Tax Code Blocks Jobs

Pages: 1 2

Ignorance of accounting principles, along with left-imbued philosophy, are churning up a political storm against beneficial future tax policies for U.S. industry—policies that could create needed American jobs.

One left-wing advocacy group, calling itself Citizens for Tax Justice (CTJ) (a real stretch in the definition of justice) is engaged in a study of Fortune 500 companies with the wacky accusation that some of the world’s more respected corporations deliberately don’t pay income taxes.

Previewing its major study, CTJ recklessly claimed, in an analysis of 12 major corporations that they pay an “effective tax rate of negative 1.5 percent on $171 million in profits and reap $62 billion in tax subsidies.”

The outlandish analysis, CTJ claimed “serves to illuminate the current corporate tax debate in Washington, and demonstrates that real corporate reform—meaning higher taxes–is long overdue.”

A flurry of sensational news media accounts recently about taxes paid by large corporations have fired up a debate over the different ways a company’s profits and tax liabilities are given to shareholders on financial statements and what is reported on a company’s tax return to IRS.

The Ways and Means Committee in June continued its series of hearings at which Chairman Dave Camp (R-MI) said, “The Tax Code is preventing, not promoting, job creation. Our focus is on what actions must be taken to reform our Tax Code and make America a more attractive place to invest and create the jobs we need.”

At the hearing, a member of the committee, the habitually arrogant Rep. Fortney “Pete: Stark (D-CA) asked to have inserted in the record the release from the Citizens for Tax Justice.

One of those corporate tax pros testifying was James H. Zrust, tax vice president for the Boeing Company. For the past three years, Rep. Stark recounted in an acid tone, Boeing made ”about $10 billion, but had a negative tax rate.”

Zrust attempted to respond, but Stark kept interrupting him, asking questions dripping with sarcasm:

“How much lower tax do you need to survive, Mr. Zrust?”

“Let me tell you what this [reported negative tax payment] is attributable to…,” Zrust tried to say.

“I know what is attributable to,” Stark shot back, as if he were all-knowing.

Finally, Zrust explained that deductible expenses of production in recent years were attributable to new products, an expanding workforce and pension costs. When allowed to speak, Zrust explained that in future years Boeing would be paying considerable taxes as its aircraft were sold—probably “in excess of 33 percent.” Zrust also mentioned that 30 IRS agents work continuously at Boeing offices to keep watch on Boeing’s proper tax accounting.

Pages: 1 2

  • sylviaharrell

    Unemployment numbers are comprised of those that are in the job market for the past 30 days. It does not include those that have not been in the job market in the last 30 days: people who have given up looking; those that have gone off unemployment because it has run out. One solution to unemployment is "High Speed University" check it out

    • davarino

      In other words unemployment is much higher than what is reported.

  • davarino

    The tax rate is higher than 30 other nations, and there are nations where the wages are unfairly held down and we still trade with them. How did China ever get permission to start trading with non communist nations?

    • StephenD

      There is no end to what you can accomplish with forced labor.

  • Texasron

    Our government is the reason why jobs have left the country and why jobs are not being created. There are too many regulations and the corporate tax rates are too high. These issues will be solved when democrats are voted out of office.

    • Dee

      It's amazing how many people don't get this texasron. Business people are sick of all of this extra accounting work and then living in fear of some other regulation that could land you in jail. Its just overwhelming. Who the hell would want to run a business in the states anymore? You have to be nuts. Obamas missing in pitting people against people has worked to the detriment of this country.

  • Shery

    I guess Obama gets all his "facts" from this group!

  • Raymond in DC

    It's in the very nature of the tax code that some activities are "more equal than others", as the government seeks to drive the economy in ways the market would not. Such market distortions results not only to inefficiencies and favoritism (e.g. crony capitalism) but to political demagoguery. That's how liberals can, at the same time, insist that subsidies and tax breaks for ethanol, solar and wind facilities, and electric cars are deemed worthy while those for oil/gas production or other industrial endeavors they don't care for are deemed unfair if not "evil".

  • mrbean

    Progressives and Liberals be afraid, be very afraid. If Obama is re-elected, the wealthy and the valuable producers will pick up and leave America altogether. There is a big world out there begging them to come. Places like Hong Kong, Singapore, Australia, New Zealand, Monte Carlo, Belize, Costa Rica, Panama, Bahamas, and Cayman Islands are low-tax havens that appreciate business owners and their sacrifices. They welcome wealthy ex-patriots. They celebrate individual achievement. They reward instead of punish business owners and financial risk-takers. They are wonderful places to live and are aggressively pursuing Americans daily.