who would you vote for and why?

[mdr]

<snip>
I think that where you get hung up is the idea of our current court system. The court system today is broken. It's real broken. Mostly because the government runs it and uses it to make money.
<snip>

Well, we both agree that it's broken - though perhaps for different reasons. The federal court system isn't run by the government... because of the way it's defined in our constitution it IS the government (1/3 of it anyway). However, I'm at a loss to see how you can make the "uses it to make money" part of that statement. The court neither makes appropriation laws nor collects taxes. If you're talking about the "fine of $50 and court costs"... well, I thought you'd approve of a business that's self funded.

Hotei

PS: I am not sure, but is your proposed court system similar to that of another country? ie English criminal law uses "a judge and a jury of your peers", but I believe other countries have either panel of judges or other arrangements (professional juries?). Actually sounds more like a military court martial now that I think of it...

 

[mdr]

Dako,

:hijack: We're off on a bit of a tangent with the court thing but you put a lot of effort into that answer and I feel it deserves a response. Besides, eventually someone is going to bring up the fact that either McCain or Obama is likely to pick the next Supreme Court Justice so I guess it's fair game. Anyway...

The system you envision looks like it will entail a lot of contract writing. That's going to put a significant part of our country at risk given that the average reading level is 8th grade and the average writing level is even lower. That's a lot of overhead for both the consumer and the business.

Wouldn't it be better to agree ahead of time on a set of standards that products should meet, so that when I go to the store to buy a chocolate chip cookie I can actually get a cookie with chocolate chips without having to provide the store a recipe? Or toothpaste that actually contains toothpaste? (Not to pick on China - but you know what I'm going to say about toys ...)

Just seems to me that with the amount of greed and selfishness existing in the world today that the only thing standing between me and getting screwed in my next commercial transaction is my government. Your mileage may vary.

Hotei

 

[mdr]

Anyone want to explain this...

"WASHINGTON — 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 released Tuesday said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.
...
More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies, or 66.7 percent of them, paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of large U.S. corporations _ those with at least $250 million in assets or $50 million in receipts _ did not pay corporate taxes."

I originally saw this on Huffington Post but here's a link to the actual document on GAO website :
http://www.gao.gov/docsearch/abstract.php?rptno=GAO-08-957

Hotei

 

[wolfc70]

Anyone want to explain this...

WASHINGTON — 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 released Tuesday said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.
...
More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies, or 66.7 percent of them, paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of large U.S. corporations _ those with at least $250 million in assets or $50 million in receipts _ did not pay corporate taxes.



[see the full article on Huffington Post]

Hotei

I may have an explanation. The companies did not make enough profit for the corporation to pay income taxes. The employees on the other hand did pay taxes on their wages. If profit margins are too low, they become exempt for income taxes, but employees are not. So it looks like on paper that corporations are not directly paying taxes, they indirectly are through their employees.

 

[wrightme43]

Limited partnerships, sub chapter S and several other business models are called pass thru org.

IE
Money comes in. It is split between the partners based on thier invested share. Tax benifits and liability is split as well. The taxes are paid at the personal level.
That is another thing that skews these results.

 

[dako81]

Anyone want to explain this...

WASHINGTON — 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 released Tuesday said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.
...
More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies, or 66.7 percent of them, paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of large U.S. corporations _ those with at least $250 million in assets or $50 million in receipts _ did not pay corporate taxes.


[see the full article on Huffington Post]

Hotei

That's because you have to remember what a corporation is(different than a compny): A corporation is a legal entity (technically, a juristic person) which has a legal personality distinct from those of its members. This means the people owning and operating the corporation, if it be few or many, are actually separate from the corporation. With my basic knowledge, there are 2 basic kinds of taxed corportations. A C corporation and and S corporation. From Legalzoom.com:

Two Types of Corporations
The IRS allows for a corporation to be taxed either as a “C corporation” or as an “S corporation.”

C Corporations

A C corporation is taxed at two levels. This is commonly referred to as double taxation. A C corporation pays a corporate tax on its corporate income (the first tax). Then, the C corporation distributes profits to stockholders who pay income tax on those dividends (the second tax).

S Corporations

One way to avoid the double taxation of a C corporation is to make a special election to be taxed as a S corporation, which is pass-through entity taxed like a partnership or a sole proprietorship. That way, there is only one level of taxation. The corporate profits "pass through" to the owners, who pay taxes on the profits at their individual tax rates.

So likely all those percentages were S corporation, but the people involved did pay taxes, just not the legal fiction of the corporation.

Hope that makes sense.

... However, I'm at a loss to see how you can make the "uses it to make money" part of that statement. The court neither makes appropriation laws nor collects taxes. If you're talking about the "fine of $50 and court costs"... well, I thought you'd approve of a business that's self funded.

Hotei

PS: I am not sure, but is your proposed court system similar to that of another country? ie English criminal law uses "a judge and a jury of your peers", but I believe other countries have either panel of judges or other arrangements (professional juries?). Actually sounds more like a military court martial now that I think of it...

Take away all of the fines collected from the court system in your local city, which includes traffic tickets because these are legal documents, and when you just pay, you're settling with the court without a trial, without increasing income anywhere else in the budget, and watch the city tank.

A business that's self funded? I think you're missing the HUGE part where everyone working in and for the court system, except for private lawyers unless they are contracted by the government to work in that court, gets a paycheck from the government that court is in, not from the money that the court takes in. That extra money is like a bonus the government of that area gets to take and use for other things. All those people already have a salary built in, already discluding what the court takes in. So maybe that clears it up a little bit? If you don't believe me go and sit in on a court and tally up the fines and fees. I'm sure you have tens of thousands of dollars easily before you get bored and leave.

But also, demanding a fine of someone who's done wrong against someone else sounds good because it creates a burdon for them as punishment. But, why should the fine payment go to the government? Why not the person. Oh well that's a whole different thing anyways.

I don't propose we do anything similar to another country. I'd like to see things move beyond what anyone else has done before or is doing currently. It's all just more of the same, and so redundant. It's common sense. You hurt or defraud somebody, you're going to pay them restitution or do something to fix it for them, and pay for the time of the people to help decide your case.

And about the reading and writing, being responsible for yourself would create an obligation and incentive to learn these skills. It wouldn't be like going through government school where they force their way on you or no way. You'd have an interest to lean these skills so you weren't douped.

I hope you don't go and talk to your local baker about this, because if he/she finds out that you think the government is the only thing keeping you safe from their greed, they'll probably be insulted, and then you will need protection from their products if you purchase from them again, if they even let you in their store.

And not everything would involve contract writing. Many things would be just as they are today, they would change so little you wouldn't even notice. You go into your bakery before you insult the baker, and see two loafs of bread that you want. You ask how much they'll take for them and you agree on a price. You pay that price and take the bread. You get home and one loaf is great, you go to slice the second loaf and there is a rat baked in. You go back to the bakery and they either refund you or replace the loaf and try to figure out what happened. Because if they don't you're going to tell everyone and they're going to loose business. What's difficult about that?

Maybe you think that everyday, normal, common interactions and transactions between individuals would change drastically? I'm not sure that all of them would, and really many would probably not really change at all.

 

[Cuba]

I'm a finance director for an S Corp. We pay no corporate taxes. Our shareholders pay taxes on every cent of profit we make. Our employees pay taxes on their salaries. We pay payroll taxes on their salaries. We pay taxes on all purchases other than product for resale. Should a shareholder sell their stock they pay capital gains tax on any profits from the sale. We collect sales tax from all taxable customers on their purchases. We pay mercantile taxes in the cities where our locations reside. We also pay state taxes where our locations reside.

All in all I estimate that last year we paid roughly 10 times our total profit on taxes. Your argument that corporations have avoided corporate taxes is probably true although completely pointless.

 

[mdr]

I'm a finance director for an S Corp. We pay no corporate taxes. Our shareholders pay taxes on every cent of profit we make. Our employees pay taxes on their salaries. We pay payroll taxes on their salaries. We pay taxes on all purchases other than product for resale. Should a shareholder sell their stock they pay capital gains tax on any profits from the sale. We collect sales tax from all taxable customers on their purchases. We pay mercantile taxes in the cities where our locations reside. We also pay state taxes where our locations reside.

All in all I estimate that last year we paid roughly 10 times our total profit on taxes. Your argument that corporations have avoided corporate taxes is probably true although completely pointless.

I think you missed the point of the GAO report. Which was that the majority of foreign owned corporations with lots of revenue (and presumably profit) are not paying US taxes. And their stockholders, most certainly aren't paying US income taxes cause the vast majority of them aren't US citizens. Which leaves you and me to make up the difference. Since the study timeframe was split between Clinton and Bush43 I'm not sure who to blame.

If you didn't pay corporate tax, you don't pay sales tax on materials you buy and you pass sales tax on to the consumer ... how did your S corp end up paying 10 X your profit on taxes? Just being nosy since I like to avoid any taxes that I legally can. I can argue that it's the employee paying the payroll tax since it's coming out of their paycheck. And I can argue that it's again the stockholder that pays the capital gains tax if they sell their shares for a profit. Isn't mercantile tax is just a fancy name for sales tax, which as noted above you pass along to the consumer? But - wait - you did forget property taxes which can take one hell of a bite out of profit. You're probably right - I'll stop digging this hole now... :surrender:

 

[keira]

I will simply say that if I had to vote today, I would vote Obama. Sure he doesn't have much experience or all the answers, but to be honest, I at least know where he stands. All I know about McCain is that he's terrified of Obama, and thus hates him. Once he exlains his positions on things, and not just tear into his opponent, then I might be able to make a more educated decision.

Though I will be honest, I also have a problem with the Republican party as of late, and it will take a lot to convince me that any Republican will do a good job int he next 4 years.

 

[mdr]

Dako,

Thanks for the explanation. I'd never heard the "pass-through" thing before now.

However, the GAO did say that 25% of the "no income taxes" US corps were in the LARGE range. See the graph on page two of the report. For large US corps it looks like it started at the end of Clinton's term at about 25%, peaked in 2001 at about 33% and has been dropping back to the 25% range.

I'm still agreeing with you that "Individuals pay taxes, not corporations." - but this still came as a surprise that so many corps had found a way to avoid them entirely.

SOOOO - the good news. Looks like we've now found two ways for you to avoid taxes. You can either found your own religion (or maybe just a church since your schedule is pretty busy) or create a legal fiction.

Hotei

 

[mdr]

<snip>

I hope you don't go and talk to your local baker about this, because if he/she finds out that you think the government is the only thing keeping you safe from their greed, they'll probably be insulted, and then you will need protection from their products if you purchase from them again, if they even let you in their store.

<Snip>

Good one :thumbup: you make Hotei smile.

 

[Cuba]

NYT: Obama leans on big-dollar donors - The New York Times - MSNBC.com

Speaking of evil corporate greed, take a look at this article explaining where exactly Obama's campaign donations are coming from. Take a guess!

 

[Officerjive]

Officerjive,
You need to do some research on how votes are counted in your state for presidential elections (not primaries). You will apparently be surprised to find that your vote does count.

Secondly, I'll be glad to send you an 800 number for you to report your company's fraudulent activity. I find it unfortunate that you want to blame the government for something that is under your control. Motorcyclists seem to be pretty far to the right on the personal accountability spectrum so step up and do the right thing.

[EDIT]Report Corporate Fraud matters directly to the FBI in Washington, DC, via our toll-free telephone number, 888-622-0117. [/EDIT]

Hotei

Good morning,

I'll skip the research, as I'm pretty savvy in regards to electorate law and voting regulations.
When I say wasting, I dont mean that my company is taking part in fraudulent activity, nor that I am party to such fraud.
However, I am free to continue working for the company while believing that some of our projects are of a wasteful nature, that they cost significant money to perform, while not providing worthwhile services to the citizens. I am a taxpayer as well as an employee.

 

[Cuba]

If you didn't pay corporate tax, you don't pay sales tax on materials you buy and you pass sales tax on to the consumer ... how did your S corp end up paying 10 X your profit on taxes? Just being nosy since I like to avoid any taxes that I legally can. I can argue that it's the employee paying the payroll tax since it's coming out of their paycheck. And I can argue that it's again the stockholder that pays the capital gains tax if they sell their shares for a profit. Isn't mercantile tax is just a fancy name for sales tax, which as noted above you pass along to the consumer? But - wait - you did forget property taxes which can take one hell of a bite out of profit. You're probably right - I'll stop digging this hole now... :surrender:

Wrong. We are not in manufacturing. Any capital purchases (fixed assets) or consumables (supplies) are indeed taxed. We pay taxes on anything that doesn't get charged to a customer. The company pays payroll taxes, last year we had more in payroll tax than we did in after tax profits. Indeed it is the stockholder that pays capital gains and what would otherwise be corporate tax. What does it matter? The corporation in a group investment of individuals, that's it. Sales tax is passed to the consumer assuming we are set up 100% correctly in the process. Services are not taxable unless a physical asset is transferred for instance. If you do a $200K reconfig and sell no product then it isn't taxed. If you provide physical drawings to the customer it is, whether you charge for them separately or not. I'm in the midst of a standard sales tax audit with the dept of revenue currently and they'll certainly find something we had missed. Guess who's gonna pay? Yes I did forget property tax. Although an LLC holding company actual owns our real estate we as the leasor are responsible for the cost. Merc taxes are a small percentage of REVENUE that is skimmed by local municipalities.

Point being, many companies that doesn't pay corporate taxes still pay more taxes in a year than you or I will in a lifetime, whether it is the "company" or the individuals that own it is inconsequential, it is money paid to the government due to the opreational activities of the company.

Foreign corporations are a whole different ball game. Tax incentives for foreign investment in the US are common place. Which is better, keeping foreign investment out and NOT creating hundreds of thousands of jobs for Americans here in the States working for Toyota for example, who all pay US income taxes, the company which pays things like property taxes, merc taxes, payroll taxes, etc. etc. or offering them a reason to open operations in a country where labor is some of the most expensive in the world? Difficult question. They open operations here because we tax the hell out of imports whereas actually producing their products here provides lower cost through tax incentives. You be the judge.

Your hypocracy is funny, attacking McCain for corporations avoiding taxes when you yourself admit to doing the same, AND forgetting that it is actually OBAMA who is taking in far more donation money from these corporations than McCain...

 

[dako81]

Good one :thumbup: you make Hotei smile.

Good! Hey, we're just all here having a fun little conversation. Glad it's enjoyable!

Did the article mention that probably that 25% of large corporations that didn't get double taxed were part of the military industrail complex?

But I think you're still confused about the whole corporations thing, them paying taxes, corps being taxed which makes the money that goes through that corp double taxed, and the individuals in that corporation paying taxes.

Maybe I can make the idea of a corporation more clear, at least I'll try.

Disclaimer: I don't claim to be a professional, and I'm just trying to understand all of this as well, so if I'm wrong, please kindly correct me so that I can learn more since all of this is pretty new to me. Thanks!

Think of a conference room with an invisible protective box around it floating in space. The box has one hole in the top of it where all money flows through. This invisible box is the corporation, called xyz company, and it protects the people inside of it from lawsuits and individual liability for actions taken by the corporation. So if stuff hits the fan, the protective barrier protects the individuals who take part in this corporation. The people around the conference table are the individuals who have stock in or work at xyz company, and they all pay their respective taxes on money, capital gains, etc. etc.. If the corporation pays taxes, think of a filter on the hole where all the money goes in. The individuals are still paying their own taxes too, so the cash flow through the coroporation is double taxed. Once when it goes in, and once when the individuals pay their respective taxes. Well, not to mention the property taxes.

This is why a corporation exists, to protect the individuals taking part, and hopefully you see that it is not a real thing. It's the invisible box. Not anything more, it's paperwork filed with the government that creates this invisible box.

To contrast, an individual's compnay or business would look like this. Think of a guy floating in a chair, or a couple people floating in chairs next to each other in space. They have no protective barrier. No imaginary box that defends them or "takes the blame" or removes their individual liability. They don't have the protection of an invisible box, because they own their company and decide everything. There isn't shareholders, just an owner or co-owners. They are personally liable for their company. They pay taxes etc. just like any other business owner, and their workers pay taxes as well.

Also, why should a foriegn corporation not operating in the US have to pay all the same taxes that a corporation does that is here? If the corp owns land here, they're paying property tax. If they sell $350 trillion worth of goods in the US, people have paid the sales tax on $350 trillion worth of goods. It's taxed. Foriegn based companies shouldn't have to pay an extra tax on that money they earned, especially when they're not based here. The stockholders that aren't US citizens shouldn't be paying US taxes either, they're not citizens here. What obligates them?

 

[mdr]

Your hypocracy is funny, attacking McCain for corporations avoiding taxes when you yourself admit to doing the same, AND forgetting that it is actually OBAMA who is taking in far more donation money from these corporations than McCain...

Pardon me Cuba, but in spite of the fact that I support Obama I never attacked McCain for what foreign corporations are or are not doing. I just pointed out what I consider to be a lack of fairness in the current system. When I attack McCain you'll know it...

I'll dispute that Obama is taking in more donation money from big biz than McCain. And just to help prove you wrong I sent Obama another $100. It's a small amount, but with the other 2,000,000 people contributing to his campaign, I hope it will be enough to give him a chance against the Exxon/McCain ticket. There was a good quote from the movie Swing Vote and I'll use it here. "If America is the richest nation on the planet why is it so many of us can't afford to live here anymore?" If you're better off now than you were 8 years ago - be my guest - vote for another 8 years of the same Republican policy.

Hotei

 

[mdr]

Good! Hey, we're just all here having a fun little conversation. Glad it's enjoyable!

Did the article mention that probably that 25% of large corporations that didn't get double taxed were part of the military industrail complex?

But I think you're still confused about the whole corporations thing, them paying taxes, corps being taxed which makes the money that goes through that corp double taxed, and the individuals in that corporation paying taxes.

Maybe I can make the idea of a corporation more clear, at least I'll try.
<snip>

Dako,
Thanks for the additional info about corps, but it wasn't entirely necessary. I have a lawyer I pay to do our LLC paperwork to keep our invisible box in place around our legal fiction. Hope you still respect me. We have a small manufacturing business and the thought of losing my life savings and my house due to a frivolous / opportunistic lawsuit over the $10 products we sell was a little daunting. I decided to insure against that possibility, thus the LLC. While I knew I wasn't being double taxed I kindof thought that most other S corps might be. Now I know better.

Hotei

 

[mdr]

<snip>
Also, why should a foriegn corporation not operating in the US have to pay all the same taxes that a corporation does that is here? If the corp owns land here, they're paying property tax. If they sell $350 trillion worth of goods in the US, people have paid the sales tax on $350 trillion worth of goods. It's taxed. Foriegn based companies shouldn't have to pay an extra tax on that money they earned, especially when they're not based here. The stockholders that aren't US citizens shouldn't be paying US taxes either, they're not citizens here. What obligates them?

Ummm. Apparently I didn't make myself clear. The foreign corporations are operating here in the US. For example - Yamaha - though I don't know if they paid corporate income taxes here or not so it might be a bad example - for the sake of argument lets assume they didn't pay any of those taxes. On to the example:

Hypothetical :
Yamaha makes a $10,000 bike in Japan, sells it in Michigan and makes $1000 profit on it.
Victory (since everyone hates HD I picked the other American MC maker) makes a similar $10,000 bike in Minnesota, sells it in Michigan and makes $1000 profit on it.

Yamaha pays no corp tax (see above) and thus profit is $1000. for them
Victory pays corp tax at 35% and thus makes $650 profit. (35% corp tax rate is from GAO report)

Since Yamaha makes 54% more profit than Victory on the same value of sales they eventually (?quickly?) force Victory out of business. Result: American jobs are lost and the tax revenue from those products disappears. And yes, before someone objects about different bike markets, the Yamaha Star series is in direct competition for Victory's buyers.

My point was that this arrangement isn't fair. Either make them both pay the tax or neither. Personally I'd rather see the corporate taxes go away, but we still need a revenue/services balanced budget so it's not an easy choice for congress to make - especially in an election year.

Part of the problem is that so many people make their living advising corporations how to evade taxes. If you want to know why I said "evade" (which is illegal) instead of the usual "avoid" (which is legal) then read the whole GAO article like Dako forced me to do. :rtfm: <-- This is Dako yelling at me. :innocent: Seems things haven't changed much at GAO (except maybe the name). Dako, your question about whether the MilIndComplex was over-represented seems to be a "maybe". The highest percentage reporting no tax liability was "manufacturing" at 40% followed by "wholesale". Anyway, my takeaway was that some foreign corporations are cheating (AKA "cooking their books") and the results are hurting the US. For what to do about it ... see paragraph above.

Hotei

 

[mdr]

Good morning,

I'll skip the research, as I'm pretty savvy in regards to electorate law and voting regulations.
When I say wasting, I dont mean that my company is taking part in fraudulent activity, nor that I am party to such fraud.
However, I am free to continue working for the company while believing that some of our projects are of a wasteful nature, that they cost significant money to perform, while not providing worthwhile services to the citizens. I am a taxpayer as well as an employee.

Since I assume you'd otherwise be voting for McCain I'm happy to hear you won't be participating this year. If you were voting for Obama I'd try a lot harder to convince you how wrong you are about your understanding of the law.

I can see the conflict that you're facing by getting a paycheck from a company whose products you don't believe are worth buying. On the other hand, if you're not voting against the government that has been the source of the wasteful purchases with your company then by my book you've pretty much given up the right to gripe about it. I'm glad I'm not in your shoes and I truly wish you well in finding the solution to the dilemma you're facing.

If you've got $5.00 to spare and want a good laugh, go see the movie "Swing Vote". Costner is great.

Hotei

 

[mdr]

Cuba,
This is what a real attack on John McCain looks like. (shamelessly stolen from HuffPost)

Hotei