Tuesday, August 12, 2008

Tax Fairness

The General Accounting Office (GAO) recently released a report that declared that 55% of corporations with "with more than $250 million in assets or $50 million in gross receipts" paid no taxes in 2005. Of that total, 80% were not showing a profit on the books and the rest using other deductions and credits against income tax owed.

The only real reform an overly complicated tax structure is a more simple tax structure. There is no doubt that the current Federal Income Tax code is complicated, and grows increasingly complicated with each Congress, it becomes increasingly difficult for one individual to understand the entire code.

Does any amount of tax reform solve this issue?

If these corporations can legitimately claim that they are not making a profit, they can't be taxed. Besides corporations were designed to escape liability in the first place. That includes tax liability.

It is important that people have confidence in the government. Especially the money that they pay. A lot of people living paycheck to paycheck are going to see this statistic and get pissed off when they look at their paystubs and see how much money the government takes away.

Ordinary people don't show much of a profit either. But they are the ones paying the bills. They are just paying the bills to themselves. Or their parent corporations. Business Week has a great blog on this topic.

Just who is paying income tax anyway?

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