpress.com/2011/03/13/whe…

There are story after story of how the working class is being manipulated at every turn….I cannot completely blame the conservs….after all the American people are dumb enough to fall for the rhetoric of the politicians……no matter how you cut it the working majority is getting the shaft and the corporations and the CEOs are getting the gold….if that is NOT class warfare….then you tell me what it is!

Was The Recent Tax Deal Good News?

With the passage of the extension on the Bush tax cuts (now and forever, to be called the Obama tax cuts) has revved up the calls for extensive tax reforms….from the Prez and his minions and even from some in the Tea Party….but what are the chances?

From the WSJ…..

This week’s great debate over the fate of the Bush-era tax cuts is doing something more important than determining tax levels for a couple of years: It’s helping set the table for a fundamental reform of the tax system.

That may be a blessing in disguise. Today’s tax compromise is laying the groundwork for tomorrow’s badly needed national debate over how to perform a much more fundamental makeover of the tax code, most likely after the next presidential election.

Actually, this week’s tax debate is merely the second big recent event pushing the country closer toward this rendezvous with real tax reform. The first came in the form of the report issued by the bipartisan deficit-reduction commission Mr. Obama created to deal with Washington’s tide of red ink.

A real conversation on tax reform is needed but will it ever come?

Ezra Klein makes a very astute observation in the WaPo……..

I doubt it. If you could agree on what the words “revenue neutral” meant, you really could redesign the tax code to feature lower rates, simpler forms and less economic drag. But given the coming expiration of the Bush tax cuts, you can’t agree on what revenue-neutral means, as Democrats will say it means revenue after the cuts expire, and Republicans will say it means revenue if the cuts were extended. Until that question is resolved, every tax reform conversation will break down when Republicans realize Democrats are trying to lock in the expiration of the Bush tax cuts and Democrats realize Republicans will only reform the tax code if it means the Bush cuts live forever and ever, amen.

Conservatives want lower taxes, particularly on the rich. They want a larger percentage of Americans to pay federal income taxes, as they believe that paying federal income taxes makes you less likely to support federal spending (Question: Is there any evidence for this view?). They want major cuts in existing government programs and a high bar to creating new programs, which means total revenues have to remain below current spending and far below projected spending.

Liberals have their own concerns: They want more revenues, as they know that their programs can’t survive forever unless taxes rise to meet spending. They want the tax code to be more progressive, and they want to see inequality fall. They want taxes on wealth-income brought into line with taxes on work-income. They want the social spending that runs through the tax code, like the Earned Income Tax Credit or the breaks for clean energy development, to survive, and even be expanded.

All this back and forth….only proves ONE thing….there will be little change in the tax code and structure in the near future……the working class will pay and the wealthy will get the benefits of their station in life…………

The Final Tally Or …You Owe…You Owe

Soon the Prez will sign the new tax cuts bill into law and there were a few tweaks….but what is the final tally of the bill?

Well, thanx to BusinessWeek we have them for you to see……and judge for yourself…..

The package extends:

–Lower rates for taxpayers at every income level. The top rate, on taxable income above $379,150, would stay at 35 percent, instead of increasing to 39.6 percent. The bottom rate, on taxable income below $8,500 for individuals and $17,000 for married couples, would stay at 10 percent, instead of increasing to 15 percent. Cost: $186.8 billion.

–More generous itemized deductions for high-income households. Cost: $20.7 billion.

–A more generous $1,000 child tax credit. Cost: $71.7 billion.

–Marriage penalty relief, increasing the standard deduction for married couples. Cost: $18 billion.

–A more generous Earned Income Tax Credit for low-income families. Cost: $15.7 billion.

–A series of tax breaks for students and their families, including interest deduction for student loans and an exemption for employer-provided educational assistance. Cost: $3.3 billion.

–A deduction for tuition and related expenses for higher education, for 2010 and 2011. Cost: $1.2 billion.

–A tax credit of up to $2,500 for students’ higher education expenses. Cost: $17.6 billion.

–The top capital gains tax rate of 15 percent. Cost: $25.9 billion.

–The top tax rate on dividends of 15 percent. Cost: $27.3 billion.

–Through 2011, enhanced jobless benefits for people who have been unemployed for long stretches. Cost: $56.5 billion.

–A series of incentives for selling, using and producing alternative fuels, including ethanol. Many of the provisions expired at the end of 2009. They would be extended through 2011. Cost: $11.3 billion.

–A $250 deduction for out-of-pocket classroom expenses by teachers, for 2010 and 2011. Cost: $390 million.

–A federal income tax deduction for state and local sales taxes, taken mostly by people who live in the nine states without state income taxes, for 2010 and 2011. Cost: $5.5 billion.

–The ability of older Americans to withdraw up to $100,000 a year from Individual Retirement Accounts, tax-free, to donate to certain public charities, for 2010 and 2011. Cost: $979 million.

–A business tax credit for research and experimentation expenses, for 2010 and 2011. Cost: $13.3 billion.

–Tax breaks for capital improvements to restaurants and other retail buildings, for 2010 and 2011. Cost: $3.6 billion.

–A tax break for active investors in foreign-based banking, securities and insurance firms, for 2010 and 2011. Cost: $9.2 billion.

–Increased depreciation and expensing for capital investments by businesses. Cost: $21.8 billion.

The package also:

–Spares more than 20 million middle-income households from tax increases averaging $3,900 from the Alternative Minimum Tax in 2010 and 2011. Cost: $136.7 billion.

–Imposes a lower estate tax for the next two years, allowing couples to pass estates as large as $10 million to heirs tax-free. The balance would be taxed at 35 percent. Cost: $68.1 billion.

–Provides a one-year Social Security tax cut for all wage earners, from 6.2 percent to 4.2 percent. Cost: $112 billion.

There she be!  And NOT one penny of it paid for….just add another trillion to the deficit….take it out of petty cash…..NO one will notice…..what happened to those guys and gals that were so concerned about the cost of all the programs….and why was this pushed through without hearings or a CBO score?

It will be fun to see who uses this as a political tool…..

We Have A Problem!

All the lip flapping coming out of Washington is about the budget, the debt and the deficit…..every new guy has his/her opinion on the proper way to handle each issue…..some are NOT so good or even rational……for one…..

Paul Ryan the new head of the House budget committee when interviewed on MSNBC said…when asked what he and the GOP would be doing come next January…he replied…..”well, we cannot just sit around and do nothing for two years can we?”……I was amused!  Why?  That is exactly what they have done for the last two years and they won the House….sounds like a good plan to me….

And then there is the new Rep. from Maryland…as reported by Political Wire….

Rep.-elect Andy Harris (R-MD), a physician who ran to repeal the new health care reform law, “surprised fellow freshmen at a Monday orientation session by demanding to know why his government-subsidized health care plan takes a month to kick in,” Politico reports.

Harris “reacted incredulously when informed that federal law mandated that his government-subsidized health care policy would take effect on Feb. 1 — 28 days after his Jan. 3rd swearing-in.”

Said Harris: “This is the only employer I’ve ever worked for where you don’t get coverage the first day you are employed.”

God!  I love these mental midgets!

All that humor aside…..let us return to the budget……okay dipsticks……if you do not balance the budget the economy will remain sluggish and unresponsive….BUT!  If you do succeed a balance the budget in the next two years….the economy will collapse…….MAY I SAY THAT AGAIN….the economy will collapse!  You will have a lot of the people in Congress say that government has to be run like a business….that it must live within its means just like a business…..well people this is just bullsh*t!  Why?  It is not the same thing and it can be disastrous for the country to think that way…basically it is just another cutsey slogan to dumb-found the voter…..and of course we have the states that have to work on a balanced budget every year…..good idea…the problem is…they do not and if they say they do it is because of creative accounting not anything that the politicians have done……Washington…we have a problem!

Why?  Very simple….at this point in the economic crisis the government is about the only thing that is producing any economic activity…oh yea…and the biggest CON job…tax cuts will generate economic activity……yep…and it has generated so much since the tax cuts went into effect 8 years ago…..if does generate the jobs…then business was lying and it was a plan to embarrass and beat Obama….they have NOTHING for the country or the people….

Give Us A Break!

We hear over and over how Obama and his policies have killed economic activity and jobs…..or that tax cuts will produce more employment…..or that the….well you get the idea….it is all so much crap!

Why would I say such a thing?

One of the shining lights, according to some, is Caterpilla…the heavy duty machine manufacturer….but look at this…

Seeking to bolster one of its more profitable business areas, Caterpillar Inc. agreed to acquire MWM Holding GmbH, a German maker of power-generation equipment, from 3i Group PLC and related investment funds for 580 million euros ($810 million).

3i, a British private-equity firm, bought the Mannheim, Germany-based company in 2007 for 360 million euros. The planned purchase is another move by Caterpillar to expand businesses outside its core areas of construction and mining …

Or maybe this….

Construction-equipment maker Caterpillar  said Tuesday it will buy locomotive maker Electro-Motive Diesel for $820 million from a private-equity firm.EMD is one of the world’s oldest and best-known makers of locomotives, producing its first engine in 1922.  The brand will remain unchanged as EMD’s brand is well-known in the rail industry.

So Caterpilla is spending about $1.5 billion on acquisitions….this will NOT create jobs…if anything some jobs will be lost because of the purchases…..none of this is to help put people back to work…..it is about the bottom line…the profits and the stock prices……business has NO desire to hire more people now and in the near future…it is more profitable the way it is today…..

So, give us a break!  Stop harping on the extension of benefits for corporations…they have NO intention of hiring more people…..nice try though….but I am not that stupid as to believe the hype!

Help For Small Businesses

Recently, our president has issued a massive challenge to the GOP in an effort to help small business and as we know….they are the engines of our economy (or at least that is the slogan these days)…it is election time and all the silliness has come to a head….small business is getting more attention that some idiot in Florida…..

Massaging the egos of the small business owners….both parties are not being forthcoming with the truth…..

But will these benefits create the demand that is needed to bring this economy back?

The problem with the small business tax breaks is two-fold: small businesses are incredibly diverse in their craft, and consequently, no single break works for every small businesses. The second issue with the proposed tax breaks is that many in the business see them as too producer driven, as the Small Business Job Act fails to address (and encourage) some much-needed consumer spending. Simply put, businesses do not need more equipment to produce items that are not selling, or selling at lower levels than in the past.

As Billy Rys explains, “Even if they’ll be able to write off their investments in just a few months, they don’t have the customers coming through the doors. They don’t have contracts to fill.” In the end, the usefulness of the proposed tax breaks will depend on the size and type of businesses, in addition to the financial state of the business.

I have been bitching since this whole debacle started with the economy….the Bush bailout only accomplished bank liquidity and the Obama stim plan was to help create demand……neither one of these plans have created the demand needed to jump start the economy….if tax cuts do not make inventories go up then No one will be hired…..if NO one goes shopping then NO amount of tax cuts will jump start the economy…..without DEMAND there will be NO easy recovery…..it is not rocket science!

To Tax Cut Or Not To Tax Cut

From the VOMITORIUM

We have all heard that the Bush tax cuts may expire and all will be bad for the economy…..you know if the tax cuts are allowed to expire then it would be in essence a new tax and jobs vreation would be dead…..think about that…..we have the tax cuts in place NOW mand how many jobs have they helped to create so far?

And then you have these 7 figure media personalities that work for this financial network or that saying that if the capital  gains tax goes up then it will effect millions of Americans who own stocks….another piece of falsehood!  Most Americans do own stocks but they are in mutual funds or similar funds and with rfe-investment they pay NO capital gains tax…….

And then there is the one about the elimination of the tax cuts and small business will not invest or hire or expand or.,….the tax cuts are on income and if a small business has not protected the owners income then they are stupid and deserve to fail……this is not in any way a tax on R&D or such actions…those tax cuts will stay and the companies will still NOT hire….

This is all so much crap being fed to the people in the game of politics…..first of all, there would be NO increase in people’s taxes if their incomes are below $250,000, where most Americans are as it is today……and secondly, not too many Americans have jobs and if there is no job there is no tax….so where is the tax increase?

This is a budgetary issue……how does one lessen the deficit by eliminating revenue …..the whole idea that saving the wealthy money will trickle down to the working stiff has been proven to be a failed policy…why continue the charade?

How long will politicians offer up crap instead of solutions for real problems?

Is This A Dumbass Plan?

Inkwell Institute

Budget Deficit Series #7

For years now I have been writing about taxation and fiscal policy….on how tax revenues are the sole source that generates money for the states and the country……and to cut taxes in times of deep economic problems is more of a give away than entitlement programs….

Allow me to qualify what I am saying….

Sales taxes on groceries would be eliminated once the state’s economic condition approves under a bill that has passed the Oklahoma Senate.

The bill would eliminate the sales tax on groceries once state revenue collections return to where they were before the economic downturn.

The bill also has a provision that would require the state to reimburse local cities and counties for sales taxes lost on groceries.

In my state there is a similar bill in the legislature but it has not yet passed……there also other forms of tax cuts being offered also….

Where I have a problem with this the fact that of reimbursement….yet another problem, even though a future problem, for local governance……the money that is being given away by cities and states just to try an lure business will not be replaced….that is why it is called a “GIVE AWAY”……..

Legislatures are looking short term and a political benefit and are ignoring the long term beast they are creating….this will come back and bite somebody in the ass!  This is just a way to gain politically for the guys in charge….yes it will save people a bit of cash….but keep in mind that the lost revenue WILL be made up as soon as they can…..so if anyone is to be bitten in the ass…..it will be YOU!

Corporations Are Disgusting

Daily Agitator

There are always stories in the news about the shenanigans that corporations pull……some arte disgusting, more so than some of the others, but then there is one that makes me really hate these self-absord dicks…..

Poverty in the US is reaching fantastic percentages, especially with the recession and all the jobs loses……..close to 20 million people live below the poverty line in the US….there is NOT enough money for them to have food or clothing or shelter…….this story is all the more reason to be disgusted, especially because of the severe weather that is gripping the nation…..

This week the New York Times reported a disheartening story about two of the largest retail chains. You see, instead of taking unsold items to sample sales or donating them to people in need, H&M and Wal-Mart have been throwing them out in giant trash bags. And in the case that someone may stumble on these bags and try to keep or re-sell the items, these companies have gone ahead and slashed up garments, cut off the sleeves of coats, and sliced holes in shoes so they are unwearable.

This unsettling discovery was made by graduate student Cynthia Magnus outside the back entrance of H&M on 35th street in New York City. Just a few doors down, she also found hundreds of Wal-Mart tagged items with holes made in them that were dumped by a contractor. On December 7, she spotted 20 bags of clothing outside of H&M including, “gloves with the fingers cut off, warm socks, cute patent leather Mary Jane school shoes, maybe for fourth graders, with the instep cut up with a scissor, men’s jackets, slashed across the body and the arms. The puffy fiber fill was coming out in big white cotton balls.”

I am sorry but this is disgusting…..you mean to tell me that with all the tax advantages these companies get that they could not have donated the clothing?  Every day there is a news story of people dying because of the weather and yet these people, who could have helped, did not assist and yet they still get advantages of their position in society.  Sorry but this is criminal and there should be some apparatus in place to deal with this situation…..heavy fines or loss of a status or something that would penalize them for turning their backs on the American people.

The next time Wal-Mart makes a commercial that talks of their record in helping society…I want this story to follow it….the people need to stop throwing money at these types of businesses….I know that is a lot to ask during a recession when we have to get all we can for our dollar….but keep in mind….YOU may need something and these companies will turn their back on you…….hold these people responsible for their actions….if you do not….then WHO?