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As Individual Witholding Taxes Roll Over, It Is Time To Ask Where The Corporate Taxes Are

Tyler Durden's picture




 

Two days ago, the US Treasury announced that for the Q2 fiscal quarter (January - March), the net borrowing need of the US would be $97 billion lower than its previous estimate, coming in at $444 billion for the three months (still a $115 billion monthly run rate, not nearly enough to last until the end of the year with the current debt ceiling capacity, and likely not even through the election). What the Treasury did not specify is where this incremental cash would come from, merely noting that the higher cash balance which it ended December 2011 with compared to estimates "was driven primarily by higher-than-projected receipts and lower outlays" implying that the Treasury was confident higher than expected tax receipts would continue.

There is however one problem with this: as the attached chart from the just released Q1 fiscal report from the Office of Debt Management shows, withheld taxes, the primary source of US government revenues, has just rolled over and is now posting negative Year over Year numbers (chart 1). Which is bad news for Tim Geithner if he hopes that the spike in tax receipts will continue, and for the TBAC which projects a lower than expected funding needs: in fact we are confident that the net issuance in Q2 will be substantially greater than the net forecast, and will likely be funded with short-term Bills, either ad hoc, or in the form of increased program Cash Management Bills issuance. Yet the fact that America can not live within its means is not news. What however, needs addressing is why, as Chart 2 shows, have US corporate taxes never regained their historical levels from 2007, when as is well-known, corporate profits have never been higher (if now rolling over finally), and corporate cash, especially that held off shore, at record levels? Because as the green line shows, the 12 month moving average of corporate income taxes, has barely budged from the recession lows. We wonder why nobody has asked the question: why is this the case and why have neither politicians nor individual taxpayers made an issue out of this yet?

Chart 1 - quarterly tax receipts: Withheld taxes has rolled over for the first time since the recession ended, at least officially.

Chart 2 - comparison of individual income taxes and corporate incomes taxes. Notice the divergence? As for Social Insurance Taxes, forgettaboutit.

 

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Wed, 02/01/2012 - 11:54 | 2116437 redpill
redpill's picture

Go ask that fuckface Immelt.

Wed, 02/01/2012 - 12:41 | 2116647 blindfaith
blindfaith's picture

 

 

and, if you think about...could you ask him how I can get my money back for this piece of total junk GE Profile Refrigerator.

Wed, 02/01/2012 - 12:57 | 2116704 dirtbagger
dirtbagger's picture

Blindfaith -

I'll trade you a styrofoam ice chest for your profile appliance

Wed, 02/01/2012 - 15:27 | 2117377 Michael
Michael's picture

Isn't this what is supposed to happens when the participation rate drops to 1984 levels?

Wed, 02/01/2012 - 22:53 | 2118752 Xkwisetly Paneful
Xkwisetly Paneful's picture

When collecting lint interest on titanic mountains of cash or in essense paying 99% tax on interest income it is not really going to show up in effective tax receipts.

I have been around a while, this is some of the most perverse stuff I have ever witnessed.

They are saying loud and clear we would rather lose to inflation than try to come up with the next mousetrap.

 

Wed, 02/01/2012 - 22:14 | 2118665 HungrySeagull
HungrySeagull's picture

Mine failed within a day. We shipped it back and got a Samsung instead.

Wed, 02/01/2012 - 11:58 | 2116450 Manthong
Manthong's picture

Everythings good.

Go buy some Facebook.

Wed, 02/01/2012 - 22:14 | 2118669 HungrySeagull
HungrySeagull's picture

I got out of Facebook, it is a timesink and probably a money sink now too.

No I've seen this movie before.

Wed, 02/01/2012 - 12:01 | 2116457 LetThemEatRand
LetThemEatRand's picture

I think we can all agree that the problem is that the police and fireman earn too much and expect to be able to retire with benefits.  And that our corporate overlords need to pay less if we expect them to do us the favor of hiring us unworthy serfs.

Wed, 02/01/2012 - 12:05 | 2116485 Caviar Emptor
Caviar Emptor's picture

Yes. Everyone knows that secretaries pay a higher tax rate than their billionaire bosses. It's kinda like frequent flyer miles and credit cards that kick money back. 

Wed, 02/01/2012 - 15:03 | 2117235 Solarman
Solarman's picture

Especially when they make 500K and make more salary than their boss.

Wed, 02/01/2012 - 12:09 | 2116507 Tortfeasor
Tortfeasor's picture

I think we can all agree that police and fireman are paid at the local level, not the federal level, and therefore your trolling post is irrelevant to the issue.

Wed, 02/01/2012 - 13:27 | 2116826 lasvegaspersona
lasvegaspersona's picture

I urge you to recall the Crime Bill of about 1992. Clinton assured the large city (read Democratic) police forces that he would keep their pay level up and allow growth if they just voted D and cracked down on gun owners rights. This was the beginning of the Federalization of everything and the beginning of the end of respect for government. Thanks to his cynacism we now have the America of today....and overpaid police. So shut up citizen, cops are better than you. Here in Las Vegas they can and will kill you if they feel like it. This is not a joke or exageration...check out today's Las Vegas Review Journal ($1.7 mil to a Mr. Cole's family. He was executed by a cop who was given a 40 hour suspension.) Thank you Bill Clinton for teaching us to respect our masters....we were getting too liberated weren't we?

Wed, 02/01/2012 - 16:14 | 2117567 Raging Debate
Raging Debate's picture

Remember that quote in what was it, 1998 from Bill that went "Americans have too much freedom." I heard that again recently out of him. Perhaps he needs some detention time with his police pals to reconsider his views.

Wed, 02/01/2012 - 12:36 | 2116527 blindfaith
blindfaith's picture

 

 

Show me one corporation, tiny or mammoth, and I will show you expensed to death items that a worker can not deduct from his pathetic paycheck.  Add on the "defered" salary executive payments that end up being 'capital gains" and a cut off on SS of 115K , and you have a reciepe for a tax roll over.  What the hell is the surprise here?

Police and fireman...what's wrong with them getting paid 100k to 250K a year?  Shoot, isn't that what we all are making?

Wed, 02/01/2012 - 12:03 | 2116473 prains
prains's picture

Corporately Captured Congress

Wed, 02/01/2012 - 12:04 | 2116482 redpill
redpill's picture

I prefer Corrupt Congressional Cockholes

Wed, 02/01/2012 - 12:10 | 2116517 DaveyJones
DaveyJones's picture

corrupt congresional crackwhores

Wed, 02/01/2012 - 13:31 | 2116843 disabledvet
disabledvet's picture

The money always comes first. Corruption? That's "to be expected." Wall Street already factors it in to their algo's. I believe the technical term is "regulatory arbitrage." it also goes by the new name "losers in loser-ville" cuz "Uncle Salami's all out of 2008's."

Wed, 02/01/2012 - 12:03 | 2116476 Dr. Richard Head
Dr. Richard Head's picture

I am surprised this roll-over hasn't happened sooner.  Back in 2008 I decided it was high time to have 12 deductions.  The IRS taught me how to change the W4 - http://www.irs.gov/individuals/article/0,,id=96196,00.html

If Uncle Sam can borrow from the Treasury, so can I bitchez.

Wed, 02/01/2012 - 12:06 | 2116489 lolmao500
lolmao500's picture

Seems to me they are ``assuming`` a lot of things.

Wed, 02/01/2012 - 12:08 | 2116493 DaveyJones
DaveyJones's picture

unlike our tax, their tax, the unlimited super pac, actually buys them a government. 

Wed, 02/01/2012 - 12:33 | 2116624 redpill
redpill's picture

I'm glad I don't nearly the amount of government I pay for.

Wed, 02/01/2012 - 13:33 | 2116860 disabledvet
disabledvet's picture

Does it buy a good government? Or only "the best that (worthless) money can buy...

Wed, 02/01/2012 - 12:07 | 2116496 scatterbrains
scatterbrains's picture

Would luv to see an overlay chart of  corperate profits vs. corperate taxes paid for extra visual effect

Wed, 02/01/2012 - 12:31 | 2116616 Tyler Durden
Tyler Durden's picture

Good idea. We will put that up shortly

Wed, 02/01/2012 - 12:41 | 2116649 asteroids
asteroids's picture

Compare tax receipts to BLS employment to see how useless the BLS numbers are.

Wed, 02/01/2012 - 13:14 | 2116776 Tyler Durden
Tyler Durden's picture

TrimTabs did that in the earlier post on Friday's NFP number.

Wed, 02/01/2012 - 13:37 | 2116875 disabledvet
disabledvet's picture

I'm sorry...did you just say money printing destroys an economy? I'm being told every day now how Europe is being saved by it tho! (Now if only those Greeks would pay there taxes....

Wed, 02/01/2012 - 13:13 | 2116774 GeezerGeek
GeezerGeek's picture

That could be tricky. I once worked for a company that made stuff in China (PRC) for the U.S. markets. The factories were subsidiary entities that made fat 'profits' by charging the U.S. parent a very high price. Then the top dogs 'sold off' the factories to a consortium consisting of some of the same top dogs, but headquartered in China. Either way the profits stayed offshore, and either way the same guys rewarded themselves. The remaining U.S. company headed downhill shortly thereafter.

Reducing corporate taxes to zero might be more beneficial economically.

Wed, 02/01/2012 - 13:42 | 2116890 disabledvet
disabledvet's picture

Not as good as a true gold standard. Try and reward your...ahem..."self"...with that money. Of course not even this site advocates that only true measure of money. Even here that advocate for something called...."free gold." hehehehehe. "free gold." would you like a war with all that..."gold that is free"?

Wed, 02/01/2012 - 12:08 | 2116500 JPM Hater001
JPM Hater001's picture

We are about to have another revenue problem.

It's never a spending problem.  It's always a revenue problem.

Wed, 02/01/2012 - 12:10 | 2116514 pods
pods's picture

Diverging functions of money in vs money out are surely a sign of prosperity.

pods

Wed, 02/01/2012 - 12:10 | 2116515 monoloco
monoloco's picture

All Americans deserve to have their taxes raised for electing the dumb fucks who convinced them we could have two enormously expensive wars, generous corporate welfare, and every conceivable pork barrel project, all while cutting taxes, unless we are made to suffer consequences for poor electoral choices, we are doomed to repeat them.

Wed, 02/01/2012 - 12:10 | 2116516 RKDS
RKDS's picture

Pennsylvania's just about at the end of a 10-year plan to phase out most corporate taxes.  They had the governor's spokeperson, addressing a revenue shortfall (alot of tax receipts are down, but corporate tax is down _alot_), state that the administration is "puzzled."  This just in, water is wet and fire is hot, wouldn't want anybody to be "puzzled" by taking a bath or touching their stove top...

Wed, 02/01/2012 - 22:57 | 2118772 Xkwisetly Paneful
Xkwisetly Paneful's picture

Be real.

Corporate tax is way up it is just not called corporate tax.

Pennsylvania now tops the nation in money derived from gambling,

getting an extra billion plus a year out of thin air.

Wed, 02/01/2012 - 12:12 | 2116518 Shizzmoney
Shizzmoney's picture

And that our corporate overlords need to pay less if we expect them to do us the favor of hiring us unworthy serfs.

Corporations and the amount of blackmail they perform over politicans whether its pitting states tax codes against each other, or the China outsourcing paradigm, and holding the working class' balls in a job creation vice, is appauling, disgraceful, and irresponsible.

LOL at the corporate line.  And the big multinationals STILL find ways to complain about business in this country, "Taxes too high!  Too much regulation!  Not enough "skilled" workers!".  Notice how it is the wealthy financiers and CEOs complaining.  I don't hear much complaining from a single mother of two who has 3 jobs.  Whiile in while, small business owners are actually doing work and busting their ass each and every single day. 

Something has gotta give at some point.

Wed, 02/01/2012 - 13:49 | 2116919 disabledvet
disabledvet's picture

How about "free market capitalism is the best path to prosperity...provided no one has any money to pay their taxes." there's what comedians call..."a punch line" here. And I imagine it will soon involve someone actually being "punched" as well.

Wed, 02/01/2012 - 12:17 | 2116550 GeorgeHayduke
GeorgeHayduke's picture

Corporation have more rights than people and none of the responsibilities.

The question is, how long do the indoctrinated zombies put up with it? My guess is as long as their stomachs are full and they can have the latest entertaining trinkets available. If there is a supply chain blip in either of those two items, then the zombies will seek flesh to satisfy their needs and desires.

Wed, 02/01/2012 - 12:26 | 2116591 vote_libertaria...
vote_libertarian_party's picture

In 2 years the consumer witholding went from 70B to 92B???  A 31% increase?

 

My taxes didn't go up.  The number of jobs added less birth\death was close to zero.  Where did that massive increase come from?

Wed, 02/01/2012 - 13:23 | 2116817 GeezerGeek
GeezerGeek's picture

I'm not sure I understand what you mean by "consumer witholding". The second chart does show receipts of individual taxes rising approximately that much, so maybe that'w what you meant. Is it possible that all those rich guys decided to pay capital gains taxes before any potential increases in tax rates? Just wondering. Or maybe it was the increased tax rates on all those severance packages: mine (last July) was big enough to put me into the top tax bracket for the payroll period in which I got the severance check. I'd complain, but at least I got a decent severance check.

Wed, 02/01/2012 - 12:28 | 2116605 QQQBall
QQQBall's picture

How many times in the past few years have you heard "I'm just lucky to have a job."

Wed, 02/01/2012 - 12:31 | 2116608 Hubbs
Hubbs's picture

I'll tell you where the sudden increase in tax receipts and therefore less immediate borrowing needs is coming from....I'm having to liquidate retirment funds with 10% penalty attached to make ends meet. 

 

And meanwhile, my former office manager, now that my practice is closed, is collecting unemployement. Despite 11 years of generous pay-to the point that she can make more sitting on her duff than she can working a similiar job, not only left and headed straight to the unemployment office, and didn't tell my accountant that she had been paying the quarterly  FUTA (federal unemployment tax) electronically (so where the hell was my accountant/), which I couldn't do  as of yesterday at the last minute because the account to the practice was closed months ago, now leaves me with a dilemma: Wire the funds thru Wells Fargo at a cost of $30 to send $44, or, after having logged in to create a new account for this one last payment, only to find AFTER I have entered all my data online at the government site  that it will take 7 days to send me my PIN so that I can then pay a penalty fee plus interest for the privilege of sending FUTA for the people like my ex office manager who left me stranded with this! 

 

 

 

I will never, ever, start a business or practice again. Never mind all the obstacles to entry. It's the butt-fucking you take when you try to (or have to) close. The government has got its tentacles in every pocket and orifice of your body, and they (the federal workers who do no productive work) don't give a shit about anything except clocking in and clocking out to get a paycheck.

Wed, 02/01/2012 - 13:36 | 2116873 lasvegaspersona
lasvegaspersona's picture

Hubbs

use employee leasing

I have for 15 years, what they charge in fees they make up for in reduced health  insurance costs.

I effectively have no employees.

Wed, 02/01/2012 - 12:32 | 2116619 onebir
onebir's picture

If the US system is anything like the UK systems, here are two innocuous possiblities that could explain why corp tax receipts have recovered slower in the US:

1) carried-forward losses, which reduce taxable profits until they're used up

2) longer lags between receiving income and paying the taxes on it. (For a long time CT installments in the UK were based the tax charge on prior year profits, which meant a lag in CT receipts when profits were increasing)

Less innocuously I read that some corporates (eg google) have been able to use offshore vehicles to drastically reduce their liabilities.  Or maybe the strength of reported profits is all accounting shenanigans :)

Wed, 02/01/2012 - 12:42 | 2116653 FreeNewEnergy
FreeNewEnergy's picture

You left one out:

3) Plain, old-fashioned lying.

Wed, 02/01/2012 - 13:57 | 2116949 disabledvet
disabledvet's picture

That's "three round trippers" as they say on this side of the pond. Anything currently in existence both over here and over there are bankrupt. PERIOD. The only real economists on this planet are me and Jimmy Cramer who understand that only NEW money is ACTUAL money in this regime. That would mean...AGAIN..."cloud computing and the nat gas space." not surprisingly even the President of the United States is now agreeing with us cuz, "yep, that guy's got bills that can't be paid too." Of course his bills only amount to mere..."trillions"...how hard could that be?

Wed, 02/01/2012 - 12:46 | 2116669 ljag
ljag's picture

I suggest we adopt the Greek tax code.......where you just pretend to pay taxes. With little or no money, wudda they gonna do. Huh?

Wed, 02/01/2012 - 13:03 | 2116730 lynnybee
lynnybee's picture

no amount of taxation will fix this LOOTING & FRAUD .    the U.S. TREASURY has been looted ...... clawback is a great way to get taxes .   

Wed, 02/01/2012 - 13:06 | 2116737 A Nanny Moose
A Nanny Moose's picture

Corporations don't pay taxes. They collect them.

Wed, 02/01/2012 - 13:11 | 2116764 stopthejunk1
stopthejunk1's picture

It's time for us to take back power from the corporations.

Few people know it, but a corporation's charter to do business in a state can be revoked at any time (or not renewed when it expires) by that state.

A corporation has no rights, except what rights are granted to it in its charter.

I propose that we identify the corporations in our respective states - focus on the ones that plunder our resources, send our jobs overseas to exploit workers in poor countries and lower our standard of living, avoid taxes, and buy politicians - and pressure our governors and/or legislatures to revoke their charters in our states.  Naturally if a corporation employs people in your state, those people may object to their jobs going away; but in the long run, as the reach of the corporation declines, they will be better off.

Think how many mom & pop stores would be able to operate in a given state, if Wal Mart, KMart, Sears, Target etc lost their charters to do business in that state.  Think how many family-owned restaurants would be able to compete again, if the giant corporate restaurant chains lost their charters.

The takeaway: CORPORATIONS DO NOT HAVE RIGHTS, except what are granted them in their charters.  Their charters can be revoked.  But only if you do something about it.

Wed, 02/01/2012 - 13:31 | 2116845 lizzy36
lizzy36's picture

Here is a better idea:campaign finance reform.

As long as corps are allowed to sponsor elections nothing will change.

Start a grass roots organization, teaching people about FINANCE. Then ask them to take back their democracy. 

FYI, you have a family to feed and educate you are NEVER going to work for your "job to go away". 

Wed, 02/01/2012 - 13:42 | 2116889 lasvegaspersona
lasvegaspersona's picture

stopthejunk1

tilt at smaller windmills

Wed, 02/01/2012 - 13:42 | 2116892 GeezerGeek
GeezerGeek's picture

We'd all be better off if we started by taking back power from the government. Or, more accurately, I should say we should restrict government at all levels to a few, well-defined rolls and dump the rest of what they do, returning the money to the taxpayers. It's not just the central government, either. For instance:

My wife is Chinese (born in Shanghai) and in the 1990s we joined a local Chinese cultural association. She became treasurer after a while, and got around to asking my help in filling out a request to the county government for funding for certain "cultural activities". To keep the peace at home I helped, but as a libertarian I kept wondering why local tax dollars were being used to fund any cultural activities at all. This is an example of the sort of stuff out of which the government should stay.

As for the later comments about "mom & pop stores" vs. the big chains: consumers using free will chose lower prices and greater variety. If every consumer stayed away from the chain stores and frequented the local versions, as you seem to want, everything would be more expensive. Or are you one of those who likes top-down central planning rather than consumer-driven markets? At least you can choose where you shop, and if you shop. It's one of the few freedoms we have left.

 

 

Wed, 02/01/2012 - 15:18 | 2117313 flattrader
flattrader's picture

>>>At least you can choose where you shop, and if you shop. It's one of the few freedoms we have left.<<<

We can only choose where to shop until the Big Box TIF funded stores run everybody else out of business...then that last so-called "freedom to shop" will be gone as well.

Wed, 02/01/2012 - 17:05 | 2117726 Goldilocks
Goldilocks's picture

But, but,,, Walmart says, "Save money. Live better."

Wed, 02/01/2012 - 13:18 | 2116798 AldoHux_IV
AldoHux_IV's picture

The United States of Corporation.

Wed, 02/01/2012 - 13:32 | 2116851 stopthejunk1
stopthejunk1's picture

From a taxation perspective, this is unimportant.

What IS important is that the entire income-based tax code is an immoral sham.  It can never be made properly progressive.

The only workable solution that makes sense is a consumption tax, like the FairTax, which by definition is appropriately progressive.  You consume more, you're taxed more.

However, despite being billed in both houses for many sessions, with 40+ cosponsors, the FairTax is having trouble getting out of committee because it will effectively END the K-street lobbyist industry.  It will also make thousands of "experts" on our 60,000-page tax code suddenly useless. 

www.fairtax.org

Wed, 02/01/2012 - 13:55 | 2116942 Bob
Bob's picture

In terms of the definitions we have long used in tax, however, the FairTax is an oxymoron and a fraud.  It is a regressive tax. 

Just a simple fact.  Blame webster. 

http://en.wikipedia.org/wiki/Regressive_tax

But please speak in honest language that makes sense. 

Wed, 02/01/2012 - 19:33 | 2118256 Bob Sacamano
Bob Sacamano's picture

Not a Fair Tax expert, so not sure if it is regressive or not (due to prebates).   But if by "regressive" it means it is more regressive than the current federal income tax system in which approximately half of the people pay no federal income tax -- then it is not exactly heartbreaking to those who are paying meaningful federal income taxes.  

Wed, 02/01/2012 - 20:48 | 2118451 blunderdog
blunderdog's picture

"Progressive" and "regressive" are very poor words to use to try to describe taxes.  The fact that "progressive" is a different meaning than "working towards positive change in the future" when applied to taxes as when applied to zealots is enough of a flaw right there that the shit should just be driven right out of the lexicon.

The upside to consumption-based taxes is that they are simple to calculate and charge, thus cheap to collect.  The downside to consumption-based taxes is that the people with the lowest incomes pay the greatest relative amount towards consumption taxes because they have to "consume" every dollar they earn, while anyone who earns "more than enough" to cover cost of survival can decrease taxes paid by spending less discretionary income.

The other catch with a sales-tax system is that there's no logic to the collection/disbursement based on the marginal value of extant government services which ALL people benefit from.  A poor guy in an apartment doesn't benefit as much from a fire department or police force as a rich guy in an expensive house.  If the apartment building burns down, poor guy might be out $5000 worth of stuff (and obviously needs a new place to sleep), but that's nothing compared to the loss a rich guy would suffer if his house burned down.  (Insurance is equally applicable in both cases, so that doesn't really affect the comparison.)

So the poor guy spending all $16,000/year he's earning is paying taxes on all $16,000 and is "consuming" less from the public pool of resources devoted to protection of individuals wealth, health, and safety, while the rich guy spending $15 million/year out of income of $75 million pays a smaller relative share for protection of much more valuable resources/property.

Back when I used to believe there was a point in talking about potentially beneficial government policy, I made the case for a selectively-applied consumption tax.  The basic idea is similar to a Fair Tax, but with all the items/services that are defined as "necessities" exempted from taxation.  My original thinking was that the necessity list would be subject to annual national referendum, but would comprise mostly food, shelter, and energy costs.  The problem then is just how to figure the distinction between someone living alone in a 10 bedroom McMansion and the household of 14 in the same circumstance.  That led me back to the idea of standard deductions and the whole concept falls apart.  Also, if you exempt milk (or whatever) as a foodstuff, what about pure pomegranite nectar from Azerbaijan that's $17/pint?

It's all got to fall apart before we're going to have a good conversation about this stuff.

Wed, 02/01/2012 - 14:00 | 2116963 disabledvet
disabledvet's picture

My prediction: "Facebook will be the Facepalm of IPO's." Morgan/Stanley's lookin good tho.

Wed, 02/01/2012 - 14:38 | 2117120 Dingleberry
Dingleberry's picture

"CORPORATIONS ARE PEOPLE, TOO!!!"  TAX them accordingly...THANK YOU SCOTUS scumbags. 

Wed, 02/01/2012 - 15:22 | 2117335 sidkof
sidkof's picture

my co-worker's step-aunt makes $82 hourly on the internet. She has been laid off for 6 months but last month her paycheck was $8731 just working on the internet for a few hours. Read more here... LazyCash9.com

Wed, 02/01/2012 - 19:24 | 2118224 Bob Sacamano
Bob Sacamano's picture

I believe NOL Carryforwards will create a lag in the taxes paid on corporate profits earned post-downturn.  Which is why GE did not pay any taxes in 2010 -- they had a loss of something like $30 billion in 2008 which they carry forward to future years that have profits.   Not sure when most companies will burn off their NOLs - but that is when you should see an uptick in corporate tax payments.  Concept is similar to individuals who can not use their capital loss in a given year can carry it forward to a year they have capital gains. 

Wed, 02/01/2012 - 19:47 | 2118290 zippy_uk
zippy_uk's picture

Corporations - a fundamental piece of the economic crisis we are in.

Corporations are licensed to make profits in exchange for a) Providing jobs b) Providing goods and services of value c) Paying taxes. d) Be accountable under the law

However todays corporations expect to a) Make profits selling goods or sevices only b) Expect to be able to rip off consumers and get away with it c) Expect not to pay any tax d) Bribe politicians to ignore or change the law so they can behave how they choose.

THE SOLUTION IS - CHANGE THE DEAL...

1. Change taxation to resources, property and consumption. Remove all taxes on productivity for all corporations and income taxes - but there are no tax breaks or allowances. 2. All home country hard assets - machinary, companies based in home country, property mush be held in a home land register legal entity for tax purposes. No combining home assets with overseas liabilities or other schemes. Buy / sell / move money back and forth still allowed but hard assets all get taxed in home country regardless. 3. Services from other legal entities are charged VAT or similar. This means offshoring gets taxed rather than a tax break. 4. Companies should get charged for access to the law (courts - i.e. a tax, especially on tax matters). You want to set up an accounting dodge - even if your scheme works as soon as it gets challenged you have to shell out on court fees at a "special rate". Lets abitriage the abitragers...

Thu, 02/02/2012 - 01:57 | 2119114 Artful Dodger
Artful Dodger's picture

Excellent post... I think one could find everything they need to know about the Brave New World of Corporations-as-Government right here.

Do NOT follow this link or you will be banned from the site!