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(Reuters)   More than 2,700 companies collect your state income tax, and then keep it for themselves under deals they have struck with the states. GE, Goldman Sachs, P&G, Chrysler, Ford, GM Nissan, Toyota, all benefit from this corporate socialism   (blogs.reuters.com ) divider line
    More: Asinine, state income taxes, Chrysler, company, Toyota, United States, Carlyle Group, Motorola Mobility, 16th state  
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4982 clicks; posted to Business » on 15 Apr 2012 at 10:15 AM (4 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-04-15 09:02:08 AM  
Then there's Amazon, who threatens to abandon the state if the state government dares to collect sales taxes.

This kind of shiat should be illegal.
 
2012-04-15 09:30:02 AM  
Disgusting.
 
ZAZ [TotalFark]
2012-04-15 09:49:11 AM  
Does the IRS count the state bribes as taxable income to the corporation?

If I get a $1,000 paycheck with $50 state withholding, but the company keeps $50, I should pay federal tax on $950 instead of $1,000. The money remained in the company and was not really part of my salary. Arguably they should pay me $1,000/.95 so the net transfer from the company to me is the $1,000 my contract says. That's a matter of state contract law and the state will construe its contract law to benefit the company.
 
2012-04-15 09:56:59 AM  
I have to agree with Zaz. Are the companies reporting the "bribes" (fairly accurate term, I approve of it) as taxable income to the Feds?
 
2012-04-15 10:00:05 AM  

SphericalTime: I have to agree with Zaz. Are the companies reporting the "bribes" (fairly accurate term, I approve of it) as taxable income to the Feds?


Well, because the companies that benefit from this wrote those laws, yes, you're paying taxes on income they're keeping that is technically yours but not ever really yours. Of course you could protest this, but they'd just fire you and blacklist you for daring to not blow the corporate cock.
 
2012-04-15 10:21:20 AM  
Socialism for individuals = bad. Socialism for corporations = good. Got it.
 
2012-04-15 10:23:01 AM  

ZAZ: Does the IRS count the state bribes as taxable income to the corporation?

If I get a $1,000 paycheck with $50 state withholding, but the company keeps $50, I should pay federal tax on $950 instead of $1,000. The money remained in the company and was not really part of my salary. Arguably they should pay me $1,000/.95 so the net transfer from the company to me is the $1,000 my contract says. That's a matter of state contract law and the state will construe its contract law to benefit the company.



You should already only be paying federal tax on $950. State taxes are a deduction.
 
2012-04-15 10:27:58 AM  

cfreak: ZAZ: Does the IRS count the state bribes as taxable income to the corporation?

If I get a $1,000 paycheck with $50 state withholding, but the company keeps $50, I should pay federal tax on $950 instead of $1,000. The money remained in the company and was not really part of my salary. Arguably they should pay me $1,000/.95 so the net transfer from the company to me is the $1,000 my contract says. That's a matter of state contract law and the state will construe its contract law to benefit the company.


You should already only be paying federal tax on $950. State taxes are a deduction.


Only if he itemizes. Most taxpayers don't.
 
ZAZ [TotalFark]
2012-04-15 10:29:08 AM  
cfreak

You're right, that occurred to me after I posted.
 
2012-04-15 10:40:06 AM  

GAT_00: Then there's Amazon, who threatens to abandon the state if the state government dares to collect sales taxes.

This kind of shiat should be illegal.


to be fair to Amazon, most companies already selectively choose where they do their business on a city-by-city/county-by-county basis much less which states (or which countries) they're willing to do business in - most often that choice doesn't reflect how much money they could make so much as how much easier it is for them to make money, that some companies get breaks from gov't isn't so much the exception as it is everybody tries and some are luckier than others

(not condoning Amazon's behavior)

as for the article, TN doesn't have a state income tax
 
2012-04-15 10:44:16 AM  

AdamK: GAT_00: Then there's Amazon, who threatens to abandon the state if the state government dares to collect sales taxes.

This kind of shiat should be illegal.

to be fair to Amazon, most companies already selectively choose where they do their business on a city-by-city/county-by-county basis much less which states (or which countries) they're willing to do business in - most often that choice doesn't reflect how much money they could make so much as how much easier it is for them to make money, that some companies get breaks from gov't isn't so much the exception as it is everybody tries and some are luckier than others

(not condoning Amazon's behavior)

as for the article, TN doesn't have a state income tax


But it has sales tax. Amazon offered to come into the state, a few thousand measly jobs, people who could be worked to death in a warehouse and then tossed aside at will, but only if the state refused to collect sales tax on any Amazon purchases. They've done similar things with other states, but it's a bit more of a deal here because almost all of the state's income is sales taxes.

And not a single one of these selective benefits should be legal.
 
2012-04-15 10:45:16 AM  
Last place I lived offered ridiculous tax breaks and stuff to companies so they would move there.

Of course, I don't think the people who got jobs with those companies are complaining much.
 
2012-04-15 10:51:36 AM  

cfreak: ZAZ: Does the IRS count the state bribes as taxable income to the corporation?

If I get a $1,000 paycheck with $50 state withholding, but the company keeps $50, I should pay federal tax on $950 instead of $1,000. The money remained in the company and was not really part of my salary. Arguably they should pay me $1,000/.95 so the net transfer from the company to me is the $1,000 my contract says. That's a matter of state contract law and the state will construe its contract law to benefit the company.


You should already only be paying federal tax on $950. State taxes are a deduction.


Only if you itemize. (you know, all those deductions the tea baggers take, but then biatch about because they just aren't smart enough to understand?)
 
2012-04-15 10:55:22 AM  
And people try to say we don't have a facsist state.
 
2012-04-15 10:58:44 AM  
dustman81: "Socialism for individuals = bad. Socialism for corporations = good. Got it."

If the one percent and the republican party support it - it's good for America. Only a libtard traitor would oppose it.

Mainstream media will explain in more detail.
 
2012-04-15 11:00:35 AM  

GAT_00: SphericalTime: I have to agree with Zaz. Are the companies reporting the "bribes" (fairly accurate term, I approve of it) as taxable income to the Feds?

Well, because the companies that benefit from this wrote those laws, yes, you're paying taxes on income they're keeping that is technically yours but not ever really yours. Of course you could protest this, but they'd just fire you and blacklist you for daring to not blow the corporate cock.


Happily, I don't work for any of the douchebag companies listed, but I'm sure they would be willing to fire my family members that do.
 
2012-04-15 11:04:37 AM  
Clearly, we need to raise taxes to counter this injustice. Right, Mojo?
 
2012-04-15 11:08:17 AM  
It's not really socialism as the risks are not spread evenly across all corporations and businesses regardless of size. It's more like corporate feudalism where the aristocracy is able to control government at the expense of their smaller competitors and ultimately the consumer.

Of course, you must favor this arrangement or else you will be a job-killer.
 
2012-04-15 11:29:58 AM  
This kind of thing is why so many people are demanding tax reform. We need a simple tax system that does not have the loopholes and deductions and kickbacks the current system does.

But when people propose reforms, they are fought bitterly by both sides. The corporations and wealthy fight to keep their privileges, and the left fights to keep the current systems because they LOOK like they soak the rich. Whether they ACTUALLY soak the rich does not matter one bit, as long as they look like they do. The appearance of being progressive is more important than what actually happens.

Proposals like the Fair Tax, while they have problems, I think go in the right direction. Whatever the real answer turns out to be, a simple, hard to cheat, objectively assessed tax that applies to everyone, and can be easily audited needs to be part of it.

And I suspect that any sort of income tax that relies on people 'voluntarily' reporting income, either directly or through their employer sure does not look like it will be it, as it does not look like it works at all.

Sales taxes, like the Fair Tax proposal, are almost as bad as income taxes, as they still rely on people honestly reporting their transactions. I have advocated a simple tax on each square foot of land owned and buildings owned, (not on the value, which is subjective and a moving target), as it is hard to cheat a tape measure. Not impossible for sure, but harder than income or sales books are to fake.
 
2012-04-15 11:31:05 AM  
No wonder my NC state income taxes refund takes months to get.
 
2012-04-15 11:32:45 AM  
So if my employer takes 200$ from me as a state tax deduction to keep and at the end of the year I'm owed 90$ back from the state, where does that 90$ come from? The employer or the state?
 
2012-04-15 11:33:05 AM  
In Illinois the Democrats that control the state do this to keep or increase the jobs so the unions continue to help with the votes.
 
2012-04-15 11:40:16 AM  
It's not socialism if the money goes to stockholders and CEOs. Ok then.
 
2012-04-15 11:48:37 AM  
This isn't socialism..

...if it were, the government would own the corporations, not the other way around.
 
2012-04-15 11:50:19 AM  

wutchamacallem: In Illinois the Democrats that control the state do this to keep or increase the jobs so the unions continue to help with the votes.


Of course, because there's no possible other reason you'd want to "keep or increase the jobs"
 
2012-04-15 12:03:16 PM  
This is basically a bookkeeping trick or incentive between states and companies. Companies have choices to where to open facilities and states actively pursue them in an attempt to create jobs. Consider a company wants to open a warehouse that would employee 1000 in the SE, 4 states bid and offer up incentives basically in tax breaks to gains the jobs. The company would pay X amount in taxes and then the state would cut a check for X back to the company, it's a bookkeeping trick to just not write the checks. The other end would be companies getting to keep the state tax outright, this encourage the companies to employee more people at the site. It lowers the companies costs and employees and end up spending money and buying houses they end up feeding the states coffers with sales tax and local communities with property tax.

(Jobs + No Income Tax + No Corporate Tax) > (No Jobs + No Income Tax + No Corporate Tax)

As long as states are pursuing jobs politicians will offer companies deals to move to their states. Politicians can sell jobs to voters.
 
2012-04-15 12:03:30 PM  

drhansenej: It's not socialism if the money goes to stockholders and CEOs. Ok then.


Actually no, because,

Rapmaster2000: It's not really socialism as the risks are not spread evenly across all corporations and businesses regardless of size. It's more like corporate feudalism where the aristocracy is able to control government at the expense of their smaller competitors and ultimately the consumer.


And the sooner people, regardless of political party, stop allowing the 2 parties to dictate the terminology and scope of the debate the sooner we can actually change something.
 
2012-04-15 12:07:20 PM  
Of course, because there's no possible other reason you'd want to "keep or increase the jobs"

Not if you're a pol in Illinois.
 
2012-04-15 12:12:45 PM  

Lt_Ryan:

(Jobs + No Income Tax + No Corporate Tax) > (No Jobs + No Income Tax + No Corporate Tax)


Not necessarily, you are not including the state services that may be required to support the jobs and company ( eg if Walmart brings in 400 workers, but the pay is low enough that all the workers qualify for Medicaid).

In the case of AMC, do you really believe that all of the employees would automatically move?
 
2012-04-15 12:13:25 PM  
I've never had much problem with tax subsidies, etc when it was things like "build your plant here and we won't charge you property tax for 15 years" types of deals, because that's mostly revenue neutral from the property tax side (they weren't likely collecting much on an empty lot prior to construction anyway), but this keeping the employees' income tax contributions is a bit much.

The writer of TFA is spot on when he says that if it were up to voters, there is no way the income tax part would fly.
 
2012-04-15 12:15:17 PM  
This story seems like it should be somewhere besides the business tab.
 
2012-04-15 12:16:28 PM  

wutchamacallem: In Illinois the Democrats that control the state do this to keep or increase the jobs so the unions continue to help with the votes.


So the only reason Democrats have to encourage job growth is so more union members can vote for them?

Really?
 
2012-04-15 12:26:56 PM  

Lt_Ryan: This is basically a bookkeeping trick or incentive between states and companies. Companies have choices to where to open facilities and states actively pursue them in an attempt to create jobs. Consider a company wants to open a warehouse that would employee 1000 in the SE, 4 states bid and offer up incentives basically in tax breaks to gains the jobs. The company would pay X amount in taxes and then the state would cut a check for X back to the company, it's a bookkeeping trick to just not write the checks. The other end would be companies getting to keep the state tax outright, this encourage the companies to employee more people at the site. It lowers the companies costs and employees and end up spending money and buying houses they end up feeding the states coffers with sales tax and local communities with property tax.


Okay, so you would say that all the income which is "taxed away" is not actually income, nor a part of employee compensation? I am told time and again that ALL employee compensation MUST be counted as part of an employee's "pay" (to explain why corporations can get away with paying so little) but apparently the money that would have been taken as tax doesn't count?
 
2012-04-15 12:36:37 PM  
It's a relatively small amount of money. But if were Chris Christie, I'd get my pr people right on this, then spend some time on a stair stepper.
 
2012-04-15 12:37:02 PM  
What's good for M&M is good for America.
 
2012-04-15 12:41:23 PM  

GAT_00: Then there's Amazon, who threatens to abandon the state if the state government dares to collect sales taxes.

This kind of shiat should be illegal.


Considering Amazon is the king of abusing job hiring incentives by hiring temp workers (who can't join unions) and creating conditions for hire turnover, most states should just say "Fark U". The sales tax collected on Amazon will more than cover the cost of unemployment/welfare for the unemployed workers.
 
2012-04-15 12:56:23 PM  
Modern American economic theory: Socialism for the rich, free enterprise for the poor.
 
2012-04-15 01:01:47 PM  
I'd like to contribute to the discussion, but Florida has no State Income Tax. Suck it, libs.
 
2012-04-15 01:10:14 PM  

Rodeodoc: I'd like to contribute to the discussion, but Florida has no State Income Tax. Suck it, libs.


Doesn't Disney have a 99 year tax abatement(property tax, school tax, corp income tax, etc)?
 
2012-04-15 01:25:41 PM  
No direct funding of corporate welfare here in Texas... It's done the ol' fashion way, in over 60 separate forms of taxes and fees...

/still happens
 
2012-04-15 01:35:10 PM  
No direct funding of corporate welfare here in Washington, either. However, it's amazing just how many different taxes (and corporate tax dodges) are available here.
 
2012-04-15 01:35:47 PM  

wutchamacallem: Of course, because there's no possible other reason you'd want to "keep or increase the jobs"

Not if you're a pol in Illinois.


Ever wonder why union members vote overwhelmingly for Democrats? It's not because they're told to.

Maybe if Republicans concentrated on "keeping and increasing the jobs," instead of petty social issues that only matter to morons and the elderly, they'd get some of those votes.
 
2012-04-15 01:38:00 PM  
Flat.

Tax.


No "loopholes" or special treatment for anyone: Unions, wealthy, nor contributors of any sort. Limit the tax for day-to-day items with non-luxury items as food and clothing (who decides though?) as is done in PA.
 
2012-04-15 01:41:05 PM  

FuturePastNow: Ever wonder why union members vote overwhelmingly for Democrats? It's not because they're told to.


So then you're O.K. with the companies keeping the sales tax.
 
2012-04-15 01:46:40 PM  

Spade: Last place I lived offered ridiculous tax breaks and stuff to companies so they would move there.

While shafting both the proper home and the new home.


Of course, I don't think the people who got jobs with those companies are complaining much.


Except that the jobs never really come.
 
2012-04-15 01:49:52 PM  

Ed Willy: Considering Amazon is the king of abusing job hiring incentives by hiring temp workers (who can't join unions) and creating conditions for hire turnover, most states should just say "Fark U". The sales tax collected on Amazon will more than cover the cost of unemployment/welfare for the unemployed workers.


Temporary workers are the company's version of the labor union. They protect the company from the workers like the unions protect the worker against the company.

I'd all but ban temporary workers and all forms of indirect labor unless RTW was abolished. What's wrong with being consistent by having a Right to Directly Work sit next to the Right to Work law?
 
2012-04-15 02:37:39 PM  

buzzcut73: I've never had much problem with tax subsidies, etc when it was things like "build your plant here and we won't charge you property tax for 15 years" types of deals, because that's mostly revenue neutral from the property tax side (they weren't likely collecting much on an empty lot prior to construction anyway), but this keeping the employees' income tax contributions is a bit much.

The writer of TFA is spot on when he says that if it were up to voters, there is no way the income tax part would fly.


Too long. It should be 7 years tops, like patents. Especially since by year 15 the company has bought a percentage of the local government and will start demanding an extension.

"Pro-business" tax breaks are VASTLY overstated in efficacy, and they absolutely create a worse "moral hazard" than anything the right-wing whines about.
 
2012-04-15 02:51:19 PM  

HempHead: Lt_Ryan:

(Jobs + No Income Tax + No Corporate Tax) > (No Jobs + No Income Tax + No Corporate Tax)

Not necessarily, you are not including the state services that may be required to support the jobs and company ( eg if Walmart brings in 400 workers, but the pay is low enough that all the workers qualify for Medicaid).

In the case of AMC, do you really believe that all of the employees would automatically move?


400 low paid workers with some government assistance is better than 400 unemployed people on even more government assistance.
 
ZAZ [TotalFark]
2012-04-15 02:53:51 PM  
It should be 7 years tops, like patents. Especially since by year 15 the company has bought a percentage of the local government and will start demanding an extension.

Long term contracts should be put to a vote of the people, preferably after a waiting period. For example, in Chicago the parking meter sale would have been subject to public debate and not been allowed to happen until after the next budget. (The city council sold a 75 year lease at ten cents on the dollar to make a budget balance.)
 
2012-04-15 03:16:53 PM  

GAT_00: Then there's Amazon, who threatens to abandon the state if the state government dares to collect sales taxes.

This kind of shiat should be illegal.


What should be illegal, refusing to do business in states where they want to tax you?
 
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