MAKE NO MISTAKE, THE BIGGEST ISSUE IN THIS DEBT REDUCTION DEBATE IS CORPORATE TAX REFORM MAKING CORPORATIONS PAY. MOVING THE CAPITAL GAINS TAX FROM 15% TO 20% IS MINOR. LOWERING THE CORPORATE TAX RATE IS UNACCEPTABLE.
THESE THIRD WAY CORPORATE DEMOCRATS ARE READY, WILLING, AND ABLE TO GIVE CORPORATIONS THE CUTS THEY NEED. WE REELECTED INCUMBENTS SO WE DESERVE IT. WE CAN REVERSE THIS. THE SPENDING CUTS ARE BEING OFFERED SO AS TO AFFORD THIS RACE TO THE BOTTOM IN CORPORATE TAXATION. AMERICA IS THE ONLY NATION IN THE WORLD DOING THIS TO SUCH GREAT EXTENT, BUT IT DOES SET PRECEDENT FOR OTHER COUNTRIES TO SAY THEY MUST. WE CANNOT ALLOW AMERICAN POLICY TO HARM ALL OF DEVELOPED WORLD. THE MANTRA OF MAKING BUSINESS COMPETITIVE IS A LIE.
IN MARYLAND WE DON'T JUST PLAY WITH TAX FRAUD, OUR POLITICIANS EMBRACE TAX FRAUD. YOU CAN'T GET ENFORCEMENT WHEN THE PEOPLE CHARGED WITH THE DUTY ARE ACTIVELY COMMITTING THE CRIME. TODAY I'D LIKE TO TALK ABOUT THE OTHER HUGE CORPORATE TAX PROBLEM THAT YOUR THIRD WAY CORPORATE DEMOCRAT IS REFUSING TO FIX.......THE 'S' CORPORATION. I SPOKE EARLIER ABOUT THIS TAX SCHEME. IT BASICALLY ALLOWS A COMPANY HAVING LESS THAN 100 SHAREHOLDERS....AND THAT IS HOW MOST CORPS ARE LISTING NOW....THE ABILITY TO PASS TAX REQUIREMENTS OFF TO SHAREHOLDERS SO THE CORP ITSELF PAYS NO TAX ON PROFITS. THE BUSINESS OWNER SIMPLY PAYS TAX ON WHATEVER INCOME HE/SHE ASSIGNS AS SALARY. I AM BEING VERY SIMPLISTIC SO PLEASE DON'T FIND EXCEPTIONS. MY POINT IS THIS: NOT ONLY ARE THESE CORPORATIONS NOT PAYING TAXES, THESE SHAREHOLDERS OVERWHELMINGLY ARE NOT PAYING TAXES BECAUSE NO ONE IS AUDITING TO VERIFY. WE ARE TALKING HUGE AMOUNTS OF MONEY LOST TO GOVERNMENT COFFERS AT ALL LEVELS.
THIS IS WHY WE HAVE THE GOVERNMENT SHORTFALLS IN REVENUE AND WE MUST DEMAND THAT CORPORATIONS PAY 39% WITH NO LOOPHOLES OR PROTECTIONS!!!!
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!!
IT IS IMPORTANT TO UNDERSTAND HOW HARMFUL ALL OF THIS CORPORATE TAX POLICY IS TO ALL LEVELS OF GOVERNMENT. I GO ON AND ON ABOUT HOW BALTIMORE AND MARYLAND USES DISTORTED TAX POLICY TO EXCESS. THESE POLS ARE TRADING THE NATION'S FUTURE TO THESE CORPORATE VULTURES.
AS IMPORTANT, IT IS THE FAILURE OF POLS AT THE NATIONAL LEVEL TO ADDRESS THIS AS FEDERAL LEGISLATION. THIS CORPORATE TAX POLICY HAS STATES PLAYING ONE OFF ANOTHER AND MUST BE ADDRESSED AT THE NATIONAL LEVEL. THIRD WAY HAS CAPTURED THE SENATE LEADERSHIP, REPUBLICANS HAVE THE HOUSE SO THEY FEEL THEY CAN PROTECT CORPORATIONS REGARDLESS OF VOTER OUTRAGE.
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!
HERE IN MARYLAND THE CAPTURED POLITICAL SYSTEM KEPT ALL THE NATIONAL POLS IN OFFICE. SARBANES, CARDIN, CUMMINGS, MIKULSKI, RUPPERSBERGER, VAN HOLLEN, AND HOYER ALL STATED THEIR READINESS TO DO A SWEEPING CORPORATE TAX REFORM THAT LOWERED THE TAX RATE WHILE ENDING LOOPHOLES (LOOPHOLES COME BACK) PAYING FOR IT BY CUTTING ENTITLEMENTS. ALL OF THE INCUMBENTS LINING UP FOR NEXT ELECTION ARE THE CORPORATE FARM TEAM.......THEY WILL DO THE SAME THING......ANTHONY BROWN, MAGGIE MCINTOSH, FRANCHOT, ULMAN, AND GANSLER.
MAKING CORPORATIONS PAY IS THE PRIMARY POLICY ISSUE ANY FISCAL PROGRESSIVE WILL HAVE THIS NEXT ELECTION!!!
CALL, WRITE, AND SHOUT AT YOUR INCUMBENT THAT WE KNOW WHAT IS RIGHT AND WE EXPECT THEM TO DO IT!!!
Race to the Bottom
Published: December 5, 2012 New York Times
Competition among states and cities to lure businesses in hopes of creating jobs is not new, but it has become more fierce in recent years. An investigation by The Times found that state and local governments are giving out $80 billion a year in tax breaks and other subsidies in a foolhardy, shortsighted race to attract companies. That money could go a long way to improving education, transportation and other public services that would have a far better shot at promoting real economic growth.
Instead, with these giveaways, politicians and officials are trying to pick winners and losers, almost exclusively to the benefit of big corporations (aided by highly paid lobbyists) at the expense of small businesses. Though they promise that the subsidies are smart investments, far too often the jobs either don’t materialize or are short-lived, leaving the communities no better off.
The three-part series by Louise Story described how in places like Texas and Ohio, state and local governments have lavished millions of dollars in tax breaks on corporate giants like Samsung and the Big Three automakers — even as they faced budget deficits and were forced to cut spending on critical services. The tax revenues forgone in this giveaway frenzy should concern Congress deeply. After all, federal funds account for one-fifth of state and local budgets.
In one particularly egregious example in Pontiac, Mich., the State of Michigan gave $14 million in tax credits and a state pension fund guaranteed $18 million in bonds to a movie studio that created just 12 permanent jobs. In Texas, Amazon.com, the online retailer, received tax abatements, sales tax exemptions and other benefits totaling $277 million to open a warehouse that promises to employ 2,500 people. Those benefits were granted after the retailer closed another warehouse because of a dispute with the government involving sales taxes.
Many governments don’t know the full value of the subsidies they hand out in the form of tax refunds, rebates, loans, grants and more. And they don’t know if the jobs created would have been created anyway. The fact is, numerous studies show that such incentives result in only a small increase in jobs and that any gains usually come at the expense of other cities and states.
Local governments would be much better off investing tax dollars in education and public works that would deliver long-term benefits to both businesses and workers. California, for instance, is among the least generous of the larger states in doling out tax breaks. It gave out just $112 per capita compared with $759 in Texas, $672 in Michigan, and $210 in New York. Its experience leaves no doubt that investments made in public institutions like the University of California system can remain critically important to economic growth decades later.
The senseless race to give away billions in subsidies is, of course, hard to stop when elected leaders think a pledge of potential jobs might help in their next election. But even when attracting businesses is a legitimate goal, it has to be done in ways that are fair and transparent.
The trouble with targeted incentives is that they are little more than transfers of wealth to a handful of powerful corporations from all other taxpayers, including other businesses. If the problem is excessive tax burdens on businesses in general, then the solution is broad tax reform that also benefits small business owners, who are more likely to stick around if the regional economy weakens and who are unlikely to hopscotch around the country in search of a bigger tax break.
BELOW IS THE RESPONSE FROM MARYLAND'S COMPTROLLER FRANCHOT ABOUT HOW MARYLAND HANDLES THE PRIMARY METHOD OF FILING CORPORATE TAXABLE INCOME. THEIR ANSWER......WE DON'T HAVE ANY MECHANISM TO CHECK, WE JUST LET THE FEDERAL IRS TELL US IF THERE IS A PROBLEM. IF YOU KNOW THAT 80% OF SHAREHOLDERS ARE SUSPECTED OF NOT FILING WOULD YOU MAKE THAT A PRIORITY IN REVENUE COLLECTION?
OF COURSE YOU WOULD IF YOU WERE HONEST!
One reason U.S. corporate tax collections are low is that many U.S. small business owners file personal income tax returns, said Eric Toder, co-director of the nonpartisan Tax Policy Center.
MY LETTER TO FRANCHOT:
I'm reading that the tax revenue that should be coming to federal and state governments from S Corps are largely unreported by shareholders. A study showed as high as 80% of S corp taxes go unpaid. There is also the matter of S corps paying employee taxes to shareholders that do work for these S corps. The study showed that this tax is rarely paid.
Will you provide me with the data for Maryland regarding the revenue collection for S corps and point to me how your office addresses these concerns?
December 3, 2012
Re: Maryland Public Information Act Request
Dear Ms. Walsh:
This is in response to your electronic mail dated October 25, 2012, sent to the Custodian of Records, Maryland Comptroller’s Office.
Pursuant to the Maryland Public Information Act you have requested “data for Maryland regarding revenue collection from S corps and …how [the Comptroller’s Office] addresses [unpaid S corp taxes]”.
In accordance with the Maryland Public Information Act, Section 10-611 et seq. of the State Government Article (“SG”) of the Annotated Code of Maryland, a thorough review of the Comptroller’s Office’s records has been conducted and found no records responsive to your request.
Further answering your inquiry, you should be informed that S corporations receive special treatment under the provisions of the Internal Revenue Code. The name, “S corporation” or “Sub-S Corporation,” is derived from Subchapter S, 26 U.S.C. §1361, etc., of the Internal Revenue Code (“IRC”). That gist of that special treatment is that a corporation electing to be treated under Subchapter S of the IRC does not pay an income tax. Instead, it is treated as a pass-through entity (similar to partnerships, limited liability companies, etc.) in which the shareholders/members are required to report their pro-rata share of the corporation’s income, expenses and other required amounts, on their individual income tax returns. The entity issues to the shareholder/member an annual Schedule K-1 containing the information the required to be reported on the shareholder/member’s individual income tax return.
Maryland law requires that taxpayers who are domiciled in Maryland report all income from whatever source on their individual tax returns. For members/shareholders of a pass-through entity, this would include reporting the entity’s information as provided on the Schedule K-1. If pass-through entity income is omitted for federal and Maryland purposes, we rely on the Internal Revenue Service (“IRS”) to identify these taxpayers through a sharing program. We are notified by the IRS of their assessments and make similar assessments on the Maryland return for the corresponding year. This program is automated in the Maryland processing data base. If a Maryland taxpayer omits that information on their Maryland return but not on their federal return, a different Maryland audit program will identity those taxpayers and issue assessments. Both of these programs are administered by the Compliance Division of the Maryland Comptroller’s Office.
S Corporations and other pass-through business entities that have income from Maryland sources are required to file
HOW CAN YOU SAY THAT SOMEONE OR SOMETHING IS REQUIRED IF YOU DO NOT VERIFY??????
Why is it that all around the world governments and citizens are shouting down US corporate abuse and we in America don't? Worldwide US corporations are now much maligned and spoken of in terms of dishonesty, inhumanity, and an entity to be curtailed.....just like a terrorist. How did the US go from being a standard-bearer to predator? Clinton's free-market globalization policy allowed corporations to much wealth and power and people with the worst traits rise to the top.
Please step up your activism through rallies and boycotts of these global/national corps and elect people who shout for downsizing these behemoths. They keep saying they are doing what is prescribed by law.......that is where your incumbent comes in. Watch what they do with corporate tax reform and:
VOTE YOUR INCUMBENT OUT OF OFFICE!!!!
Starbucks Tax Row: £10m Climbdown
By (c) Sky News 2012 | Sky News – 18 hours ago
Starbucks (NasdaqGS: SBUX - news) has vowed to pay more corporation tax than it is obliged to as the coffee chain denies hiding profits from the UK taxman.
The company's UK managing director Kris Engskov told Sky News that the decision to "take action" followed anger from its customers in recent weeks.
Starbucks will now pay around £20m in corporation tax over the next two years, after paying nothing last year.
The U-turn comes after the Government pledged to crack down on tax avoidance after public outrage over how little some multinational companies contribute to the UK Exchequer.
Mr Engskov told Sky's Jeff Randall: "We are paying corporate tax and we are going to do that beyond what is required by the law and whether we make a profit in the next two years and I think that is what we should do.
"We have reacted to our customers... We have seen that doing business responsibly is good for the bottom line and this is a good example of that."
In the same interview, he said the US coffee giant had not been profitable in the UK since it brought its brand to Britain 14 years ago.
And he admitted their 2011 report and accounts may be wrong when they referred to the fact that the UK was making a "significant portion of the net revenue and earnings of our international operations".
This could mean major penalties for the company.
Since arriving in the UK, Starbucks has paid just £8.6m in corporation tax despite taking billions of pounds in revenue from its shops, which now number more than 750.
The low bill has been explained by the practice of transfer pricing, which involves charges being made by companies in the same group based in different jurisdictions, with the effect of depressing profits in the higher-tax jurisdiction.
In Starbucks' case, that relates to the royalty fee paid to a sister company in the Netherlands for the right to use its brand and coffee recipe.
While the previous tax arrangements were legal, its actions were called into question amid a wider debate about tax avoidance which has also engulfed the likes of Amazon and Google (NasdaqGS: GOOG - news) .
The companies were accused of "immorally" minimising UK tax bills in a damning report by the Public Accounts Committee of MPs (BSE: MPSLTD.BO - news) . WOULD YOU HEAR THAT IN AMERICA????
Its (Euronext: ALITS.NX - news) chairman, Margaret Hodge MP told Sky News the development was a "step in the right direction" which had been brought about by "people power."
The firm has argued that its UK operations already inject £300m into the UK economy annually.
Mr Engskov, speaking earlier in a speech to business leaders, admitted that the "emotion" surrounding the tax payments had "taken us a bit by surprise".
"Since we started doing business here, we have always organised our tax affairs according to the letter of the law - always," he said.
"We have used existing and agreed-upon measures to pay what is expected of us, but not more - just as most companies do and I am sure many of the people here today run their businesses in similar ways."
But in his remarks to the London Chamber of Commerce he admitted: "With the backdrop of these difficult times, in the area of tax, our customers clearly expect us to do more."
Mike Lewis, tax justice policy adviser for charity ActionAid UK,said: "Starbucks' tax back-down proves that companies do have a choice about where and how they pay taxes."
Other critics suggested the country should wait to see the colour of Starbucks' money.
Hannah Pearce, a UK Uncut spokesperson said: “Offering to pay some tax if and when it suits you doesn’t stop you being a tax dodger.
"Starbucks have been avoiding tax for over a decade and continue to deny that it paid too little tax in the past. Today’s announcement is just a desperate attempt to deflect public pressure.
"There’s no money yet, and hollow promises on press releases don’t fund women’s refuges or child benefits."
An HMRC spokesman said: "Corporation Tax is not a voluntary tax. The public expects businesses to pay their fair share and we will challenge, through the courts if necessary, any structures or tax payments that do not comply with the UK tax law."