OT Are taxes killing us financially?

On Wed, 23 Mar 2011 14:57:36 -0500, Ignoramus29973


Funny you should bring up this topic. The other week I added up all the federal, state, and local taxes, Social Security, Medicare, etc witheld from my pay check last year and divided that by my gross income. All those witholds cost me 34%, and I never qualify for a refund. and no I didn' t make a mistake in my taxes; they're done by an accountant.
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GeoLane at PTD dot NET wrote:

Clearly you don't make enough money to get beyond regressive payroll taxes.
G.E.'s Strategies Let It Avoid Taxes Altogether By DAVID KOCIENIEWSKI General Electric, the nation's largest corporation, had a very good year in 2010.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.
Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.'s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world's best tax law firm. Indeed, the company's slogan "Imagination at Work" fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.
While General Electric is one of the most skilled at reducing its tax burden, many other companies have become better at this as well. Although the top corporate tax rate in the United States is 35 percent, one of the highest in the world, companies have been increasingly using a maze of shelters, tax credits and subsidies to pay far less.
In a regulatory filing just a week before the Japanese disaster put a spotlight on the company's nuclear reactor business, G.E. reported that its tax burden was 7.4 percent of its American profits, about a third of the average reported by other American multinationals. Even those figures are overstated, because they include taxes that will be paid only if the company brings its overseas profits back to the United States. With those profits still offshore, G.E. is effectively getting money back.
http://www.nytimes.com/2011/03/25/business/economy/25tax.html?_r=1&hp
--
John R. Carroll




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On Thu, 24 Mar 2011 20:27:29 -0700, "John R. Carroll"

========Another excellent argument for an AMCT [alternative minimum corporate tax] possibly based on total domestic gross sales rather than net domestic profit.
Another "buzz phrase" that resonates is "unitary taxation." http://www.jrank.org/finance/pages/13376/unitary-taxation.html http://www.caltax.org/issues/legislation/WatersEdgeUnitaryTax.pdf http://findarticles.com/p/articles/mi_m1079/is_v84/ai_3329237 / and many more
-- Unka George (George McDuffee) .............................. The past is a foreign country; they do things differently there. L. P. Hartley (1895-1972), British author. The Go-Between, Prologue (1953).
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On Thursday, March 24, 2011 10:04:12 PM UTC-7, F. George McDuffee wrote:

We have that right now in Oregon and it taxes "C" corps on their gross sales in Oregon. This is the second year in force because the legislature back dated the law! "S" corps and others pay a minimum of $150. I have had to borrow that amount because my company lost money.
As many "C" corps as possible have changed to "S" corps. Many co-ops have gone out of business. Many large wheat ranches, etc. have been sold to out of state corporations. They would have NO in state sales.
Of course, the lawyers, the "PC" professional corporations, are exempt!
What a screwed up mess.
Paul
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KD7HB wrote:

Perhaps but this doesn't look especially onerous to me. You can't get a business license in most California cities at the rates Oregon charges.
Revised Minimum Tax - Prior to the law change, Oregon imposed a $10 minimum tax on all C
corporations subject to the corporate excise tax as well as all S corporations, but partnerships were
not subject to a minimum tax. For C corporations or affiliated groups filing a return under Or. Rev.
Stat. § 317.710, the new law revises the minimum tax by applying a sliding scale based on Oregon
sales as determined under Oregon's sales factor rules (Or. Rev. Stat. § 314.665).3 The applicable
minimum tax amounts, based on Oregon sales, are as follows:
. Less than $500,000 $150
. $500,000 or more, but less than $1 million $500
. $1 million or more, but less than $2 million $1,000
. $2 million or more, but less than $3 million $1,500
. $3 million or more, but less than $5 million $2,000
. $5 million or more, but less than $7 million $4,000
. $7 million or more, but less than $10 million $7,500
. $10 million or more, but less than $25 million $15,000
. $25 million or more, but less than $50 million $30,000
. $50 million or more, but less than $75 million $50,000
. $75 million or more, but less than $100 million $75,000
. $100 million or more: $100,0004
The revised law also imposes a minimum tax of $150 on S corporations and on partnerships
transacting business in Oregon.5 These law changes are effective for tax years beginning on or
after January 1, 2009.
http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Content/Articles/Tax/us_tax_OregonIncomeTaxChanges_07-21-09_v3_.pdf
--
John R. Carroll




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KD7HB wrote:

Why do people so steadfastly refuse that there's no such thing as a corporate tax, at least not the way the politics of envy sees it. To a corporation, no matter how much you tax them, from their point of view, it's just part of the cost of doing business, and the only place they get the money to pay it is from their customers. When you raise corporate taxes, all you're doing is raising the price you pay for products.
Thanks, Rich
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From the Lockheed Martin 2009 annual report.
$4,284,000,000 earnings before taxes
1,267,000,000 Federal Income Taxes.
Doing the math I get 29.58 % as the percentage of Federal Taxes. Did you pay as high a percentage of your income in taxes? Or are you much better than Lockheed Martin at not paying your way?
Dan
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wrote:

From the Lockheed Martin 2009 annual report.
$4,284,000,000 earnings before taxes
1,267,000,000 Federal Income Taxes.
Doing the math I get 29.58 % as the percentage of Federal Taxes. Did you pay as high a percentage of your income in taxes? Or are you much better than Lockheed Martin at not paying your way?
Dan
===================================================Lockheed Martin's business is 74% defense contracts. We pay them for what they make, and they build their taxes into their bids -- so we pay them on top of what they make for the taxes they pay back to us.
Nice work if you can get it.
--
Ed Huntress



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As far as I know, every company gets paid for what they make. And every company build taxes into their bids. So every time you buy something you are paying for the taxes on top of what the item costs.
So I do not understand what you are trying to say.
Dan
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wrote:

Most of Lockheed Martin's defense work is sole-sourced, no-bid, fixed-price-incentive, cost-plus-incentive-fee, and/or cost-plus-fixed-fee.
You remarked about the high percentage -- 29.58% -- of profits they pay in taxes. The reason they pay high taxes is that they don't care. They just tack it on to their fees.
As I said, nice work if you can get it.
--
Ed Huntress



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Most of Lockheed Martin's defense work is on contracts which were competitively bid. Boeing, Northrup, etc are some of the companies that Lockheed Martin competes with.
As I said all companies add taxes on to the bids, so Lockheed Martin is no different than any other companies. Corporate taxes are always tacked on. That is why it is often said the corporations do not pay taxes. They just pass the taxes on to the consumer. You really do not expect them to bid ignoring taxes, do you?
So I still do not understand your comment.
Dan
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wrote:

"More than 70 percent of Bethesda-based Lockheed Martin's $90 billion in prime contracts during the past six years were awarded without a full or open competition..." (2004)
When I was researching US arms trade, seven or eight years ago, one of the first things I learned was that most defense contracting, in terms of total dollars, that is awarded first on a competitive bid is then followed-up with orders are placed with no bid. The companies involved generally claim that they bid on the whole project but they rarely did.
Overall, even including the little companies, roughly 40% of US defense contracts are awarded no-bid. And, without getting into this one, many of the cases where there ARE bids, they are highly rigged.

Not if you're not really competing.

Only if they're bidding on government contracts. That's not a place to try to play games with taxes. It's so much easier just to tack them onto the bills.

Try harder.
--
Ed Huntress



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I should have said your comment is stupid, rather than say I did not understand it.
Dan
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wrote:

Defense procurement certainly is stupid, but what I said is correct, and documented. What you've said about Lockheed Martin's contracting is stupid, and incorrect.
--
Ed Huntress



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I prefer to think that you, someone who studied the defense procurement for a good six months, do not have a clue. The defense contractors compete on many levels. Buying weapons systems is somewhat like buying a car. Most all cars will take 4 people down the road at 60 mph. But there is a difference between buying a Ford and buying a BMW or Mercedes. Some will perform better than the required minimum. Some are easier to maintain. Some will last longer than others. Buying a weapons system is not like buying bolts where every ones product is essentially fungible. The military contract specifications provide a minimum requirement.
Take a look at the thread on the C-130.
Boeing designed a cargo plane that out performed the current Lockheed cargo plane in almost every category. However the Lockheed plane could be loaded and unloaded much faster than the Boeing plane. So while the Boeing plane could fly faster and carry more, the Lockheed plane could make two trips for every one trip the Boeing plane could make and land on unimproved airfields closer to where the supplies were needed.
Dan
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wrote:

Let's get back for a moment to the original point of contention. You showed that Lockheed Martin pays nearly 30% of their profit in income taxes. Aside from the suggestion that Lockheed Martin is truly stupid compared, for example, to GE, who pays no income taxes, one wonders what point you were making, given that we know that most companies pay far less.
I pointed out that they don't care how much tax they pay, because they're not really in competition for most of their contract dollars and they can just lay the taxes on top of their charges. They're easy to justify and no one is going to underbid them on that basis.
To which you said, my statements are stupid. To which I replied that your figures are cockeyed, starting with your initial claim that "Most of Lockheed Martin's defense work is on contracts which were competitively bid." This is patently false. Anyone who has dealt with the economics of defense contracting knows immediately that it's false. You can't spend any time investigating the defense industry and not learn that the big contractors derive most of their revenue from no-bid projects.

So are you now saying there are justifications for no-bid contracts? That's a separate issue. I'm not arguing with you about that. What I said is that the nature of the bidding and contracts that Lockheed Martin is awarded makes the taxes they pay a non-issue. They pay a lot of taxes -- with our tax money. And they have no incentive to minimize their taxes. because it's not a competitive issue for them. The taxes don't come out of their pocket, either directly or indirectly. They're just pass-alongs.
--
Ed Huntress



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On 3/25/2011 5:33 PM, Ed Huntress wrote:

What you said above is not factually correct. most of their work is NOT sole sourced, Lockheed, Northrup, Boeing compete for most of the large prime contracts in an overlapping area. Whether you like the defense industry or not, you really should try to be factually correct.
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. wrote:

Not in the satellite market they don't.
--
John R. Carroll



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Actually they do.
Dan
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Yes it is.

I am. I studied it for six months, including several visits to the BEA and the Defense Department before writing about US trade in aerospace and arms it some years ago. Looking around, it appears that nothing much has changed.
--
Ed Huntress



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