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September 27th, 2008

What corporate taxes?!

All this talk about raising funds for the bailout got me poking around government websites.  (The horror!)  GAO writes some horrific stuff.  This one's a report of trends for how many corporations pay federal taxes.  I'll spoil the ending: few pay; many exempt themselves.  It's kinda neat how quickly they use IRS forms to exempt themselves from any tax liability -- zero taxes, nichts, nadda, etc. 

The only question is whether anything's income should be taxed? -- corporate income or personal income or anything's income.  I haven't been sold on the practicality of taxing sales exclusively (or to be more precise, value added tax).  Does some government as large and as indebted as the US operate this way ... successfully?  France doesn't count. :) 

I would think, as a naive American, that as often as we are told that our economy is driven by consumerism, then a gradual switch to tax on consumption would a) raise large funds in the short term, and b) curb debt in the long term.  Now no gas guzzling, restaurant eating, decor buying American would agree to the substantial increase in cost; VAT for example flies in the face of the American Dream because a) it's French, and b) if one makes more money, one should spend more money, right?  Wrong.

That's just me putting a 2 cent coin in the bucket ... and still wondering if I could live through a Canadian winter :)