Conference back40::soapbox

    
    First, I think corporate taxation, other than for externalites, are
    pretty silly and counter-productive.  They hurt companies big time ...
    on the order of magnitude of 50% of profits.
    
    Second, in the scheme of overall tax revenue corpoaret taxes are minute;
    something like 10-15% of federal tax revenue.  
    
    The effect on an idividual is probably something like a 5% sales tax
    (50% tax on a company making a 10% profit).
    
    Greg
      
                                                      

    re. 0
    
    "Everything a corporation receives is income"
    
    Wrong!
    
    Everything a corporation receives is revenue.  They do not pay taxes on
    revenue.  They pay taxes on income (revenue-cost=income).  They may
    have billions in revenue and have no income because there costs were to
    high (Digital in 90-94). 

    re. 0
    
    Corporations have only three ways to deal with higher taxes:
    
    1. Pass along to consumer as higher prices for products
    2. Lower dividend payment to stockholders
    3. Pass along to employees in the form of lower salaries and benefits
    
    In highly competitive, price sensitive markets, you cannot simply pass
    the higher taxes along to the consumer.  

    <---  Please look at Digital's Annual Reports for thje past few years. 
    Even in the years when we lost money big time we had a significant tax
    liability.
    
    Also I was using the term income generically.  Revenue comes from you
    when you purchase a product.  Incoem comes from you after they deduct
    expenses, including the taxes they pay.
    
    They pay 'em - you pay 'em.  It all comes out of your pocket.
    
    I just find it fascinating that some people want to raise corporate
    taxes and have no idea who really pays it.  Wait, amybe they do know
    and figure everyone else is to dumb to figure it out.
    

    
      This doesn't happen to a personal business or partnership.  The
     owners of the corporation get limited liability in exchange for
     the tax.  It's up to you when you incorporate.
    
      bb

    
    
>    I just find it fascinating that some people want to raise corporate
>    taxes and have no idea who really pays it.  Wait, amybe they do know
>    and figure everyone else is to dumb to figure it out.
    
    Assuming you're talking about folks in the US.
    
    
>    <---  Please look at Digital's Annual Reports for thje past few years. 
>    Even in the years when we lost money big time we had a significant tax
>    liability.
    
    We have paid no taxes in the US for a while (and won't for a while). 
    Our SEC filings cover our operations worldwide.  While the company as a
    whole has lost moeny (big money) over the last few years we made money
    in lots of places other than the US and hence the tax bill. 
     
    

    Let's see if we can try this one more time.  Businesses get their money
    from you the consumer one way or another.  The prior reply that said
    companies can cut their costs usually translates into reduced income to
    the employee or the loss of a job.  I for one don't think it's very
    productive to lose my job so the government can collect taxes from my
    employer.  This would put me on unemployment, etc, etc thereby
    increasing the need for more tax revenue.
    
    Also, as far as I know Digital wa snot exempt from paying real estate
    taxes during the past several years, nor were they exempt from paying
    social security.  All of these taxes end up in the end product that you
    pay for.  Add these hidden taxes into your annual tax bill to find out
    what it really takes out of your pocket to support the ever expanding
    governement.
    
    If you think it's a good idea to tax corporations then let's tax the
    government as well.  You will end up with the same result.
    

    Let's make it real simple:
    
       Take the amount gummint collected during the year.
       (include federal, state, and local taxes of all kinds)
    
       Divide that amount by the gross domestic product that year.
    
       The fraction spent by gummint is the tax rate.
    
    Folks, it's been rising for many years.  Any guesses how high it
    is now?  (Hint: close to Ted Williams's best batting average)
    
    -Jerry

One of our major banks here just reported a year end profit of over
a billion dollars.   Meanwhile they nickel and dime the public to death
with service charges for every measly transaction.  I'd love to know
how much tax this bank ends up paying...

    BUSINESSES DON"T PAY TAXES!
    
    The tax burden of any business is reflected in the cost to their
    customer. Taxing business is double taxing the consumer and ever 
    continues to erode the economy.

    
    .5 bb> This doesn't happen to a personal business or partnership.  The
    > owners of the corporation get limited liability in exchange for the
    > tax.  It's up to you when you incorporate.
    
    Corporations (large and small), partnerships, etc. get hit with all
    sorts of fews and taxes that it's not even remotely funny.  Since I am
    a 50% owner of a corporation I get first hand experience with these
    things.  Some of the more enjoyable ones: (Since we do engineering
    instead of manufacturing we are considered a personal service
    corporaction which adds a whole new layer of fun and excitement.)
    
         - If we show any profit, the tax rate is 35% Federal and 10%
         Mass income taxes for a total of 45%.
         
         - I collect a salary from the company.  The company must pay
         7.65% of that salary as an Employment Tax (company's half of
         social security).
         
         - The company must pay 6.8% on the first $10,800 of each
         employee's annual salary to the Dept of Employment and
         Training (unemployment tax).
         
         - The company must pay 1.6% of the first $7,000 salary to 
         FUTA (Federal Unemployment).
         
         (Note, the unemployment is paid on my salary as well as my
         partner's salary even though it is unlikely we would be
         allowed to collect unemployment since we own 50% of the
         company.)
         
         - The company is required by law to carry worker's comp. 
         This is not considered a tax, but is a mandatory payment.  It
         amounts to around $1,000 or so per employee.
         
         - The company must file a yearly report with the state
         indicating officers and directors.  The fee is $85.
         
         - Taxachusetts applies an "asset" tax of $410 per $100,000 of
         assets owned by the company.  If you have less than $100,000
         in assets, you still pay $410.
         
         - If a company has over $3,000 in withholdings in any 4 day
         period, that company must send those withholdings to the IRS
         (via certain banks) withing 3 days of that withholding
         otherwise they get tagged with big penalties.  (I heard of a
         story where an incorrect date was entered on the mainframe
         resulting in being late by 8 hours on the payment.  The
         company was fined over $100,000 for those 8 hours.)
         
         - We don't own realestate, but many towns have different
         rates for industrial and commercial versus residential
         realestate.  I would bet most of those rates are higher.
         
    Note also that if the company ever pays a dividend on its profits,
    the company gets taxed for its profits, then the shareholder gets
    taxed for income.
    
    When all is said and done, the true tax burden on a family of 4
    making $50,000 per year is, I believe, close to 50%.  (When you
    throw in state, local, and fed taxes, sales, excise and other
    taxes on tangibles, and hidden taxes on the costs of goods and
    services.)
    
    	Skip

    re. 10
    
    You are absolutely right, CORPORATIONS DON'T PAY TAXES.  However, you
    only mentioned 1/3 of the reasons they don't.  Taxes are not always
    passed along to the consumers of the corporations products.  Re. 3
    lists the other two:
    
    2. Reduced dividend to stock holders
    3. Reduced salaries and benefits to employees
    
    So either the:
    
    1. customer will pay
    2. stock holder will pay
    3. employee will pay
    
    But NEVER the corporation.
    
    Congress constantly talks about corporate taxes because most of the
    public thinks that that's not them, but it is.  The three groups listed
    above are all the public.  Congress can stick it to you twice without
    the smart ones knowing.  A corporation is only made up of customers,
    stock holders and employees.  There are no more parts.  This is it.

    >When all is said and done, the true tax burden on a family of 4
    >making $50,000 per year is, I believe, close to 50%.  
    
    This is true. Most other countries, who force this kind of tax burden on
    it's citizens, are run by socialist governments. But, at least they give
    their citizens free healthcare.
    
    

    
    
    
    
    NOW...Lets remember that Corporations, at least some, sell their
    wares overseas. So if the cost of taxes are passed to the consumers
    then at least some of our taxes are not paid by U.S. Consumers.
    
    Also, Taxes are a method of control. If you want U.S. Corporations
    to invest heavily into research. You give them a tax break for
    investing in research.  
    
    Promote Investing in employees retirement, health, long term
    employeement, education (Boy did congress they blow it here.), etc.
                  
     

    I was just wondering if other folks saw the same thing I did when I
    heard the clamor for taxing Corporations even more.
    
    I also beleive that the actual tax rate is closer to 60%+ than 50%
    since there are taxes included in purchases that are not identified
    i.e., gas taxes, alcohol, entertainment, etc.  When you add these in to
    the rest of your IRS, SS, State taxes, property and hidden corporate
    taxes the rate gets real high - real quick.
    

    
    
    .15 I'm reminded of a Far side comic looking at a few replies here.
    
    	picture:
    
    	Cows standing in a field grazing and one shouts.
    
    	Caption:
    
    	"Hold on a second...this is grass! We've been eating grass!"

    re. 13
    
    How on earth to you put a 50% tax burden and "free" healtcare in the
    same statement?  It ain't free!  Inflation in the U.S.
    Medicaid/Medicare system is higher than in the private healtcare
    systems.  The Government overhead/regulations/reporting just drives up
    the cost.

    Re: .17, -< It ain't free! >-
    
    That was my not-very-well-made point. It is true though that in other
    countries, where the citizens pay in excess of 50% in taxes, they don't
    shell out extra for health care, like in the US.
    
    ...Tom
    
    ps: So as not to cause confusion, I am totally against government 
        controlled, sponsored or regulated healthcare.

    
    $set mode/rant=high
    
    re:.14

    > Also, Taxes are a method of control. If you want U.S. Corporations
    > to invest heavily into research. You give them a tax break for
    > investing in research.  

    BINGO!  GIVE THAT MAN A CIGAR!  "Taxes are a method of control" and
    this is precisely WHY the congress is so opposed to simplifying the tax
    codes, and lowering our taxes.  With money comes power.  The government
    has no money of its own, because it produces nothing.  Therefore they
    take OUR MONEY, to do what THEY want!  HELLLLLOOOOO!  What's wrong with
    this picture!  Government has become addicted to our money, and we have
    to make it kick this habit.  But like every junkie, it's gonna do
    everything it can to get another "fix".  This is why I vote against
    every tax hike I get a chance to.  If they raise your taxes throw the
    bastages out, they are choking the life outta you!

    Between taxes and inflation we are being cooked alive, and most people
    don't even realize it!
                      
    $set mode/rant=off
    

    Research is tax deductable already.  The regulation is what's killing
    bizness.  Our gov't makes it profitable for companies to leave our
    shores.
    
    MadMike

    
    >Our gov't makes it profitable for companies to leave our shores.
    
    ...as do our consumers, every time they buy "Made In Taiwan" or
    "Made In Bangladesh" or "Made In Japan" or...
    

    Why do consumers buy stuff "made in Taiwan", etc.?  
    
    Look a bit further, and you may find that government regulations cause
    the price of things made here to be more expensive than products from
    Taiwan.  There are other factors, of course, but we can't overlook this
    relation to product costs.

>    Look a bit further, and you may find that government regulations cause
>    the price of things made here to be more expensive than products from
>    Taiwan.  There are other factors, of course, but we can't overlook this
>    relation to product costs.

Little things like child labor laws.  (Probably not true of Taiwan, but
certainly true of newer global competitors like Bangladesh).

    
    ...and anti-pollution laws and minimum-wage laws and workplace safety
    laws and anti-collusion laws...
    

    ..and advertising / sponsorship budgets that make your kids clamour
    for $70 sneakers that cost $5 to make in malaysia.

    
    These last few have been a definite simplification of why things are
    made overseas.  The U.S. employee is the most productive in the world,
    exceeding the second most (Japan) by over $6,000/year in productivity.
    
    When you take costs and divide it by productivity, you get the
    cost per unit of product.  This number is used to indicate where the
    cheapest production costs are located.  For many industries, the lost
    production cost is the USA.  Even after adding in all the taxes and
    other overhead, many industries would be more profitable in the USA if
    produced there.  So why go overseas or south (or north) of the border?
    
    Singer Sewing Machine company offers a good example.  There was a large
    part of a set of sewing machines that could not be done by automation. 
    Yet the work was repitious and boring.  So, even though they were
    offering $14.00 per hour for the jobs, they could not hire enough
    people to fill the orders they had.  After trying for 2 years, they
    decided to move the company.  They moved to Mexico.  Note that although
    they were paying only $7.00 per hour to the Mexicans, the productivity
    was so low they were not making the profit they used to make in the
    USA.
    
    Other reasons companies produce outside of the USA:
    
         Some countries have strict import regulations.  You can't send
         goods to those countries unless a significant portion is made in
         that country.
         
         Labor - the work is labor intensive, yet requires little or no
         skill.  Minimum salary laws usually price unskilled labor above
         its actual value.
         
         Labor - the USA work force is used to a certain type of job.  It
         is also getting used to unemployment/welfare handouts.  The work
         force is getting so it would rather be on the Dole than work.
         
         Supply and Demand - many times companies position themselves
         nearer to a source of materials or their primary market.
         
         Government/corporate subsidies - Many foreign companies get
         subsidize by their government when they export.  Many Japanese
         companies would sell in the USA at below costs to capture market
         share.  They would sell locally at inflated prices to offset loses
         overseas.
         
    There are many more.  Although corporate taxes and labor expenses do
    factor in when a company moves overseas, those are not the only nor the
    biggest of reasons.  As a side note - many Japanese companies are
    starting to open plants in the USA, since they found out how profitable
    it can be.
    
    	Skip

    The whole discussion around foreign made goods always strikes me as an
    incredible effort in fingerpointing.
    
    The simple fact of the matter is is that American consumers look for
    the best buy and couldn't care less about where it was made.  Oh, they
    will from time to time complain about foreign trade but when it comes
    to putting there money on the table they but the least expensive.
    
    The arguments around child labor and environmental issues is just a
    bunch of smoke.  Since when did America become the great arbiter of
    what other  countries should do in terms of employment of their
    citizens and their environment.  The abuses of the American
    environmental activists and laws is well documented.  The laws add an
    incredible amount to the cost of doing business, but the wackos and
    government control freaks keep claiming that these are necessary to
    keep thing spristine - hog wash.  They go so far beyond what is
    necessary that it is beyond comprehension.
    
    If you want to get into the issue of child labor and protecting them,
    well our country didn't do such a good job as we entered the industrial
    age and yet we want to keep others form doing what we did.  Also, if
    you want to get into the whole "bad things" for kids then start looking
    at the studies starting to come out about day care and it's negative
    effect on children.  Of course, we couch it in terms of need, career
    growth, etc.  The bottom line is day care had identified numerous
    negative impacts on children and yet we do nothing about it.  So before
    you rail agianst someone else, start right here and clena up our laws.
     

    
    .27
    
    >The whole discussion around foreign made goods always strikes me as an
    >incredible effort in fingerpointing.
    
    Actually, it was brought up to show that consumers hold just as much,
    if not more, responsibility for corporate relocation as "government"
    (that alien force controlling everything) does.
    
    Skip's reply (.26) was much better (unsurprisingly). 
    

    Re: 28
    
    My response .27 was in reply to notes .23 amd .24.  I did not take
    exception to .26 as I beleive a lot of what was stated is relatively
    accurate.
    
    My response was related to the items raised regarding child labor laws,
    pollution and minimum wage.
    
    Apparently it was difficult for you to follow.
    

>    If you want to get into the issue of child labor and protecting them,
>    well our country didn't do such a good job as we entered the industrial
>    age and yet we want to keep others form doing what we did.

Well, gee whiz, we also slaughtered the Indians, so we're hypocritical to
say Hitler was bad.

    
    .29
    
    HAR!!  
    
    Extra-dense today, are we?
    

    .31
    
    I don't know, are you?
    

    
    
    
    .26 Great note.
    
    .20 read .26 but I'm not sure where .20 came from anyways...
    
    .19 I disagree that control through taxes is a bad thing.
        It's a tool that has its uses.
    
        If there were no taxes and services were magically working on their
    	own tomorrow...do you think you would be any richer?
        I think inflation from a large influx of money into the economy 
    	would quickly replace your taxes and equalize everything out to
    	the break even point very quickly..
    
    	You can't remove all taxes and come out ahead...You can try to be the 
    	minority benifactor of tax changes though. Then you can get an
    	advantage.
    

    re: WILL-bur
    
    My .20 came about as a result of this statement found in .19 and
    .14
    
    > Also, Taxes are a method of control. If you want U.S. Corporations
    > to invest heavily into research. You give them a tax break for
    > investing in research.
    
    To which I said, "They do this".  Then I beefed about regulations
    which is the culprit.  I didn't say ALL regulations are bad, I just
    said trying to run a bizness is a nightmare because of it... for
    whatever reason.
    
    MadMike

    
    re:.33
    
    >     If there were no taxes and services were magically working on their
    > 	own tomorrow...do you think you would be any richer?
    
    uuummm... you missed the point of my note.  My main complaint is the
    control thing.  If you take away their money, you take away their power
    etc...
    

    
    
    
    
    .34 >    re: WILL-bur
    
    	     Isn't MACIOLEK the name of a disease?
    
    

    
    
    	re: .36
    
    	still playing DECweb Dennis?
    
    
    

    
    
    
    .35 Since this is a government by the people? Why would I want to
    	take away my power?
    
    	Taken as a whole I think Government is doing a good job so far.
    	
    	There are lots of things I'd like to change but balanced against
    	what others think should be done...Government becomes a tug of war
    	toy...that sooner or later goes in the direction the masses demand.
                                                                           

    
    
    
    	.37 Can't live without it.
    
    

    
    	re: .39
    
    	8*)
    
    	Wish I still had the time for it. No better feeling than taking
    over someone's homeworld....:)
    
    
    	jim

    >Taken as a whole I think Government is doing a good job so far.
    
    
    <insert choking noises>  <<thud>>

    I know Steve, when I read that I didn't know whether I should have laughed 
    or cried. :(

    
    
    
    .42 I must admit I was more comfortable with the universe when it used
    	to be the Conservatives that were screaming
    
    			"America, Love or Leave it"
    
    	

    < Note 615.33 by MIMS::WILBUR_D >>        If there were no taxes and
    services were magically working on their own tomorrow...do you think
    you would be any richer? I think inflation from a large influx of money
    into the economy
    
    - - -
    
    There is one extremely important and major differrence between taxation
    and paying for your own services - CHOICE.
    
    Taxation forces you to pay for services you may neither need, want, nor
    afford.  
    
    Unfortunately, the flip side is that there may be services that you
    desperately need, but could not afford, or would be unreasonable to
    assume the total costs on an individual basis.  For example, national
    defense comes to mind.  It is difficult as an individual to defend your
    property from other countries.  (Of course then gun control becomes a
    totally moot point.)
    
    But consider this item - There are two people - A and B.  A, for
    whatever reason decides to live a life of leisure.  B is therefore
    forced to labor 4 months a year to supply A with the money and goods to
    support that life of leisure.  What is the relationship between A and
    B.
    
    To me it looks like A is the master and B is the slave.  To the US
    Government, A is the welfare recepient and B is the taxpayer.  Here is
    a case where B never benifits, and yet has to pay.
    
    A goverment can be viewed on what roles it takes in society.  The major
    ones are:
    
    				Establish a system
    				of trade and money.
    					/\
    				      /    \
                                    /Capital-\
                                  /    ism     \
                                /                \
                              /                    \
                            /          USA           \
                          /              \             \
                        /                 v              \
                      /                                    \
                    /                                        \
                  /                                            \
                / Feudalism                             Communism\
              /----------------------------------------------------\
    	Protect the						Redistribute
    	Citizens from						the Wealth
    	Domestic and
    	Foreign Threats
    
    Those that concentrate on trade and monetary system are true
    capitalistic based governments.  Those that concentrate on protection
    are Feudalistic in nature.  While Communism is designed (in theory) to
    distribute the wealth as widely as possible.
    
    No viable government can totally ignore one aspect over the other two. 
    Yet, a balance needs to be maintained.  Increasing taxes to support
    different public projects always slides you towards the redistribute
    the wealth end.  Cutting taxes and government regulations on
    corporations slides you towards capitalism.  Protecting the citizens
    can't be ignored, since that is where individual rights comes in.  So
    it is a delicate balance.
    
    What has been shown throughout the world is that the redistribution of
    wealth tends to not work on several fronts:
    
        - No incentive to try harder.
        - Corruption means redistribute to those in power.
        - Mediocrity is rewarded over excellence.
        - Buracracy runs rampant.
        - The feedback between supply/damand/reward is so filtered it 
          can stop functioning completely.
    
    Thus, as been shown in every Communistic/Socialistic country, the GNP
    growth stops and even reverses.  The idea of capitalism is to allow the
    best to zoom ahead, and the rising tide of their excellence helps
    everyone.  ("A rising tide lifts all boats")
    
    Although the theory is fine, the reality is that many boats sink.  Some
    of the problems are:
    
        - A gap forms between the rich and the poor.  Class structure
          forms (whether or not it is intended).
        - The size of the gap will always grow.  (year one - rich =
          $100,000, poor = $10,000 - gap $90,000.  Year 5, both groups
          grew by 40%.  Rich = $140,000, poor - $14,000 - gap $126,000.)
        - Fraud and deception can easily rob the less knowledgeable.
        - Huge dislocation as technology and markets change.  Whole 
          industries can disappear very quickly cause large scale
          unemployment.
        - Those without access to education will have little luck
          in getting ahead.
        - A serious event (injury, lost job, etc) could cause a rapid
          decent from the upper class to the lower class.  The climb 
          back up may be difficult.
        - No "safty net" for the "disadvantaged"
    
    Anyway, this note is going on for too long - so I will sum it up.
    
    Up through the early 1900's, this country was very capitalistic.  Maybe
    to much so, as there was no underlying safety net when the depression
    showed up.  We have now swung to far to the communistic/socialistic
    side.  That also has significant drawbacks.  It is time to start
    heading back towards true capitalism (but not going all of the way).
    
        Skip

    re: .44
    
    Actually, we did have a safety net- just not a government safety
    net.  In comparing the different eras- pre(federal)government net to post
    government net- it is difficult to find any benefits whatsoever to
    having this (federal) government net.  Private charity- especially
    during the Great Depression- was certainly a capable ally to those in
    trouble.
    
    I know the arguments will come that there weren't as many
    "disadvantaged" then, but I submit that the government run charity is
    responsible for this dramatic increase, and has created an entire
    "disadvantaged" class.  We have a full 1/3 of our economy being pissed
    away on "entitlement" programs.  Imagine what kind of productivity we
    could have with this 1/3 of our economy back in the hands of the
    taxpayers.
                             
    
    -steve

    re. 44
    
    "I think inflation from a large influx of money into the economy."
    
    It seems your long diatribe on economics begins with a blatant error in
    he first paragraph.  Inflation is caused by too much money chasing too
    few goods and services.  You seemed to miss the part about the goods
    and services. 
    
    Did it ever occur to you that reducing taxes would free up productive
    capital and thus help generate more goods and services, thus countering
    the large infux of money into the economy?

    .46 > It seems your long diatribe on economics begins with a blatant
        > error in he first paragraph.
    
    The quote was actually from .33.  I was quoting it as an intro to my
    long diatribe.  I am sorry I did not more clearly indicate it was a
    quote from a previous message.  I am fairly familiar with how inflation
    and economy works.
    
    As a note - Deficit spending tends to be inflationary, especially
    during the early stages.  This was seen with the inflation between 1968
    and 1984.  We have gone over the edge and reached the deflationary
    stage of deficit spending and hence the well behaved inflation of
    recent years.  The deflationary phase starts when the interest payments
    exceed the deficit amounts.  This tends to reduce the amount of money
    available (especially if a lot of the money is going overseas).
    
    	Skip