The republican lie about corporate tax rates

Two-Thirds Of Corporations Did Not Pay Taxes: According to last month's Government Accountability Office (GAO) report, between 1998 and 2005 "about two-thirds of corporations operating in the United States did not pay taxes" because of a variety of corporate tax loopholes.

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Your statistics are a bit out of context in that most "corporations" are more or less empty shells, having no revenues and no taxes either. I run a consulting firm that does about $100 million net revenue per year. That means we see very little in the way of depreciation of capital equipment and things like that (which are real factors). Our Federal and state tax bill works out to about 38.4% of our pretax profits - this of course is in addition to various sales, property and excise taxes - a very large bite indeed. We have professional accountants and lawyers who work hard to minimize our tax exposure, but the resulting taxes are large indeed and very real.

This is certainly a more realistic and accurate picture of the reality than that given in your statistics.

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@georgeob1,

But of course Good Ole Dys won't buy your pitch.

The real question is why should any business pay any taxes other than yet another insidious way to take wealth from citizens?

Tax is a cost of doing business, and business have to pass their costs off to consmers or they can't exist.

If they can't, they operate at a loss and eventually go under. All their employees are then out of work and unable to pay taxes

People like Dys have this ignorant obsession with people like you paying your corporation's tax burden from your personal wealth.

After all, what have you done to deserve your riches?

Your business shouldn't pass off its costs, they should come out of your personal profit.

You need to realize that it's your duty to operate a 100 million company at the slimest of margins, while it is the right of union auto workers to make as much as you.

The stupidity of the position is breathtaking.

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@Finn dAbuzz,

jeeze you offer an alternative thought with potential for discussion and some people just sticck their thumb up their ass and **** comes out of their mouth.

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@georgeob1,

I don't doubt you george but just how "most" corporations would that apply to? Brown & Root, Haliburton etc.

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@dyslexia,

dyslexia wrote:

I don't doubt you george but just how "most" corporations would that apply to? Brown & Root, Haliburton etc.

Haliburton is a very good company. They operate in very risky markets and deal; with a host of risk factors ranging from technical to currency valuations to political issues that we are afraid to touch. Moreover they are a nearly unique concentration of skills and competency in engineering, project management, geological, construction and international mobilization capabilities that have repeatedly been indispensible to major international corporations and governments around the world. In short they represent a key competency in the effective operation of the economy of the modern world.

It is very easy for the uninformed minions of the media and various political hacks to take cheap shots at Haliburton, but few of them could cut the mustard in the very real and accountable projects that this company executes successfully every day.

If we were to apply anything close to the same standard that is applied to Haliburton as is applied to the comedy duo of Pelosi and Reed or even to the fabled tax cheat Geisner, these political amateurs would quickly be laughed off the stage. The credulity of the chattering class - and even more the public - is truly one of the great wonders of the world.

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@georgeob1,

georgeob1 wrote:

dyslexia wrote:

I don't doubt you george but just how "most" corporations would that apply to? Brown & Root, Haliburton etc.

Haliburton is a very good company. They operate in very risky markets and deal; with a host of risk factors ranging from technical to currency valuations to political issues that we are afraid to touch. Moreover they are a nearly unique concentration of skills and competency in engineering, project management, geological, construction and international mobilization capabilities that have repeatedly been indispensible to major international corporations and governments around the world. In short they represent a key competency in the effective operation of the economy of the modern world.

It is very easy for the uninformed minions of the media and various political hacks to take cheap shots at Haliburton, but few of them could cut the mustard in the very real and accountable projects that this company executes successfully every day.

If we were to apply anything close to the same standard that is applied to Haliburton as is applied to the comedy duo of Pelosi and Reed or even to the fabled tax cheat Geisner, these political amateurs would quickly be laughed off the stage. The credulity of the chattering class - and even more the public - is truly one of the great wonders of the world.

well yeah my father worked for Brown & Root but George, the question as about corporate taxes, are you saying Haliburton pays anywhere near top corporate tax rates? And, this has what to do with Pelosi/Reed?

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@georgeob1,

Hey, O'George . . . when Halliburton was ripping the U.S. taxpayers off for tens of millions of dollars on the cost of gasoline purchased in Kuwait to be trucked across the border to the Army in Iraq . . . was that an example of ". . . a key competency in the effective operation of the economy of the modern world"?

Chattering classes indeed . . . there's a chattering class among the shills for capitalism, too, O'George.

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@Setanta,

Setanta,

Your understanding of the duplicitous venality of the bureaucracy of the Federal government is entirely inadequate.

The bastards are entirely capable of telling their contractors to go ahead at full speed no matter what the cost in order to meet an arbitrary deadline and then several years later to quibble about pennies after the fact in an audit when the work is done.

This stuff happens all the time. Take a look at the alleged "overruns" on Ted Kennedy's "big dig" project in Boston.

There is much more to these stories than is reported in our generally superficial and incompetent press.

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@dyslexia,

dyslexia wrote:

well yeah my father worked for Brown & Root but George, the question as about corporate taxes, are you saying Haliburton pays anywhere near top corporate tax rates?

I suspect Haliburton pays a larger fraction of its taxes due that the average Obama appointee.

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@dyslexia,

An alternative thought?

In this forum? Please.

But yes, the title of this thread reveals your desire to engage in reasoned discussion.

Sometimes I err in assuming we are starting with the same basic assumptions and so I have to ask:

Do you agree that it is fundamental economics that for a business to survive, let alone thrive, if must charge its customers some amount in excess of its costs?

Now the Big question: Are corporate taxes part of a businesses costs?

If george must pay his corporate taxes from his profits, and then must pay personal taxes on his profits, is he not getting hit double?

if george is permitted to pass his corp taxes off to his customers as he is the cost of labor and materials, who is the government taxing when they tax business?

If george is charging his customers more than they think his services are worth, no one will buy them and he will go out of business. If he is fortunate enough to provide services that customers will highly value and pay a premium for, how is this a problem, and why should his profits be perceived as "too much?"

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@georgeob1,

You didn't answer the question about Halliburton, O'George. I already knew you were a good dancer, you didn't need to display your footwork for me.

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@georgeob1,

Your honesty about how duplicitous and venal corporate officers work their games is entirely inadequate, O'George. So let's revisit my question in a situation in which you cannot attempt to fob off the responsibility on the administration or the Congress (both in Republican hands at the time of the gasoline pricing scandal with Halliburton/KBR).

Quote:

DOW JONES NEWSWIRES

A KBR Inc. (KBR) unit has agreed to plead guilty to violating the Foreign Corrupt Practices Act for bribing Nigerian government officials for a decade- long span to obtain $6 billion in contracts as the company and former parent Halliburton Co. (HAL) finalized a $579 settlement of federal corruption charges.

The Securities and Exchange Commission had also alleged Halliburton engaged in accounting and internal controls violations in relation to the case.

The deal was announced last month, with the total settlement amount then put at $559 million. The payments smash the prior record in a bribery investigation.

As part of the settlement, the federal government agreed not to prosecute Halliburton as part of the bribery scheme but the company agreed to be jointly liable with KBR. The company had indemnified KBR from fines or other penalties prior its 2006 spinoff.

The KBR unit, Kellogg Brown & Root LLC, will pay $382 million to settle the allegations by the Securities and Exchange Commission and Justice Department, with KBR paying $20 million. Halliburton's cost is $177 million.

The SEC alleged that the chief executive of KBR's predecessor companies, Albert Stanley, met with high-ranking Nigerian officials at least four times to arrange bribe payments in return for construction contracts. To conceal the payments, it entered what the SEC called "sham contracts" with two agents to send money to the Nigerian officials.

Stanley pleaded guilty to bribery and related charges in September, and reached a settlement with the SEC under which he faces seven years in prison and payment of $10.8 million in fines.

The SEC alleged that Halliburton failed to come up with adequate controls to govern such practices, and that as a result of the scheme, Halliburton records contained false information relating to the payments.

KBR's shares were recently down 2.7% at $14.47 and Halliburton's were up 3 cents at $18.36.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; kerry.grace@ dowjones.com

From CNN Money-dot-com, a project of CNN, Fortune magazine and Money magazine--not an irresponsible "liberal" media source in the bunch.

Now, O'George, perhaps you'd be so good as to explain to me if and how Halliburton's admission of guilt in the largest bribery scandal ever investigated by the SEC is an example of their "unique competency." Is one to assume that other duplicitous and venal corporate officers are not as competent to bribe their way into six billion dollars in contracts?

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Here, O'George, from a CBS News article in late 2003 about gasoline overcharges by Halliburton's KBR subsidiary:

Quote:

The defense officials said they had no reason to believe the problems were anything other than "stupid mistakes" by Halliburton. They said the company and the Pentagon were negotiating a possible settlement of the matter, which could include repayment by Halliburton.

Source

So, tell me, are these "stupid mistakes"--as alleged by the Defense Department--evidence of Halliburton's "unique competency?"

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From the Business Week online magazine, a late 2004 article:

Quote:

Chief Executive David J. Lesar might be right when he describes Halliburton Co. (HAL ) as "the most scrutinized company in the world." The $20 billion Houston giant has taken a public beating in the past couple of years over allegations that its Kellogg Brown & Root (KBR) engineering subsidiary overcharged the government on Iraq contracts and that some KBR executives bribed Nigerian officials, as well as for costly ongoing asbestos litigation. But in the eyes of some investors, the most damning thing about KBR is that it doesn't make any money.

For that reason, investors and analysts are betting that Halliburton will dump KBR within six months to a year. The unit is a poor fit with Halliburton's successful oil-services business, they say, and its weak performance explains why Halliburton trades at a significant discount to its peers. Says energy analyst Jason E. Putman at Victory Capital Management Inc., which holds some 2.3 million Halliburton shares: "KBR has become an albatross for them."

KBR was Halliburton's engineering subsidiary. Is this an example of the evidence we will find of Halliburton's "unique competency?"

Had enough yet, O'George? I can do this all night.

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@Setanta,

What aspect of the question about Haliburton didn't I answer? The "sole source contracts" they were awarded for services in support of the Iraqi operation were in fact individual task order assignments under a pre-existing competitive contract awarded before the conflict started - all in accordance with the very lengthy and opaque Federal regulations that govern such things. That core aspect of the much ballyhooed story was fiction from the start. The after-the-fact close out audits enabled the government to take back charges it later deemed excessive - in accordance with standard practice. Much was made about all this, but very little attention was paid to the many items in dispute which proved to be entirely legitamate and in keeping with the specific direction of government project managers at the time. Wars create local shortages and involve high degrees of urgency - factors which tend to raise the prices for locally provided services ranging from warehousing to trucking and labor.

I have been through several post contract audits by Federal agencies ranging from the Corps of Engineers to EPA and the Department of Energy. I can tell you that there is more than a little chicken **** and frankly unfair revisionism by auditors who don't know and aren't even interested in the often conflicting direction provided by their project manager counterparts often several years earlier. It's somewhat like a fraud audit by the IRS, and it involves a heavy presumption of guilt and very little recourse from usually arbitrary administrative findings.

I'm not suggesting there was no wrongdoing on Haliburton's part - it has been extensively reported, generally by a politically motivated press. However, only one side of the story was told.

Dys reported entirely out-of-context statistics on Corporate tax as a percent of GDP from an unnamed source to support his remarkable and very counterintuitive allegations. The answers I gave him were far more substantial than were his rather fantastic allegations.

I thought my crack about Haliburton & other corporations paying a larger fraction of their taxes due than Obama appointees was elegant, to the point and rhetorically quite devastating. Very good dancing indeed.

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@Setanta,

No defense on the Haliburton violations of the FCPA with respect to the bribing of Nigerian officials with respect to petroleum extraction there.

The extent and depth of corruption in Nigeria and among Nigerians is truly legendary. Politically imprudent to say so, but I would never hire a Nigerian for anything. Any company doing business there is eventually caught up in it.

The US law (FCPA) has indeed limited the bad behavior of makor U.S. corporations in this area. Compared to their EU counterparts they are little altarboys.

You, however, are merely restricting yourself to your accustomed role as cranky critic. Relatively easy pickings there. Just what fundamental ideas or propositions are you asserting here - if I may be so bold as to ask?

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@georgeob1,

Quote:

You, however, are merely restricting yourself to your accustomed role as cranky critic. Relatively easy pickings there. Just what fundamental ideas or propositions are you asserting here - if I may be so bold as to ask?

The name calling is unnecessary. I am not asserting any "fundamental ideas or propositions," other than observing that corporate capitalists are as likely to show "duplicitous venality" as you allege is the case with politicians and bureaucrats (who were conservatives at that time of the pricing scandals). I was specifically asking you if these matters are evidence of what you alleged as "unique competency." In fact, this is what you wrote:

Quote:

Moreover they are a nearly unique concentration of skills and competency in engineering, project management, geological, construction and international mobilization capabilities that have repeatedly been indispensible to major international corporations and governments around the world.

Kellogg, Brown and Root was Halliburton's engineering subsidiary. So, i ask you once again, does their behavior provide evidence of this "unique concentration of skills and competency?"

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@Setanta,

Setanta wrote:

Kellogg, Brown and Root was Halliburton's engineering subsidiary. So, i ask you once again, does their behavior provide evidence of this "unique concentration of skills and competency?"

No it doesn't. But neither does it call that competency into question.

I'm not at all fond of or given to name-calling on these threads. While reference to your role as a "cranky critic" does indeed qualify as name-calling in the strictest sense, I don't think it begins to touch your accustomed irritable irascability -- a quality to which I have long since become reconciled. Indeed I even made the reference with a touch of brotherly affection.

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The republican lie about corporate tax rates

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