First off, the idea behind buycott.com makes me happier than I've been in a long time. Only time will tell if this actually works, but the intention and approach seems fantastic.
It led me to this idea for Tax Reform...
We know that companies like GE have legions of tax lawyers and so they are able to simultaneously:
- make huge profits
- get huge subsidies
- pay no taxes
It pisses me off that I personally (and my small business) pay more taxes than GE. But what's to be done?
Imagine that a non-profit organization was created. Many small business would contribute to this non-profit. The non-profit would hire lawyers to analyze the tax returns and/or financial statements of large corporations like GE, and document the strategies that large corporations use to minimize taxes. The next step would be for these lawyers to create versions of these same strategies that small businesses could use. Basically, we'd all band together to hire our own legion of lawyers so that we could do taxes like the big boys!
Spot false dilemmas now, ask me how!
(If you're not on the edge, you're taking up too much room.)
I'd think we should just simplify the tax code and make it more transparent so that everyone would pay their fair share. We could then put the legions of lawyers to work on something with more social benefit like ... well, anything. They're lawyers now, so the bar is pretty low.
My guess would be that a number of options available to someone shifting around $1b is larger than the number of options available to someone having $1m. Like, the Cayman Islands may not allow them to incorporate, or some investment fund may not let them invest because the amounts are too small. So I'm not sure how far the "create versions of these same strategies that small businesses could use" part could go.
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Greg Charles wrote:I'd think we should just simplify the tax code and make it more transparent so that everyone would pay their fair share. We could then put the legions of lawyers to work on something with more social benefit like ... well, anything. They're lawyers now, so the bar is pretty low.
That's not going to happen. Unfortunately, lawyers are involved in drafting the laws, and it is clearly against their interest to draft laws that would result in, well, less work for the lawyers.
Whenever I've tried to profoundly understand any law in my country (including my country constitution), I found it to be confused, convoluted and surprisingly often interpreted to mean the exact opposite of what you'd understand in common language. No wonder you need to study 5+ years to be able to understand the law. (Now, that's job security! )
Which reminds me of a joke I've heard long time ago: a band of criminals hijacks a charter plane full of lawyers going to a law conference. After long and difficult talks with police negotiator they came up with their terms: "We want a million of dollars and a free passage. If our conditions are not met, we're gonna free one lawyer every hour!"
The idea of making businesses pay their "fair share" is this; businesses do not pay taxes. Ever. Any taxes levied on a business are passed along to the consumer as part of the cost of doing business. Only wage earners and consumers pay taxes.
This misconception has always annoyed me when people start ranting about how the oil companies should pay more taxes. You can tax them all you want, it's just going to drive up the price of oil products. Ditto for any other product or service. In the end, only you and I pay taxes.
I'll avoid the temptation of launching into a tirade about our tax system and the IRS.
"There is no reason for any individual to have a computer in his home" ~ Ken Olson, Co-founder of DEC, 1977
J. Kevin Robbins wrote:Only wage earners and consumers pay taxes.
While I agree with the philosophy behind your statements, this one is not true. Stockholders (who are people) also pay taxes on the dividends and/or capital gains.
While his statement was unfortunate, Mr Romney's statement that "corporations are people too" is correct on two levels: first, as far as the law is concerned, a corporation is treated as if it was one person for most things. and second, mythical legal entities don't pay taxes, only people pay taxes, so you have to settle the money out of the corporation and into the hands of real people before you can talk about it.
Any multi-national company that does NOT arrange its transactions to minimize taxes is failing at its fiduciary duties to its stockholders.