Hi Michael,
More evidence that there are two sets of books. No company exaggerates its profits when reporting to the IRS. From today's WSJ:
CORPORATE INCOME-TAX payments drop, while corporate
profits keep rising.
Treasury Department figures show that quarterly tax installment payments
slipped 3.7% to $38.4 billion in June from a year ago, marking the smallest
June payment since 1996, says William V. Sullivan Jr., senior economist at
Morgan Stanley Dean Witter, New York. Softness in collections in recent
months implies collections may decline for the fiscal year ending in
September. That would be an "unusual development," considering the
consensus view of a vigorous economy, he says.
Corporate efforts to achieve a lower tax rate could be one reason for the
drop, suggests James Grant, editor of Grant's Interest Rate Observer. Of
course, collections could easily head upward in future months, Mr. Sullivan
says. But even if they do, the latest tax-payment data indicate that the
revenue generation may not mirror past performance. Slippage in
corporate tax payments, he adds, puts more burden on payroll tax to
generate revenue. |
