An article appeared yesterday on Worldnetdaily titled, “Most companies in US avoid federal income taxes“. Not long after reading this, I saw the latest Obama commercial about how unfair it is that Oil companies are reaping record profits while we the people are suffering thru really high gas prices, so as Prez he would tax corporate profits to give a rebate to the ‘poor’.
Marry that up with this quote off of Worldnetdaily by the ‘good’ Senator from North Dakota, ‘”It’s shameful that so many corporations make big profits and pay nothing to support our country,” said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich.’
These ideas tread on VERY VERY slippery ground. First, most if not all of our 401k or similar retirement funds are in mutual funds of which the majority of have oil stocks. Good performance for the corporation is good performance for the investors. The price of the stock goes up which means the balance on our retirement funds goes up.
I’m not business accountant or attorney, but as I understand the tax laws, corporations (and I mean ALL corporations) are different then individuals in that they Earn Profit, Pay expenses, then Pay Taxes on what’s left. As worker-bees, we work to earn Pay, Pay taxes, and then Pay expenses. Its been set up that way since I don’t know when. A very well run small business will carefully balance their income with expenses so that at the end of the fiscal year, there is little or no profit left to pay taxes on. If your a business owner and have a high tax bill each year, you’re probably not doing something right.
While a corporation may make huge profits but pay little to the tax man, a hugely profitable company will be a growing company, hiring more employees who do get paid and taxed and then spend what they have left on other taxable goods and services. Comparably, a company that makes little or no profit probably won’t be around for very long. It isn’t hard to understand by people who don’t have an economics background.
Exactly how Obama plans to tax just the big bad oil companies is another big question. Will there be a new corporate tax on wind-fall profits specifically? Will there be a special wind-fall tax that only applies to what ever company happens to be raking it in at a given time? All things are cyclical. Piling a new tax onto businesses usually doesn’t work out very well, because increased taxes just flow on down to the point-of-sale consumer. Suddenly when oil profits are no longer considered ‘windfalls’ and someone else starts raking it in, like Electricity companies with solar or wind power generation capability, or maybe Toyota America profits are high, are they fair game for new taxes????
Sure doesn’t sound like a democratic land of opportunity to me, sounds an awful lot like communism or socialism….take what every company or individual earns, an redistribute it to the populace…..
Scary, very scary!..
I’m not saying McCain is much better, but on at least this one issue….
Tags: Obama, oil profits, socialism, taxes
