Wednesday, August 13, 2008

"In The Name Of Fairness"

Here’s another wonderful hack job from the liberal blog Huffington Post:

WASHINGTON — Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

The study by the Government Accountability Office released Tuesday said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.

"It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.

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.

At least they had the decency to quote Chris Edwards from the Cato Institute who nails the issue right on target. A good chunk of those “rich” people that Obama wants to raise taxes on are actually LLC or “S” corporations that create and maintain jobs. Maybe someone should tell Obama and Sen. Dorgan that thousands of professionals and business owners who used to report most of their income under the corporate tax responded to lower individual income-tax rates after 1986 and 2003 by reporting more income under the individual tax as partnerships, LLCs and Sub-S corporations. Moving business income from the corporate to the individual tax, not CEO pay for example, has raised the top 1%'s share on individual tax returns. But I digress. Here is the crux of Sen. Dorgan’s complaint:

Dorgan and Levin have complained about companies abusing transfer prices _ amounts charged on transactions between companies in a group, such as a parent and subsidiary. In some cases, multinational companies can manipulate transfer prices to shift income from higher to lower tax jurisdictions, cutting their tax liabilities. The GAO did not suggest which companies might be doing this.

"It's time for the big corporations to pay their fair share," Dorgan said.

So, Sen. Dorgan wants to create even more corporate tax bureaucracy in order to capture what parent and subsidiary companies transact. Perfect. And when has it been “unfair” for a company to try to save on their tax liabilities? That’s what I would call good corporate governance. Cutting tax liability is what tax credits, losses, and write-offs are for and provided by the tax code.

Oh, I can’t wait until liberal Democrats have full control of Congress and the White House, folks. We are going to see a lot more of these witch hunts against business. As Obama once said in a primary debate discussing an increase in capital gains taxes, it's all "in the name of fairness.”

3 comments:

The BoBo said...

Oh boo freakin hoo! I am so tired of them playing that "fairness" game. Who the hell are they? You know what else would be fair - if we cut them off from all of their perks that taxpayers are on the hook for: housing allowance, cars, car insurance, gas, health insurance, dental insurance, breakfast, lunch, travel to and from home (I wish I could get paid to travel from home to work and back), 100% salary retirement that gets passed on to spouse upon death, etc etc. Paying for all of this for each of those senators who have been vying for the presidency instead of doing what they were hired to do. It's no wonder they don't know how we the real people suffer - cuz - we are paying for them not to suffer.

Get rid of em all

The Vegas Art Guy said...

Well what do you expect from them? Obama wants to raise the minimum wage to $9/hr! What is that going to do to the economy? Simple...

It goes boom and dies...

The Historian said...

VH-

Not to mention there are a lot of individuals who are incorporated as a service business who do not drive enough income to pay taxes. The story is a straw man. The IRS hunts down corps who are breaking the law. These Dems simply have to name names and the scofflaw behavior would be over. Of course they cannot do that since they have no hard information and are simply playing with numbers that mean very little.