Honest question - can you give an example of a tax law that was lobbied for that benefited corporations?
And I mean beyond just a decrease in tax rate which businesses would be expected to lobby for.
And I mean beyond just a decrease in tax rate which businesses would be expected to lobby for.
Here is a HN discussion on it though: https://news.ycombinator.com/item?id=16841449
https://www.propublica.org/article/filing-taxes-could-be-fre...
This thread is about reducing tax payable. The intuit story is about making it harder for citizens to file taxes.
Then the question is, does it really influence laws? Well I think if it didn't, they wouldn't spend so much money.
It's also notable that you couldn't point to a specific tax law, like OP asked for. Lower taxes in general--nobody needs to lobby for that, there is a large contingent of people who favor that just on principle.
We have the same thing for judges. The conservatives have the Federalist Society. The liberals have the ACS. But for whatever reason, the Federalists have better branding, and are a perennial bogeyman. But all either organization does is keep track of judges that fit their policy goals. What's wrong with that?
It's also a matter of perception. Keeping the lobbying sums low(ish) also helps keep a lower profile. You don't want to draw too much attention to the fact that you're paying to get something done your way.
Plus, how much can you reasonably spend? In the end you're still trying to influence the same (relatively few) people, spending a considerable percentage of that "$19 trillion economy" is hard to make look legitimate.
I think this is really the crux of the issue.
If a CEO met with a politician and said "I've talked to all my CEO buddies and if you do XYZ we're all going to make substantial contributions to your campaign and PACs" that's clear-cut bribery and honest services fraud.
But if the same CEO hires a lobbyist to say the exact same thing to a politician suddenly it's "free speech" and we're expected to believe the government can't do anything to reign it in.
This is not what happens during lobbying. If you have any concrete evidence of this sort of exchange happening, please report it, since it's a blatant violation of federal law.
100 senators 435 representatives 1 President 1 Vice President
~7 million dollars per person per year
:)
During the bush tax cuts, there was also a tax holiday that allowed money to be brought back into the US at a very low tax rate. Can't imagine that 0 corporate lobbyists were involved in the process of creating these laws.
from wikipedia: "In 2004, the United States Congress enacted such a tax holiday for U.S. multinational companies in the American Jobs Creation Act of 2004 (AJCA)) section 965, allowing them to repatriate foreign profits to the United States at a 5.25% tax rate, rather than the existing 35% corporate tax rate."
Edit: From this[1] Bloomberg article:
> Under pressure from industry lobbyists and exploiting a split among White House advisers, the Republican Congress in December failed to fulfill Trump’s promise to end the tax windfall enjoyed by money managers. And lawmakers seemed to stumble in trying to narrow their tax advantage, writing the new carried-interest rule in a way that provided firms an easy escape.
Closing the loophole actually has bi-partisan support... except among those who spend a lot of time with industry lobbyists.
[1] https://www.bloomberg.com/news/articles/2018-02-14/mnuchin-s...
I don't know the answer so this is just speculation and five seconds of Googling (but I am writing this regardless because I hope someone knowledgeable will see this and correct me so I actually learn something)
My first stop was https://www.investopedia.com/terms/c/corporatetax.asp
> Corporations are permitted to reduce taxable income by certain necessary and ordinary business expenditures. All current expenses required for the operation of the business are fully tax deductible. Investments and real estate purchased for the intent of generating income for the business are also deductible. A corporation can deduct employee salaries, health benefits, tuition reimbursement and bonuses. In addition, a corporation can reduce its taxable income by insurance premiums, travel expenses, bad debts, interest payments, sales taxes, fuel taxes and excise taxes. Tax preparation fees, legal services, bookkeeping and advertising costs are also used to reduce business income.
So here is my interpretation: Let us say for ease of math, I am Pupflix and I have 100 customers who pay $10 per month. I have an annual income of $100 * 10 * 12 = $12,000. Let us say I pay salary of $20 a month, so $12 * 20 = $240. I can deduct that. So my income is now $1200 - $240 = $960. Lets say my operating expenses are $10 a month. I can deduct that as well, so deduct $120 from $960, which leaves me with $840.
Now all this is relatively straight forward. From what I've learned from previous conversations, corporation tax is on profits, and not in revenue. Apparently, this is essential because some businesses are very low margin. Apparently, when all is said and done, a retail grocery store typically has under 5% profit (before any shenanigans).
However, what happens when our Pupflix pays Disney Corporation $1000 in licensing fees for the right to stream Disney content for the next ten years? Does our Pupflix deduct $1000 this year? That would be very wasteful because our income at this point is only $840.
I believe this is where Loss Carryforward comes in. https://www.investopedia.com/terms/l/losscarryforward.asp
> For example, if a company experiences negative net operating income (NOI) in year one, but positive NOI in subsequent years, it can reduce the amount of future profits it reports using a loss carryforward to report some or all of the loss from the first year in the subsequent years. This results in lower taxable income in positive NOI years, and reduces the amount the company owes the government in taxes. Imagine a company lost $5 million one year and earned $6 million the next. The loss from the first year can be carried forward and included in the current balance sheet for the second year, lowering the profits, and therefore the taxable income, for that year to $1 million.
I am not an accountant. My guess is that the accounting people will somehow run multiple possible execution paths and choose the "best" one. I think the tax field is very nuanced and just being able to classify an expense as either operating vs capital can make a difference in the amount of taxes a corporation has to pay:
https://www.investopedia.com/ask/answers/042415/what-differe...
For example, when I was a contractor my boss told me that I am a "cap ex" which is OK but for some reason he couldn't bring me on as full time because reasons. Not that this would change my work at all. I was working with the team just like any full-time employee would. I just wasn't their employee. How this makes sense, I have no idea. I doubt he lied to me. There are probably hundreds of things like this where you could argue an expense is one way or another depending on what suits a company the best at that time.
I welcome all corrections and additions to eliminate omissions and especially concrete examples that refurb asked for
My last job had a number of people in a similar situation. The reason was fairly straight forward: Higher-ups in the parent company decided how many full-time developers we would need over the next 5-10 years, and anything we needed on top of that had to be contractors because we were only filling short-term needs.
Nobody in the chain between us and them actually understood the rationale, because it was a totally arbitrary number for a plan made under assumptions that were no longer the case. Unfortunately, noone could convince them that it wasn't the case either, so we all just carried on.