FROM FORBES:
"Come Back, Jimmy Carter"
William Baldwin, 03.01.04, 12:00 AM ET
Our annual survey of real estate investment trusts could give great inspiration to a populist denouncing corporate greed. Loopholes? Why, these corporations don't pay a blessed dime of income tax. Their profits, from shopping malls and office buildings and what have you, flow straight through to shareholders. If you want a piece of the action, check out Stephane Fitch's review of the stocks on page 94.
There's a risk, though. What would happen if someone like John Kerry got wind of what's going on? What if he ended this "loophole"? Typical of the man's pronouncements on taxation, from a campaign press release: "Kerry Calls for Crack Down on Corporations That Avoid Taxes."
In a fairer tax system every single corporation would be taxed just like REITs. The business would pay no income tax, and instead its shareholders would owe personal tax on their share of the profits, whether those profits were distributed as dividends or not. Bill Gates would owe 35% on his share of Microsoft's net; the starving widow with 100 shares would owe nothing on hers. The dividend tax, recently cut to 15%, would be abolished altogether.
President Jimmy Carter spoke vaguely about just such a reform but didn't push it. It's just too hard to explain to the voters. Far more appealing to them is the notion that corporations are hoarding piles of money, and if we could just get our hands on some of it we could lighten the tax burden on us hard-working citizens. As the chart illustrates, corporations seem to be getting off too easy.
But are voters dumb enough to think that taxes on corporations don't ultimately fall on people? They might be. I am reminded of a spectacularly stupid tax proposal that came out 13 years ago. The idea was to raise a quick and easy $85 billion a year with a tiny 0.02% tax on checks and bank wires. In a letter pushing the idea, a senator noted that the tax would cost just pennies for an individual writing a $100 check. The burden would be borne mostly by financial institutions that wire money back and forth all day long. Hey, those banks have sacks of cash in their vaults! Take some for the Treasury!
The senator behind the check tax (which died before reaching the floor): John Kerry. If you think he has a shot at winning this November, you should hold off buying REITs--or any other investments.
WHAT A STUPI, STUPID IDEA.... PAYING TAXES ON YOUR CHECKS.....HOW AMNY OF YOU CAN AFFORD THAT ? ESPECIALLY IF YOU ARE LOW INCOME ?
"Come Back, Jimmy Carter"
William Baldwin, 03.01.04, 12:00 AM ET
Our annual survey of real estate investment trusts could give great inspiration to a populist denouncing corporate greed. Loopholes? Why, these corporations don't pay a blessed dime of income tax. Their profits, from shopping malls and office buildings and what have you, flow straight through to shareholders. If you want a piece of the action, check out Stephane Fitch's review of the stocks on page 94.
There's a risk, though. What would happen if someone like John Kerry got wind of what's going on? What if he ended this "loophole"? Typical of the man's pronouncements on taxation, from a campaign press release: "Kerry Calls for Crack Down on Corporations That Avoid Taxes."
In a fairer tax system every single corporation would be taxed just like REITs. The business would pay no income tax, and instead its shareholders would owe personal tax on their share of the profits, whether those profits were distributed as dividends or not. Bill Gates would owe 35% on his share of Microsoft's net; the starving widow with 100 shares would owe nothing on hers. The dividend tax, recently cut to 15%, would be abolished altogether.
President Jimmy Carter spoke vaguely about just such a reform but didn't push it. It's just too hard to explain to the voters. Far more appealing to them is the notion that corporations are hoarding piles of money, and if we could just get our hands on some of it we could lighten the tax burden on us hard-working citizens. As the chart illustrates, corporations seem to be getting off too easy.
But are voters dumb enough to think that taxes on corporations don't ultimately fall on people? They might be. I am reminded of a spectacularly stupid tax proposal that came out 13 years ago. The idea was to raise a quick and easy $85 billion a year with a tiny 0.02% tax on checks and bank wires. In a letter pushing the idea, a senator noted that the tax would cost just pennies for an individual writing a $100 check. The burden would be borne mostly by financial institutions that wire money back and forth all day long. Hey, those banks have sacks of cash in their vaults! Take some for the Treasury!
The senator behind the check tax (which died before reaching the floor): John Kerry. If you think he has a shot at winning this November, you should hold off buying REITs--or any other investments.
WHAT A STUPI, STUPID IDEA.... PAYING TAXES ON YOUR CHECKS.....HOW AMNY OF YOU CAN AFFORD THAT ? ESPECIALLY IF YOU ARE LOW INCOME ?
