Need something to kickstart your American Spring protest? Consider that big corporations are happy to take our tax dollars — while finding new ways to skip out on Uncle Sam.
March 22, 2012 |
Photo Credit: Shutterstock
But increasingly, the biggest punchline of all is a growing breed of firms that are classified as “non-taxable.” That’s right. These firms pay zilch. Nada. Zippo.being.
Take the case of StoneMor Partners, a firm seeking to profit from dying baby boomers, who will need an awful lot of cemetery real estate. The company, whose mission is “to memorialize each life with dignity” might add a second motto to its mission statement: “to capitalize on each tax break with alacrity.”
StoneMor takes advantage of a special structure known as a pass through, in which profits are passed along to investors who pay taxes on those sums through their individual returns. The exception has been around for decades, but lately Congress and state governments have broadened it to encourage “entrepreneurship.” The idea is to help small businesses, which sounds like a good thing. Until you realize that a mammoth private equity company like Blackstone and a massive construction firm like Bechtel, among others, are using this kind of business organization to avoid the taxman altogether.
The percentage of U.S. corporations structured as “nontaxable businesses” soared from about 24 percent in 1986 to about 69 percent as of 2008, according to the Internal Revenue Service. If you include partnerships and sole proprietors, the number gets even bigger.
And there’s more: Up to 60 percent of all U.S. businesses with profits of $1 million are structured as pass-throughs. In the Wall Street Journal, John D. McKinnon points out that their enormous popularity is “one big reason why federal corporate tax collections amounted to just 1.3% of GDP in 2010, well below their mark of 2.7% in 2006 and far beneath their peak of 6.1% in 1952.”
Who is in favor of this gross unfairness? Democrats and Republicans alike have failed to make taking it on a priority. Unsurprisingly, a GOP-backed coalition of building contractors, beer distributors, car dealers and funeral directors has been the most vehement in arguing that changing the rules will block “entrepreneurship.”
Does Blackstone, the world’s fifth-largest private equity firm, really need our assistance?
The pass-through structure, in addition to being unfair, encourages fraud that the Internal Revenue Service has a hard time spotting. S corporations, partnerships and other pass-throughs game the system by underreporting income and overstating deductions. Billions in uncollected taxes each year are the result of this scamming.
In an era of laid-off school teachers, uninsured children, widespread joblessness, and crumbling roads and bridges, this is nothing short of obscene. As economist William Lazonick, director of the U Mass Center for Industrial Competitiveness, put it to me in an email:
“Ordinary taxpayers should be outraged by the obsession of business executives with tax avoidance. Our tax dollars have played a major role in funding the physical infrastructures and human capital that support business enterprise. Then they pull out every trick in the book to deprive us of our fair share of business profits. Besides reflecting a profound moral deficit on the part of our business ‘leaders,’ it is a recipe for U.S. economic decline that calls for massive tax reform.”
Obviously, reform to get rid of these loopholes is wildly overdue. Once we decide as a nation what our government needs to spend in order to have a decent and prosperous society and what share of total tax revenues different types of economic actors should pay, there should be no more excuses. And businesses that refuse to pay their share should be called by their proper name: parasites.
Yu Yu Hakusho was, as a matter of fact! This list makes me feel really old, though.
Buffy the Vampire Slayer. I was like… ten, yelling about how Spuffy was superior to Bangel… yup.
Disney’s Aladdin. I fangirled Iago - who is basically Tyrion in parrot form. Go figure.
Lord of the Rings.
I’m pretty sure I started Digimon and Star Wars at the same time… I mean, I distinctly remember coming up with what I now recognize as fanfic in my head before I went to bed, about how Tai and Sora would get married and Obi-Wan would catch the bouquet.
I was a charming child.
Relic … Hunter …
First fandom where I actually interacted with people…American Idol. Adam Lambert. Kradam. ‘Nuff said. :’)
“Human beings took our animal need for palatable food … and turned it into chocolate souffles with salted caramel cream. We took our ability to co-operate as a social species … and turned it into craft circles and bowling leagues and the Metropolitan Museum of Art. We took our capacity to make and use tools … and turned it into the Apollo moon landing. We took our uniquely precise ability to communicate through language … and turned it into King Lear.
None of these things are necessary for survival and reproduction. That is exactly what makes them so splendid. When we take our basic evolutionary wiring and transform it into something far beyond any prosaic matters of survival and reproduction … that’s when humanity is at its best. That’s when we show ourselves to be capable of creating meaning and joy, for ourselves and for one another. That’s when we’re most uniquely human.
And the same is true for sex. Human beings have a deep, hard-wired urge to replicate our DNA, instilled in us by millions of years of evolution. And we’ve turned it into an intense and delightful form of communication, intimacy, creativity, community, personal expression, transcendence, joy, pleasure, and love. Regardless of whether any DNA gets replicated in the process.
Why is it accepted that some people who eat a ton of food can stay thin, but not accepted that some people who eat a small amount of food can be fat?
Since thin people get diabetes, heart disease and high blood pressure, why is becoming thin suggested as a cure?
Why bother using BMI as a substitute for metabolic health measures when we can easily test metabolic health measures?
Doctors treat thin people for joint pain with options other than weight loss, why don’t they give fat people those same treatments?
Why do we believe that doing unhealthy things (liquid diet, smoking, urine injections coupled with starvation, stomach amputation) will lead to a healthy body?
If the diet industry’s product actually “cured fatness”, wouldn’t their profits be going down instead of up as more and more people were permanently thin?
Isn’t it medically unethical to prescribe something without telling your patients that it works less than 5% of the time with a much greater chance at leaving you heavier and less healthy than when you started?
Why do people continue to think that shaming people will lead them to health?
Why do we accept wide variations in things like foot and hand size, nose and lip shape etc. but expect every body to fit into a very narrow proportion of height and weight?
If weight gain isn’t proven to cause diabetes, high blood pressure etc., why would weight loss be recommended as a cure?
Since weight loss ads have to carry a “results not typical” warning, shouldn’t doctors have to give patients a similar warning?
Why do people take the time to come to my blog and make death threats?
Does anyone really succeed at hating themselves healthy? If so is it worth it?
If we’ve been prescribing dieting since the 1800s and still can’t prove that it works, shouldn’t we be trying something else?
How is it possible that suggesting that healthy habits are the best chance for a healthy body is controversial?