Corporate taxation

Inthemiddle

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Let's take a given company. We'll call them Biztime.

Biztime makes a certain amount of money every year. Of course they make more or less based on how well they run their business.

Biztime's income creates for them a certain tax liability.

But, Biztime's savvy tax accountants find a variety of tax credits, some of them maybe sounding almost silly on their face. Like a tax credit for a piece of machinery that is essentially a mega sized garbage disposal. Biztime found out about this credit and decided to go ahead and buy one for its employee cafeteria.

Biztime also realizes that they qualify for additional credits and subsidies simply to help them survive as a business. They decide that even though they don't really need them, they'll claim them anyway, because they qualify according to the rules. And it's all about having as much money as you can, right?

Biztime is, overall, a very successful company. They have no problem paying their bills, paying their employees, paying their executives, paying out to their share holders. In fact, they are one of the biggest companies in the country. They file their taxes, and reap the benefits of being attentive to the tax code and to all the various things for which they qualify.

After all this is said and done, I want to know what about this is wrong, or right, and why. What has Biztime done that is unethical, immoral, or whatever other reason that you might think up to insist that they shouldn't have reaped these benefits.
 
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Inthemiddle

Inthemiddle

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Nobody has anything to say, really?
 

Jarhead

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Let's take a given company. We'll call them Biztime.

Biztime makes a certain amount of money every year. Of course they make more or less based on how well they run their business.

Biztime's income creates for them a certain tax liability.

But, Biztime's savvy tax accountants find a variety of tax credits, some of them maybe sounding almost silly on their face. Like a tax credit for a piece of machinery that is essentially a mega sized garbage disposal. Biztime found out about this credit and decided to go ahead and buy one for its employee cafeteria.

Biztime also realizes that they qualify for additional credits and subsidies simply to help them survive as a business. They decide that even though they don't really need them, they'll claim them anyway, because they qualify according to the rules. And it's all about having as much money as you can, right?

Biztime is, overall, a very successful company. They have no problem paying their bills, paying their employees, paying their executives, paying out to their share holders. In fact, they are one of the biggest companies in the country. They file their taxes, and reap the benefits of being attentive to the tax code and to all the various things for which they qualify.

After all this is said and done, I want to know what about this is wrong, or right, and why. What has Biztime done that is unethical, immoral, or whatever other reason that you might think up to insist that they shouldn't have reaped these benefits.
the problem with your scenario is you dont look at the benefits created by the tax creidts..and why the tax credits exist.

Perhaps there was a tax credit on that garbage disposal becuase the makers of the disposal use recycled material to make it.....so the company spent money on it, got the tax credit...but in the end, they still spent more than they saved with the tax credit...and the maker of the unit made money, and their employees are paying income tax, etc.

Or...

Section 42...LIHTC....

Investors would not boild or buy real estate in depressed areas without LIHTC...so when they do it, yes, they save on taxes...but the depressed community has a developer helping their neuighborhood.

Truth is...tax credits are susually for the better....there are usually good reasons for them...although some are nothing but ways for politicians to look good....but I wont go there right now.
 

Wiseacre

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" But, Biztime's savvy tax accountants find a variety of tax credits, some of them maybe sounding almost silly on their face. Like a tax credit for a piece of machinery that is essentially a mega sized garbage disposal. Biztime found out about this credit and decided to go ahead and buy one for its employee cafeteria. "


I have a big problem with any business that gets any kind of tax break, subsidy, credit, or anything else from the gov't. That's how we wound up with the most ridiculous tax code in the world, we simply cannot be favoring any one company or industry over the rest. Far as I'm concerned, if you can't make it on your own without any help from the gov't, then you should be out of business and finding something else to do.
 
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Inthemiddle

Inthemiddle

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the problem with your scenario is you dont look at the benefits created by the tax creidts..and why the tax credits exist.
I don't think you understand my question. I'm trying to get people to explain why they think any of this is wrong. I'm not saying it's wrong, I want to know why other people might think it's wrong, of if people will agree that it's not wrong after all.
 

OohPooPahDoo

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I have a big problem with any business that gets any kind of tax break, subsidy, credit, or anything else from the gov't.
Really? So you oppose the Postal Act of 1792? Please explain how newspapers being able to ship copies of their paper to other newspapers postage free isn't a good idea! George Washington thought it was a good idea, you got a problem with Washington? Because he will [ame="http://www.youtube.com/watch?v=sbRom1Rz8OA"]RIP YOU APART[/ame]
 
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The Rabbi

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Companies are in business to make money. The accountants' job is to minimize their tax liability. Individuals work the same way. Do you think someone who is entitled to a tax credit says "no, I wont take this credit because it would be immoral"? Answer, no.

The issue is that the tax code allows for this kind of nonsense. Some of it is inevitable. Tax should be on profit, which is sales less expense. What is an expense? Lots of room for debate.
 

LoneLaugher

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the problem with your scenario is you dont look at the benefits created by the tax creidts..and why the tax credits exist.
I don't think you understand my question. I'm trying to get people to explain why they think any of this is wrong. I'm not saying it's wrong, I want to know why other people might think it's wrong, of if people will agree that it's not wrong after all.
Don't you just love it when a rabid nutter rushes to present an opposing argument to a thread OP that supports his well established POV.

Inthemiddle........ya have to limit your dopey strawman scenerios to 30 words or less if you want the "right" to catch on to your drift.

And.....seeking a counter-argument from thinking people requires that you present the facts accurately. Nobody here is banging on corporations for taking advantage of intended tax breaks.
 
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Inthemiddle

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Okay, so there's nothing immoral about tax subsidies and corporate welfare? As Rabbi said, nobody entitled to it would say no, right?

What, then, is the rationale to attach moral valuations against individual welfare and entitlements? If a person on welfare uses that money for drugs, why do we insist that they should be left without the welfare because they obviously have the money to pay for food in the first place? I mean, big oil companies obviously have more than enough money to produce their product, pay their employees, and still make a decent profit. Why is it okay to use taxpayer money to support large and wealthy companies so that they don't have to pay as much of their own expenses and have more money left over for indulgences, but it's immoral to use taxpayer money to support low income people so they can have more money left over for indulgences?
 

Katzndogz

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Why is it immoral for Biztime to get a tax credit for buying a megal garbage disposal that performs cheaper, and better, and has the benefit of supporting the start up mega disposal company. Yet it is NOT immoral for a consumer to get a tax credit for converting his home to solar power with panels made in China.
 
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Inthemiddle

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Actually, the reason for the tax credit for the garbage disposal is that it eliminates a large portion of organic waste that goes into the trash, and thus helps to reduce the amount of material that goes into our landfills. The disposal is powerful enough to pulverize most organic material and wash it away as gray water, which can then be safely recycled into potable water, and results in a lesser overall carbon footprint.
 

GeorgiaBoy

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Personally I think corporations should not be taxed. Keeps jobs within our borders. Allows corporations to hire more employees. Besides corporations only subsidize what they are taxed with higher product prices and lower employee compensation. Take away the taxes and you will lower prices and improve the economic outlook and boost employment. ANDDD the most important thing we need, keep jobs in the U. S. of A
 

pgm

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I can think of a number of good reasons for getting rid of taxes on corporations. I'm just not sure it's fair to give all the breaks to corporations when small businesses tend to pay income taxes, not corporate taxes and they create the majority of jobs.

We'd also need to find a way to make up for the lost revenue, in my opinion. Part of that could be taxing Capital Gains as income, but I'm not sure that would be enough.
 

WatertheTree

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Personally I think corporations should not be taxed. Keeps jobs within our borders. Allows corporations to hire more employees. Besides corporations only subsidize what they are taxed with higher product prices and lower employee compensation. Take away the taxes and you will lower prices and improve the economic outlook and boost employment. ANDDD the most important thing we need, keep jobs in the U. S. of A
I agree with you, much to mine own reluctance. My opinion is formed based on my other opinion that a corporation should not have the rights of a human being. They go hand in hand, if a corporation is denied the right to contribute in the voting process and there ability to lobby is limited, then they should pay no taxes.

In return though owners will be subject to the same tax code as workers. All income will fall into the same catagory, be it capital gains or otherwise. No loopholes at all, no deductions for any reason, for anyone. And owners should be made financially responsable for actions of the corporation.
 

GeorgiaBoy

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I can think of a number of good reasons for getting rid of taxes on corporations. I'm just not sure it's fair to give all the breaks to corporations when small businesses tend to pay income taxes, not corporate taxes and they create the majority of jobs.

We'd also need to find a way to make up for the lost revenue, in my opinion. Part of that could be taxing Capital Gains as income, but I'm not sure that would be enough.
Well in my opinion we need to cut A LOT of federal expenses anyway. I know there is no way to cut enough to make up for the loss of corporate tax. I operate under the belief that states should hold MOST of the power over what their citizens need. IMO federal government should exist to protect us from foreign threats, be a court system, and other NATIONAL affairs. States should have control over everything else. If you don't like your state. Move. Then states will have to give the citizens the best product they can in order to keep them from moving and further lowering their revenue. Turn the government over to a free market type of model where they will be put to the fire and if they can't do their job they will fail.
 

Katzndogz

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Personally I think corporations should not be taxed. Keeps jobs within our borders. Allows corporations to hire more employees. Besides corporations only subsidize what they are taxed with higher product prices and lower employee compensation. Take away the taxes and you will lower prices and improve the economic outlook and boost employment. ANDDD the most important thing we need, keep jobs in the U. S. of A
I agree with you, much to mine own reluctance. My opinion is formed based on my other opinion that a corporation should not have the rights of a human being. They go hand in hand, if a corporation is denied the right to contribute in the voting process and there ability to lobby is limited, then they should pay no taxes.

In return though owners will be subject to the same tax code as workers. All income will fall into the same catagory, be it capital gains or otherwise. No loopholes at all, no deductions for any reason, for anyone. And owners should be made financially responsable for actions of the corporation.
You just need to know more about how corporations are taxed. I couldn't begin to instruct you on everything you don't know. It would take a very long time and waste a lot of bandwidth. You really do need to read up on it.
 

pgm

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Well in my opinion we need to cut A LOT of federal expenses anyway.
Well, of course we do. And we have been doing it. But it's difficult to do and gets more and more painful. You also have to be sure that cutting expenses doesn't hurt growth.

We have to cut spending, but a bigger problem is revenue. The solution to that is not increasing taxes, but to increase growth. Tax revenue is one of the lowest its been in terms of a percentage of GDP since the '60s, but that really doesn't explain how depressed revenues are right now.

Anyway, we have a fundamental disagreement in philosophy, so I won't push the point too much.
 

Katzndogz

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Tax revenue is down because there is less money in circulation. Every time a dollar is spent it is taxed. People are hanging onto money right now afraid of what will happen in the future. Whether it's a company that won't hire or a homeowner that won't make a repair. Everyone is waiting to see how bad it will get.
 

GeorgiaBoy

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I think we need to cut back as many taxes as possible in the country right now. Let corporations and citizens breath for a year or two. Let the economy thrive with a marketplace that is not throttled by regulations and taxes. Let us grow. Then we can see where this country is and see what needs to be done. You cannot get out of Debt by spending more money. However you can get out by MAKING more money. And to do this the government needs to turn us all loose.
 

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