when people talk about corporation writing the laws to favor themselves they are referring to stuff like this, Corporate fines for thing like polluting rivers, etc are the same as charitable donation in the sense that they can write them off on their taxes.
turning 80 billion in fines into 48 billion in tax cuts.
Over the last three years, federal regulators have won giant legal settlements from companies like BP, Citigroup and JPMorgan Chase, but according to a new study, the outlines of those agreements have freed firms to write off billions as tax deductions.
The study by the United States Public Interest Group, a nonprofit advocacy group, examined the 10 largest settlements by five government regulators since 2012: the Department of Justice, the Securities and Exchange Commission, the Environmental Protection Agency, the Department of Health and Human Services and the Consumer Financial Protection Bureau.
In that time, companies were required to pay nearly $80 billion to resolve investigations into alleged wrongdoing, but the analysis found that companies “can readily write off at least $48 billion of this amount as a tax deduction.” That translates to a loss of $17 billion in federal tax revenue, more than what the Internal Revenue Service collects each year in estate taxes, according to the report.
In addition to removing the fines as a tax deduction I think that those in charge of the company should be liable to a significant fine that is also not able to be used as a tax deduction would be appropriate.
Actually I would like to revise my earlier suggestion. In view of the likelihood that paying a fine would not be sufficient a deterrent I think a gaol term of not less than 18 months non-parole term in a maximum security prison is warranted
A fine…lowers profit. Taxes…are paid on profit. Do libs believe a company should both pay the fine plus…the taxes on profit that would have been, had the fines never been levied? Please explain the problem here?
I’d have to sit down with my accountant to see how best I could nullify the damages from a fine but I would think that there is a way to carry it forward against next year’s taxes?
Additionally, since you are a small business (compared to the businesses in this article), you can’t derduct any government fines you pay as an expense either, so don’t go asking your accountant…that’s another cup of coffee for me.
At issue are the large settlements…from the article:
At issue is the legal language of the deals and how they address what the authors call a “gray area” of the tax code. Corporations are allowed to deduct from their taxable income all ordinary and necessary business expenses. What they can’t do is deduct penalties or fines paid to the government.With large settlements, though, payments are often not a penalty or fine, but rather meant to address some form of liability connected to alleged misdeeds. When that’s the case, firms can typically write that amount off as a cost of doing business.
“It’s kind of a compromise,” said the report’s co-author, Michelle Surka, a tax and budget program associate at U.S. PIRG. “The corporation gets to ultimately deduct these huge amounts of payments, the government agency gets to advertise these huge top-line numbers saying that they’re holding the corporation accountable for its behavior, but the bottom line is that taxpayers are the ones who are losing.”
Prime example of who owns government right now.
Commit a large enough crime- profit massively from that crime.
The government structures the “punishment” for “getting caught” in such a way that the company gets to double-dip with a tax break.
So tell me…in what possible way is a business incentivized to NOT commit fraud on a massive scale?
Thanks. According to the information you provided, it would depend on the specifics of the court order surrounding this fine. It appears to go both ways. If there’s a problem with the law, change it. Be prepared though for this company to go out of business which would stop all future tax revenues as an unintended consequence?
So what you’re saying here is “Don’t try and hold businesses accountable for committing fraud because if you do they’ll go out of business and hurt the economy”?
