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Monday, February 18, 2019

Treat every company like Amazon

Fortune magazine reported, "Amazon Will Pay a Whopping $0 in Federal Taxes on $11.2 Billion Profits."

Good.

Just why are we taxing companies? I have been told they are not people.

Make that why are we taxing some companies? Abortion industry giant Planned Parenthood not only pays no federal taxes but courts have deemed it is entitled to annual subsidies.

The story on Amazon by Laura Sampler was just that: a story.

It was not a news report.

It began, "Those wondering how many zeros Amazon, which is valued at nearly $800 billion, has to pay in federal taxes might be surprised to learn that its check to the IRS will read exactly $0.00."

Those wondering.

Do people sit around all day wondering "how many zeros Amazon has to pay in federal taxes"?

And just what does she mean by ""how many zeros"?

Sampler dressed up a press handout from the Institute on Taxation and Economic Policy, a tax-exempt company that pushes for more taxes on other companies.

I am sure that Amazon took advantage of the tax loopholes in the 73,954 pages of the federal tax code. That figure is as of 2014. By the way, you are supposed to know and obey every rule in the book.

But the real policy question is why are we taxing the profits of companies?

So that congressmen can shake down companies and industry groups for campaign contributions (bribes) in exchange for tax exemptions?

End the corporate taxes. Watch stocks rise. Watch employment rise, too. Watch more people become millionaires and grow self-reliant and independent of government.

Look at how well things are going now following a 40% drop in corporate taxes last year.

14 comments:

  1. You hit the nail on the head. The corporate tax business is a shakedown run by politicians.

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  2. When you're a journo with the name "Sampler", you really should refrain from embroidering.

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    1. Maybe she's looking forward to being framed & hung on the wall. Is her first name "Homily?"

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  3. I dissent.

    Corporations are distinct legal entities, with an independent existence. I am a distinct legal entity, too, and I have to pay taxes on my income.

    So you can do away with the income tax on individuals and individuals will be richer, too. Why limit the "spread the wealth" to corporations and LLC's? The government still needs to be funded. Not at the level it's getting funded at, now, but there is a legitimate need for core government. And all distinct legal entities need to contribute to funding it. Including corporations.

    But then again I think capital gains should be taxed as ordinary income. Why is money made from investments considered superior for tax purposes than money earned from hard work? You know who else thought that? Ronald Reagan. President Reagan was right, once again.

    I love reading you, Mr. Surber. But you're wrong on this one.
    -TK

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    1. Well put. It is said corporations pay no taxes. They just collect it from others.

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    2. Corporations are not people. In fact they are ethereal, without substance. As such, they do not in and of themselves make a profit. The people owning and running them do, however. And these people pay taxes on that income. Intercepting that money earlier in the sequence deprives the owners of the corporation the income that is due them and distorts their business planning. That is why corporate taxes are so nefarious. The damage they do is not apparent until they are stopped.

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    3. Don, you are exactly right. Corporations don't pay taxes, they collect them from us. We are the low people on the totem pole, the end of the line. We don't have any body to collect from so we pay all the taxes--some directly to the government and the rest to corporations who collect them and pass them on.
      Maybe if all corporations paid 0% there would be more $800 billion companies.

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  4. "But then again I think capital gains should be taxed as ordinary income. Why is money made from investments considered superior for tax purposes than money earned from hard work?"

    Because of the risk inherent in any investment. The government provides incentive for private citizens to incur risk on the creation of value, whether it's an apartment building or an investment in stock. Take away the incentive and overall investment in the country would decline. That's not making America great. That's transforming America into Obamaland.
    GaryB

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  5. The major problem, as I see it, is that at every stage of production, stuff is taxed. I could be wrong, it's been a long time since I studied economics in College.

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  6. Just be glad Congress hasn't passed a Value Added Tax like Great Britain. Every stage is taxed from raw material to finished product.

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    1. Australia did that too, called the GST. It's a very sneaky tax; people don't realize how much the tax is, since they only see the price at the checkout, after the tax has been compounded again and again.

      One guy bought a bumper for his Korean car; the Korean price was (IIRC) $150. Then GST was added when the item was shipped to the distributor, then again at the importer, then wholesaler, then add shipping, import duty, etc- by the time the item arrived at his doorstep the cost was over $2500; most of that increase being from taxation!

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  7. shareholders own the corporations and they pay taxes on dividends and capital gains.

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  8. An uncle of mine used to say “if you are not being audited every year, you are not taking enough deductions”. Everyone’s (and corporations too) goal is to legally pay no taxes by taking advantage of the existing laws.

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  9. I used to agree with a 0% corp "income" tax / on profit.

    Big corporations should be facing a 1% REVENUE tax on the amount over $1 bln. Top line revenue, not post-expense & post-loophole "profit".

    The power of big corporations really is too big, and semi-educated / indoctrinated "elites" are making it worse.

    Big company revenue taxes, no loopholes, will reduce the sub-optimal tax avoidance strategies.

    Reduced spending is also still important, but much less popular.

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