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View Diary: Walmart owners look to slash federal tax payments (66 comments)

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  •  Of course they are looking to slash their (7+ / 0-)

    federal tax payments.  Absolutely.  And there's nothing wrong with looking to pay the lowest tax you legally have to pay.  

    You act like there's something wrong with structuring your affairs so as to pay the lowest tax legally required.  There is nothing wrong with that -- virtually every American who pays federal income tax does it in some way, shape, or form.  That's exactly what a 401(k) is - a way to save for retirement that lessens your federal income tax burden.  And how many people factored that first time home buyers' credit into when they would buy a house?  There's absolutely nothing legally or ethically wrong with structuring your affairs to pay the lowest tax legally required, whether you are an individual or a business that is owned by a group of individuals.  The Supreme Court has recognized this numerous times.  That rule doesn't change when an individual or a business reaches an economic threshold.  Nobody, and no business -- no matter how rich -- has a legal or ethical obligation to behave a way that increases their tax burden.

    It's up to the people who write the tax laws to recognize that fact, and to factor that into the tax laws they write.  And certainly they know that any time the tax laws are going to chance significantly on January 1, people and businesses will take whatever steps they can prior to January 1 to lessen the taxes they ultimately will pay.  That's happened with the capital gains taxes -- when people know that the rates will go up, they sell before those higher rates take effect, and after the rates go up, refrain from selling (if they can) until the rates go back down.

    Tax laws affect behavior.  That is a fundamental economic truth.  And it's kind of silly to pretend it doesn't.  It's even sillier to pretend that people should not alter their behavior so as to get the best tax treatment legally possible.  After all, a lot of tax policy is designed to make people and businesses alter their decision-making and behavior.  

    •  A Couple of Follow Ups (2+ / 0-)
      Recommended by:
      tardis10, Lujane

      I completely agree with you that companies trying to move capital and dividend gains into 2012 makes perfect sense.  It is neither irrational nor illegal.

      As I noted in another comment response, businesses and individuals have done this many times before as tax rates have risen or fallen.  The Reagan reforms in 1986 or Clinton's income tax increase in 1993 and later, capital gains cut, also shifted when taxpayers took gains/losses.

      It is worth noting that not all tax changes influence behavior in the same ways.  For example, there is a fair amount of evidence that lower capital gains taxes don't spur higher investment (that is, the reason claimed for lowering them).  They do, however, drive higher income inequality.  Also, slightly higher top end marginal income tax rates don't have much impact on the economy when tax rates are historically low (as they are now).

      For more background, see here and here.

    •  You are forgetting (5+ / 0-)

      one thing.  The wealthy themselves have structured the tax code in their own favor, and now YOU say there's nothing wrong with them following their own manipulation of the code.  Can an ordinary citizen do that too?  YES, there's something wrong with them being able to structure the tax code in their favor.  Yes, they have the wealth to do it through PAID lobbyists, most of whom are former members of congress and have become nothing more than paid lackeys of the wealthy.  Get a life!

      Without adequate taxation, we can't live in a civilized country.

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