I'm a Corporation - Tax me. Go ahead try... (Full Version)

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Mercnbeth -> I'm a Corporation - Tax me. Go ahead try... (4/28/2008 10:39:51 AM)

Recent posts regarding Corporate Profits and the 'final solution' being proposed by certain candidates to solve the economic issues facing the US today by taking up banner cry of 'Tax Corporate Profits'; lack a key ingredient - how? Better yet, how do you tax Corporations without the tax ultimately being paid by the consumer of the product/service?

Is it naiveté, didn't think it through, or plan old stupidity; that leads people to believe that getting behind a 'Tax the Corporations' candidate? That policy insures everyone will pay more for services and products while simultaneously reducing the jobs market and disincentives capital investment in new businesses and industry.

First, consider that the USA is #1 in something - the Corporate Tax Rate. At 35% that is incentive number one for setting up business off shore. India has a sliding scale which can get to 40% but the average rate is 30%. (Link to table: http://www.worldwide-tax.com/index.asp#partthree ) I'd think that contingency plans have already been drawn up to relocate many operations off shore if that rate goes much higher. How difficult would it be for GM to move a Saturn off to say Mexico (29%) or Canada (19.5%). As a bonus they'd also benefit from having the burden of health insurance removed from them under the Canada's 'great' socialized medicine program. Currently $3,500 of every car you buy from GM goes for paying employee benefits for workers and retirees. You could look at it that cars would be cheaper, but then again, who in the US would be able to afford them?

Take this into consideration when complaining about CEO compensation, you have a better shot of getting tax money from an individual. Individuals exist and can go to prison, (see Wesley Snipes) for not paying taxes. Corporations, don't exist; and can appear and disappear with the flick of an accounts pencil. (see Enron)

When putting together a Corporate business plan the number you shoot for it IBIT. The smaller the corporation the closer to zero you want that IBIT number. It's a economic exercise that you work from both ends of the equation. You need income and gross receipts at the start and before you get to your IBIT; you work on the expenses. Employees are the number one expense. Salary is one one factor regarding that calculation; insurance and the employer's portion of Federal tax and SS are bigger consideration. The reference to insurance wasn't to imply that all business pay employee's health coverage, although some do, the other employee insurance factor is the high cost of 'workers compensation' insurance; required by most States.

With an ongoing source of gross revenue the Corporations can really have some 'fun' before getting to the IBIT. Those corporate picnics, or employee incentive programs - 100% write off. Oh, and if the CEO/President need to check out the facility for a week or two ahead of time - 100% write off. You do have to talk about business for a few hours every day - what better way to insure a 3 hour exclusive 'ear' of a potential client than on the golf course. A huge portion of the country club membership given to executives still can be written off. Every year, one of my neighbors has a Halloween party for his 'staff' and business associates. Last year he claims to have spent $300k - It was a blast! That's $300k that never got to his companies IBIT. Wonder if the landscaping, painting, renovating needed for the party were included in that number? Next door, the CEO of a company holds a business meeting at his home every quarter to reduce his companies IBIT and insure his house is upgraded with state of the art electronic equipment. You need those 60" plasma TV's to see remote sites and make presentations easier to see. Hey - you may as well use them to see the Superbowl. Better yet, invite a few clients over and write off that party too.

Get the idea? Of course this doesn't work if the company is loosing money, but even then a Corporate loss isn't always a loss and in the zero sum game of economics, can be tracked back to an individual gain. 

There comes a time when more salary isn't important. I doubt that Mattel's CEO needed or wanted that cash - but they ran out of IBID spending opportunities. You think he cares about the rising price of gas? Think any CEO, President, high ranking officer, or owner of any viable  corporation knows it? Most likely they don't and neither do their families, because they pay their gas with a corporate credit card. Sure, public corporations have some over site by the Board of Directors and shareholders, but the Boards are made up of other CEO's; and the shareholders don't give a damn as long as the stock price rises and dividends are paid. It's not quite like the old days, when a man in one industry bought a 70 foot yacht and wrote off 100% of it and its costs. When audited by the IRS his claim was that everyone who came on-board was a potential client. His business - a chain of funeral parlors.

I'm sure this will draw out those who's strong arguments and points require labeling and name calling. It would be interesting to see someone come up with a pragmatic simple approach and  tactic thought through to an expected result. In other words, without rhetoric, - a plan, an effect, and a consequence spelled out generating the desired result. I assume the goal is for higher taxes on Corporations and high income individuals; while lowering the tax on low to middle income individuals and perhaps raising the minimum wage. Make sure you define high, low, middle income.

So go ahead, since none of the candidates have spelled out exactly how they plan on taxing the Corporations while inhibiting them from taking their operation off shore; you give it a try. Do you believe the high rollers will just stick around and pay more? You think the CEO's and executives care whether their estates in in the hills of California or the hills of Tuscany? The view is very similar and breathtaking in both instances. 




OrionTheWolf -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 10:45:11 AM)

Before I tax you I am going to price fix you, and place regulations on how you hire and fire. I have heard some socialist say that the government should run the business, and the owners alotted resonable compensation for running the company.

Many do not understand that increasing the cost of a business, just causes prices to go up. Control the damn spending first, then look to gain further funds.




LadyHibiscus -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 12:19:15 PM)

Here in lovely Michigan we had this thing called the Single Business Tax.  It was started back in the 70's when many companies were running in the red, and did charming things like add back compensation and depreciation to come up with a positive number that could be taxed.  It's been replaced by a NEW tax, which is astoundingly more complex and will increase tax bills (for those who are subject to it) by orders of magnitude.  woohooo!  Way to keep businesses in Michigan, eh?

When setting up smaller corporations and doing their books, we PLAN so that profits---and thereby taxes---are lower.  Money gets funneled back into the business, into bonuses, into new equipment purchases, WHATEVER so that if there is free money floating around it's being put to use, not just given away in taxes.  The folks working for the BIG corporations have mad money hiding skillz that I can only dream of, I am sure! 




pahunkboy -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 1:03:11 PM)

US corporations enjoy the luxury of the military.  That service does not come free.  It must be paid for.

If  India can do them better- go for it.




pahunkboy -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 1:34:10 PM)

If federal Corp tax goes down, state/local tax will go up.

quite simply one can not enjoy services w/o some cost occuring.   corporation assets are protected by the courts and the military.  Thats where globalization falls short.  One can not insure assets in civil-unrest-villes,of the globe.  [as try as they might]

It reaks of a race to the bottom.

Why isnt there a stock transfer tax?

Real estate,most goods, cars,campers, jet skis, boats, trucks, the computer, the electric to it, the DSL- all required a transfer payment.   Somehow stocks dont. buy a 100,000.00 home,  2,000.00 transfer tax.  by 100,000.00 walmart stock, not a penny to put it in your name.




Termyn8or -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 1:43:05 PM)

You are schmardt man. But what you describe is the fact that there is no solution as long as business is done the way it is.

While most people think of the word taxation to mean percentages, tolls and fees extracted by the government, the root of the word does not mean that specifically. When a corporation becomes top heavy, what that means is that it is beling taxed by the people who run it, as well as the shareholders and the government.

It all adds up. Merc, you give a figure of $3500 per car. I will simply stipulate to that because it seems reasonable. It is probably verifiable somewhere, but I don't think that's necessary to make the point. If that is the figure though, how much of it is going to the workers who get two or three grand a month and how much is going to ex execs getting possibly 100 times that amount ?

But this is the tip of the iceberg, you could buy a Ford. (that comes in later) Let's get into this supposed public service sector. I have heard of quite a few city school directors who when fired, get extravagent severence packages, referred to as the "golden parachute". This is rewarding failure plain and simple. So just who was the brainiac who thought that up ?

Like Mattel, they have all kinds of problems about the lead based paint, the company surely sufferred, yet the CEO, the Man in charge gets a huge raise.

Lee Iacocca was heralded as the one who saved Chrysler, but he did it with huge government loans. He had worked for Ford y'know, and was fired. Why ?

Realistically the only way to really get out of this situation with the outsourcing offshore is to impose tariffs. There are so many laws regulating corporations now it is ridiculous, and as we all should know, anything the corporation pays, we pay. But when it is in the form of a tariff, it shifts the playing field a bit.

What we need is some serious tort reform. Make companies responsible, and actually put CEOs in jail if the products turn out to be harmful. They are supposed to educated and smart to make that money, so consider a mistake a tort. Watch them be a bit more careful.  Put a tariff on almost anything coming into this country, that would make it less attractive to outsource overseas.

A decade or two ago the US based firm Zenith started letting Goldstar build their VCRs. In a cost cutting campaign in about 1979 they maintained prices pretty well on their TVs. But with new designs, specifically formulated to cut costs, their profits jumped by 400%.

I will tell you that the quality of their product did drop, but it still wasn't bad compared to the competitors' products. They stayed competitive and did well, but now they are owned by Goldstar, which has changed it's name. Apparently building VCRs and sticking someone else's name on them was quite lucrative.

Times being what they are, they kinda stopped saying things like "Keep your GM car all GM", and for good reason. For many a year that would have meant "Keep your GM radio all Hughes Aircraft, keep your cassette deck all Blaupunkt, keep your AC all Frigidaire and keep your changing/starting system all Bosch". I am talking the 1980s here. Who knows now. Most likely the lowest bidder. I could go on "Keep the convergernce circuit in your Sony bigscreen all Pioneer, keep the video processor in your Toshiba all Sony".

There was a time when you could expect a product to be made of parts that all came from the same company. When you got a Ford the radio said Philco, when you got a Chevy the radio said Delco. Those days are over.

Economic forces, both natural and unnatural have driven this trend. The market has changed drastically and there is very little if any brand loyalty anymore, but what did you expect ? Things have developed this way and I think it happened a bit too fast. Even as dumbed down as the public is, there are a few things they notice.

It's all about cost. Every dollar you don't spend is a dollar in your pocket. People are, or were largely unaware when they started putting Chevy engines in Oldsmobiles and Olds engines in Cadillacs. Thing is, did it really matter ? I had an Olds with a Chevy engine and I'll tell you it was fast. I mean on the rare occasions I let someone else drive I told them "DO NOT PUNCH THIS CAR" and for good reason. But it didn't sound or feel like and Olds.

Did I care ?

Corporations have been changing for a long time. The directrion is usually set by market forces. I remember the differences between Olds, Chevy, Buick and Cadillac engines, but do I really care ? Well that's what they thought and somehow they came to that conclusion. But if I had bought the car brand new, what now ? Back then there were people who actually tried to return cars for a refund because of this. I wonder what year would be considered official, that you can't even expect the right engine to be in a car.

They did what they did, and everything they do is to make money. Somehow things got how they are because of those natural as well as unnatural forces.

So I guess it boils down to this :

We will buy anything
They will sell anything

So where do we go from here ?

T




pahunkboy -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 2:11:35 PM)

oddly enough as much as I bash globalization, I enjoy some of it. Many items that dont have to last a lifetime I have consumed. 

On GM engines: I had forgotten that; there was a guy who sued over that when it fist happened.  So now with the feds ordering the re-fueling aircraft to be headed in Europe- my response is a glossy eyed -dazed "so what?" [what else is new]  Outsourcing after all is the holy grail of trade.  The holy grail of capitalism..

Using a fast food item for an example.  When it first comes out- the price is cheap, the portion generous. The consumer likes it and buying it becomes a habit. Meanwhile- you are condidtioned to buy it and humans dont like change; so portions shrink, quality fades.

I popped into an appliance store the other day. I seen all these good prices $149.00 and such, bold signs on every unit.  Looking closer that is the price for the extended warrantee!!  Does anyone recall the "fitness of merchantabilty"  rule?? why should one pay twice?


I do see more people getting abit more rational about expenses.

Last year- when I  bought my house I needed to furnish it. A friend in LA said to go to the mall and get new stuff. meanwhile she put a 3rd mortgage on her condo for funiture.  [the condo her grandfather willed to her paid in FULL]  I got a bunch of fruniture from a thrift store that delievers.  @ $600.00.   I have no 3rd mortgage, no 2nd, and if i was a better consumer I will pay down serverly the 1st!


But back to Term8s Q;   where do we go from here?

1. simplify finances
2. keep various denominations of cash.
3. use up gift cards, coupons that sort of thing. it will be worthless before long.
4. stiock up a bit on food, toilet paper- household supplies.
5. cut expenses.  if you think hard- you will find something to cut.
6. organize your bric-a-brack.  when you know what you have you know how to organize your life/
7. shelving- add it- it is your freind.
8. instead of buying name brand beer, drop in at Term8s, and tell him you are very thirsty.  [ladies-wear  flatterring attire]
9. move in with Term8.
10.  go shopping with Term8.


hehe. seriously tho. Term8 has alot of wisdom.  The post on job skills, well that was pessimistic.

Here is how to measure skills; who would you want to be stuck with in a month long disaster like a blizzard?

certainly not someone totally dependent.






Mercnbeth -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 2:48:05 PM)

T,
I looked up the $3,500 figure I quoted, but I'm on a different computer now and don't remember my exact search parameter. My father is retired GM worker and if he and my mother are any indication, the number is low! The source quoted it as a per employee, retired or active, and did not split it out for 'executives'. Trying to duplicate the effort only found a 2006 reference to $1500 per auto.
quote:


GM spends about $1,500 per car on employee health benefits. Toyota spends about $300. GM has about 400,000 retirees and Toyota has about 1,000 in North America.
http://www.chron.com/disp/story.mpl/business/steffy/3616040.html 
Until I can find the original, I'll call myself wrong on the original $3,500 number. I'd rather have a verifiable source. I don't know if they are using the same definition of "benefits". However this number still provides an example of the disparity of competition with the comparison with Toyota.

I appreciate everything you've said. It's only fair, since you stipulated to me - I'll stipulate back to you!

I was hoping by now that someone would have taken up the challenge about taxing the Corporations or the "wealthy" without having an impact on the "working, everyday man"; but so far, much to my disappointment, there is only resignation. Maybe it serves a purpose for those already locked into a candidate to begin to ask the same question of their candidate. "TAX THE CORPORATIONS!" may be a campaign cry, but it is NOT a business plan for government. Coming from a group of three with deep commitments to their PAC campaign fund providers I doubt there is any substance behind their words. The hope nobody asks that question - How?

So where do we go from here ?

I have some things  in mind. I don't believe it would be difficult to accomplish and would have a dramatic impact on Corporations, especially multi-nationals, as well as a positive impact on the US labor force. In two words - Tariff Reciprocity.

Eliminate all existing tariff laws and replace them with reciprocity tariffs. Currently the US has some of the lowest import tariffs than any other country. Conversely it is subject to some of the highest export taxes with some of their trading partners. Most notable among these is Japan. Level the playing field and it may be more economical to manufacture goods with US workers versus outsourcing to places outside the US and importing them.

At one time, ALL government income came from tariffs. It is an idea to explore again. It is one of the few methods to impact a Corporation.

Another idea, if willing to bear the 'pain' of putting 2,000,000 lawyers and accountants instantly out of work, not to mention the IRS - eliminate the income tax and replace it with a national consumption tax on all produces except food. Adjust the percentage so that every individual making $30k or less, and every family making $50k or less annually can file for 100% reimbursement. You can use 100,000 of those ex-IRS employees to handle the paperwork.

The other 1,900,000 can be used to enforce and collect the consumption tax.

Legalize drugs, and place a 50% consumption tax on their sale. Take 50% of the tax proceeds of this program to establish free rehabilitation clinics. I'd call it a self funded addiction program.

National Health care - under a program similar to the voluntary military. It is the basic level care, provided for by people who sign up as government paid doctors, nurses, and other health care workers. Salary is paid based upon the average salary for each category of worker. This does not replace the existing insurance company plans, it would be in place only for those who do not have health care paid for by their employers. Corporations can 'opt into' the plan by paying a pro rata share of the average annual cost of coverage.

There are any number of other, 'outside the box' thoughts. We'll never get them when our candidates are boxed in by their Corporate campaign contributors.




Hippiekinkster -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 2:48:21 PM)

It's EBIT, not IBIT. Most use EBITDA to include depreciation and amortization, which are non-cash events the Tax Code allows corporations to deduct on the Income Statement, one of the four primary accounting statements.

If I thought you knew what you were talking about I might try and figure out what the fuck you are talking about.




Mercnbeth -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 2:53:49 PM)

quote:

I'm sure this will draw out those who's strong arguments and points require labeling and name calling.


For example...

quote:

ORIGINAL: Hippiekinkster

It's EBIT, not IBIT. Most use EBITDA to include depreciation and amortization, which are non-cash events the Tax Code allows corporations to deduct on the Income Statement, one of the four primary accounting statements.

If I thought you knew what you were talking about I might try and figure out what the fuck you are talking about.

"Better to be silent and thought a fool than to open your mouth and remove all doubt".





IBIT-
Income Before Interest and Taxes Source: http://acronyms.thefreedictionary.com/IBIT




NorthernGent -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 3:09:10 PM)

Is this Earning Before Interest and Tax you're talking of? Otherwise known as Operating Profit.

Employees are the number one expense? It will depend on the nature of your business.

You aim for the lowest EBIT in your corporate business plan? I wouldn't recommend it in the event you have a potential partner or such who wants to see a return on his investment. Plus, the idea of a business plan is to act as an incentive for you to maximise your performance; setting the Operating Profit at zero, as you suggest, will completely defeat the object.

The write-offs are interesting. Tax Auditors are generally shit hot over here; they'd have no problems pulling apart that which you describe - and rightly so.




NorthernGent -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 3:15:57 PM)

quote:

ORIGINAL: Mercnbeth

When putting together a Corporate business plan the number you shoot for it IBIT. The smaller the corporation the closer to zero you want that IBIT number. It's a economic exercise that you work from both ends of the equation. You need income and gross receipts at the start and before you get to your IBIT; you work on the expenses.



quote:

ORIGINAL: Mercnbeth

IBIT-
Income Before Interest and Taxes Source: http://acronyms.thefreedictionary.com/IBIT

  

Review the emboldened section of your first quote.

Quite clearly, you were talking of expenses and income, which makes the correct accounting term: Earnings Before Income and Tax (or Operating Profit).

Edited to add: well, almost Operating Profit........give or take a few small fees for auditors and the like...




pahunkboy -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 5:21:53 PM)

tarriff matching- how would that work?  if we sell apples, and they sell oranges, how can that be matched?


oh on lawyers, that is one field that wont be replaced by automation, unlikely to be outsourced.   each change in law demands even more attorneys.   lawyers do better when people fight it out- so peace and harmony is not a profit.




Mercnbeth -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 6:15:24 PM)

Defining pre-tax profits. Discussions of IBID.  As enlightening to the subject as it is tangential. Maybe pulled directly from the Presidential campaign platforms. Much better than having to explain how taxing the corporations would work, or explaining how a tax on an entity won't be ultimately paid by those applauding the false concept.

Is there no way to fulfill the campaign promise to "tax the corporations"? 

quote:

ORIGINAL: pahunkboy

tariff matching- how would that work?  if we sell apples, and they sell oranges, how can that be matched?


If it is a tariff on food you set a similar import tariff on any food; apples, oranges, green beans or soy. Should a country have different tariffs on different goods; sort them collectively and do the same on imports. However a group of commodities or products, like electrical appliances, is tariffed imported from the US will be what is charged when imported to the US.

You are correct about the lawyer factor. Most likely they would prohibit any progress from occurring.




Termyn8or -> RE: I'm a Corporation - Tax me. Go ahead try... (4/28/2008 6:43:32 PM)

The time for reciprocally fair tariffs was about twenty years ago or so.

Back then the trade imbalance was not so bad, and we weren't under the thumb of China and others. People don't seem to realize that the trade deficit is real and the money to pay must come from somewhere. These days most of it comes from credit, which basically means it is created out of nothing.

But it is not created out of nothing after all, it is a mortgage in a way, and we have been getting away with paying interest on it and that's it. The principle always grows. Otherwise we would have very few plasma TVs and new cars. A few other things as well.

And planned obsolescence it at an all time high. Chinese products, if there are any replacable parts they are not available. Everything is made to break, and break it does. This applies to everything from toasters to Toyotas. Crumple zones for your safety, now about non crumple zones. Instead of a total loss it's a fender bender buy the idiot who ran into someone else's car got smacked nice and hard by the steering column.

I for one know this much, if I am traveling in a metal box at 60-70 MPH I'd like for it to be a sturdy one. But I see where they are coming from. He who wrecks and walks away lives to buy a car another day.

It is pervasive in all the junk we buy. There were days back when you would actually take a toaster in for repair. Now if you have a two thousand dollar TV and it breaks, in alot of cases you might as well throw it in the garbage and save the estimate charge. That money has to come from somewhere.

Most of us have lived all our lives during the time they simply rabidly print money. So people don't really see the real problem. The wealth to pay the debt is never created. In fact we have lost alot of ground in creating wealth, a big part of our manufacturing base is gone, and a service oriented society simply does not work. Even that is being outsourced anyway.

People do not see how detrimental this is. If one stands back and looks at the big picture, we are so screwed that it takes the light from screwed 12 minutes to reach us. It only take 9 minutes from the sun.

It is so bad that even I, with my extremely radical views and ideas, can't think of anything that would fix this. No action of which I can concieve would do it. This includes an armed revolution. Even if successful we will be cut off from the rest of the world, dying here with outdated and/or disassembled factories, played out land and so many incompetent people running around it is not funny. The dollar will be useless outside our borders and if it really was a revolt we can kiss Hawall and Alaska goodbye.

I have given alot of thought to the tumultuous times in store for us. It is very plain that they are inevitable. It is only a matter of time. And they must come, because the way we are going we are wasting every natural resouce we can get our grubby little fingers on, at alarming levels.

Businessmen will do everything in their power to make the most money. How that works exactly is defined by government. Businesses enjoy the protection of their property, as well as their intellectual property. The situation would be workable if the companies had not gotten so big as to be able to effect major influences on those who are supposed to govern them. On a smaller scale, if I pay off a judge and get a traffic ticket thrown out, did I do the right thing ?

Corruption cannot be discluded. I remember going to a meet with a buddy looking at some property. The building was owned by someone very well connected. I strongly advised against the purchase for two reasons. Because of the guy's connections they were not bothering him about some serious structural issues. They had a basement wall caved in over a foot, and it had alreadt seen a poor attempt at bracing, all of which was broken.

That was bad enough, but when we showed up we met the guy across the street at an apartment building, actually right next to it. I saw people out on a front stoop. I decided to talk to the guy, this was before the owner of the property arrived. It was quite interesting.

This guy bought this about twelve plex from the same seller, who built it himself, or directed the erection. It was probably up to the same standard as the other building with the basement falling in.

What tyhis guy told me was that he bought the apartments to rent out but he couldn't because the zoning had been changed to single family. So he and his family lived in the whole place.

The seller was the one who did it he said, he had the zoning changed and built the complex, and then had the zoning changed again, hoping to get the property back after a foreclosure. And he said something to the effect "And this is not the first time".

The seller was no doubt a millionaire. He tried to tell us that the problem in the basement could be fixed easily. Even then I was not so easily fooled.

Thing is, millionaire or not, he was small potatoes. But this should illustrate what political influence can do. Now step this up to the big boys. If a small time operator can do this, what do you think is going on behind closed doors ?

This was North Royalton, Ohio. This is one of the most corrupt governments in this country. I could tell you about what kind of other things they do there, but it is all based on bribery. You will never see a bunch of money grubbing MFs like this. It is so bad there, and property taxes are so high that property values dropped years ago, even in the buyer's market of the past. Bet they're having plenty of problem these days. I knew people who lived there who could not give away their houses, and that was in a buyer's market.

So here we are now with a similar situation on a national scale.

The government is bought off. They say a new drug requires years of testing, but that is the past. There have been so many class action lawsuits now that they are working to "reform" tort law so their actions do not bite them in the ass too hard. I suspect most of them spend half of their time covering up misdeeds rather than doing anything productive.

It is a sad state of affairs.

"Give me the power over a country's money and I care not who makes the laws". You know who said that, and I am leaving it at that. If you don't know who said that it is easy to find out.

Bankers caused the redistribution of wealth, to their advantage of course and now wield enough power to operate outside the law, in case they didn't get around to having it changed.

With the wealth in the hands of the "proper" people, they enjoy a position of power perhaps greater than the President of this, and some other countries.

There is more, like why aren't our politicians even the slightest bit concerned about us ? You would think they would want to take care of their cash cow, their golden goose, so to speak.

T




Mercnbeth -> RE: I'm a Corporation - Tax me. Go ahead try... (4/29/2008 6:29:57 AM)

Looks like some big bonuses for the oil companies this year. One quarter, 90 days of income - $7.8 Billion for Shell. No way to tax it. $4 - $5 / gallon at the pump.
quote:

BP's pre-tax profits rose 48 per cent in the first quarter to $6.6 billion (£3.3 billion) while Shell increased its profits 12 per cent to a record $7.8 billion (£3.9 billion). Source: http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3837029.ece  


Tax the Corporations!

How?




Hippiekinkster -> RE: I'm a Corporation - Tax me. Go ahead try... (4/29/2008 8:32:30 AM)

quote:

ORIGINAL: Mercnbeth

quote:

I'm sure this will draw out those who's strong arguments and points require labeling and name calling.


For example...

quote:

ORIGINAL: Hippiekinkster

It's EBIT, not IBIT. Most use EBITDA to include depreciation and amortization, which are non-cash events the Tax Code allows corporations to deduct on the Income Statement, one of the four primary accounting statements.

If I thought you knew what you were talking about I might try and figure out what the fuck you are talking about.

"Better to be silent and thought a fool than to open your mouth and remove all doubt".





IBIT-
Income Before Interest and Taxes Source: http://acronyms.thefreedictionary.com/IBIT
My Managerial Accounting book calls that Income Statement line "Income before Taxes, Interest, Depreciation, and Amortization."  My Financial Analysis book calls it "EBIT" so, what the fuck, I'll give you this one.  Es tut mir Leid.




Hippiekinkster -> RE: I'm a Corporation - Tax me. Go ahead try... (4/29/2008 8:47:36 AM)

Now, I am in general in favor of eliminating corporate personhood. That is, there would no longer be the fiction that a corporation is an individual entity. I haven't completely thought it through, but I don't see any compelling reason to keep the corporation as a legal organizational business entity.

This link http://www.radicalmiddle.com/x_enron.htm doesn't discuss that concept, but there are some interesting ideas here.





Hippiekinkster -> RE: I'm a Corporation - Tax me. Go ahead try... (4/29/2008 9:08:52 AM)

quote:

ORIGINAL: NorthernGent

Is this Earning Before Interest and Tax you're talking of? Otherwise known as Operating Profit.

Employees are the number one expense? It will depend on the nature of your business.

You aim for the lowest EBIT in your corporate business plan? I wouldn't recommend it in the event you have a potential partner or such who wants to see a return on his investment. Plus, the idea of a business plan is to act as an incentive for you to maximise your performance; setting the Operating Profit at zero, as you suggest, will completely defeat the object.

The write-offs are interesting. Tax Auditors are generally shit hot over here; they'd have no problems pulling apart that which you describe - and rightly so.
Yeah, I personally wouldn't set up another corporation with the intent of breaking even.
  I regard business plans as, more or less, marketing tools used to convince investors to give me money.  Pro Formas usually are about as meaningful as "Mission Statements" or "Code of Ethics". And that's what a business plan is, after all the glowing imagery and feel-good bs is stripped away; just a bunch of spreadsheets illustrating the aspirations of the author(s).

Do y'all have Forensic Accountants over there? That's something that interests me. In one of my Hospitality Accounting classes, we had to put together and balance all the theoretical expenses, revenues, etc. of an imaginary hotel and come up with  the Income Statements, Balance Sheets, & Statements of Cash Flows, by month for an entire year's operations. They'd been using this particular exercise for several years, and no one ever figured out that it was off by a penny. Until me. [8D] Fuck-a-doodle-doo, that and 2 quid will buy me  a cup of coffee, eh wot?
Anyways, it's always been interesting to me just what kinds of corporate crimes can be hidden in the footnotes.




Mercnbeth -> RE: I'm a Corporation - Tax me. Go ahead try... (4/29/2008 10:26:54 AM)

quote:

ORIGINAL: NorthernGent
The write-offs are interesting. Tax Auditors are generally shit hot over here; they'd have no problems pulling apart that which you describe - and rightly so.


Really? How? 

There are tax regulations spelling it out that any businessperson uses for a guide. There are specifics telling you exactly how many days you must stay on your yacht for it to qualify as a 2nd home and therefore be able to deduct 100% of the interest paid. The Tax Code spells out how many hours a day you have to talk business to write off 100% of a Corporate run convention. How much of your home, by percentage, must be used to write it off as a business office. How many business meetings you have at your home to qualify it, or a portion of it, as a business deduction. Some deductions are corporate, some business. You can even charge your business for renting your home for business meetings and pay yourself. All it requires is maintaining records, and the more you make, the more you don't want or need fraud. There is more than enough legal opportunity to reduce paying tax. You only need fraud when you fail and then you should be prosecuted, if for no other reason than greed and stupidity.

The goal isn't to pay none, its to pay as little as possible.  

You are consistent in one thing - the lack of details and the reliance on someone else, in this case the 'tax auditors' to try and digress from the point. 

Apparently you can't think of one way to tax a corporation without the result being a increased cost on the end consumer of the Corporations products or services.
quote:

 ORIGINAL: Hippiekinkster
My Managerial Accounting book calls that Income Statement line "Income before Taxes, Interest, Depreciation, and Amortization."  My Financial Analysis book calls it "EBIT" so, what the fuck, I'll give you this one.  Es tut mir Leid.
Kein Problem! Apprciate Sie so sagend.

HK, Verzeihen Sie bitte meinem rostigen Deutschen

I took the reference from memory and had to look it up to make sure. I wasn't sure if it was senility or an no longer utilized term, until I looked it up. I drive my accountant crazy all the time with my archaic references.  

Anyway..."Now, I am in general in favor of eliminating corporate person-hood." Going from Twain to Shakespeare; "a rose by any other name..." comes to mind regarding your position.

Whether the factious entity is a sole proprietorship, LLC, or partnership, or an individual; the function and therefor the result would be the same. How would you tax any of those entities without the impact being felt by the consumer?

"I personally wouldn't set up another corporation with the intent of breaking even." No neither do/would I - but through a Corporate shell you can manipulate purchases, income, and expenses to take advantage of the 'best case scenario' and dramatically reduce your resulting personal tax payment. ALL legal under the current US tax code. Within its 44,000 pages and 5.5 Million words, and 721 forms you can find plenty of write off opportunities; especially when, you have the ability to can use both the Corporate and Personal statutes.

I've used and been under the scrutiny of 'Forensic Accountants'. Fun guys! They are always 100% accurate about yesterday's weather; and with both hands can find their heads - as long as you provide clues. 

But this thread has disappointed me. Where are all those who support the candidates who cry 'Tax the Corporations'? Where are the ideas?

These large, evil, cold, entities are sitting out there and no body can hit them? Shell has made $85,714,285.71 each and every day since January 1, 2008. That's $3,571,428.57 per hour 24/7. No doubt every executive has received a proportionate salary to that number and has visited an exclusive resort/spa or two on the company credit card.  And you can't touch them? Or your proposal is to send in 'forensic accountants' and read financial statement foot notes?

If anything it should give you and anyone else who points to a 'tax the corporations' solution to the economic problems something to think about. At the very least they should not applaud based upon the candidate or concept until they hear the details of how.

Meanwhile enjoy your check from the 28% share of the $100 Billion 'Economic Stimulus Package'. Based upon the accolades its received I'm sure it will spurn on re-electing 90% of the candidates supported by campaign contributions from those who got the remaining 72% share of 'stimulation' - the Corporations. 




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