Tuesday, August 12, 2008

Because, Yes, We Want MORE Tax Cuts For The Wealthy!

Oh lord, this can't help but seal the deal for Barack Obama:
WASHINGTON (AP) — Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress.

The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.

Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate.

"It's shameful that so many corporations make big profits and pay nothing to support our country," said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.

An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called "S" corporations pay taxes under individual tax codes.

"Half of all business income in the United States now ends up going through the individual tax code," Edwards said.
I added that last bit of the story to present a reasonable condition to the headline, but also to rebut it, slightly.

It's true that many corporations are so-called "individual corporations", LLCs and S-Corporations where the income is essentially passed thru to the shareholders for tax purposes.

The problem, one the Cato Institute fails to note, is the compliance with this when filing tax forms.

The IRS estimates that roughly $300 billion in undeclared income just vanishes somewhere between the corporations' books and the shareholders' tax returns each year.

At a 35% tax bracket, that ain't small potatoes, taxwise!

Too, where Cato makes it appear that this problem is almost solely a function of the tax liabilty shifted to the individual business owner, in truth, the GAO report shows that "about 25 percent of the U.S. corporations not paying corporate taxes were considered large corporations, meaning they had at least $250 million in assets or $50 million in receipts."

That's each, not collectively. When you are talking about trillions in revenues, $50 million is a small piece, so this is not an insignificant number of tax evaders.

In plain English, what does this mean?

It means that the entities-- people and corporations-- that beneift most from the bounty of resources of this great nation, its people, land, and other natural resources, are not giving back in a commensurate fashion as payment for these resources.

In other words, they are stealing our country out from under us, and either refusing to pony up reparations or are off-shoring your tax dollars in their Cayman Island bank accounts!

John McCain would encourage this by extending Bush's tax cuts and specifically, his capital gains, estate and dividend tax breaks that benefit the richest one percent of this nation far more than Barack Obama's middle class tax cut would benefit the middle classes of America.

And the middle class outnumbers the wealthy, but make that case and you're declaring class warfare.

I think it's about time we did just that. After all, class warfare has already been declared on the middle class!