Missing the point on the economy- Individu

[Justice]

http://www.boston.com/news/globe/editorial_opinion/letters/articles/2003/09/30/missing_the_point_on_the_economy/


"THE DEBATE over President Bush's tax cuts misses the real issues causing our economy's under-performance. These include:

The percentage of federal taxes paid by corporations versus individuals has declined sharply over the past 20 years due to foreign and other tax shelters. If individuals can pay an alternate minimum tax, why shouldn't the largest corporations pay a minimum tax to create a level playing field?"

This letter makes three great points:

1. Above - % of Federal corporate tax versus federal individual taxes paid.

2. Payroll Taxes are Significant, at times more than income tax paid by a family.

3. High Payroll Taxes Create Disincentive for Employers to Hire Because Employers have to match part of payroll tax.

[papau]

1. There is a Corporate Alternative Minimum Tax - which Bush cut by $90B

The AMT is an IRS mechanism created to ensure that high-income individuals, corporations, trusts, and estates pay at least some minimum amount of tax, regardless of deductions, credits or exemptions. It operates by adding certain tax-preference items back into adjusted gross incomeThe AMT (Alternate Minimum Tax) was passed in 1986 when it was discovered by American voters that literally hundreds of America's most profitable corporations had paid absolutely no taxes in the preceding years due to lovingly enacted loopholes passed by Congress. This tax only required that the corporations compute both their minimum tax and the regular tax responsibilities for that year and to pay the AMT is it was larger than the regular tax obligation.

An IRS mechanism created to ensure that high-income individuals, corporations, trusts, and estates pay at least some minimum amount of tax, regardless of deductions, credits or exemptions. It operates by adding certain tax-preference items back into adjusted gross incomeThe AMT (Alternate Minimum Tax) was passed in 1986 when it was discovered by American voters that literally hundreds of America's most profitable corporations had paid absolutely no taxes in the preceding years due to lovingly enacted loopholes passed by Congress. This tax only required that the corporations compute both their minimum tax and the regular tax responsibilities for that year and to pay the AMT is it was larger than the regular tax obligation.

The 1999 version of the tax bill now also completely wipes out a corporation's federal tax debt if it can show a large enough foreign tax credit to offset any owed here -Fair, perhaps if you do not look at services provided by the US to the overseas "high tax operation" but a cumulative $26 billion cost over the next decade - and a incentive to move jobs overeas.

Indeed, through "partnerships" and "joint ventures" with foreign entities one gets a drop in the real tax paid in the US. Indeed Oil companies by changing what they pay foriegn gov's from royalty payments to a tax just about end tax payments to the US.

And our export tax breaks - deemed illegal/unfair by the WTO - provided 15% Defense industry tax breaks via sales corporations. It will interesting to see what new break the GOP comes up with.

And that Alt Min tax for those corporations that have for years polluted the air and water and soil is no longer - it went from Superfund Tax into "Hazardous Substance Superfund Trust Fund" to the "Leaking Underground Storage Tanks Trust Fund" -renaming them the "Environmental Trust Fund" with no tax to fund it.

But these are additional tax breaks - other tax breaks to Corps and the rich amount to about a Corporate Welfare costs of ONE TRILLION DOLLARS every year.

Now all of these were passed by a GOP controlled Congress - and some signed into law by Clinton in 97 and 99 back when we had surpluses.

So we have an Alt min tax for business - it just does not work to be fair!

:-(