Evolution of Dispossession

Evolution of Dispossession
How to Steal a Country?

Tuesday, August 12, 2008

Corporations Evade Taxes

When corporations evade their tax responsibilities it places undue burdens on the individual taxpayer. This should be one of the top stories of the year, and Americans ought to tax protest until either the rich, greedy corporations pay their fair share or income taxes are abolished altogether. This is outrageous and very depressing.

9 comments:

John Bisceglia said...

While we will NEVER KNOW how many Americans are withholding tax money (including working in the cash-only ecomony), I am certain that the numbers are growing exponentially each day. Between the Iraq was and Marriage Inequality, Americans have plenty of reasons to stop sanctioning this government's immoral acts. David Gross has a great site on the subject (The Picket Line); I've started my own protest (GAY TAX PROTEST).

The government is ACCOUNTABLE to us.

scottie said...

Thank you for your comments John. Please continue to visit my blog.

The linked article said 2/3 of these corporations neglected to pay income taxes. This is fundamentally wrong. On this blog somewhere is another article which illustrates how big corporations set up shell companies in other countries considered to be tax havens, and through some crafty paperwork (like selling a bulldozer to its shell company for $500 the company can then claim a $100,000 loss on the domestic side and the profits gained from the sale of the dozer go to the shell company in the tax haven nation, or things along these lines)

In 1930, corporations accounted for 30% of the income tax revenue generate. In 1999, this figure shrunk to 9%, while the number of corporations has exploded in the same time frame.

This is clearly inequitable.

Most Americans are in the dark on how much of their tax dollars actually fund programs compared to how much pays interest on the national debt. Some researchers peg this amount at 40%, meaning 40% of tax dollars pay the interest on the debt. The official government figures are lower, something like 8%. The bottom line is the tax burden on the individual is enormous, and the tax burden on the corporations is not what it should be. It does not matter if the 35% is the stated rate on income tax for corporations when they simple worm their way out of paying it through deceptive and immoral practices.

But as long as Americans let this go and refuse to stand up and be heard, nothing will be done.

And the government SHOULD be accountable to us, but I don't think it really is in practice.

wdporter said...

UM...Scottie.

Hate to burst your bubble, but this story makes no sense.

Corporations are taxed on profit, just like individuals. They have write-offs, and very often break even after paying their employees and taking whatever profits they do have and either investing it back into the business or finding some way to (legally) hide the money from the IRS.

Wealth is ALWAYS held in the hands of individuals, and what would make the system WAY more efficient would be the ABSOLUTE ELIMINATION of Corporate income tax.

Anyone that thinks that corporations do not take into consideration their tax burdens when they price their products and pay their employees (which is essentially shifting that burden to individuals) has a) never had any finance education, b) never worked for a corporation, or c) is so obsessed, politically, with BIG this and BIG that being the boogey-man, that the laws of economics and finance don't matter at all.

Truthfully, the percentages you cite (30% vs. 9%) are just corporations creating a more efficient system by using the tax code; and the BILLIONS of dollars wasted on tax attorneys and accountants, could be better spent on paying the employees and suppliers of these corporations. In either case, the taxes ARE being paid--by individuals, whose burden has increased, and when they AREN'T being paid, it is because the money is making its way to a tax bracket that pays less than the corporate income tax, which the egalitarians of the world (which I am not) should applaud.

And Mr. Bisceglia, a couple of questions:

1) Aren't you saying that INDIVIDUALS not CORPORATIONS are the most guilty of evading income taxes?

2) Isn't a position of these individuals' fraudulently withholding tax money a pro-Government position. How are the Government's policies immoral, if the blame is on individuals' evasion of income tax?

3) What is the "GAY TAX PROTEST," and whatever it is, aren't you as guilty as the aforementioned tax evaders?

Scottie, keep in touch.

scottie said...

wdporter, did you read the source article from the detroit free press? the report it cites was sanctioned by congress and performed by the GAO. i'm fairly certain their numbers are accurate and the report is very damning. i do not understand your nonchalant attitude about corporations not paying their fair share.

here's what i'd like to do. you say that the corporations are getting better at hiding their profits, or whatever. i would like for you to read another piece on my site under the label of corporate raiders because it goes in great depth of the deceptive practices that actually happen. and when pfizer and northrop grumman get tax rebates on top of their tax-subsidized R & D then their is a huge problem. in a nutshell, tax-dollars go into corporate coffers to use for R & D then the corporations profit immensely from the products developed with OUR money and then the corporations get tax rebates from the government while not paying any income taxes themselves.

this is total garbage.

and if you want to be an apologist for it, that is your business, but based on your comments, i am not sure you are aware of these offshore tax haven schemes they use. so how about we comment further on this after you check out that other post. there. are only 6 or 7 posts there so it should be easy to find.

wdporter said...

yes I read the article. I always read the article.

I think you're mixing issues, and perhaps it's easy to do, but this:

"here's what i'd like to do. you say that the corporations are getting better at hiding their profits, or whatever. i would like for you to read another piece on my site under the label of corporate raiders because it goes in great depth of the deceptive practices that actually happen. and when pfizer and northrop grumman get tax rebates on top of their tax-subsidized R & D then their is a huge problem. in a nutshell, tax-dollars go into corporate coffers to use for R & D then the corporations profit immensely from the products developed with OUR money and then the corporations get tax rebates from the government while not paying any income taxes themselves."

...has no relationship to the article or my response to the article. Corporations pay taxes on profits. And they rarely pay income taxes when they're better off investing that money into the business (or their owners or employees). I know this, as I'm a business owner myself--and thus, I suppose, a corporate "apologist", and it will be a LONG TIME before my Corporation pays any corporate income tax (at least until the corporate rate is lower than my personal rate).

Subsidies for defense companies, oil companies, and pharmaceutical companies are indeed a bad idea, and so is regulating them to death (they run hand-in-hand). But these are political statements about particular industries and particular regulatory and tax subsidy issues...Issues we might agree on.

The article, and hence your original post, cast a very large net about corporations in general, and the article actually casually invalidates itself (making one wonder why the article was even printed) at the very end:

"An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called "S" corporations pay taxes under individual tax codes.

"The study did not investigate why corporations weren't paying federal income taxes or corporate taxes and it did not identify any corporations by name. It said they may escape paying taxes because of operating losses or tax credits."

It's a pointless, at the best uninformative, and at the worst misleading article. Your corporate raider article is undoubtedly interesting and I'll be happy to respond to it when I get the chance.

Make it a great day!

scottie said...

all right butch, i see some of your points, but the deceptive way that corporations hide income to prevent paying income taxes is VERY pertinent to my comments on the article ;

my premise was pretty basic : if individuals pay income taxes then so should corporations , pretty controversial stuff i know :-)

and if corporations are indeed guilty of creating shell companies in tax haven nations thereby creating the illusion of lower income to avoid income tax liability, then i have a huge problem with that.

if the average american has to fear the irs crawling up their asses with a microscope then please explain why our heavily subsidized and highly profitable corporations get a pass. i call for a full audit of all these corporations with shell companies.

and if you get a chance please visit that other article under the label of CORPORATE RAIDERS

i doubt you will defend their practices as passionately as you are now after having read that piece

but i agree with your solution ; income tax = 0 for corporations and the individual but this is only possible if the federal reserve is abolished, which wont happen short of an armed revolution ....

MOM said...

All the more reason we should have supported Ron Paul; abolish the individual income tax! Corporations should have at least paid their fair share and they didn't. Even Sub-Chapter S corporations are established to shield persons from liability and they are allowed to deduct all interest (individuals can only deduct interest on their principal residences, while corporations can deduct all interest)...not quite fair.

samadams said...

I know I'm a little late to this game here, but for my own 2 cents worth:

There is no such thing as "fair share" with respect to taxes. The "fairest share" I should pay is zero. It is my money, I worked for it. It is mine to do with as I see fit. I am not a slave to have to work to give that to someone else at, ultimately, the point of a gun.

Corporations do not pay taxes, consumers do. It is impossible to make them "pay their fair share." The largest problem with the "fair share" standard, is it is no standard at all, and depends entirely on the subjectivity of the person advocating it.

The problem here I think isn't how much or little an individual or a corporation pays, the problem is an un-level playing field. Corporations are NOT the free market. They are a government granted privilege of limited liability. Such privilege is a distortion of the free market, and its implications have been realized for over 100 years now. (though corporations have been very good at confounding themselves with business in general and thus labeling anyone who was anti-corporate as a communist)
The personal income tax, is truly and originally a corporate income tax. That is why it was created, and it is only after decades of legal illiteracy that people are paying it on their own salaries. (The Supreme Court specifically ruled that the tax is NOT on salaries back in 1927)

The worst offenders in the corporate world, are surprisingly or not, NOT business corporations, but municipal ones - cities. There, you will find more cooked books than in Farenheit 451, more corruption than the Chicago mob, and more laundered money than the Cayman Islands. And the worst of it is, these corporations assume the powers and immunities of government.

Scottie, I understand your disdain and outrage, but methinks it is misdirected. It seems after reading everything here, that most everyone in this conversation is on the same page, but simply coming from differing perspectives.

scottie said...

welcome back sam adams

i agree 100% but as a realist i know that income tax will never be abolished until the federal reserve is, my last comment to wdporter's last entry.

so short of an armed revolution, pragmatically corporations should pay since we have to pay. but as far as moral prescriptions go, no we should NOT have to pay income tax at all, and you and i have discussed this issue before on the marriage of income tax legislation with the federal reserve act. i believe the downturn of our nation started in 1913 because we strayed from our Constitution and allowed foreign bankers control of our currency supply and monetary policy, which has dragged us into wars we had no business in, led to inflation, the great depression, the socialized state, etc etc etc

thats what must change, but until it does, i'll continue to gripe about corporations who shirk their tax liabilities

:-)