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To: willcousa who wrote (172421)	1/9/2003 4:48:27 PM
From: brushwud	Read Replies (2) \| Respond to of 186894

Win, you are absolutely right about simply abolishing the corporate income tax. The cost of compliance now exceeds the government's take. Are you saying this is true for Intel, that it costs more to comply with the corporate income tax than they actually pay? (They still need to report audited financial results, regardless of taxes.) Don't the individual & corporate income taxes have to be integrated to some degree? Otherwise we would all incorporate, hire our businesses out to our employers, and then buy business breakfasts, lunches, dinners, clothes, and transportation, and finally only pay ourselves as individuals enough for our mortgages and charitable giving.

To: willcousa who wrote (172421)	1/9/2003 5:14:11 PM
From: Win Smith	Read Replies (1) \| Respond to of 186894

W, you might be entertained by this story from the Sunday NYT, on the new top guys at Merrill Lynch. Have Merrill's Bulls Been Led to Pasture? nytimes.com Clips: Throughout his 15-year career at Merrill, Mr. Zakaria has had a hand in devising and selling some of the most lucrative financial products ever to come out of Merrill Lynch. These range from off-balance-sheet tax-shelter partnerships in the late 1980's to a variety of equity-linked instruments in the mid-1990's that allowed Merrill's corporate and individual clients to raise billions in cash while escaping hundreds of millions in taxes. . . . Mr. Zakaria skipped through the training program and went directly to work for E. S. Purandar Das, a managing director and fellow Indian who was involved in an effort to create tax-shelter partnerships and sell them to Fortune 500 companies looking to avoid capital gains taxes. Mr. Das, a former chemical engineer with a deep understanding of the United States tax code, had less expertise in creating financial products — where Mr. Zakaria was useful. At the time, according to court documents cited in news accounts, several big Merrill Lynch clients, like Schering-Plough, AlliedSignal and Colgate-Palmolive, were eager to lower the taxes they were paying on subsidiary sales. Mr. Zakaria worked on a team with Mr. Das that solved the problem with a plan to set up an offshore fund with a foreign partner for each client. Within the fund, securities would be bought and sold, generating an eventual loss that could be carried forward to offset the company's capital gain. It was a brilliant piece of financial craftsmanship. One of the first purchasers was Robert P. Luciano, then the chief executive of Schering-Plough and a Merrill board member, a position he still holds. The fees for Merrill ran as high as $15 million a client. . . . Mr. Patrick oversees all finance, tax, legal and research functions within Merrill and is a close adviser to Mr. O'Neal. He is seen within the firm as a de facto president and as an architect of its restructuring efforts. During his 24 years at the firm, Mr. Patrick has twice served as chief financial officer, has headed the equity markets group and has run the insurance business. He is best known for having helped invent zero-coupon bond instruments convertible into equity, called Lyons for liquid-yield option notes, in the mid-1980's. Arcane yet lucrative, these products opened a new vista for Merrill corporate clients, allowing them to raise cash by issuing debt, pay out less in interest and get a tax break in the process. They were a wild success, generating hundreds of millions in fees for Merrill and spurring copycat products from Merrill's peers. IMPRESSED with Mr. Zakaria's work on the tax shelters, Mr. Patrick became his mentor and moved him to the firm's corporate finance group. Although the tax shelters were an embarrassment for the firm, the powerful demand for them, together with the success of the Lyons, made it clear to top Merrill executives like Mr. Patrick that the real potential on Wall Street was in the design of instruments that allowed clients to raise money while paying less taxes. By the mid-1990's, Mr. Zakaria and his team, under the careful eye of Mr. Patrick, were churning out and marketing several similar tax-avoiding financial instruments. Called trust-preferred securities, they were an evolution of the Lyons product, with specific trademarked names like Strypes and Prides. Each served a different purpose, but the overriding aim was the same: to allow a company or individual to raise cash while paying as little tax as legally permissible. Mr. Zakaria's team manufactured the products, and Mr. Patrick, an experienced relationship banker, sold them to clients like Sam Zell, the Chicago-based real estate investor, and Eli Broad, the chairman of SunAmerica. While the I.R.S. has raised questions from time to time about these products, it has never prohibited them and they have wide acceptance on the Street.

To: willcousa who wrote (172421)	1/9/2003 6:20:08 PM
From: The Duke of URL©	Read Replies (1) \| Respond to of 186894

"I am a corporate tax lawyer" Then this must have been the tax department that you were running, in this post, I guess? :)) From: willcousa Thursday, Jan 9, 2003 12:40 PM View Replies (1) \| Respond to of 341118 I ran a department in an international organization. I finally bought a set of the pull-down maps we had in fourth grade for our library because very few of my people any the least notion where the countries they dealt with on a daily basis were.