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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Freedom Fighter who wrote (76916)	3/3/2000 8:38:00 AM
From: Exacctnt	Read Replies (1) \| Respond to of 132070

Wayne, Actually, the taxman is neutral on this. They collect their share from the employee while giving the company a deduction. I'm sure that they would love to collect from both, given the opportunity. <g> Regards

To: Freedom Fighter who wrote (76916)	3/4/2000 2:04:00 PM
From: Don Lloyd	Respond to of 132070

Wayne - [[I happened to be reading the MSFT annual report last night and I decided to take a look at the option activity. It seems that they are granting fewer and fewer options per year these days. Another thing that caught my eye was the size of the tax benefit due to options. We may have discussed this in the past but it was over 3 billion. Their tax bill slightly over 4 billion. So MSFT, and probably SUNW, ORCL, CSCO, and all the other high flying options granters are probably paying a lower tax rate than a lot of people that are living pay check to pay check. Of course they either have to buy back shares at those high prices or dilute, but the tax man sure isn't getting much.]] That is interesting. There is a cliche that goes something like - 'Don't tax you, don't tax me, tax that fellow behind the tree'. This is precisely what the corporate income tax is, a politically acceptable (or even demanded) method of raising taxes without disclosing upon whom they are incident. It should be clear that corporations do not pay taxes, people do. In particular, the corporate income tax has the same first order effect as a reduction in productivity, with its negative effects shared between shareholders, consumers and workers. However, the higher order effects are even more onerous. - a severe distortion of corporate activities and results, as with MSFT - profitable companies are penalized, relative to their competitors - a prime source of the requirement for the lobbying of the government for both special favors and to prevent specific impairments due to other lobbyists - in general, a reduction in the standard of living, an increased cost of living, a reduction in corporate profitability, and a reduction in business formations Since I favor MUCH broader tax reform, I don't particularly want to see corporate income taxes targeted specifically. (as if it mattered what I want -g-) However, recently the WTO ruled in favor of the EC in a complaint against the US allowing favorable tax treatment of foreign sales corporations in order to offset inherent tax subsidies for European companies. It would definitely be worth eliminating the corporate income tax entirely simply to really tick off the trade EUROcrats. -g- Regards, Don