Comments on: Why public companies should have public tax returns A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: JulzElie Mon, 11 Nov 2013 12:29:04 +0000 Find blank and fillable 1120 forms at PDFfiller.
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By: realist50 Thu, 23 May 2013 02:04:20 +0000 Per the report that Felix links regarding corporate taxes:

“First, the average effective corporate tax rate has decreased over time, mostly as a result of reductions in the statutory rate and changes affecting the tax treatment of investment and capital recovery (depreciation). Second, an increasing fraction of business activity is being carried out by partnerships and S corporations, which are not subject to the corporate income tax. This has led to an erosion of the corporate tax base. And third, corporate sector profitability has fallen over time, leading to a further erosion of the corporate tax base.”

The 2nd item is a matter of where tax is collected – S corp and partnership income is taxed at the individual level not the corporate level. It just moves tax collection from the “corporate income tax” bucket to the “individual income tax” bucket. To call it is “an erosion of the corporate tax base” is misleading.

The 3rd item is what the inherent nature of the corporate income tax should be – it is paid on income.

Only the 1st item is a true “cut” – and even that one combines a true reduction (statutory rate) and a timing change (depreciation time period).

Very important to understand the magnitude of each of these different components because they are different things.

By: AlkalineState Wed, 22 May 2013 16:57:08 +0000 Simplify it all the way. Quarterly statements to investors…. ARE the tax returns. And the market country is the tax country. NYSE, NASDAQ = American tax. Simple. You want to start a fake stock market in the Caiman Islands. Fine, you’re kicked off the NYSE and NASDAQ. Discontinue allowing two sets of books (a rosy set for investors, a dire set for the IRS).

By: darbsnave Wed, 22 May 2013 11:33:28 +0000 OK, what about this argument: companies and individuals, by seeking their best deal for limiting their own taxes, in turn forces countries to compete with each other on the basis of tax rates. This means lower taxes for all of us.

Or, is that argument too dumb even to consider?

By: Dollared Tue, 21 May 2013 23:49:08 +0000 Felix, I think this is interesting but misses a broader public policy point. With so much of the corporate sector going private, the impact of public tax returns is less than it would have been 20 years ago. The real problem is the business of America is business, and it is not in the least transparent.

By: TimWorstall Tue, 21 May 2013 20:24:52 +0000 “The report then presents the actual amount of cash paid in taxes, as reported on Apple’s tax return. (This is where that subpoena power comes in particularly handy: I’d love to see Apple’s response to a reporter asking to see Apple’s Form 1120 for the past three years.) According to the Form 1120, which is the corporate equivalent of the 1099 1040 for individuals, Apple paid $2.5 billion in actual cash payments to Treasury in FY2011, up from $1.2 billion in FY2010.”

Yes, obviously. Corporate income tax is paid *in arrears*!

You’ve got to get to year end to know what the tax to be paid is.

There is indeed a system whereby you pay advance corporate income tax. Which is based on your tax bill for the *previous* tax year. So, if you’re a company whose profits are rising strongly tax cash paid in any accounting or tax year will be based upon the earnings in the *previous* year. Provisions for tax to be paid will give a much better idea of the amount that will have to be paid. Simply because the balancing payment between the estimate of taxes (and thus the cash actually handed over) and the actual amount owing must, by definition, come after the end of the tax year.

The cash taxes paid number is simply nonsense with any company with swiftly growing profits.

By: Auros Tue, 21 May 2013 18:32:30 +0000 I’m with masaccio. Companies have incentives to massage earnings reported to investors to make the numbers go up; they have incentives to make earnings reported to the gov’t go down. So how about we make them stick with one number, so that those two pressures can counterbalance each other somewhat? Combine that with the various ways you can get in legal hot water for being fraudulent in reporting either, and maybe we really do get more honesty, overall.

By: masaccio Tue, 21 May 2013 13:57:54 +0000 My solution: a tax of a specific percentage of income as reported to Shareholders on Form 10-K. It’s a real simplification: you get your audit and multiply the bottom line by the percentage. It pays no attention to where the income is said to originate. It’s transparent. And it cuts the legs out from under an entire class of tax planners, by putting the auditors on the hook for unpaid taxes.