1/25/12

Tax Rates On US Corporations in 2011 just 1.3%

I am tired of hearing that US corporations are saddled with some of the highest tax rates in the world and often quoted as 35%.

While 35% may be the starting point, US companies are allowed deductions like no other country on Earth to the point that the average tax rate on US companies is just 1.3% according to the OMB (office of mgmt and budget).

Maybe some of the politicians should use this figure going forward when it comes time to balance the budget.

You want to talk fair share, how about corporations pay their fair share and maybe we could actually balance the budget, build our infrastructure, offer the kinds of social services that are just and fair - while we enjoy lower personal income taxes?!

1/23/12

US Small Businesses Seriously Disadvantaged In Healthcare

OK, you have two small companies, both supply widgets to bigger companies around the world and they have five employees.  One is in Buffalo, NY and the other is in Toronto, Canada.

The company in Toronto has a huge advantage over the company in Buffalo.  Why?

Because of universal healthcare.  I am not here to debate which system is better but the bottom line is the bottom  line.  The employees in Buffalo have to shell out upwards of $500 a month for terrible coverage with high deductables.  The employees in Toronto have universal healthcare and sure they pay a higher personal tax rate but in the end, this small difference is not so small.

Extrapolate that across thousands of small companies in hundreds of countries, and you see the problem.  In the end, costs have to be passed on to the customer and our boys in Buffalo are a serious disadvantage.

As we compete globally, we have to consider universal healthcare for business reasons.

1/10/12

Mitt Romney, Private Equity and Politics

As most people know, Mitt Romney made a lot of money at Bain Capital, a firm he founded.

What most people don't know is what private equity is and what Bain Capital does.  Bain is a private equity company which basically buys distressed companies using leverage in hopes of selling them in the future for a profit.  That profit is a capital gain and thus currently taxed at 15%, not the 35% most people would pay.  

During the course of 'managing' the companies that were acquired, often times people are let go aka fired and of course, sometimes everyone involved makes out pretty well.

The other republican contenders are jumping on this opportunity to paint Mitt as an elitist who cares nothing about the people they fire and are interested in only profit for themselves (and the investors).

Mitt can probably weather this storm but private equity will be in the spotlight until after the election.  Watch for Gordon Gekko and "greed is good" analogies.

1/6/12

Consumer Protection Agency

President Obama has been trying to fill the vacancy of the head of the newly created Consumer Protection Agency for quite some time only to be blocked by republicans at every turn.

He just filled the position with an old political trick called a recess appointment.  Basically when Congress is out of session, the President can make these (all have done it hundreds of times) appointments.

Republicans oppose the agency period and are trying to thwart the appointment of the head of the department and will undoubtedly try to defund the agency as well and if that's really what the people that they represent really want, well then that is their job, however, I can't believe that most citizens even know what their elected representatives are doing on this issue.

Now I know its an election year but how can an agency that protects consumers and their money be a bad thing?

It's not.