Capital Gains Tax
The current tax system imposed on corporations by the U.S.
government is at best, a biased system; for corporations that
have a net profit, taxes on those profits amount to a full
one-third. So, if you're doing business as a standard "C"
corporation, and you do manage to make a profit, you're going to
owe Uncle Sam about 30%. Now, you add to that tax a capital
gains tax that is levied on the investment capital of that
corporation, and you have the makings for a tremendous tax
liability, or do you? The actual income tax paid by corporations
and the tax paid as a capital gains tax has diminished
tremendously over the last thirty or forty years, and apparently
not many of the citizenry of this country, nor the media are
asking any questions. The general public doesn't ask because for
the vast majority and understanding of corporate taxation is
non-existent; why isn't the media asking? That's another issue
altogether.
The first thing you must understand when dealing with the
corporate tax structure, is that for the most part, many large
corporations do not pay the complete 30% tax that would
typically be levied against an individual if they were in the
same situation; corporate accountants and the sheer process by
which corporations must report their income, expenses,
deductions, depreciation, dividends, and any other financial
transactions allows for huge deductions that typically offset
any tax due. This concept is a major topic of discussion today,
as we attempt to better control and regulate corporate
accountability for their finances.
As for the capital gains tax, it is at an all time low, and
President Bush has given corporate America and even greater gift
of capital gains exemption on foreign income. Could you imagine
how excited the average citizen would be to find their income
had been exempted for a couple of years from tax? Don't look for
that to happen any time soon, as the average guy doesn't have
expensive lobbyists in Washington working for them.
When you have large corporations that are obviously reporting
earnings and paying dividends, yet they pay no tax, you should
be tipped off to the fact that there is a problem. How to fix
that problem, may be another subject altogether.
The latest proposals have been to eliminate the corporate tax
altogether. This would leave only the capital gains tax, and
would shift the tax burden to the individuals of this country;
that is a tremendous shift from the post-war era of the Second
World War, when corporations and individuals shared the
responsibility almost equally. Thanks to the lobbying done by
corporate lobbyists over the last thirty years, we've finally
reached the point of no return. The latest proposals have come
from within the halls of Congress to eliminate corporate tax,
and let the average taxpayer assume all the responsibility. Of
course, these are the same individuals who voted themselves a
pay raise in the face of a huge national deficit and a sluggish
economy.
In case some of you have noticed, we as individual citizens are
losing more and more of our take home pay each year, to taxes of
some kind. Medicare, social security, and income taxes take a
larger portion of our dispensable income each year. This would
take a step closer to making even more of our income the
property of the tax man. What about this seems unfair? As
pointed out by the individuals who are in favor of eliminating
corporate tax, it would encourage capital investment and job
growth in this country and that is absolutely true, it
theoretically would do just that. But since when does theory
actually work in practice? Communism works in theory. Many
individuals believe it is simply another way to provide tax-free
income to CEOs, and Board Members. The latest scandals such as
Enron and HealthSouth have shown this country real hard evidence
of the corporate abuses that are rampant in this country, and so
far uncontrolled. The Sarbanes-Oxley Act has taken great steps
toward greater accountability on the part of the corporate
environment, but elimination of corporate tax is simply a legal
way to avoid paying the tax.
When you factor in the ability of the wealthy and the corporate
entities of this country to hire brilliant accountants that find
loopholes in the tax system, and relieve their clients entirely
of their tax liability, you cannot believe that the current
system operates for the people, by the people, can you?