1
2
3
Next

Read Discussion
Reply to All

1

Corporate citizenship?

Forums: Politics
Email this Topic • Print this Page

According to the General Accounting Office, between 1966 and 2000, sixty percent of American corporations paid NO income tax. The office said that apparently income tax evasion, either legal or illegal, has become a fundamental aspect of corporate culture.

The conservative Heritage Foundation explained, "Corporations have a responsibility to their share holders to pay as little tax as possible."

Does the Heritage Foundation have this right? If so, how is a corporation different from co-operative financial entities, say, a family? Why might not the father or mother, whoever is in charge of family finances, make the same claim, "It's my responsibility to keep as much money in the hands of my family as I possibly can."?

Topic Stats
Top Replies
Link to this Topic

Type: Discussion • Score: 1 • Views: 2,275 • Replies: 48

No top replies

Re: Corporate citizenship?

blatham wrote:

According to the General Accounting Office, between 1966 and 2000, sixty percent of American corporations paid NO income tax.

The way you stated it, this doesn't surprise me at all; it has a perfectly harmless explanation. Most companies, incorporated or not, go bankrupt in the first one or two years, without ever making a profit to pay taxes on. If the General Accounting office's number applied to all American corporations that stayed alive from 1966 and 2000, and if sixty percent of these paid no income tax at all for 34 years, I would be very surprised indeed. But the way you stated it, the General Accounting Office's statement doesn't mean anything.

blatham wrote:

The office said that apparently income tax evasion, either legal or illegal, has become a fundamental aspect of corporate culture.

Judging by casual newspaper reading, I agree that an increasing number of corporations incorporate themselves in Bermudas and other tax havens, but continue to receive government services in America. That's legal, but it stinks to high heaven.

blatham wrote:

The conservative Heritage Foundation explained, "Corporations have a responsibility to their share holders to pay as little tax as possible."

Does the Heritage Foundation have this right?

They do, if "as possible" implies "as legally possible". In my opinion, there are two solutions to this problem. One is to abolish taxes on corporations. All taxes are ultimately paid by people, and I don't see the case for taxing people who work for companies twice when freelancers are taxed only once. The other solution would be a rule that corporations pay taxes which are based on the public infrastructure they use, not the income they generate.

blatham wrote:

If so, how is a corporation different from co-operative financial entities, say, a family? Why might not the father or mother, whoever is in charge of family finances, make the same claim, "It's my responsibility to keep as much money in the hands of my family as I possibly can."?

I know many families who are making this claim, and who do go through a lot of trouble to save taxes. Nothing wrong with that, as long as they keep it legal.

0 Replies

Re: Corporate citizenship?

blatham wrote:

The conservative Heritage Foundation explained, "Corporations have a responsibility to their share holders to pay as little tax as possible."

Does the Heritage Foundation have this right?

Without more context it's hard to say but overall. Yes, I think they do have it right. There is a fiducary responsibility to the shareholders to work to maximize their returns.

Quote:

If so, how is a corporation different from co-operative financial entities, say, a family? Why might not the father or mother, whoever is in charge of family finances, make the same claim, "It's my responsibility to keep as much money in the hands of my family as I possibly can."?

I don't think they are much different at all. People seem to to use as many tax deductions/credits as they can when they file (at least here in the US). I doubt many people think of it in the term expresed here but the end result of their actions comes out the same doesn't it?

0 Replies

In my opinion, every entity has got to contribute at least some income tax.

0 Replies

Suzy: Families are entities too. How would you feel if somebody proposed to introduce an income tax on famililes? And if you feel that would be unjust, what makes corporations different than families for tax purposes?

0 Replies

or churches

0 Replies

Thomas,
Families already pay income taxes.
Yes, I know, so do individuals in corporations, however, there's a difference. They are for-profit entities making money from individuals. They are businesses, taking money from Americans and making a hefty profit, and as such, should throw a little extra in the pot for the privilige of being allowed to do business. You can think of it as a "kickback" if you like. I think it's warranted. I know you'll disagree, but that's what I believe.
Churches, too? Yeah, why not?
There should be a cost to doing business, yes.
I don't understand why you should worry about giant corporations having to pay taxes. They already get all kinds of breaks just for existing.

0 Replies

suzy wrote:

I don't understand why you should worry about giant corporations having to pay taxes. They already get all kinds of breaks just for existing.

So do churches, families, and individuals.

I think there are several misconceptions in your posts. First of all, most corporations are not giant. Second, doing business is not a privilege. It is a right every sane adult has, and so is associating to do business together. There may be good reasons for taxing corporations, but charging for the privilege of doing business is not one of them.

Third, corporations aren't just taking money from Americans; they are also making money for Americans. You, as an individual, save a lot of money by buying your car from a big Detroit corporation instead of building it yourself.

It's too much to say that I worry about companies having to pay taxes. I just don't see a good case for it either. And I suspect that corporate taxes are popular mostly because of an optical illusion. They make people believe that taxes are being paid by someone else instead of themselves -- which they aren't.

0 Replies

Thomas

What room do you make for 'ought' claims regarding taxation? That is, do you see any moral component in the matter?

You bring up the aspect of 'legality'...an entity (corporate or family) within the civic community ought to follow the established laws, you feel. But is that a moral concern or simply a pragmatic one (agreement and consistency needed for the group functioning with predictability)?

If a family, say, is to operate such as to minimize the taxes they pay towards the group endeavor, this seems to place that family in opposition to the larger community. Likewise, a corporate entity.

If I imagine the sort of early neolithic community, where permanent habitation replaced seasonal occupation, various group endeavors like irrigation systems had to be engaged. These would often have been large projects and, one assumes, everyone would have been expected to make physical contribution to the endeavor. If each family were to have as their fundamental goal the minimization of time and effort towards such projects, then problems arise.

0 Replies

blatham wrote:

What room do you make for 'ought' claims regarding taxation? That is, do you see any moral component in the matter?

I do, but I'll spare you the full exposition of the "oughts" because they can fill a whole thread of their own. For the purposes of this thread, suffice it to say that I believe moral claims ought to be addressed to individuals, not collectives. Individuals have hearts and brains, collectives don't. Therefore I don't see collectives as meaningful moral entities, no matter if they're companies, churches, families or states.

blatham wrote:

You bring up the aspect of 'legality'...an entity (corporate or family) within the civic community ought to follow the established laws, you feel. But is that a moral concern or simply a pragmatic one (agreement and consistency needed for the group functioning with predictability)?

I feel it's both. On the other hand, every moral concern I can think of is grounded in pragmatic benefits, so I reject the distinction you are making here.

blatham wrote:

If a family, say, is to operate such as to minimize the taxes they pay towards the group endeavor, this seems to place that family in opposition to the larger community. Likewise, a corporate entity.

That depends on the tax system. In a well designed tax system, a family can minimize the taxes it pays by sending its children to private schools, by taking care of its elderly members itself rather than by sending them into a government-run retirement home, by donating to charities, and by doing all kinds of other things that benefit society. If a family turns out to rip off the larger community by legally avoiding taxes, I see that as a bug in the tax code, not as a defect in the family's values.

0 Replies

Quote:

For the purposes of this thread, suffice it to say that I believe moral claims ought to be addressed to individuals, not collectives. Individuals have hearts and brains, collectives don't. Therefore I don't see collectives as meaningful moral entities, no matter if they're companies, churches, families or states.

I understand your point here...one can't coherently say that 'Belgium is a moral country'. And where some body, such as the ICC, addresses immoral acts, they clearly have to target individuals.

Yet I'm uncertain that your formulation is sufficient. Would the Nazi party be a morally-meaningless entity? Or the Hell's Angels? Or a street mob in Fallujah? Or a group of fifty of Atilla's horsemen?

In other words, is the culture and circumstance of said group irrelevant?

The complaint from certain folks like Elliot Spitzer, which I think has obvious merit, is that modern corporate culture too commonly operates unethically or immorally. Obviously, that means that the individuals making the specific decisions are the causal factor. But that would also hold true in the instance of Tariq pulling his horse in near a running woman and lopping her noggin off.

I'm deeply uneducated on corporate law. Are there no legal constraints directed at the corporate collectives?

0 Replies

blatham wrote:

Yet I'm uncertain that your formulation is sufficient. Would the Nazi party be a morally-meaningless entity? Or the Hell's Angels? Or a street mob in Fallujah? Or a group of fifty of Atilla's horsemen?

In other words, is the culture and circumstance of said group irrelevant?

I'd say that none of these have morals standing as entities. Their individual members each have moral standing (good or bad) and those morals are formed in the culture of each group though.

Quote:

I'm deeply uneducated on corporate law. Are there no legal constraints directed at the corporate collectives?

There are laws that cover corporate entities in regard to labor, financial, environmental and other issues. But most laws are directed at how individuals within those corporations act. There are many more laws covering things like stock ownership and trading, etc.. Most state corporation statutes operate under the assumption that each corporation will adopt bylaws to define the rights and obligations of officers, persons and groups within its structure. Federal securities laws govern requirements of fiduciary conduct for corporate members too. Those set out requirements for what those people must tell employes and investors.

To use an example, if incorrect information is given to investors (i.e. ENRON, etc..) the individual officers are subject to legal sanctions for failing to comply with their fiduciary responsibilites but the corporation itself isn't necessarily liable.

0 Replies

I have not done a thorough analysis, but I would guess 60% of American corporations are mom and pop businesses who incorporated to reduce the extreme general liability exposure in our litigious society. If so, it is probable that 'mom and pop' assigned all corporate profits as salaries to themselves and maybe a few employees leaving no profit to tax in the corporation. They, in turn, of course did pay taxes on the salaries they paid to themselves. If they don't do it this way, they wind up being double taxed.

0 Replies

Okay. I'm speaking specifically of multi-nationals.
The sleaze bags who move operations (and jobs) overseas to avoid paying taxes in the country in which the majority of share-holders and executives live and where they make their profits.
Not families, nor mom & pops or nazis.

0 Replies

Like John and Mrs. Kerry and the Heinz corporation? Sorry, I just couldn't resist. Smile

Smile

0 Replies

fishin...thanks. Of course, you and I have talked about similar matters before, as has thomas. This is a frustrating area for me, due to lack of appropriate study. Intuitively, I feel you two guys are missing something, but I'm likely much less capable of finding out what that might be than you two are.

Could you please make my arguments for me, and then form a weak rebuttal.

0 Replies

What fer is we missin'? If anything here methinks the only real differences are how we view the "corporate" entity.

You seem to want it to be something tangible which isn't how I see it. But, with regard to your original post here, I don't condem corporations for using the tax code to their advantage any more than I do when an individual does it. I DO disagree with a lot of the tax breaks they are given though.

0 Replies

That's my problem with them too.
As far as Heinz goes, they sell food products. They sell in the countries where the food is made. It's a freshness thing. It's not merely a tax avoidance scheme, although I'm sure it does the same hijinx as other multi-nationals.

0 Replies

suzy wrote:

As far as Heinz goes, they sell food products. They sell in the countries where the food is made. It's a freshness thing.

*choke* Come on now! Very Happy

Very Happy

Freshness? Really? lol What's the shelf life on mustard and relish? 4 years? 5? It's not like they are selling fresh produce here.

0 Replies

That's false fishin'. They do sell perishables and "fresh" products.

For example:

Bagel Bites®
Poppers®

In addition the "freshness" of the end product is not really the factor, the freshness of the ingredients on their way to the end product is.

Importing the end product makes no sense from a financial standpoint. The claim that Heinz's is outsourcing is meant to imply anti-americanism when in reality the foreign market for almost all food products is dictated by logistics and local production is the only business strategy that is viable in some markets.

0 Replies

Related Topics

Obama '08? - Discussion by sozobe

Let's get rid of the Electoral College - Discussion by Robert Gentel

McCain's VP: - Discussion by Cycloptichorn

AMERICAN CONSERVATISM IN 2008 AND BEYOND - Discussion by Foxfyre

Food Stamp Turkeys - Discussion by H2O MAN

The 2008 Democrat Convention - Discussion by Lash

McCain is blowing his election chances. - Discussion by McGentrix

Snowdon is a dummy - Discussion by cicerone imposter

Fellow Bostonians: How many of us wished we had an assault weapon last night? - Question by maxdancona

What should be first on the agenda of the winner in November? - Discussion by Frank Apisa

TEA PARTY TO AMERICA: NOW WHAT?! - Discussion by farmerman

Forums
» Corporate citizenship?

1
2
3
Next

Read Discussion
Reply to All

Copyright © 2024 MadLab, LLC :: Terms of Service :: Privacy Policy :: Page generated in 0.03 seconds on 05/03/2024 at 08:23:38

▲ ▼