While Warren Buffett cozies up to President Obama and says it's unbelievable that he pays a lower tax rate than his secretary, he's not pointing out that Berkshire Hathaway may owe over $1 billion in back taxes. Nor does he seem to want anyone to know that he's constantly coming up with new tax-avoidance schemes in his investments.
QuoteA little over two weeks ago, Berkshire Hathaway CEO Warren Buffett, the third-richest person in the world, penned an op-ed critical of the low tax rates for the superrich. It would seem his own company hasn't prioritized paying its rightful share in a timely fashion either.
Berkshire Hathaway, the eighth-largest public company in the world according to Forbes, openly admits to still owing taxes for years 2002 through 2004 and 2005 through 2009, according to the New York Post. The company says it expects to "resolve all adjustments proposed by the US Internal Revenue Service" within the next year.
But The Post doesn't focus on the issue of a major corporation not paying its correct amount in taxes in a timely manner. Instead, the newspaper criticizes Buffett's position that America's rich should be taxed at a higher rate, taking issue with Buffett's claim that he gave 17 percent of his income to the government in 2010. The Post contends that since the majority of his income comes from dividends and capital games -- taxed indirectly through the corporate income tax -- "his effective rate would really be well north of 40 percent for a big chunk of his income."
"And if [Buffett's] firm wants to keep its tax bill low, well, that's its right," The Post editors write. "But it would be nice if this 'pro-tax-hike' tycoon were a bit more honest about it."
This isn't the first conservative criticism of Buffett since his Op-Ed. Jon Stewart recently singled out one Fox News commentator who asked if Buffett was "completely a socialist?" Yes, the same man who last week dreamt up a $5 billion BofA deal in the bathtub
What The Post hence assumes is that Berkshire Hathaway pays taxes at the top marginal rate of 35 percent. The corporation's effective tax rate was last put at 29 percent, according to Forbes. More generally, due to a variety of breaks and loopholes, many U.S. corporations don't pay the top marginal rate. Over one-fourth of the U.S. corporations comprising the S&P 500 paid a corporate tax rate below 20 percent over the last half-decade, The New York Times recently reported.
At a minimum, "United States corporations pay only slightly more on average than their counterparts in other industrial countries," according to The New York Times. Indeed, corporate tax revenues are now nearing historic lows as a percentage of GDP.
http://www.huffingtonpost.com/2011/08/29/warren-buffett-taxes-berkshire-hathaway_n_941099.html
And you want to know why I say Mr. Buffett is disingenuous?
QuoteBillionaire investor Warren Buffett triggered a major debate over taxes recently when he wrote in The New York Times that he should be paying more to the federal government. He called on Washington lawmakers to up tax rates on the rich.
But it turns out that Buffett's own company, Berkshire Hathaway, has had every opportunity to pay more taxes over the last decade. Instead, it's been mired in a protracted legal battle with the Internal Revenue Service over a bill that one analyst estimates may total $1 billion.
Yes, that's right: while Warren Buffett complains that the rich aren't paying their fair share his own company has been fighting tooth and nail to avoid paying a larger share.
The story of Berkshire's years-long tax battle, which is generally known in business circles, took on new life this week when a group called Americans for Limited Government (ALG) reported that, according to Berkshire Hathaway's own annual report, the company is embroiled in an ongoing standoff over its tax bills.
That report, in turn, was cited in an editorial in The New York Post.
"Obvious question: If Buffett really thinks he and his 'mega-rich friends' should pay higher taxes, why doesn't his firm fork over what it already owes under current rates?" the Post opined.
"Likely answer: He cares more about shilling for President Obama -- who's practically made socking "millionaires and billionaires" his re-election theme song -- than about kicking in more himself."
Using only publicly-available documents, a certified public accountant (CPA) detailed Berkshire Hathaway's tax problems to ALG. AlG President Bill Wilson cites the company's own 2010 annual report, which states at one point that "At December 31, 2010... net unrecognized tax benefits were $1,005 million", or about $1 billion."
"Unrecognized tax benefits represent the company's potential future obligation to the IRS and other taxing authorities," ALG explained in its report. "They have to be recorded in the company's financial statements."
"The notation means that Berkshire Hathaway's own auditors have probably said that $1 billion is more likely than not owed to the government," the ALG report explained.
That $1 billion represents about 0.2 percent of the company's $372 billion in total assets, according to ALG.
As Wilson points out, "On one hand Buffett advocates for paying more taxes, but when it comes to his own company's taxes, he has gone through great lengths to pay less. That's rich."
Here's the key section from Berkshire's report:
"We anticipate that we will resolve all adjustments proposed by the U.S. Internal Revenue Service ('IRS') for the 2002 through 2004 tax years at the IRS Appeals Division within the next 12 months," the report states. "The IRS has completed its examination of our consolidated U.S. federal income tax returns for the 2005 and 2006 tax years and the proposed adjustments are currently being reviewed by the IRS Appeals Division process. The IRS is currently auditing our consolidated U.S. federal income tax returns for the 2007 through 2009 tax years."
Wilson also points to a prior tax fight the company fought. "Apparently, this is not the first time that Berkshire Hathaway has tangled with the IRS. They fought a 14-year battle over the dividends received deduction. That case was just resolved in 2005," Wilson reports..
"Although the prior case was settled in Buffett's favor, it demonstrates a decades-long pattern of behavior by Buffett to minimize his taxes. That's the important part of the story," Wilson writes.
And Buffett this week is at the center of another tax controversy, according to The Wall Street Journal. His recent decision to invest in Bank of America "represents another tax-avoidance triumph for the Berkshire chief executive," the Journal wrote in an editorial Wednesdy.
It turns out that U.S. corporations are subject to a top federal income tax rate of 35 percent, the second highest in the world. But Berkshire won't pay anything close to that on their investment in BofA preferred shares.
"Berkshire will hold the investment in a property-casualty insurance subsidiary. Such corporations can exclude from taxation 59.5% of the dividends they receive from an investment in another corporation," the Journal reported. "This exclusion is intended to prevent double- or even triple-taxation as money is earned by one company, paid to another company and then ultimately paid out to shareholders. The policy makes sense; we only wonder why the exclusion isn't 100%.
"With the exclusion for Mr. Buffett and his fellow shareholders, Berkshire will enjoy an effective tax rate of 14.175% on the $300 million in dividends it will receive each year from Bank of America," the Journal reported.
These new revelations about Buffett's tax practices have only furthered enraged conservatives at the hypocrisy being shown by the famed "Oracle of Omaha."
Writing in the conservative website Human Events, John Hayward added that analysts should look at the "value of the time IRS agents have invested trying to collect it – they don't work cheap, and we pay their salaries – and the resources Buffett's people have invested fighting back. All of which would have been saved if Buffett simply practiced what he preached, and willingly handed over his fortune to the brilliant and compassionate 'leaders' he commands the rest of us to support without resistance.
"Warren Buffett is no different from the other liars and frauds orbiting Barack Obama. His hypocrisy just runs billions of dollars deeper. When it comes to 'shared sacrifice,' you do the sacrificing, and they do the sharing," Hayward writes.
Read more on Newsmax.com: Report: Buffett's Berkshire Owes $1 Billion In Back Taxes
http://www.newsmax.com/Headline/buffett-irs-back-taxes/2011/09/01/id/409520
Villify Buffet....that's the ticket. :-*
Should we trust any of them?
He's a guy. There are lots of guys like him.
There's lots of guys making choices for all these other guys in order to run these companies.
There's also lots of guys making choices on how to run the government.
None of these guys are making choices to benefit us. They are making choices to benefit them.
I would never say I trust any of them to do anything for my benefit.
Does he tell untruths? Do the pundits, govt officials and everyone else with even a wee bit of power tell untruths? #youbetyourasstheydo
It simply shows Buffett as being a useful tool in class warfare. Obama and his cronies don't really care about raising taxes, they simply want to frame an argument about the evil rich getting all the breaks on the backs of the working poor to retain power. Buffett being compliant makes him one of the "nice" rich I suppose.
Quote from: Conan71 on January 27, 2012, 10:52:20 AM
It simply shows Buffett as being a useful tool in class warfare. Obama and his cronies don't really care about raising taxes, they simply want to frame an argument about the evil rich getting all the breaks on the backs of the working poor to retain power. Buffett being compliant makes him one of the "nice" rich I suppose.
That "class warfare" thing throws me. Why is it being used? Is that really going on or is it a buzzword being tossed about by media and the GOP?
I don't hear any of my friends refer to a war of the classes. I'm not hearing it in the non-profit meetings or being used in local stories.
Is it a national political class war?
Quote from: Townsend on January 27, 2012, 10:57:54 AM
That "class warfare" thing throws me. Why is it being used? Is that really going on or is it a buzzword being tossed about by media and the GOP?
I don't hear any of my friends refer to a war of the classes. I'm not hearing it in the non-profit meetings or being used in local stories.
Is it a national political class war?
What is the point in vilifying the wealthy as not paying their fair share when 1/2 of all Americans pay no income tax? What do you think the invention of the 1%'er rhetoric is all about? "He" is nothing more than a bogeyman to direct ire away from the incompetent leadership of this administration and Congress.
It's a lot easier than simply explaining to the American worker: "Look we sold you out via a myriad of free trade accords and spreading money around with our preferred contributors rather than areas which might have actually created jobs via government investment the last three years."
What would be the point in obsessing about the rich and including it in political speeches? Why not silently go about raising their taxes instead of making it a campaign issue?
Quote from: Conan71 on January 27, 2012, 10:09:03 AM
And you want to know why I say Mr. Buffett is disingenuous?
Newsmax Conan? Really?
Large companies have tax disagreements all the time. Berkshire Hathaway is a very large and complex company and is not Buffett's personal piggybank. He has a responsibility to his shareholders to maximize profits and to not pay more in taxes than is reasonable and necessary. That is just good business.
It's stupid to merge Berkshire Hathaway's tax burden with Buffett's personal tax burden to show that Buffett has a reasonable tax burden. The company as an entity is not the same as the person Warren Buffett. The company as an entity has a tax responsibility. Warren Buffett is a person who has a separate tax responsibility, the same as any other investor or employee does. Should I merge my employer's tax burden with my own to show what rate I pay?
Quote from: Conan71 on January 27, 2012, 11:10:23 AM
What is the point in vilifying the wealthy as not paying their fair share when 1/2 of all Americans pay no income tax? What do you think the invention of the 1%'er rhetoric is all about? "He" is nothing more than a bogeyman to direct ire away from the incompetent leadership of this administration and Congress.
It's a lot easier than simply explaining to the American worker: "Look we sold you out via a myriad of free trade accords and spreading money around with our preferred contributors rather than areas which might have actually created jobs via government investment the last three years."
What would be the point in obsessing about the rich and including it in political speeches? Why not silently go about raising their taxes instead of making it a campaign issue?
It reminds me of "take our country back". I was told by a co-worker that we needed to "take our country back" two years ago. I asked him "from what?" He was unable to tell me.
I imagine if I asked most people I knew which classes were at war they would have a tough time telling me.
I'm guessing many people who might come up with a class warfare situation to tell me about would not belong to the wealthy class. The ones in the wealthy class would just titter and say "I have no idea."
Quote from: swake on January 27, 2012, 11:13:32 AM
Newsmax Conan? Really?
Large companies have tax disagreements all the time. Berkshire Hathaway is a very large and complex company and is not Buffett's personal piggybank. He has a responsibility to his shareholders to maximize profits and to not pay more in taxes than is reasonable and necessary. That is just good business.
It's stupid to merge Berkshire Hathaway's tax burden with Buffett's personal tax burden to show that Buffett has a reasonable tax burden. The company as an entity is not the same as the person Warren Buffett. The company as an entity has a tax responsibility. Warren Buffett is a person who has a separate tax responsibility, the same as any other investor or employee does. Should I merge my employer's tax burden with my own to show what rate I pay?
I also cited a similar article from Huff-Po. Happy? Facts are facts.
It's simply fascinating to see Buffett used as a poster child for a just tax code when businesses he wholly controls engage in expensive tax-avoidance schemes. How do you not see the irony and hypocrisy in that?
Quote from: Townsend on January 27, 2012, 11:20:09 AM
It reminds me of "take our country back". I was told by a co-worker that we needed to "take our country back" two years ago. I asked him "from what?" He was unable to tell me.
I imagine if I asked most people I knew which classes were at war they would have a tough time telling me.
I'm guessing many people who might come up with a class warfare situation to tell me about would not belong to the wealthy class. The ones in the wealthy class would just titter and say "I have no idea."
Take a look at voting demographics, lower income overwhelmingly vote Democrat in national elections. Who do you think Obama is talking to when he engages in this rhetoric of the rich not paying their share? He's rallying the troops to come out and vote next November. The point will be that the rich man is standing on the heads of the poor for the reason they are still not working or are severely underemployed.
Quote from: Conan71 on January 27, 2012, 11:33:52 AM
I also cited a similar article from Huff-Po. Happy? Facts are facts.
It's simply fascinating to see Buffett used as a poster child for a just tax code when businesses he wholly controls engage in expensive tax-avoidance schemes. How do you not see the irony and hypocrisy in that?
Would it be better that he hide 100% behind the tax codes like other wealthy folks?
Quote from: Conan71 on January 27, 2012, 11:36:17 AM
Take a look at voting demographics, lower income overwhelmingly vote Democrat in national elections. Who do you think Obama is talking to when he engages in this rhetoric of the rich not paying their share? He's rallying the troops to come out and vote next November. The point will be that the rich man is standing on the heads of the poor for the reason they are still not working or are severely underemployed.
Who are the republican candidates talking to when they say their rhetoric?
I'm not poor but I'm not rich either. I want everyone to pay fairly but I'm at war with no-one.
The wealthy and powerful are able to get air-time so they get a point out to the masses. The points getting out to us pretty much mean jack-squat to our betterment.
In Oklahoma, our problems are bigger than "class wars" or who Gingrich was banging when. The presidential race doesn't mean anything to us. Our vote won't count no matter what we do.
I'll still vote though.
Seems to me the people with the bigger guns would win any battle in a war or class war.
Look at me. Standing here in a corner with a pop-gun.
Quote from: Townsend on January 27, 2012, 11:48:26 AM
Look at me. Standing here in a corner with a pop-gun.
Is that what that was? I thought you farted.
Your vote always counts, Townsend. It puts you in the process. Of course Oklahoma will never be a pivotal state in a national election, or at least not in our lifetime.
Quote from: Conan71 on January 27, 2012, 12:31:01 PM
Is that what that was? I thought you farted.
Your vote always counts, Townsend. It puts you in the process. Of course Oklahoma will never be a pivotal state in a national election, or at least not in our lifetime.
That too.
Process of what? So the media can gloss over our state and say, "ha, look, they actually voted."?
Quote from: Townsend on January 27, 2012, 12:34:08 PM
That too.
Process of what? So the media can gloss over our state and say, "ha, look, they actually voted."?
Dude, knock it off. I'm on a roll.
Quote from: Conan71 on January 27, 2012, 12:31:01 PM
Your vote always counts, Townsend. It puts you in the process. Of course Oklahoma will never be a pivotal state in a national election, or at least not in our lifetime.
Voting enables the right to complain.
Quote from: Conan71 on January 27, 2012, 12:41:23 PM
Dude, knock it off. I'm on a roll.
I'm trying to reduce the amount of time watching the political stuff on the 24/7 so I can stop being so negative. It really is depressing.
Jews in concentration camps complained. Not a big right on my list.
Must be nice to be from a relevant state.
Quote from: AquaMan on January 27, 2012, 12:44:41 PM
Must be nice to be from a relevant state.
No kidding. At least AZ's governor made a show of his visit. Our governor would piddle herself and have a narcoleptic fit.
Quote from: Townsend on January 27, 2012, 12:46:58 PM
No kidding. At least AZ's governor made a show of his visit. Our governor would piddle herself and have a narcoleptic fit.
Blagojevich had narcissistic fits.
Shortey would try to feed him dead baby.
Quote from: Townsend on January 27, 2012, 12:52:53 PM
Shortey would try to feed him dead baby.
That's illegal now....!!!
Quote from: Breadburner on January 27, 2012, 01:07:26 PM
That's illegal now....!!!
I don't think he covered individuals. Just all the corporations putting dead baby in their products.
Strange since Oklahoma is working on building a surplus of dead baby with the new health insurance rules.
http://tinyurl.com/76e8glc
(http://tinyurl.com/76e8glc)
QuoteOklahoma now requires that babies otherwise eligible for coverage in the child-only market remain uninsured. Contributor Sarah Wildman asks why the state has prioritized insurers' demands over the well being of its newborns...
Quote from: Conan71 on January 27, 2012, 10:09:03 AM
And you want to know why I say Mr. Buffett is disingenuous?
Because you are completely avoiding the fact that he has a fiduciary responsibility to the shareholders to find and use every little nook and cranny of the tax code! As you know, if he didn't, then he would be held responsible to those same.
There is no moral conflict nor hypocrisy when he uses the tax code the way it has been defined that he is required to use it, and also say that it needs fixin'. Another point in the "as you already know" category.
Quote from: Red Arrow on January 27, 2012, 12:42:40 PM
Voting enables requires one the right to complain.
Fixed it for you.
Quote from: Townsend on January 27, 2012, 12:52:53 PM
Shortey would try to feed him dead baby.
But that is gonna be illegal here...
Quote from: Conan71 on January 27, 2012, 10:52:20 AM
It simply shows Buffett as being a useful tool in class warfare. Obama and his cronies don't really care about raising taxes, they simply want to frame an argument about the evil rich getting all the breaks on the backs of the working poor to retain power. Buffett being compliant makes him one of the "nice" rich I suppose.
That was awesome, conflating Buffett and Berkshire like that. It makes for a much more difficult argument once someone notices, though.
TBH, I don't know what Obama cares about. I know I care about the fact that the forms of income the super rich are more likely to earn are taxed lower than the forms that everyone else earns.
Quote from: nathanm on January 27, 2012, 02:44:40 PM
That was awesome, conflating Buffett and Berkshire like that. It makes for a much more difficult argument once someone notices, though.
TBH, I don't know what Obama cares about. I know I care about the fact that the forms of income the super rich are more likely to earn are taxed lower than the forms that everyone else earns.
So it's perfectly okay by you if people conflate the issue of Romney and Bain?
How is it conflating when the major and very hands-on stakeholder in one of the largest PEF's advocates for higher taxes on one hand and employing schemes to lower them on another? I thought the idea is to overcome the massive deficits and debt, unless the whole idea is for people like Buffett to pay more taxes so the underclasses can feel better.
Quote from: Conan71 on January 27, 2012, 03:09:51 PM
So it's perfectly okay by you if people conflate the issue of Romney and Bain?
How is it conflating when the major and very hands-on stakeholder in one of the largest PEF's advocates for higher taxes on one hand and employing schemes to lower them on another? I thought the idea is to overcome the massive deficits and debt, unless the whole idea is for people like Buffett to pay more taxes so the underclasses can feel better.
I don't see any hypocrisy in paying what is asked, even as you advocate that more be asked of you.
Are people saying Romney is somehow bad because of Bain itself or because of what he did while he was at Bain?
No Nate. They vilify Mitty because he's a Mormon....they'd never admit to it though...just like Obama and his skin color
war on the rich.
I'm amused at how many posties are defending the %1. Rather clueless and not too sincere about balancing the budget.
Just sitting around until after the election to see how we go back to pre-Bush. Meanwhile, ya'll wasting your time.
Quote from: nathanm on January 27, 2012, 03:21:27 PM
I don't see any hypocrisy in paying what is asked, even as you advocate that more be asked of you.
Are people saying Romney is somehow bad because of Bain itself or because of what he did while he was at Bain?
That's the point though, Buffett has employed a cadre of accountants and attorney's to avoid paying the government what has been asked of Berkshire.
Quote from: Teatownclown on January 27, 2012, 03:41:13 PM
No Nate. They vilify Mitty because he's a Mormon....they'd never admit to it though...just like Obama and his skin color
war on the rich.
I'm amused at how many posties are defending the %1. Rather clueless and not too sincere about balancing the budget.
Just sitting around until after the election to see how we go back to pre-Bush. Meanwhile, ya'll wasting your time.
It's not the black thing about Obama for me. I hate angry white guys. He is 1/2 white and is angry at the upper crust. Ironically, he will be one of the 1%'ers
when he's fired in 2012 after he leaves office.
Who's defending them? I'm simply pointing out the folly in Buffett as being some paragon of tax fairness.
Quote from: Conan71 on January 27, 2012, 03:47:48 PM
It's not the black thing about Obama for me. I hate angry white guys. He is 1/2 white and is angry at the upper crust. Ironically, he will be one of the 1%'ers when he's fired in 2012 after he leaves office.
Who's defending them? I'm simply pointing out the folly in Buffett as being some paragon of tax fairness.
You and every other fright wingnut talk host....today's jabber is all about Buffet's secretary. Talk about having no material. :o
No originality, either. And you better work on flexibility if you have some. :-X
You fear the runs? ;)
Quote from: Teatownclown on January 27, 2012, 03:55:42 PM
And you better work on flexibility if you have some. :-X
I haven't been to yoga in ages, so no.
Quote from: Conan71 on January 27, 2012, 03:44:42 PM
That's the point though, Buffett has employed a cadre of accountants and attorney's to avoid paying the government what has been asked of Berkshire.
If you can avoid it legally, you haven't been asked to pay it. For example, a person taking the mortgage interest deduction is still paying what was asked of them. It may be that they were not asked for as much as they should have been, but that's a different question entirely.
Also, you appear to misunderstand the point. Buffett does not say he pays enough taxes. He says he and those like him pay too little. I don't know why you expected him to be a paragon of fairness when the entire conversation is about how he doesn't pay as much as he ought to in taxes.
I'm still not sure why hedge fund managers get a lower rate than the part of the 1% who actually start and run productive nonfinancial businesses.
Quote from: Conan71 on January 27, 2012, 03:44:42 PM
That's the point though, Buffett has employed a cadre of accountants and attorney's to avoid paying the government what has been asked of Berkshire.
Again...
Because you are completely avoiding the fact that he has a fiduciary responsibility to the shareholders to find and use every little nook and cranny of the tax code! As you know, if he didn't, then he would be held responsible to those same.
There is no moral conflict nor hypocrisy when he uses the tax code the way it has been defined that he is required to use it, and also say that it needs fixin'. Another point in the "as you already know" category.
He owns 30% of Berkshire. Not all of it. As a stockholder he gets to avoid personal responsibility for the corporations actions. That is a benefit. He may or may not receive a dividend (though with such a large share he certainly has influence). That is a benefit. Corporations are considered people. They are responsible for paying their taxes. Buffet is responsible for paying his own taxes. The corporation has a responsibility to minimize its costs, including taxes, as much as possible for its stockholders, just like they have a responsibility to maximize its profits. Buffet is only responsible to himself. These are the facts.
So, Buffet basically is not paying taxes twice as Conan and the new script from the right alleges. Neither are any other stockholders. Taxes are a cost of doing business that the government exacts to offset the use of the people's resources that the corporation uses to make private profit. Stuff like roads, bridges, lighting, air etc.
This is not all that complex and the right is using the lack of knowledge of the public to spin this into some sort of hypocrisy. Its not.
Quote from: AquaMan on January 30, 2012, 09:53:55 AM
He owns 30% of Berkshire. Not all of it. As a stockholder he gets to avoid personal responsibility for the corporations actions. That is a benefit. He may or may not receive a dividend (though with such a large share he certainly has influence). That is a benefit. Corporations are considered people. They are responsible for paying their taxes. Buffet is responsible for paying his own taxes. The corporation has a responsibility to minimize its costs, including taxes, as much as possible for its stockholders, just like they have a responsibility to maximize its profits. Buffet is only responsible to himself. These are the facts.
So, Buffet basically is not paying taxes twice as Conan and the new script from the right alleges. Neither are any other stockholders. Taxes are a cost of doing business that the government exacts to offset the use of the people's resources that the corporation uses to make private profit. Stuff like roads, bridges, lighting, air etc.
This is not all that complex and the right is using the lack of knowledge of the public to spin this into some sort of hypocrisy. Its not.
How does that work?
I own part of a company, my profits from that company are taxed at a rate of 35%. I have the right to participate in corporate governance. I am only taxed once. This pays for the public resources this company enjoys. The remainder of that profit is mine to keep or reinvest in the company. My real tax rate is 35%.
I also own part of several other companies to varying extents. I have the right and responsibility to participate in corporate governance for those companies too. My profits from those companies are taxed at 35%. This pays for the public resources these companies enjoy. The remainder of that profit is then taxed a second time at 15% before I can keep or reinvest that money. My real tax rate is 50%.
Where is the spin?
Quote from: Gaspar on January 30, 2012, 10:15:50 AM
I own part of a company, my profits from that company are taxed at a rate of 35%.
Where is the spin?
Let's take it one spin at a time.
Untrue. It is not
your company (if we're talking corporation and not partnership). They are not
your profits. It is the corporation's profits. The corporation made a profit that they may or may not share with stockholders like yourself depending upon your agreement.
If they don't share them, and yet are taxed on them, would you say you were taxed twice? No. Would you take that loss of profit sharing off your taxes? No. Because they weren't your profits to begin with.
That person, the corporation, made a deal with you to sell a portion of his business. His business is in effect, his personhood.
Quote from: Gaspar on January 30, 2012, 10:15:50 AM
How does that work?
I also own part of several other companies to varying extents. I have the right and responsibility to participate in corporate governance for those companies too. My profits from those companies are taxed at 35%. This pays for the public resources these companies enjoy. The remainder of that profit is then taxed a second time at 15% before I can keep or reinvest that money. My real tax rate is 50%.
This again is based on your assumption that you own the company. You own a fractional part of a corporation with an agreement that may or may not involve a share of its profit. The corporation's profit. You may have some say as to whether a dividend is paid but that is also spelled out in your agreement and is by no means a responsibility. You take a risk that the company will prosper and share its wealth with you but mostly you are hoping it prospers and its shares all become more valuable on the open market.
IMO, many people confuse this agreement with marketing that implies they are the real owners of the corporation and that they are making money "the old fashioned way....earning it." In fact they are simply low level gamblers and the corporations are bookies.
Quote from: AquaMan on January 30, 2012, 10:59:01 AM
Let's take it one spin at a time.
Untrue. It is not your company (if we're talking corporation and not partnership). They are not your profits. It is the corporation's profits. The corporation made a profit that they may or may not share with stockholders like yourself depending upon your agreement.
If they don't share them, and yet are taxed on them, would you say you were taxed twice? No. Would you take that loss of profit sharing off your taxes? No. Because they weren't your profits to begin with.
That person, the corporation, made a deal with you to sell a portion of his business. His business is in effect, his personhood.
You are not making sense. The profit amount is taxed twice. There is no mechanism to disassociate corporate ownership from being a stockholder.
Quote from: Gaspar on January 30, 2012, 11:16:21 AM
You are not making sense. The profit amount is taxed twice. There is no mechanism to disassociate corporate ownership from being a stockholder.
That's funny. I just heard a discussion of this new script on NPR with someone like yourself across from two other qualified guests. They called his assertions "nonsense" and "indefensible". He was pimping his book on the subject and espousing eliminating all corporate taxation. You writing a book?
And, are you going to write off your lost income on your taxes this year from not receiving a share of your company's profits? Cause if they are being taxed on your income then the loss of that income should certainly be deductible. I think that's either under gambling losses or losses from theft. :D
There are ways to avoid it being taxed at the corporate level. MLP's are allowed to distribute profits as return of capital lowering your basis in the event you sell then the tax is based on cap gains rate if held for the one year period. REIT's are capital intensive and shelter much of their income through depreciation.
Quote from: Gaspar on January 30, 2012, 11:16:21 AM
The profit amount is taxed twice.
This is different. You said
your profit was being taxed twice.
Nonetheless, once the profit is disseminated to the shareholder it represents an increase of value derived from the original amount of their investment. True? The investment is still there, it may actually have increased by the very nature of just aggregating with other investors. You can get it back. So, its taxable.
That is separate from the corporation's activities to take those investments and utilize them to create greater value and paying a tax, which represents the cost of acquiring the privilege of using public resources (that I have a share of) for their private use, which I didn't really get paid for. Jets fly over my house, using my air that I pay for each month and they didn't ask or compensate me for that. :) I'm sensitive about that since I am being taxed three times for that air, once when I pay my mortgage, once when I pay my taxes for cleaner air and once when the airlines includes it into their fares. 3 times!
Perhaps you would prefer that the corporation pay a higher tax rate so that you didn't have to pay anything at all? I assure you they want to do the converse.
Tell me. Is this double taxation?
I agree to provide my truck to my brother who has a scheme to drive to Bixby and load up on vegetables directly from a farmer who is desperate to sell to pay his ag loan. I also pay for his gasoline. We agree to share, 80/20 in any profits he makes. But my brother has to do the picking, take it to the Cherry Street Market, set up a booth and man it, and pay any sales taxes. The sales taxes go toward making sure the bridge doesn't collapse under the weight of the truck, that the roads don't damage the fruit and that the farmer has subsidies or a subsidized loan to help him farm.
Its a success. After all expenses are paid, including taxes, he makes a profit of $1000. I take my truck back and pocket $200 bucks and include it in my 1040 dutifully subtracting out my mileage. Pretty good return for a $20 investment in fuel and still getting my truck back dontcha think? The farmer is happy too. In fact, we decide to do it more often.
Your concept is that I shouldn't have to pay taxes on my $200 and my truck use. You either want the farmer to pay for it all or your brother.
Quote from: heironymouspasparagus on January 30, 2012, 09:09:00 AM
Again...
Because you are completely avoiding the fact that he has a fiduciary responsibility to the shareholders to find and use every little nook and cranny of the tax code! As you know, if he didn't, then he would be held responsible to those same.
There is no moral conflict nor hypocrisy when he uses the tax code the way it has been defined that he is required to use it, and also say that it needs fixin'. Another point in the "as you already know" category.
B-H also has a responsibility to properly calculate and pay the taxes that they owe in a timely manner. They apparently took some questionable short-cuts. In the case of the $1 billion plus owed in back taxes, B-H apparently did not use the tax code as required.
B-H doesn't pay a dividend, so I suspect in terms of real value, that B-H shareholders wouldn't have noticed $1 billion in cumulative taxes over a period from 2002 to 2009 reflected in the value of their shares, so that really weakens the argument about any significant detriment to the value shareholder's expect. That's roughly $142mm per year for a company with total revenues at or above $100 billion and net earnings averaging around $10 billion over the last 5-6 years.
You do understand that essentially this is money which was properly owed to the government but was not paid in a timely manner by B-H, right? Do you also realize the millions taxpayers are spending on the enforcement actions to make sure this money was properly accounted for and does get paid?
Quote from: Gaspar on January 30, 2012, 10:15:50 AM
I own part of a company, my profits from that company are taxed at a rate of 35%. I have the right to participate in corporate governance. I am only taxed once. This pays for the public resources this company enjoys. The remainder of that profit is mine to keep or reinvest in the company. My real tax rate is 35%.
I also own part of several other companies to varying extents. I have the right and responsibility to participate in corporate governance for those companies too. My profits from those companies are taxed at 35%. This pays for the public resources these companies enjoy. The remainder of that profit is then taxed a second time at 15% before I can keep or reinvest that money. My real tax rate is 50%.
No, your real tax rate is not 50%, unless you're arguing that the company would instantly be worth 35% more if corporate taxation went away tomorrow, which is an assertion that requires evidence. Even among economists, this isn't as black and white as you might wish. Also, if your real personal income tax rate is 35% you need to get a better accountant.
Does a short seller have a negative effective tax rate?
Quote
The absurdity of this claim is clearly revealed if one considers capital gains that accrue to short sellers, who pay rather than receive dividends while their positions are open. Following the logic of the argument, one would be forced to conclude that short sellers are taxed at an effective rate of negative 20%, thereby receiving a significant subsidy due to the existence of the corporate tax. The flaw in this reasoning is apparent when one recognizes that asset prices are lower (relative to the zero corporate tax benchmark) not only when a short position is covered, but also when it is entered.
Quote
There is no doubt that the presence of the corporate tax depresses the price of equities, but it does so both at the time of purchase and at the time of sale. If there were no corporate tax, dividends and capital gains per share would certainly be higher, but an investor would have paid substantially more per share to acquire his assets in the first place. As a result he would be holding fewer shares for any given initial outlay, and his after-tax income (holding constant the rate paid on capital gains) would not be substantially different.
http://rajivsethi.blogspot.com/2012/01/double-taxation.html
Quote from: nathanm on January 30, 2012, 12:45:37 PM
Also, if your real personal income tax rate is 35% you need to get a better accountant.
I saw on TV last week (as I remember) that Buffett's secretary's personal tax rate is between 34% and 35%. I don't remember the exact number after the decimal point. In order for this to happen with only ordinary income, she would have to have about $2.2 million in annual income. Maybe Gaspar is a bit more wealthy than he lets on to be.
Quote from: AquaMan on January 30, 2012, 12:25:03 PM
Tell me. Is this double taxation? ...
Set your truck up a a corporation. Let the truck/corporation pay taxes on the $200 and the corporation can then distribute some dividends to you on which you will pay 15%.
Quote from: Gaspar on January 30, 2012, 10:15:50 AM
How does that work?
I own part of a company, my profits from that company are taxed at a rate of 35%. I have the right to participate in corporate governance. I am only taxed once. This pays for the public resources this company enjoys. The remainder of that profit is mine to keep or reinvest in the company. My real tax rate is 35%.
I also own part of several other companies to varying extents. I have the right and responsibility to participate in corporate governance for those companies too. My profits from those companies are taxed at 35%. This pays for the public resources these companies enjoy. The remainder of that profit is then taxed a second time at 15% before I can keep or reinvest that money. My real tax rate is 50%.
Part of the spin is the assertion that your tax rate is 35%. Your tax rate is only 35% on the amount of income that exceeds $379,000.
http://www.moneychimp.com/features/tax_brackets.htm
Below that is a series of steps - referred to as the progressive tax rate schedule. You know that - I stated that for anyone who doesn't know how it works.
Your second example just restates the first, then adds 15%. Probably meant to say dividend income somewhere in there. If you are talking about a C corporation, then there is a corporate tax plus whatever dividend or capital gains you get. If your company is a C, then congratulations, you have arrived! But then you also shouldn't be paying that kind of tax in the first place, 'cause you should be able to utilize the ISO program like Abercrombie & Fitch does - put you back into the 15% zone.
If an S, then you are just trying to deflect, 'cause all the income goes right to your personal return. And if you are in the 35% bracket for a substantial part of your income, again, congratulations! You still have arrived! And again, you should be looking into the ISO features that are possible with an S corporation - more complicated, but still possible. Puts you back into the 15% zone.
Quote from: heironymouspasparagus on January 30, 2012, 01:20:30 PM
Part of the spin is the assertion that your tax rate is 35%. Your tax rate is only 35% on the amount of income that exceeds $379,000.
http://www.moneychimp.com/features/tax_brackets.htm
Below that is a series of steps - referred to as the progressive tax rate schedule. You know that - I stated that for anyone who doesn't know how it works.
Your second example just restates the first, then adds 15%. Probably meant to say dividend income somewhere in there. If you are talking about a C corporation, then there is a corporate tax plus whatever dividend or capital gains you get. If your company is a C, then congratulations, you have arrived! But then you also shouldn't be paying that kind of tax in the first place, 'cause you should be able to utilize the ISO program like Abercrombie & Fitch does - put you back into the 15% zone.
If an S, then you are just trying to deflect, 'cause all the income goes right to your personal return. And if you are in the 35% bracket for a substantial part of your income, again, congratulations! You still have arrived! And again, you should be looking into the ISO features that are possible with an S corporation - more complicated, but still possible. Puts you back into the 15% zone.
Uh, Gaspar is referring to the 35% corporate tax rate, not graduated personal income tax rates.
Quote from: Red Arrow on January 30, 2012, 12:54:49 PM
I saw on TV last week (as I remember) that Buffett's secretary's personal tax rate is between 34% and 35%. I don't remember the exact number after the decimal point. In order for this to happen with only ordinary income, she would have to have about $2.2 million in annual income. Maybe Gaspar is a bit more wealthy than he lets on to be.
And I bet she also pays 15% on any of her capital gains and dividends as well. So unfair!
And if Buffett is paying her that much, where's the fiduciary responsibility to shareholders of Berkshire-Hathaway?
The current cry is for corporations to not be taxed at all. That means the shareholders take the hit. Everyone incorporates.
If the corporation absorbs all the taxation you can bet the result will be reflected in dividends, share price or both.
If neither pay a tax on their profits then government slowly suffocates, which leads to lower profitability.
If you merely eliminate or decrease loopholes the tax rate can be lowered for both.
what to do...what to do....
Quote from: Conan71 on January 30, 2012, 01:25:08 PM
And I bet she also pays 15% on any of her capital gains and dividends as well. So unfair!
I still haven't heard a cogent argument as to why capital gains income should be taxed at a lower rate than wage income.
Quote from: Conan71 on January 30, 2012, 01:24:19 PM
Uh, Gaspar is referring to the 35% corporate tax rate, not graduated personal income tax rates.
As of 2010, it is alleged to be;
http://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States
Or 35% on income over $18 million or so. (38% from 15 million to 18 million).
Aqua, I think the take-away from all this is our tax code has become far too convoluted and complicated. There's no reason a corporation should have to employ a cadre of accountants and attorneys to interpret how much they owe in the first place. I'm in agreement that getting rid of loopholes would be a great first step.
Quote from: nathanm on January 30, 2012, 01:27:42 PM
I still haven't heard a cogent argument as to why capital gains income should be taxed at a lower rate than wage income.
That's because there is none!
Quote from: Conan71 on January 30, 2012, 01:28:26 PM
I'm in agreement that getting rid of loopholes would be a great first step.
Unfortunately, Congressional Republicans have decided that loophole closing is a tax increase. Yes, Reagan's tax cuts would be a tax increase in the eyes of this crop of nutters.
Quote from: nathanm on January 30, 2012, 01:27:42 PM
I still haven't heard a cogent argument as to why capital gains income should be taxed at a lower rate than wage income.
The preference toward this seems to be the philosophy that investors and business owners will continue to plough excess un-taxed profits into new investments, capital expansion projects, or personal consumption- all activities which will stimulate the economy. Granted, if it's simply day-trading and flipping stocks and having no hands-on investment in a company or companies that really isn't what the cap gains rate is trying to encourage.
At least that's my over-simplified understanding of it.
Quote from: Conan71 on January 30, 2012, 12:40:10 PM
B-H also has a responsibility to properly calculate and pay the taxes that they owe in a timely manner. They apparently took some questionable short-cuts. In the case of the $1 billion plus owed in back taxes, B-H apparently did not use the tax code as required.
B-H doesn't pay a dividend, so I suspect in terms of real value, that B-H shareholders wouldn't have noticed $1 billion in cumulative taxes over a period from 2002 to 2009 reflected in the value of their shares, so that really weakens the argument about any significant detriment to the value shareholder's expect. That's roughly $142mm per year for a company with total revenues at or above $100 billion and net earnings averaging around $10 billion over the last 5-6 years.
You do understand that essentially this is money which was properly owed to the government but was not paid in a timely manner by B-H, right? Do you also realize the millions taxpayers are spending on the enforcement actions to make sure this money was properly accounted for and does get paid?
Perhaps. Perhaps they were paying what they thought at the time was the correct number, then situations arose that required an amended return. It most likely is one of those hindsight situations. Notice, they are not whining about it like Newt or Santorum might have. They are just gonna man up and do what is required.
Have you managed to avoid filing an amended return your entire life? That's good, if so. I have had items a couple of times that indicated amendment - one to my detriment, two to my benefit. Darn right I'm gonna change it if necessary.
Quote from: nathanm on January 30, 2012, 01:30:16 PM
Unfortunately, Congressional Republicans have decided that loophole closing is a tax increase. Yes, Reagan's tax cuts would be a tax increase in the eyes of this crop of nutters.
Aaaah yes, the cult of Norquist. They felt that ending corn subsidies was a tax increase on farmers. I think that was the issue, wasn't it?
Quote from: Conan71 on January 30, 2012, 01:33:00 PM
The preference toward this seems to be the philosophy that investors and business owners will continue to plough excess un-taxed profits into new investments, capital expansion projects, or personal consumption- all activities which will stimulate the economy. Granted, if it's simply day-trading and flipping stocks and having no hands-on investment in a company or companies that really isn't what the cap gains rate is trying to encourage.
At least that's my over-simplified understanding of it.
And still they continue the deception after 30+ years of proof that such is NOT the case.
I agree Conan.
Nathan- They do that because their constituents (pacs, corporations, and themselves) insist on those loopholes on both sides of the aisle or they don't get elected and they don't get wealthy.
PAC's!! And That starts with P and that rhymes with T and that stands for TROUBLE!
LOOPHOLES!! That starts with L and that rhymes with Hell and that stands for TAX RELIEF!
This is getting fun now. The argument is not wether we are being "double and triple taxed" because everyone who pays taxes knows that there are several instances where that happens. The argument is wether stating that as a shareholder you are only liable to the 15% tax on investment income. The answer to that question is no, no matter how you attempt to cut it.
Mr. Buffet pays far more than 15% in taxes. Because he owns several financial vehicles and all of those vehicles are taxed, his total tax liability is built upon the various taxes levied on those businesses plus any additional secondary or tertiary taxation.
Owning a company or part of a company is like owning a living thing, and if there is one thing our government is good at, it's taxing living things. If you buy a moose and keep it for 5 years to sell and make a profit, your expenses include the costs of keeping that moose alive. This includes food, shelter, and yearly moose taxes. You are as liable for moose taxes as you are for anything else necessary to keep your moose.
If you sell that moose for a big profit, you pay taxes on your gains, but those are not the only taxes you paid on your moose! You had to pay yearly moose taxes as a part of owning your moose. So when you look back at your investment to see how profitable you were, and how you might be able to improve on your investment strategy, you look at:
1. Initial purchase price of your moose.
2. Cost for shelter and medical care for your moose.
3. Moose chow.
4. Taxes on your moose.
5. Profit on the sale of your moose.
6. Tax obligation on the profit from the sale of your moose.
You cannot ignore #4 and say it does not exist, or roll it up somewhere else in the cost. #5 is profoundly affected by whatever #4 is, so when you figure your total real tax liability per-moose, it is a function of 4 and 6!
If this doesn't work, I fear sock-puppets will be necessary!
Quote from: Gaspar on January 30, 2012, 01:54:45 PM
This is getting fun now. The argument is not wether we are being "double and triple taxed" because everyone who pays taxes knows that there are several instances where that happens. The argument is wether stating that as a shareholder you are only liable to the 15% tax on investment income. The answer to that question is no, no matter how you attempt to cut it.
Mr. Buffet pays far more than 15% in taxes. Because he owns several financial vehicles and all of those vehicles are taxed, his total tax liability is built upon the various taxes levied on those businesses plus any additional secondary or tertiary taxation.
Owning a company or part of a company is like owning a living thing, and if there is one thing our government is good at, it's taxing living things. If you buy a moose and keep it for 5 years to sell and make a profit, your expenses include the costs of keeping that moose alive. This includes food, shelter, and yearly moose taxes. You are as liable for moose taxes as you are for anything else necessary to keep your moose.
If you sell that moose for a big profit, you pay taxes on your gains, but those are not the only taxes you paid on your moose! You had to pay yearly moose taxes as a part of owning your moose. So when you look back at your investment to see how profitable you were, and how you might be able to improve on your investment strategy, you look at:
1. Initial purchase price of your moose.
2. Cost for shelter and medical care for your moose.
3. Moose chow.
4. Taxes on your moose.
5. Profit on the sale of your moose.
6. Tax obligation on the profit from the sale of your moose.
You cannot ignore #4 and say it does not exist, or roll it up somewhere else in the cost. #5 is profoundly affected by whatever #4 is, so when you figure your total real tax liability per-moose, it is a function of 4 and 6!
If this doesn't work, I fear sock-puppets will be necessary!
Or you can try these, works for me sometimes when I'm trying to explain enthalpy and entropy to a non-engineer customer
(http://upload.wikimedia.org/wikipedia/en/thumb/3/31/Crayola-64.jpg/220px-Crayola-64.jpg)
(http://www.skiptomylou.org/wp-content/uploads/2010/05/Cookie-Monster-sock-puppet-1.jpg)
Here's how I know Gaspar's argument is just pissing in the wind: corporate tax receipts are trending downward relative to GDP, yet total receipts are not. If there was double taxation happening, it would be reasonable to expect that total receipts would have at least some correlation with the corporate tax receipts. That they are not tells me quite clearly that there is not much effective double taxation going on, regardless of what theory predicts.
Personally, I'd rather lay all the taxes on the corporate entities, relieving us real people of the paperwork burden. It's all the same, anyway.
How very non-progressive of me.
Quote from: Gaspar on January 30, 2012, 01:54:45 PM
This is getting fun now. The argument is not wether we are being "double and triple taxed" because everyone who pays taxes knows that there are several instances where that happens. The argument is wether stating that as a shareholder you are only liable to the 15% tax on investment income. The answer to that question is no, no matter how you attempt to cut it.
If you sell that moose for a big profit, you pay taxes on your gains, but those are not the only taxes you paid on your moose! You had to pay yearly moose taxes as a part of owning your moose. So when you look back at your investment to see how profitable you were, and how you might be able to improve on your investment strategy, you look at:
1. Initial purchase price of your moose.
2. Cost for shelter and medical care for your moose.
3. Moose chow.
4. Taxes on your moose.
5. Profit on the sale of your moose.
6. Tax obligation on the profit from the sale of your moose.
You cannot ignore #4 and say it does not exist, or roll it up somewhere else in the cost. #5 is profoundly affected by whatever #4 is, so when you figure your total real tax liability per-moose, it is a function of 4 and 6!
Moose is a lot like a cow. Or a hog or chicken or duck. As far as the tax dudes are concerned. I have kept quite a few of each over the years and never had an intermediate tax on any of them - step 4. Car might be better example - tags, etc. Or maybe inventory at the end of fiscal year. A moose is more like a piece of capital equipment, maybe like a lathe or stamping machine - and as such, you get to miss the sales tax when you buy it, cause it is for use in production (manufacturing exemption) - making more meese!
And if you grass fed that moose, you would have better moose meat and no Purina Moose Chow bill!!
I admire you Nate. Thinking like a liberal requires mental acrobatics and a level of complexity that never fails to amaze me. I become exhausted just thinking about how hard it must be to keep everything straight.
Yet I am somehow glad that I never have the need to aspire to that level of complexity. For me, accounting is a game of simple numbers that requires logic without the injection of fuzzy variables or theory.
I am confident that if we continue this line of discussion we will ultimately arrive at a debate to define actual terminology, like the definition of "is" or "tax" or the derivative of the actual language we use every day, and that would bore the crap out of me.
So, I will just stop here, and you and the liberal ilk can ridicule me for offering simple explanations to situations again.
I suppose this is how we arrive at a 6,000 page progressive tax code. ;)
Quote from: heironymouspasparagus on January 30, 2012, 04:18:42 PM
Moose is a lot like a cow. Or a hog or chicken or duck. As far as the tax dudes are concerned. I have kept quite a few of each over the years and never had an intermediate tax on any of them - step 4. Car might be better example - tags, etc. Or maybe inventory at the end of fiscal year. A moose is more like a piece of capital equipment, maybe like a lathe or stamping machine - and as such, you get to miss the sales tax when you buy it, cause it is for use in production (manufacturing exemption) - making more meese!
And if you grass fed that moose, you would have better moose meat and no Purina Moose Chow bill!!
Probably right, but moose was the first thing that popped into my head. Glad we don't have pet taxes in this country. . .yet!
Quote from: Gaspar on January 30, 2012, 04:19:34 PM
Yet I am somehow glad that I never have the need to aspire to that level of complexity. For me, accounting is a game of simple numbers that requires logic without the injection of fuzzy variables or theory.
My explanation is very simple. Your thesis cannot possibly be correct because the data are not consistent with premise, much less your explanation.
Quote from: nathanm on January 30, 2012, 03:58:01 PM
Here's how I know Gaspar's argument is just pissing in the wind: corporate tax receipts are trending downward relative to GDP, yet total receipts are not. If there was double taxation happening, it would be reasonable to expect that total receipts would have at least some correlation with the corporate tax receipts. That they are not tells me quite clearly that there is not much effective double taxation going on, regardless of what theory predicts.
Personally, I'd rather lay all the taxes on the corporate entities, relieving us real people of the paperwork burden. It's all the same, anyway.
How very non-progressive of me.
It really means nothing as you don't have a full set of data to reach such a conclusion. It could well be that corporate profits are down ergo corporate tax receipts would be in a decline. There's a pretty good causation.
There's simply no getting around the fact that the government is taxing a profit twice. Once when it's at the corporate level and again when that profit is passed to a share-holder, either as a dividend or in the additional value that profit created in the person's shares if they sold them and realized a personal profit.
If a company turns a profit of $1 million and the government assesses and collects a tax of $350,000 at the corporate level, then taxes the owner's distribution of the remaining $650,000 at 15%, that's an additional $97,500. That's a total of $447,500 or 44.75% that's taxed on that profit. That profit is taxed twice, once at the corporate level and once at the distribution level.
Someone explain how the government did not tax 44.75% of that profit.
Quote from: Gaspar on January 30, 2012, 04:22:13 PM
Probably right, but moose was the first thing that popped into my head. Glad we don't have pet taxes in this country. . .yet!
A lot of places require dog owners to get a "license" for their dogs. I think cats so far escape the license treatment.
Okay. I'm convinced. Just get rid of all taxes on everybody. But please wait till I can stock a warehouse full of torches, kerosene, bullets and mary jane. I'm gonna be king (of this neighborhood anyway).
Quote from: AquaMan on January 30, 2012, 06:24:28 PM
Okay. I'm convinced. Just get rid of all taxes on everybody. But please wait till I can stock a warehouse full of torches, kerosene, bullets and mary jane. I'm gonna be king (of this neighborhood anyway).
Come on over, we are locked and, ahem, loaded here. You know how to find me. ;D
Its hard to take all this too seriously. I have to keep reminding myself of that. Politics, business and ex-wives always make good conversation.
I was thinking about corporate taxation as I was drifting off to sleep last night (exciting, I know) and I came up with a modest proposal.
The argument often made against corporate taxation is that it just gets passed through to customers anyway. Ok, I believe you guys. Doesn't the same hold true for their phone bill? I propose that, from this day forward, corporations no longer have to pay utility bills. We will just go ahead and pay their utility bills out of general government revenues. After all, the cost of the utility service is just being passed on to the people anyway. Once everyone has adjusted to that new norm, we can start paying their payroll expenses, their rent, and maybe even compensate them for the cost of capital used in production. After all, those costs are just being passed on to the people anyway. Think how cheap goods will be!
More seriously, I found this article interesting:
http://americawhatwentwrong.org/story/taxes-and-corporations/
If what they claim about Carnival is true, it sounds like we may need to eliminate personal income taxes also, lest the corporate entities end up paying it on behalf of their major shareholders. That just wouldn't be right.
Quote from: nathanm on February 04, 2012, 04:04:13 PM
I was thinking about corporate taxation as I was drifting off to sleep last night (exciting, I know) and I came up with a modest proposal.
The argument often made against corporate taxation is that it just gets passed through to customers anyway. Ok, I believe you guys. Doesn't the same hold true for their phone bill? I propose that, from this day forward, corporations no longer have to pay utility bills. We will just go ahead and pay their utility bills out of general government revenues. After all, the cost of the utility service is just being passed on to the people anyway. Once everyone has adjusted to that new norm, we can start paying their payroll expenses, their rent, and maybe even compensate them for the cost of capital used in production. After all, those costs are just being passed on to the people anyway. Think how cheap goods will be!
More seriously, I found this article interesting:
http://americawhatwentwrong.org/story/taxes-and-corporations/
If what they claim about Carnival is true, it sounds like we may need to eliminate personal income taxes also, lest the corporate entities end up paying it on behalf of their major shareholders. That just wouldn't be right.
I prefer to keep business (non-tax) expenses separate and paid for directly by the business. It provides at least some incentive to keep them to a minimum.
Taxes seem to be following a similar path to minimization when offshore options are considered. When it's less expensive to pay offshore taxes than US taxes, guess where the money will go.
From the article you link to:
QuoteIn its most recent filing, Exxon Mobil Corp., the global energy giant, reported income of $34.8 billion before taxes on total revenue of $310.6 billion for 2009. Its U.S. income tax bill: Zero. Actually, it was a little better than that. Exxon Mobil claimed a tax benefit of $838 million, while it paid $15.8 billion in income taxes to other countries.
However, $15.8 billion is more than 35% (approx 45%) of $34.8 billion so there is something more complex going on.
Even on an individual level, state income taxes paid to another state are deductible on the Oklahoma State Income Tax. I didn't check the details but there is a line to subtract from your OK State Income Tax (tax, not income) at least some portion of the tax you paid to another state. (Form 511-2010, line 16)
"And now, here's something we hope you'll really like": (from Rocky and Bullwinkle)
Quote
First, for any plan to work, we need a federal tax policy that's simple, fair and — to the maximum extent possible — involves someone else's money.
With that principle in mind, like Willie Sutton, that early "corporate raider," we go where the money is. Our national treasure: America's billionaires.
Read more here: http://www.miamiherald.com/2012/02/02/2621843/bonfire-of-the-billionaires.html#storylink=cpy
I found this in today's TW but there are no links to it on the web, even using the TW search on the TW website.