As I have repeatedly explained on this blog, from entries on polls to entries on "global warming" to entries showing how the despicable, anti-American AP twists numbers, there is no truer statement than this one (from an original source unknown to me): "There are three types of lies: lies, damn lies and statistics." The implication is that "statistics" are the worst kind of lie, or at least the most dangerous (pretending a meaning they do not have, as if that meaning is established by mathematics or science).
Democrats have gotten the General Accountability Office to determine how many corporations paid taxes. Now one of the unreported things going on here is the POLITICALIZATION of the GAO (always described as "non-partisan). Make no mistake about it, This was a DEMCORAT CAMPAIGN STUNT. The "statistics" lie was the "news" announcement that "most" (more than half) of U.S. corporations paid no Federal Income Tax in several years ending in 2005.
General Motors will pay NO income tax this year. That is because it LOST MONEY. It is true that it is a multi-billion dollar corporation, but it still LOST MONEY. Ditto Citicorp. Ditto bankrupt IMB. Ditto almost ALL banks and financial institutions, and companies depending on the "burst bubble" housing industry. Not true, of course, for Big Oil--demonized by the Democrats. Big Oil pays LOTS of taxes, and the Federal Government has made LOTS of money out of higher oil prices--even though the direct gasoline tax has not been raised. It is only leftists, Democrats, and the media who would suggest that corporations should automatically pay taxes, WHETHER THEY MAKE MONEY OR NOT.
"Hey," you protest, "the economy was doing WELL in 2005." Indeed it was, although you would never know it from media reporting at the time. Statistic is still a LIE, and means absolutely NOTHING. You have to understand how corporate taxes operate.
MOST profitable pubic companies pay substantial taxes (a tax rate of 35%--one of the highest rates in the world). However, PRIVATE companies are operated in a way to pay little in income taxes. This lying by statistics was NOT limited to public companies, or large companies, but included ALL corporations. There is "double taxation" of corporate profits and dividends. Corporations get no deduction for dividends, and recipients are taxed on them. However, corporations can ELECT to be treated as a partnership, which means the corporation pays NO income taxes (but the individual owners do pay a tax on the profits). Further, private corporations generally try to pay their profits out in SALARIES, if they would otherwise owe income taxes. It is true that salaries and bonuses are not supposed to be used as a subterfuge for dividends, but there is no reasonable way to determine what a "reasonable" salary is when public company CEO's are routinely earning 40 million dollars these days (not just Big Oil either). This is not really a "tax dodge", since people receiving the salaries DO have to pay tax on them.
Aren't there tax loopholes? Sure. Some. For example, there are all of those TAX CREDITS for "renewable fuels"--including credits to Big Oil for using "biofuels" like ethanol and biodiesel. However, unjustified as that credit may be--fuel would be MORE expensive without the credit, and gasoline already goes up as the more expensive fuel mix goes into effect in summer. The oil companies, however, have made a lot of money, and paid a LOT of taxes. The "corporations" who pay NO taxes are those beloved of Democrats, such as solar power, wind power, fuel cell, and similar companies with BIG tax credits--so big that the companies only EXIST because of TAXPAYER MONEY. Every tax loophole has been created by Congress. As I have explained before, a TAX CREDITA (like the "earned income tax credit" for the "working poor") are an EXPENDITURE of the Federal Government (in most cases, although sometimes they can be the equivalent of a tax deduction). Cuts in TAX RATES are NOT an "expenditure". That is merely letting people keep their own money.
You should realize by now why this headline today was "lying by statistics". The reasons why so many corporations pay no income tax are varied--including simply losing money. As a comparison, almost 50% of INDIVIDUALS pay little or no Federal income tax. That is because they don't earn enough money (after we have deliberately kept raising the threshold for owing income tax). In fact, as stated, MANY individuals get PAID by the Federal Government (earned income tax credit). That is why Democrats can claim tax cuts mainly benefit "the rich". "The rich" are the main ones PAYING TAXES--depending on how you define "rich". See last week's entry as the Walter Williams' view that this is THEFT--taking money from the "rich", at the point of a gun, and giving it to the "poor"--sometimes directly, as in the recent "tax rebate" or the "earned income tax credit".
The point here is that there are MANY reasons why "most" corporations pay no income tax. Means nothing, unless you can show that we should STOP SPECIFIC TAX BREAKS OR PRACATICES. Otherwise, you are just acting as a demagogue by issuing a "statistic" like this. It is EASY to imply that a meaningless statistic like this means something, when it means NOTHING. What is HARD is to sell the idea that specific tax "breaks" (the ethanol one benefits not only big oil, but farmers). should be taken away. There is a REASON that these disgraceful farm subsidy bills (farm welfare) keep getting passe, even over vetoes.
I would be in favor of limiting these "corporate" tax breaks on solar power, wind power, farmers, etc. Would you?
Nope, when you see headlines like this, about how many corporations pay no income tax, you should realize they mean one, and only one, thing. DEMOCRATS AND LEFTISTS THINK YOU, THE PUBLIC, ARE STUPID. They think that you will accept a the demagogue EMOTION behind presenting this statistic, without looking at whether it really means anything.
As I have said before, you could say that Democrats are proven right, in a major way, because the mainstream media routinely presents these Democrat/leftist lies without critical scrutiny. But you know, and I know, that the mainstream media is now an ARM of the Democratic Party. Therefore, it is not so much that they are stupid, although they may be, but that they are part of the left who think
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