Loopholes v. Patriotism

[Marcus Aurelius]

Does anyone know much Obama's campaign made from all of those (under $250.00 foreign contributions?)

Get rid of the income tax and have a national sales tax. Even TTH's lawn keepers would pay taxes then.

[pjorourke]

Originally Posted by atlcomedy

The Board and Management have a duty to their shareholders to maximize returns and follow the laws where they do business. Period.

Bingo! You guys do realize that no corporations actually pay taxes -- they just collect them from their customers. I've never seen a public company (where things are cleanest) that measured its success on pre-tax profit. "Oh gee! We made $3 bajillion pre-tax, I guess we should pay our fair share of $1 bajillion in taxes." Bullshit, the only number they care about is the net. Taxes are a cost of doing business that are conceptually no different than payroll, rent or raw materials. If their taxes go up, they raise their prices. If they go down, they will cut prices, but only if it generates more volume or a competitor forces it. If they can put the operation in a lower tax jurisdiction, they will move it, just like they'd move to a lower cost labor area, or a cheaper building. This is the way they are supposed to work. Its clean, its simple, its efficient. There is no ambiguity in their mission. Bitching about corporations not paying "a fair share" of taxes makes as much sense as complaining about tigers eating gazelles. Its their nature.

BTW, a VAT is conceptually no different than an income tax -- its just different math. With a Value Added Tax, corporations just structure their accounting so that the most "value added" occurs in the lowest VAT jurisdictions.

The problems with tax systems occur because politicians attempt to control corporations -- which they inherently can't. They create (make that sell) all kinds of exception to the rules, that the corporate guys end up driving trucks through. If you had something like a 10 page tax code, it would be a lot harder to screw with.

[Marcus Aurelius]

Well said PJ.

[atlcomedy]

Originally Posted by pjorourke

Bingo! You guys do realize that no corporations actually pay taxes -- they just collect them from their customers. I've never seen a public company (where things are cleanest) that measured its success on pre-tax profit. "Oh gee! We made $3 bajillion pre-tax, I guess we should pay our fair share of $1 bajillion in taxes." Bullshit, the only number they care about is the net. Taxes are a cost of doing business that are conceptually no different than payroll, rent or raw materials. If their taxes go up, they raise their prices. If they go down, they will cut prices, but only if it generates more volume or a competitor forces it. If they can put the operation in a lower tax jurisdiction, they will move it, just like they'd move to a lower cost labor area, or a cheaper building. This is the way they are supposed to work. Its clean, its simple, its efficient. There is no ambiguity in their mission. Bitching about corporations not paying "a fair share" of taxes makes as much sense as complaining about tigers eating gazelles. Its their nature.

BTW, a VAT is conceptually no different than an income tax -- its just different math. With a Value Added Tax, corporations just structure their accounting so that the most "value added" occurs in the lowest VAT jurisdictions.

The problems with tax systems occur because politicians attempt to control corporations -- which they inherently can't. They create (make that sell) all kinds of exception to the rules, that the corporate guys end up driving trucks through. If you had something like a 10 page tax code, it would be a lot harder to screw with.

Your point is well made but I've seen a number of companies, even public, even huge public, have the magic "bonus number" be EBITDA or simply BT profit even at the Group General Manager/President type level because they don't control in the short term tax costs....now the VP of Tax...of course evaluated in terms of tax avoidance.

I've seen younger, smaller, but still public, companies still have EBITDA as the primary bonus number, but it is more a lack of sophistication in their performance metrics. Everybody undertands EBITDA...but usually it is the "I" (&/or the D&A) they want to deduct not the "T"

But to your point most every compay makes a concerted effort to minimize their tax bill/cash outlay

[Rudyard K]

There are actually a few deductions (some that I even afford myself of) that I am unclear why they are available to me. They don't have economic justification...at least as far as I see it.

But most things that folks call 'loopholes" are far from it. I can't speak much to the international world...I just don't know that much about it...but I do think that the tax treaties, and international companies running things through offshore shells to reduce appearant earnings is BS. But admittedly, I am jst not familiar enough with it.

Nevertheless, for most of us, operating domestically, the tax rules are in place to reduce the current deductablity of current cash expenditures. There is a rational for such reduction. But utilizing the rules is not a loophole. It generally means the cash was spent.

If you just let people deduct every dollar they spent in business?...there would never be any tax revenue. Those folks would invest every dollar they could nto their business.

[pjorourke]

Before tax is commonly used at the group/subsidiary/division level where the tax bill is controlled at corporate. But the CEO almost always has at least one performance metric based on Net.

You do see EBITDA used a lot, but primarily in situations where the balance sheet is fungible -- like in a private equity. There, they are looking at interest coverage on the debt -- they just replace taxable income with deductible debt to minimize taxes.

[atlcomedy]

PJ, I was responding to your statement "I've never seen" & I'm simply saying you probably have..particularly in companies with a lot of debt on the balance sheet.

That said those CEOs aren't running around saying "Hey my bonus isn't tied to our tax bill so where can I pay more..."

[Black Sedan]

Originally Posted by pjorourke

Bingo! You guys do realize that no corporations actually pay taxes -- they just collect them from their customers. I've never seen a public company (where things are cleanest) that measured its success on pre-tax profit. "Oh gee! We made $3 bajillion pre-tax, I guess we should pay our fair share of $1 bajillion in taxes." Bullshit, the only number they care about is the net. Taxes are a cost of doing business that are conceptually no different than payroll, rent or raw materials. If their taxes go up, they raise their prices. If they go down, they will cut prices, but only if it generates more volume or a competitor forces it. If they can put the operation in a lower tax jurisdiction, they will move it, just like they'd move to a lower cost labor area, or a cheaper building. This is the way they are supposed to work. Its clean, its simple, its efficient. There is no ambiguity in their mission. Bitching about corporations not paying "a fair share" of taxes makes as much sense as complaining about tigers eating gazelles. Its their nature.

Let's not confuse perspective. In the macro view; when we allow large firms to pay less; the tax burden is shifted more on the smaller firms who cannot afford the sophistication. As smaller firms generate more innovation and jobs, this retards the economy. If our laws better regulated all corporations, including those closely held, from transferring wealth (use of planes, houses, travel, clubs) and political power to officers and shareholders, then we wouldn't need to tax corps at all; we would just tax the individuals income.

Originally Posted by pjorourke

BTW, a VAT is conceptually no different than an income tax -- its just different math. With a Value Added Tax, corporations just structure their accounting so that the most "value added" occurs in the lowest VAT jurisdictions.

The problems with tax systems occur because politicians attempt to control corporations -- which they inherently can't. They create (make that sell) all kinds of exception to the rules, that the corporate guys end up driving trucks through. If you had something like a 10 page tax code, it would be a lot harder to screw with.

(not directed at you PJ, just to expand clarity and move the discussion along)

So you've got two things that are going on with activity taxes; Be it collected on VAT, Sales or Income.

1. Redirecting a % of the GDP to pay for the government who provides the peace and regulatory authority.

2. Government influencing the investment focuses and priorities of GDP activity. Education, hiring, capital investment, sustainability, energy efficiency, the list is a mile long.

With #2, the dog chases its' own tail. The government is being lobbied to make the tax code fit what business wants its priorities to be, and at the same time, business is chasing to achieve the lowest tax liability with the law it currently has.

Somewhere out of the muck maybe we the people are achieving a measure of regulation of the economy via tax code, but it sure does employ a bunch of asses who wouldn't otherwise be contributing anything!

[charlestudor2005]

Originally Posted by pjorourke

"Oh gee! We made $3 bajillion pre-tax, I guess we should pay our fair share of $1 bajillion in taxes."

What a crock. One of the major reasons they don't want to pay taxes is not because their post tax profit would be 2 bajillion, but rather because it would be 3 bajillion. They (and since you defend them, I guess you) don't give a fuck about paying taxes. They care about how much they can line their pockets with. And yes, if they're unwilling to pay the taxes in Detroit or find a better deal in Montreal, then don't let the door hit them in the ass on the way out.

They have to do things for financial reason, but so the hell does the USA. I think companies WANT to do business in the USA because they make fantastic money here, or they wouldn't be here. AND I think they want to stay. But if they don't, fuck 'em. And, especially fuck 'em if they don't want to pay their fair share of taxes for doing business in the USA.

[pjorourke]

As normal Chuckie, you didn't pay any attention to what I wrote.

Knock yourself out.

[charlestudor2005]

Originally Posted by pjorourke

As normal Chuckie, you didn't pay any attention to what I wrote.

Knock yourself out.

You make me the butt of every one of your wise-ass jokes and the target of unending derision, and after treating me so nice you expect my attention and reverence?

You ever hear about the flies and vinegar approach?

'Course, in your case, you're shoveling shit.

[atlcomedy]

Can we agree (for about the 30th time lol) on 2 things:

Ultimately:

1) Any taxes, big company/small company/public/private/GE/Mom&Pop....ultimately get bourne by the consumer....

2) Public/Big Companies are owned by all of us directly or indirectly. Sure they may pay executives huge amounts but the profits they deliver (by hook or crook) accrue to us.

[pjorourke]

Originally Posted by charlestudor2005

You make me the butt of every one of your wise-ass jokes and the target of unending derision, and after treating me so nice you expect my attention and reverence?

I don't expect anything out of you, because you are an economic moron as you just pathetically demonstrated with your inane "rebuttal" of my parenthetical pseudo-dialogue. If you are going to waste ink engaging my comments, at least display the basic intelligence to read what I wrote -- otherwise there is no sense in quoting me. If you don't want to respond to what I actually wrote, then don't quote me asshole.

[WTF]

Originally Posted by pjorourke

. then don't quote me asshole.

Was that spoken with a British dialect , PJ?

[Marshall]

Originally Posted by pjorourke

I don't expect anything out of you, because you are an economic moron as you just pathetically demonstrated with your inane "rebuttal" of my parenthetical pseudo-dialogue. If you are going to waste ink engaging my comments, at least display the basic intelligence to read what I wrote -- otherwise there is no sense in quoting me. If you don't want to respond to what I actually wrote, then don't quote me asshole.

The board is a stage and we must all play our part..............

I don't mean to shock anybody, but I don't think Chuck is an economic moron [WTF and Doove, hmmmmmmmmm.....]

I don't think Chuck really cares very much about these topics. What he does care about is the left-right debate and keeping it going, and going hot............it's his role on the board and he's rewarded with attention and various relationships....if he was seriously debating he would read the posts and articles presented and attempt to formulate arguments to advance his position. He doesn't do this because he doesn't care about the substance of the debate........He's a troll and it's his "job" to start and maintain the debate......because he really doesn't care about the topic, he puts no effort into reading, researching or thinking........he, like the other liberals, is ruled by his emotions rather than intellect. His opinions are based on how he feels about things rather intellect.....intellectually, he's lazy.....he comes to this board to feel good, not learn or think.........he accomplishes his goals and feels good......he doesn't care whether he looks stupid or is right about things, that's not why he is here........he just wants to rile up the Right to get the debate started or maintained......he is a useful idiot to the board.....some may say he meets the classic definition of a troll, but so what...........keep posting Chuck, I got your back [in my cross-hairs that is]