The Hidden Agenda of Corporate Tax Returns
The hidden agenda of corporate tax returns is being revealed at an alarming rate. As corporations and special interest groups are discovering the profit potential of this law making, they are sending money away in the form of donations. While it might sound like a great idea, who does she think is writing these checks? You know the answer. The politicians who passed the legislation.
It is easy to see why corporations are eager to find ways to “ Dodge “the new tax law”. The plain and simple truth is that their “new” strategy is a risky one. As corporations and special interest groups scramble to figure out how to legally pass their income to their owners, the average citizen is stuck holding the bag. Will the new corporate tax returns become another feeding frenzy for public officials looking for campaign contributions? Remember when President George W. Bush requested contributions in the fall of 2021? His original intention was to raise money for his re-election.
The new secret of the corporate tax returns is not the “in hid” agenda of politicians and special interest groups, but rather the “out hidden” agenda of the very corporations that are trying to hide it. If the U.S. Congress does not re-authorize the necessary deductions for small business owners, corporations will have no choice but to take their business to countries where they can enjoy a higher tax rate. This means lower wages, less buying power, and less opportunity for job-creating innovations.
If the U.S. Congress re-authorizes the deductions for U.S. corporations that were dropped from the payroll of American business owners due to the passage of the recently enacted law, then there will be a large influx of international business into our country. There are a great many advantages to having foreign investors and entrepreneurs to move their money and their businesses here. Many will bring with them the skills they developed over years of business in their home country, and they will increase the population of our population by increasing the supply of workers. But it is the hidden agenda of corporate tax returns that will cause this positive scenario to go sour quickly, if the deduction is not re-authorized.
For example, the U.S. has lost several tax credits because of the global recession. Some are being phased out, but many more are scheduled to be terminated soon. These include research and development credits, write offs for energy use, and other items under the green house gases provisions of the Tax Relief Act passed by our Congress. One provision in particular, the business energy expenditure credit, is a popular target of many business owners who complain about how much they are paying in deductions. It only takes about a couple minutes to research this in depth, so I would recommend doing so even if you happen to know nothing about the subject. The Tax Retreat has done just this for me and many others and can be found at the Children’s Hospital in Seattle blog.
The other problem, and the one that I believe is most likely to cause the eventual demise of the U.S. corporate tax code, is the corporate welfare provisions that are embedded into the tax code. These provisions are often designed to favor large corporations, and to prevent smaller businesses or start ups from competing with established larger companies. The recent case of the Boeing Corp. is a perfect example of this. The aerospace giant was given tax breaks, and subsidies, to keep its manufacturing facility in Seattle, even though it is not profitable. This is wrong, and I believe it is destined to lead to many more such corporate giveaways.
The solution? Keep corporate tax returns secret. As with the IRS, the people who should know about these tax breaks are those who work at the IRS. And while I don’t think that they should have to, I do believe that taxpayers should be made aware of these giveaway events, just as we were made aware of them with the tobacco industry. Any tax law passed by our government should not be allowed to loophole by our elected representatives in the name of keeping our nation’s economy healthy.
Unfortunately, that is not where most business owners think they should go. They tend to look to their own personal gain rather than looking out for the best interests of their fellow citizens. Unfortunately, this kind of selfishness does not just carry over into the taxation issue. Too many business owners also seem to forget that their wealth was built on the back of the sweat and toil of their fellow workers.
