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Flubber
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With a view of the Rockies
Aug 2000
time: 22:36
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quote:
Originally posted by Kidicious
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I just assume you guys have a ton of waste . The riders to some of you appropriations bills are hilarious.
heck-- The Canadian feds have wasted a ton on money as well on things like a useless gun registry and the Liberal party giving away money to people so they can then bribe the Liberal party. We do this in a country with a tenth your population and STILL have a balanced budget.
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shawnmmcc
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First, I must agree with Flubber. There is insufficient data in a single articles data to determine how seriously corporations are dodging tax numbers. Secondly, there is incontrovertible proof that tax avoidance activity has been at a fairly high level, if you look at the number of reincorporations outside the US, the number of tax shelters that are so raw that the Bush IRS is going after them, under funded as the audit department is (both parties get buy in), and the level of CEO and Board reimbursement (the money has to come from somewhere - but more on that later). It's like global warming. I was unconvinced until the glaciers started melting. I still don't know all the causes, nor the interactions of the various factors, due to lack of definitive proof. But the glaciers are still f**king melting, and the tax avoidance activity is at a fairly high level anecdotally.
DanS, your statement that 50% of tax revenue in the US is similar to your name-calling at Oerdin, i.e. you are presenting no facts, only opinions. The US economy was radically different due to deficit spending and WW2, companies were making huge profits, and the government was using its coercive power to grant corporations control over labor factors due to WW2. You could well be wrong - i.e. 50% of US government revenue during that time period, may indeed have been provided by corporate income tax and it may not have been confiscatory. Show your proof.
Lastly, Saras has some bad information of US corporation governance. To quote an op-ed piece in the Wall Street Journal last year, I believe, over changes in corporate governance, as close as I can remember - "What do they believe, a corporation is a democracy?"
In the US corporate governance rules have for years made it both difficult and very expensive for shareholders to nominate candidates to the Board of Directors who are not approved by the current board and/or management. In addition, like Saras personal situation, many of these boards interlock, so a CEO sits on his fellow CEO's board, who sits on his board. Between that and the governance rules, the CEO does get to essentially steal from the company, i.e. get excessive compensation that is not warranted by either his job performance nor the availability of hungry upper-level managers who are both competent and would happily replace him.
There are some CEO’s who have earned there compensation. However, if you look at a country like Japan, and their CEO’s (and other upper level US management) compensation, and take that difference and reinvest it in the company every year – that may well be, when compounded over decades, one of the reasons Japanese corporations have routinely kicked the butt of US corporations in the global marketplace.
In addition changes made by the Bush administration and the Republican Congress have now made it much more difficult for stockholders to sue, especially over exactly those issues. Sarbanes-Oxly has created some accountability over the CEO providing bogus figures to inflate his compensation, but it does not provide any other protections against the interlocking boards as described above. There have been some recent attempts to change corporate governance, taking it from extremely difficult and exorbitantly expensive to simply very difficult and very expensive to run an alternate slate of directors to that put forward by corporate management, and those are in the process of being roll-backed. It seems investors are not owners, but some strange class of people who put money into a corporation somewhere between bondholders and the CEO plus the Board of Directors, who actually control the company.
That is the real scandal of US financial markets, that while largely doing away with the old game of class A and B stock, i.e. turning one group of investors into nonvoting stockholders, more akin to a kind of uber-bondholder instead of real stockholder who owns part of the company. Ownership without control often turned into a sham as those with the controlling stock found ways to divert profits into their coffers.
Now instead we have boards and CEO’s, along with associated upper-level managers life CFO’s, who instead use their control to find ways to divert profits into their personal gain away the actual stockholders. It’s a variation on the game mentioned in the previous paragraph, just the words and techniques have been rearranged. That, along with the huge amount of corporate welfare by the federal government, is the real scandal
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Flubber
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With a view of the Rockies
Aug 2000
time: 22:36
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Oerdin
I read your silly Pdf again and saw claims that IBM for instance paid 1.3 % of its income in taxes. Then I went to the IBM website and found these numbers
YEAR Inc. Tax
2002 7.5B 2.1B
2003 10.9B 3.3B
2004 12 B 3.6 B
SOURCE ??? www.ibm.com
Since there is no footnote in your pdf to support the IBM numbers unless it was taken from one of the cited articles, I will defer to the financial published by the company from the income statement. Incase some taxes were DEFERRED, I looked at the satement of cash flows to see cash paid in taxes were 2002 1.7 B , 2003 1.8B-- still a far way away from the claimed 260 million "between 2001 and 2003". You will say there were subsidies and rebates or something but that makes no sense. If you get a subsidy or rebate that should be offset against your cash outflow for taxes.
Rereading your revered PDF, The only source for the info is the Citizens for Tax Justice who I am sure will be discovered to be totally unbiased -- ya right!! I am actually on their website now and found an interesting fact-- There are many corporations that end up paying more tax than the magical 35% rate they cite-- The reason is tax deferrals coming home to roost on companies that are no longer investing. They point out that an active investing company has to pay their taxes from prior deferrals but are able to use current investing to defer current taxes.
Bottom line is that taxation is too complex to garner anything from a silly stupid ratio
Last edited by Flubber on 16-06-2005 at 04:04
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Flubber
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With a view of the Rockies
Aug 2000
time: 22:36
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quote:
Originally posted by DanS
Nowhere in the end notes is a source for the profits. Show me where he gets his profit numbers. |
It comes from those Citizens for Tax Justice. Do a yahoo search and you'll find their site. They claim to be non-partisan and then have a list of articles like
We're paying dearly for Bush's Tac cuts
Bush's 10 trillion Borrowing binge
return of Corporate Tax Freeloaders
My favorites
DO fat cats pay lower tax rates than Workers
Corporate Pork trumps rational Job policy
I hate Bush's economic policies and have sympathy with with some of what was written. These guys are about as impartial as Dick Cheney though.
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Flubber
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With a view of the Rockies
Aug 2000
time: 22:36
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Oederin
I am into their methodology now-- They seem to discount any tax that is deferred and they admit outright that a tax rebate occurs " by carrying back excess tax deductions and/or credits to an earlier year"
See the methodology section of their report
You did look at the detailed report right ??
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Flubber
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With a view of the Rockies
Aug 2000
time: 22:36
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Back on the tax to profit ratio--
The methodology was not as bad as I thought but not great either. According to them
1. They do only count US source income although they indicated that they do move some foreign income into the US category if it was only "foreign on paper". Limited detail on how they do that and why they consider some income to be US when the taxman does not.
2. They seem not to give any heed to present deferrals. If a corp earned a billion and has to pay tax of 50 million now and 250 million more over the next few years, they say thats only 50 million PLUS any deferrals from the last few years. Their method is consistent but misleading. Even the authors admit that corps will "pay" super high ratios when the deferred taxes come due in a year when the corp is not investing much (probably in worse times). This is the reason why the authors numbers and the corps financials do not match. The corp expenses the tax when accrued and lists it as a liability. The authors ignore it until the tax is payable. They seem to like cash accounting when it comes to taxes. The result is a corp might have a few years of supre low ratios and then perhaps a year when they make a loss yet pay tax or pay taxes in excess of 100%of income for that year
Finally, their analysis pays little heed to the policy reasons behind some of the deductions. Yes a corp might get an extra deduction for investing in x or y as an incentive to make that investment. It might be a risky 100 million invested in something the government wanted investment in. The corp might get 20 million in tax savings so their "rate of tax paid" is a little less. Absent the incentive the corp would not have made the investment. So the question for government is whether they would rather have the 20 million extra in tax revenue or not have the 20 million but have had someone invest 100 million in an area they see as desirable.
Many incentives are really that simple. Government forgos some tax revenue to get a bigger investment in some desirable field. Obviously the corp will only do it if there is some business sense to do it but on a lot of investments, an immediate guaranteed rebate of some of the investment amount would be enough to take it into the viable category.
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Ted Striker
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United States of America
Jan 1970
time: 21:36
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Did any of you even bother to read shawn's post?
Or are you too busy girl fighting over the details of Oerdin's article? Even if the article itself cannot be proven though the minutea, the spirit of what it is conveying is correct.
quote:
Secondly, there is incontrovertible proof that tax avoidance activity has been at a fairly high level, if you look at the number of reincorporations outside the US, the number of tax shelters that are so raw that the Bush IRS is going after them, under funded as the audit department is (both parties get buy in), and the level of CEO and Board reimbursement (the money has to come from somewhere - but more on that later). It's like global warming. I was unconvinced until the glaciers started melting. I still don't know all the causes, nor the interactions of the various factors, due to lack of definitive proof. But the glaciers are still f**king melting, and the tax avoidance activity is at a fairly high level anecdotally. |
Well done, shawn.
And the second part of his post, mentions the tighter controls of Sarbanes-Oxley, but also points out the "good old boys club" mentality of boards and who really gets the power. It's transformed from beyond networking and more into a cliques, scratch-my-back, I'll scratch yours oligarchy, where the shareholders really wield little if any power at all.
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16-06-2005 01:29
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