Another excellent article in my opinion by Marlowe.

I would like to add on the subject of lying, that it is in the USA illegal to lie to a federal law enforcement officer, this is obviously an affront to the first amendment to the Constitution. I believe we would live in a much freer country if it was illegal for government officials from the highest to the lowest to lie to us. We have also seen more and more of the government in this country becoming secretive, and demanding more and more openess (divulging our privacy in almost every area) instead of the other way around.

Again thanks for the great article Marlowe.

Marlowe, I'm not sure you're explaining (or understanding) this case entirely clearly.

The basis for the ruling is that while the colluding businesses (Motorola and Scientific Atlanta) did special favors for Charter which made them look more profitable than they really were, that action did not directly harm or deceive the stockholders because the ultimate responsibility for any deception lay with Charter, which should have disclosed the nature and effects of those special relationships.

The court did not rule that stockholders had no recourse for their losses, but that their claims should be directed at Charter rather than going after secondary parties just because they have more money. Charter committed the only actual fraud here and had a responsibility to report their deals with the two other companies to their auditors who should have then informed stockholders.

What they did here is rule against vampiric lawyers who sue everybody and anybody they can go after no matter how much of a long shot it is, so that they can pocket millions of dollars and pass on pennies to the actual injured parties.

If the court had ruled the other way it would have opened the gates to even more spurious and speculative suits from these leeches which do a hell of a lot more harm to stockholders than anything Scientific Atlanta or Motorola did here.

You can read the actual opinion in this PDF.

Dave

...do you really think that Congress meant to leave this gaping hole (undermining basic concepts on which the rule of law is based) when it passed the underlying legislation - ?

Stevens' short dissent calls 'bullshit'

Dave... Thanks for the points. And I didn't realize lawyers had evolved TO the level of vampires - certainly a Day to hail for the species. There's a chance for them yet!

I guess we can cut to the chase on what this means... Enron. I'm sure the accounting firms are all screaming this week - wondering if this ruling can't be retroactive.

We have another case warming up in the bull pin that is a much larger example of this - General Re (the reinsurer which is a part of Berkshire Hathaway). This stems from the 2000/01 intent to inflate the LOSS RESERVES of AIG which I think everyone knows....

And any moment now we're going to hear how some company X knew very well that the practices Countrywide was using were certianly unethical and perhaps illegal.

NOW, with this ruling - certainly the way I read it and various analysts read it (and by the way Dave I do have the actual text - thanks for the offer - appreciate it) NO ONE can go after the DEN of thieves just the one - WHO, in the cases such as Enron are nothing more (by that time) but a hollow shell...

Lying is lying... Why on earth should we give separate rules for business? Would this ever stand in criminal court?

"Mr. Accessory since you didn't ACTUALLY hold the knife to this lady's throat and rob her but only assisted in it... And despite the fact that subsequently the assailant spent all the stolen money and has no more assets you, yourself have nothing to worry about... Since all you did was ASSIST in the commission of the crime you can't be held libel."

And you see NO problems with this ruling? You don't see the Pandora's box being opened up here?

P.Marlowe

I am weary of this hatred of Corporations.

Here is the Income Statement for Motorola. You will notice they pay 1 to 2 billion in taxes per year. They have 66 thousand employees. If Motorola did not exist those employees would have to pay 15 to 30 thousand dollars a year to make up the difference in tax loss.

Does that have meaning for anyone?

Lying is lying, but the two companies being sued in this case didn't lie to anyone. They never communicated with or had an obligation to communicate with anyone but the company they were dealing with. Their actions weren't even illegal. They can sell stuff to Charter on any twisted terms they like as long as both parties agree to it.

I think the implications of this ruling are much more limited than you realize. If the secondary companies had actually been parties to the fraud the situation would have been very different, but the ruling clearly says that they were not approached with this arrangement by someone saying 'we need your help to defraud our investors' so they can plead ignorance of Charter's criminal intent. It's still the US. there's still a presumption of innocence even for corporations.

And frankly, as someone who owns stock in Motorola I don't much like the idea of them being screwed for something someone else did. Motorola supplies components to EVERYONE under all sorts of strange arrangements especially because they deal with the cell phone industry. As a stockholder I don't want them dragged through the courts as part of ever class action suit over undisclosed rates and by people who don't read their service agreements just because they're in partnership as a supplier to these somewhat sleazy companies.

Your accessory example from criminal law does not work here, because it's not clear that the companies knew that their assistance to Charter would be used to commit fraud. As far as they knew Charter was going to disclose their actions to the auditor. A better analogy would be suing the gun store for selling the gun that's used in a crime. Yes, they knew that it's possible to use a gun in a crime, but they had no knowledge of the intent of the purchaser to do so.

And yes, lawyers were recently upgraded from leeches to vampires. Did you not see it on the news?

Dave

followup to #5

the disparity would actually be 30~60 thousand dollars per employee since only about half MOT employees are in the US.

Vampires are now offended.

"I am weary of this hatred of Corporations."

Maurice,

It's becoming very clear to me that the hatred of corporations is yet another front in the class war being fomented by the far left in this country.

Having failed miserably to bring socialism to the USA during the Cold War years, the socialists sat back and studied where they went wrong.

What they realized was that socialism has hitherto failed here because, for the most part, there has been very little dissatisfaction on the part of the workers here. For socialism to take root anywhere, the workers have to be unhappy; they have to feel they are being exploited.

American workers for decades were among the best paid, best housed, best fed and clothed in the world during those years. They actually still are, but what has changed is there is a concerted propaganda effort on the part of left wing extremists to make them think they're not full participants in the economy.

Hence the hatred of corporations, the growing envy of the wealthy, and the constant drumming in the press and on the internet that American workers are exploited, the system has failed them, the rich are evil, CEOs are overpaid, etc.

You tell a lie long enough, and it becomes the truth.

The stakes are huge; and unfortunately, it appears that most supporters of capitalism are unaware there even is a battle, let alone that they're losing it.

Maurice...

First, I don't remember stating that I 'hated' corporations.

Second, which is it with Motorola (who used to be a large customer of mine) 1 billion or 2 billion?

Third, educate yourself on the corporate "tax" system in this country. Read PERFECTLY LEGAL by the Pulitzer Prize winning David Cay Johnston... Or his latest FREE LUNCH.

Forth, pay a bit more attention to the business sections of the New York Times, The Washington Post and the WSJ...

Fifth, read up on IBM's latest $1.6 billion dollar TAX DODGE that was finally caught by the IRS

And SIXTH... Realize that in 1957 corporations paid 50% of the taxes collected in this country... in 2005 it was LESS than 7%.

GUESS who picks up the difference... YOU DO.

Marlowe

Dave... The example of the criminal is perfectly accurate here. I won't be surprised if we see some mention of the USSC case re: General Re and AIG in the coming weeks. The whole Enron case is likely to be tossed out now (since it's been languishing on the dockets for who knows how long).

The ENTIRE IMPORT of this case is that the two cable equipment suppliers DID know what Charter Communications was doing! But that since they were metaphorically standing BEHIND Charter (who was committing the crime) they themselves can't be touched.

This has been evolving or rather devolving for years. As pointed out in the NYT article (01/15/08) the USSC case back in '94 (Central Bank of Denver v. First Interstate Bank)came down on the STINKING side of this pig pen - insisting that somehow, "aiding and abetting" doesn't mean anything legally in the realm of securities!

I hope you're just as blase some day when a huge chunk of your investments is wiped out in one of these deals... While the CEO skips off to his new island in the Caribbean and you're left wondering how the hell you're going to handle retirment or your kid's college costs and the court's are saying, "Sorry Dave, but why should the banks, brokerage houses, insurance companies that "aided and abetted" in this fraud that's now destroyed your retirement plans be held liable? Just because they knew you were going to be wrecked by these actions doesn't mean they had an obligation to inform you."

You REALLY want to live in this world?

Marlowe

Speaking of the IMMEDIATE fall out from the USSC case.

Second, which is it with Motorola (who used to be a large customer of mine) 1 billion or 2 billion?

If you had clicked my link you would know what I meant by that comment. They pay taxes base on how much money they make. The range is for the last 3 years.

Please click the link.

"GUESS who picks up the difference... YOU DO."

Marlowe,

Guess who picks up the taxes when corporations pay them...YOU DO.

Corporations act only as tax collectors; what taxes they pay are passed on to the end users of their product or service in the prices charged.

And SIXTH... Realize that in 1957 corporations paid 50% of the taxes collected in this country... in 2005 it was LESS than 7%.

We have been very successful in taxing our Corporations to point they must leave our shores.

Clavos - great post. Marlowes comment about the CEO supports your points for you.

Maurice... First off, I hope that your point that Motorola paying some tax (and I assume you're smart enough to know you can't trust the annual statements) isn't supposed to be definitive PROOF that there's has been and isn't any corruption, tax dodging, no rigging of the tax structure in the past 30 years in US business history to grossly favor the richest 1% of this country, to hide a whole CONTINENT worth of unethical and immoral business dealings you've got a long LONG way to go... You certainly aren't expecting us to swallow that are you??

My beef here isn't with Motorola per se. They're playing on the field they, along with thousands of others helped to create. I'm saying the FIELD is putrid...

And simply saying "Well, Motorola paid tax" as some kind of argument to DISMISS other abhorrent behavior is the same as saying, "Well, Osama once left me a nice tip and paid his check so he must be OK..."

Wake up. Your naivete is giving me a headache...

Marlowe

Clav... Do us all a favor and actually do some research before posting next alright? Seriously... This argument is so threadbare it's embarrassing that you've used it.

American corporations don't "leave" the US. They shift their HQs simply to avoid as many laws as they possibly can.

If you love the present structure of corporations so much I'm sure you'll have no problem volunteering to strip your WAGES back to pre-minimum wage times, in order to convince these behemoths to stay here in the US.


God forbid you should make a livable wage while the CEO is earning over 1700% more than you (at your CURRENT wage).

For God sake Clav, turn off Rush and READ a few books and newspapers.

Marlowe

Marlowe,

thanks for your kind words about my intelligence. Your comments give me the impression you might not make as much money as I do. I am a wage earner that pays 6 figures in taxes. If you were to look over my tax return you would be shocked at the exemptions I don't quality for. As you go up the scale you lose deductions most people take for granted (mortgage, dependants).

You would be amazed at the amount of property taxes Motorola pays.

Great reply, Marlowe! Unfortunately, you didn't address a single point I made:

I said nothing about corporations moving offshore; it was Maurice who made that very cogent point.

"Threadbare" means well worn, not wrong. Show me how corporations actually DO pay (without passing through) taxes.

The rest of your "response" to me was cutely flippant but totally devoid of any meaning or substance.

I guess that's one way of obviating any need to actually think when responding...

Maurice... I didn't insult your INTELLIGENCE fella. Your lack of education on this matter is another point entirely...

You think because you're making/paying in the six figures you're NOT being screwed?

I'm begging you. READ "PERFECTLY LEGAL" by David Cay Johnston.

Everyone making between $24K and $250,000 per year are the ones suffering because of the tax shift...

One of the things you will learn is that the TAX a corporation waves about in front of everyone, yelling "look what we have to pay!" is in many respects a smoke screen.

Just go read the book...

As we so often do in this country we personalize things... We assume because we're making a great income AND getting drilled by taxes that this must be happening to everyone else up the line...

If you've been in business as long as you suggest M then you have to know that things stink mightily
up the hill from where you are....

Gotta run

Marlowe

Clav... "Cutely flippant" - thanks.

Sorry if I misquoted you...

No doubt you're absolutely right. Corporations are ALL model citizens. Despite all the government tax data to the contrary they shoulder a terrible burden (tax-wise)...

One point though Mr. C... If you detest "socialism" you no doubt don't avail yourself of ROADS, SCHOOLS, LIBRARIES, THE FIRE DEPARTMENT, THE POLICE DEPARTMENT, THE SEWER SYSTEM, THE WATER SYSTEM, ANY PUBLIC UTILITY, etc, etc, etc. Because of course, by your definition THIS TOO is socialism - since all our taxes go to paying for them...

Gotta go boys! Been fun!

Marlowe

"Corporations are ALL model citizens."

Again, a deliberate misinterpretation of my comments.

I have not portrayed corporations as "model citizens:" merely pointed out that taxing the hell out of them does NOT shift the tax burden from the end user or consumer, because in the final analysis, the ONLY REAL PAYERS OF TAXES in our system are those who earn income (regardless of source, unless said source is legally not taxable), and the consumers. NO ONE ELSE.

As Maurice has pointed out, with the growth of global business, American corporations now face the problem of competing against foreign companies which pay lower, or even no, taxes in their respective countries.

These two points, taken together, militate for a reduction (or even elimination), not an increase, in the taxation of businesses.

Once again, your condescension and flippancy fail to respond adequately to my points.

My remarks address the economic system of this country, not the political structure. The fact that the various governments, federal and state, are responsible for elements of the infrastructure such as roads, and obvious responsibilities of the state, such as policing, has nothing whatever to do with maintaining an economic system based on capitalism, as you well know.

To bring them up in response to my comments is a non sequitur.

Maurice... First off, I hope that your point that Motorola paying some tax (and I assume you're smart enough to know you can't trust the annual statements...

Maurice... I didn't insult your INTELLIGENCE fella

I do trust the Income statement so I must not be as smart as you had hoped. When a corporation announces profits(loss) they are making an official declaration.

Are you saying you don't believe Motorola paid the 1~2 billion in taxes these past 3 years?

Did you click my link to their Income Statement?

Clav & Maurice:

By the IRS's own accounting records (as reported in PERFECTLY LEGAL for example) and as I've already stated, in the 50's US corporations paid nearly 50% of all COLLECTED taxes in this country. As of 2005 it is roughly 7%...

At the same time the number of reported corporate tax avoidance schemes has skyrocketed. Corporate inversions along with other off-shore transfers, etc., etc, etc., funnel hundred of BILLIONS off the books every year.

Now THIS BEHAVIOR doesn't account for that 7% above. No, that 7% is what the ACTUAL TAX LAWS REQUIRE - currently - of corporations.

Do yourselves a favor. Read the business sections - specifically the TAX SUB-SECTIONS of the New York Times, the Washington Post and the Wall Street Journal (and occasionally the LA Times does a good job reporting).

In the Washington Post - read the (free to everyone) THINK TANK section. There are reports in there EVEN FROM THE CONSERVATIVE think tanks that lament some of these same conditions.

It is simply not true that US corporations are scrambling to leave the US because their being taxed too much. The tax laws have been so stunningly rewritten for the corporations as well the super-rich has wrecked our economy...

It began in the early 60's when the ultra-conservatives began a real effort to take over the Republican party. They needed charismatic leaders - so the shopped around and their first acquisition was Ronald Reagan - a died-in-the-wool DEMOCRAT prior to this...

It is true that back in the times of FDR those with the most paid some serious tax... So did corporations... It was the price of living in society.

As a matter of fact most workers were not taxed at all. It was considered savage to tax a man who sweats to make a dollar... Those who could AFFORD to pay taxes - paid them...

But by the late 70's Republicans and Business did everything they could to make TAX a four letter word. They pounded away at this, making the common man and woman believe that THEY were being ripped off and that the system must be changed...

It was changing alright... The program to re-write the tax code to favor the rich and corporate America had begun...

Marlowe...

The whole Enron case is likely to be tossed out now (since it's been languishing on the dockets for who knows how long).

The Enron case bears very little relationship to this case since both of the major parties were directly involved in the fraud and there's not even a possibility of presumption of innocence.

The ENTIRE IMPORT of this case is that the two cable equipment suppliers DID know what Charter Communications was doing! But that since they were metaphorically standing BEHIND Charter (who was committing the crime) they themselves can't be touched.

I hate to be tedious and introduce facts here, but here is a key quote from the actual ruling. On page 10 it says:

"In all events we conclude respondents' deceptive acts, which were not disclosed to the investing public, are too remote to satisfy the requirement of reliance. It was Charter, not respondents, that misled its auditor and filed fraudulent financial statements; nothing respondents did made it necessary or inevitable for Charter to record the transactions as it did."

Dave... let's start with you last statement first...

>And ultimately, Marlowe, we're talking investments here.<

Yes. And were a hurricane to have blown your investment away or a petite asteroid hit it, well, C'est la vie...

What you suffered was NOT an Act of God. It was an Act of Greed. Were you to be held at gunpoint at a 7-11, shot, wounded and robbed would you tell the judge:

"Well judge, I took a risk stepping out of my house... I should have known better than hanker for a mega-slurpy!"

As to the case... I know what Kennedy said. I know his wording. "Wording" doesn't make it right. "Wording" didn't make the Taney Court right in Dred Scott. "Wording" didn't make Lockner right...

It is simply another brick pulled from the wall...

And the plaintives in the Enron case have already pleaded with the USSC. See the WASHINGTON POST today - ENRON INVESTORS PETITION JUSTICES...

Corporations should NEVER have been given the legal status of personal entity - but if we must continue to accept them as such then they DAMN WELL better abide by the same ethical and legal code I have to...

P. Marlowe

Marly, corporations have had a status equivalent to being a person under common law since the first joint stock companies were formed in the early modern era. Before that religious orders and churches and guilds had the same kind of legal status. This isn't some sudden, new aberration of the law unique to contemporary America.

What you seem not to be getting here is that the bottom line is that Charter was badly managed and unscrupulous. They bear the responsibility for investor losses, and investors also bear some responsibility for the risks they take with their investments.

I'll agree that maybe Scientific Atlanta and Motorola may have some limited liability, but this is NOT a criminal case. It's a civil case. And as the ruling points out there is no precedent and no law governing assigning responsibility or damages in a situation like this. If you're going to find fault, find it with the original court which ruled against the plaintiffs. They could have legislated from the bench and assigned damages, but they didn't for all the reasons I've pointed out. The Supreme Court is not at fault. They're right to say that the answer to this problem is the passage of a law to address it.

Dave

Dave... I understand what you're saying... The PROBLEM is that the Court has simply shrugged.

It "shrugged" in Dred Scott.

It "shrugged" in Plessy v. Ferguson

It "shrugged" Lochner v. New Yortk

It "shrugged" on Federal Trade Commission v. Gratz (which led to it "shrugging" on Federal Trade Commission v. Curtis Publishing later on)

It "shrugged" A LOT at Kurematsu v. United States (the Japanese Internment)

Etc., etc., etc.

This ruling Dave allows the carpetbaggers to go FULL TILT in several directions - NOT THE LEAST is lobbying Congress to shore up the ruling by enshrining certain existing provisions and building on platform STONERIDGE is now offering...

P.Marlowe

Marlowe, the PROBLEM is that you assume that the interests of business are hostile to the interests of the people when the truth is the exact opposite.

Dave

Dave... You and I get along... We work well together... We do well on the webcast... I enjoy our behind-the-scenes joking... So, please understand that I offer this with all the true warmth i feel toward you...




ARE YOU OUT OF YOUR FRIGGIN' MIND?!?!?!?!

BUSINESS "concerned" about "people"?

The MOUNTAIN (damn this boring static FONT SIZE! Just imagine "Mountain" IN Times New Roman 87 font!)... Where the hell was I now...

OH!

THE MOUNTAIN of USSC court cases ALONE showing just the opposite of this would indeed require you to have your own Tenzing Norgay!

Unless of course by "business" you mean senior management desperate for investors and by "people" you mean - follow me closely here... INVESTORS!

Because corporations (and I am talking corporations here, not a mom and pop operation with ten employees) have NEVER liked "people" if by "people" we mean folks that have to WORK for a living...

Business has, at every step in the history of this country done everything it could to keep "people" in near-serfdom.

As FDR stated:

"These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power. Our allegiance to American institutions requires the overthrow of this kind of power. In vain they seek to hide behind the Flag and the Constitution. In their blindness they forget what the Flag and the Constitution stand for. Now, as always, they stand for democracy, not tyranny; for freedom, not subjection; and against a dictatorship by mob rule and the over-privileged alike."

No, no NO Dave... You face a Sahara crossing of facts and history arrayed against you on this one...

Your bro...

Marlowe

Marlowe,

as one that has been penalized for making too much money I have to respectfully disagree with your notion of corporations and rich people not being taxed enough. I am a wage earner but I am not able to claim the same privileges you receive because I am guilty of making too much money. You are given exemptions (perks!) that I am not.

The same is true for corporations. Home owners can get breaks for their property taxes - corporations cannot.

The U.S. is taxing the golden goose right out of this country.

The corporate tax uses a marginal tax rate system as its base, then additional taxes may be levied based on systems such as the corporate Alternative Minimum Tax or an accumulated earnings tax. The marginal rates have shifted over time resulting in the current system with marginal rates that rise with taxable income, then fall, then rise, only to fall again for the bracket with the highest taxable income. In addition to the rates below, depending on tax preference items, a corporation may be subject to alternative minimum tax if their tax under the marginal tax rate system is less than the alternative minimum tax.

Taxable Income ($) Tax Rate Deduction ($)
0 to 50,000 15% 0
50,000 to 75,000 25% 5,000
75,000 to 100,000 34% 11,750
100,000 to 335,000 39% 16,750
335,000 to 10,000,000 34% 0
10,000,000 to 15,000,000 35% 100,000
15,000,000 to 18,333,333 38% 550,000
18,333,333 and up 35% 0


I just gotta know, Marlowe. Do you beieve Motorola paid 1.3 billion in income tax to the Fed in 2006? How about 1.9 billion in 2005? 1 billion in 2004?

I believe they did. Those are real billions of dollars they paid that working stiffs like you and me would have to pay if corporations are convinced to leave these shores.

Maurice...

I realize you probably have been hit severely with taxes. It makes perfect sense... The tax structure, over the past 30 years has been rewritten to the advantage of the top 5% and esp., the top 1%.

The reason I disagree with you (for instance) with regard to Motorola and taxes... You have to realize that WHAT a corporation REPORTS - on the face of things - and what it actually has to do, or does do are two wholly separate things...

FOR EXAMPLE... What the CEO is paid - his or her salary... We think "Well, at least they have to pay the TAX on that salary!"

No, they don't. Almost ALWAYS what happens is this: the CEO's salary is "deferred" by the company. It is put into a separate account by the company, where it gains interest.

So the CEO declines to accept payment until some future date. He pays NO TAX. So now his FULL PAYCHECK is earning interest. The company has invested this money in this other account. Later on, when the CEO does take the pay, the COMPANY WITHHOLDS the income taxes and pays the CEO the balance - usually over a period of YEARS.

Essentially this becomes a GIGANTIC UNLIMITED 401K. And this is a HUGE kick in the ASS for the workers of that company and EVEN the investors...

Money like this CANNOT be deducted on the company's TAX RETURN (is this coming to you now?).

So let's say MR. CEO made $90 million. XYZ Corp gave him $5 million immediately. CEO pays "some" tax on that - (I'll explain what happens there some other time) but THE COMPANY HAS TO PAY TAX ON THE OTHER $85 MILLION!

And this isn't JUST for the CEO - these laws were set up for all making OVER a certain amount per year - so most of XYZ's execs are taking advantage of this. So XYZ ends up this year paying TAX on an additional - let's say - $130 million.

It gets worse... Often companies will agree as part of the compensation package to pay the CEO a certain % on that deferred income. However, (many of these packaged deals state) if it turns out that CEO would have made MORE MONEY via ANOTHER structured deal - the CEO gets paid the higher amount! Worse, FAR worse, most of these comp packages state that even if the company's STOCK PRICE has tumbled - EVEN at the hands OF this CEO, the CEO has to be paid the price-per-share when it was at it's highest...

It goes on and on and on Maurice.

Yes, you are getting screwed. The tax laws have been rewritten and people making less that $350,000 per year are shut out of virtually all of these benefits.

Think of it another way... The way these rules are written can be viewed like this:

Let's say that XYZ company doesn't pay the CEO any interest on the deferred income but rather buys BONDS with it. Still, the company is technically making an interest-free loan to the exec in the amount of TAXES the exec didn't have to pay and that the company DID HAVE TO because of this deferment.

What does this mean? Well, at the corporate tax rate of 35% (which gets sidestepped often but that is ANOTHER story too) this means that for EVERY MILLION DOLLARS DEFERRED it costs the company $1,350,000 - the amount of the deferral AND the income taxes that it has to pay FOR the CEO...

You can see how this would be a HUGE burden on a company. If it's goal was a 20% on capital it really has to come up with a HIGHER % growth doesn't it to comp for all the senior execs taking advantage of these loopholes. So wonderful things happen... Like DOWNSIZING to adjust the books...

I've PERSONALLY seen this happen... Been witness to it from the inside. "Hey, we're gonna need to cut 5% of our workforce to 'make the numbers'!"

Pathetic...

Marlowe

nice Marlow

Maurice - *Those are real billions of dollars they paid that working stiffs like you and me would have to pay if corporations are convinced to leave these shores.*

...I thought that these real billions were already being paid by those working stiffs as an element of the price of goods

so which is it - ?

So, Marlowe:

Why don't we make business pay ALL the taxes?

The government figures out what it needs in the way of tax revenue, then assigns all the responsibility for covering that number to all the companies in the country on a sliding scale.

Then we individuals/workers/consumers wouldn't have to pay any taxes on either our income or our consumption, right?

Cool!!

Maurice...

Go to the NEW YORK TIMES, 06/07/07 BUSINESS SECTION. Look for this story:

I.R.S. MOVES TO CLOSE TAX SHELTER SHORTLY AFTER I.B.M. USES IT TO SAVE $1.6 BILLION.

Read this... Then realize this is happening everywhere and the IRS itself said that even though they've "closed" this shelter they DON'T have the manpower to enforce it...

Did Motorola actually pay that amount in taxes as you keep insisting? I don't know. But what I am saying is that WHAT YOU ARE "SEEING" ON A PRINTED PAGE and what is ACTUALLY HAPPENING are two ENTIRELY different things.

You naively think these corporations are ACTUALLY being "good corporate citizens" when nothing can be further from the truth!

Read the Business and Tax sections of the NYT or the Washing Post, or the LA Times, etc., etc. Nearly DAILY you are seeing what will make you sick because, my dear Maurice YOU and I are PAYING for this!

Every time Wal-Mart gets a tax incentive "reinvestment" package from a local city/county what is happening is that that $1.25 you plunked down for that pack of gum, with the 6% sales tax is COMPLETELY diverted to Wal-Mart. Yah, your .06 cents doesn't go to pay for the roads in front of your house, the school your kids go to, the library down the street...

INSTEAD it goes to PAY FOR THE BUILDING OF THE WAL-MART...

This happens with virtually ALL "Box stores". The city/county are told they can "make it up with local income taxes".

What's the tax rate on someone making minimum wage in say, Missouri? NOTHING.

You really REALLY need to study the tax structure in this country to realize how savagely we're being raped...

Marlowe...

...'e'

Marlowe is right. It helps if one is privy to the deliberations of the BoD, where you will discover that the BoD spends half their time (at least) dealing with the compensation demands of the top execs in the company. They've streamlined the process a lot in the last 30 years by composing the BoD mostly of those same top execs. Gee, that way they can vote their own compensation packages. It's even better than being a congresscritter!

Where should taxes be collected? It's clear that the economic system is a Closed Loop, money goes round and round, so it's a matter of choice. All tax schemes are money re-direction schemes: you take money where it is perceived that there is already money and where it's easy and re-direct it to where it's needed for societal purposes. And anywhere you draw money out to redirect it you introduce a drag.

Taxing corporations is attractive because they keep books already, they owe transparency to their owners, and they have suitable resources to deal with the government. None of that is true for most individuals.

One can argue that collecting taxes from corporations would be easier and more regular if it were done.

"One can argue that collecting taxes from corporations would be easier and more regular if it were done."

True, Bliffle.

But if we do so, one can also argue that in the end we (Wage earners/interest recipients/income earners/consumers) still pay all the taxes.

#33 Troll it is both - and I think you already know that. Consumers and corporations are paying. My only point was if you kill the golden goose (Motorola) then the hungry beast (government) will demand the money comes from somewhere else. Motorola employs 33k people in the US. The tax MOT pays is equal to ~$33k per person! Talk about synergy. Could those 33 thousand people pay $33 thousand to the Fed without MOT?

#34 Clavos - LOL! Very droll....


#35 P.Marlowe You really REALLY need to study the tax structure in this country to realize how savagely we're being raped...

True words for both of us. I am listed as an HCE by the IRS and am tightly controlled and limited by tax regulations. Ask your tax preparer if rich people pay taxes. You might be surprised.


#37 bliffle All tax schemes are money re-direction schemes: you take money where it is perceived that there is already money and where it's easy and re-direct it to where it's needed for societal purposes. And anywhere you draw money out to redirect it you introduce a drag.


I agree with bliffle but on the other side of the issue again. Especially the part about "...where it is easy". Money is the transferable representation of work. It is never easy. As far as it being used for "..societal purposes.." I invoke Adam Smiths invisible hand.

Maurice! Thanks for the summations there. I think we are closer in agreement than you realize. Yah, you get the stink eye from the IRS... There was a report in the New York Times some time ago about the IRS focusing their attention on people in your category Maurice as opposed to the rich.

Here's another piece that'll poke ya in the eye... Go check out this article from ONE YEAR ago... (01/12/07, "AGENTS SAY FAST AUDITS HURT I.R.S.)

It is all about another new "mechanism" used by the IRS is the "fast-audit". Again, major MAJOR complaints from the IRS field auditors themselves... Why?

Because now this new program forces the IRS auditor to do a "sample audit" of major corporations... Of course these "sample audits" turn up nothing...

Here is the rub... IRS Area Managers receive a BONUS if their field agents FINISH "X" number of audits per month. The BONUS is not based on finding tax CHEATS... Simply in getting through them as fast as possible!

I don't know... Is it ME? Does this WORRY anyone? Managers, pressuring their field agents to close the audit early in order for the manager to get a fatter bonus?!?!?

WTF...

Sorry! That article I mentioned IS also in the NEW YORK TIMES...

(01/12/07, "AGENTS SAY FAST AUDITS HURT I.R.S.)