I disagree. Corporations have as much incentive and possibly greater resources (accountants and lawyers) to structure activities in a manner consistent with reducing tax liability.
Does that mean they are able to abuse more? I don't think so. Corporations don't have the incentive to the extent that individuals do. Why should corporate management take risks with tax liability? What consequence does that have on each of them personally? Certainly not what cooking their own personal 1040s do. It is rare that any management attempts shenanigans. That's why I'm perfectly confident that I could show you that whatever Marriott is doing, is not only legal, but also is not very efficient, but accepts a dismal situation and tries to make the best of it. That isn't my solution and eventually Marriott will have to abandon it.
It is wrong because the latter doesn't add to the common good, i.e., total societal wealth. In fact, it reduces the wealth of the individual using tax avoidance schemes.
Tax policy is structured to create incentives by policy makers.
If you believe this, then why would you assert that corporations receive better treatment?
The purpose of the AMT is to discourage individuals from abusing their wealth by using it in unprofitable tax avoidance schemes, when it could be used to the benefit of all, especially to themselves.
So you agree with both interpretations,
I gave the reason the liberals created the AMT. Whether I disagree with it is another matter.
What about Section 1029 credits for Coal Seam Gas royalties?
This is a good example of misallocation of resources, i.e., providing a tax incentive with sweeteners in order to encourage a spurious activity which in fact, has hidden costs which create a net net loss for those seeking the shelter. By net net I mean the contribution of wealth to the individual is negative over a sufficiently long period of time. In a word, it's uneconomic even though on the surface, it looks economic. The AMT was intended to disrupt this kind of activity, but the AMT throws the baby out with the bath water.
I can see how it would be argued that the capital tied up in this enterprise might have been better deployed elsewhere, resulting in a net larger pie. But again, is it the fault of the individual who complies with the wishes of the policy makers, or the policy enacted by the policy makers that should bear the brunt of your concern?
The policy makers don't know business, so they're persuaded by people removed from these particular activities like academics and accountants, to enact them. Those who think they're getting a better deal, invariably are being swindled, but the swindle is so small that the game yields merely a push. It's just that everyone's time has been squandered. It is true though that these types of people are intrinsically worthless especially academics, so it is equitable. Stay away from them and you'll come out net net positive.
Hmm. Perhaps groups can gain some synergy, but I don't see this as a reason to exempt them from rules applying to individuals.
They aren't. The AMT oppresses corporations and individuals. It just causes more harm to the public at large when individuals and corporations are treated equally.
It was the Democrats and liberals circa 1986 that created this absurd tax rule. It should be abolished immediately, but that can't be done because the Democrats would block it, so the Bush Administration has to get whatever they can. Can they get a reduction in corporate AMT? I doubt it.
we may be in a new era where economies of scale begin to work against global corporate entities.
We have always been in an environment where size is a detriment. It takes government passing laws in order to stop size to guarantee that size continues. Otherwise size would break apart into much smaller units. Government's intent is to force unnaturally what would occur naturally and in so trying, brings about the opposite of its intent.
I bear them, while trying to understand their implications. As do many others. I occasionly object to policy decisions (like shorter duration curves for Govt Debt) that I believe will increase them with no concurrent offsetting benefits.
I don't understand how you could object to "shorter duration curves for Govt Debt", whatever that is. All government debt is subject to extremely free market forces. Indeed, the market is so free that the government wants to get rid of treasury paper maybe because it so disciplines the FED. In any event it doesn't matter at all what the duration is or what its yield is, so I can't see your objection. |
