Monday, June 23, 2008

Idaho Tax Commission

I've got the day off so I can attend BSU's freshman orientation with my son, but have a moment to note a couple of fun facts.

Betsy Russell reports that Gov Otter, the legislature, and AG Lawrence Wasden are all looking into investigating the whistleblower allegations about the Idaho Tax Commission giving discounts to corporations who protest their taxes. Tax Commission Chair is Royce Chigbrow. Campaign treasurer for Gov Otter and Ben Ysursa is Cordell Chigbrow, who I think is Royce's son. Nice connection there.

Also, as of May 31, 2008, Idaho collected
Sales tax $1,229,822,166
Individual tax $1,598,367,220
Corporate tax $180,900,984

So, corporations are paying a bit over 10% of what individuals are paying, and even less if you count sales tax which is mostly paid by consumers.

Good thing corporations are getting those discounts. We'd hate to over tax them.

5 comments:

Sisyphus said...

Two excellent gems, my friend. Good job.

alan said...

Thanks.

More evidence of the poobah faction, i.e., the good ol' boy network.

It will be interesting to see how this plays out, given that the Tax Cmsn is politically divided, but the investigations are not.

Geoff said...

This does smell very fishy. However, this points out some of the flaws in the system of states taxing corporations.
A corporation, of course, is a legal fiction- the taxes a 'corporation' pays are in fact a sales tax on the goods or services the corporation sells, and it is paid, ultimately, by the consumer. It is a shell game. If they paid less taxes, the cost of the goods they provided could be less in some proportion. Taxing a corporation is only taxing you and I, but triply- reducing our dividends because of the tax paid, making the products more expensive to cover the cost of the tax, and then paying yet another tax when shareholders receive the reduced dividend. Kind of a 'pay me now or pay me later' transaction, also known as TANSTAAFL (there ain't no such thing as a free lunch). It sounds good to go after 'corporations', but they are in fact, just you, me, your neighbors, and pension funds like PERSI.

alan said...

Your argument works only for publicly held corporations that sell their entire output in the taxing jurisdiction. When Micron sells its chips to some outfit in another country, Idaho consumers don’t necessarily pay more (unless they buy that product), so they avoid that part of the “triple” tax.

Closely held corps typically don’t pay dividends, they just distribute the profits to the few shareholders. Taxing Simplot more will just hit the Simplot family, and somewhat to consumers who buy Simplot products. On the other hand, the Simplots benefit immensely from government; roads, stable and predictable financial markets, police and security, educated work force, etc. Yes, they can raise prices to offset taxes, but to the extent they compete outside the jurisdiction or globally, they are constrained in passing along taxes. So, the tax simply reduces the amount available to pass to the few shareholders, and employees, but not as directly.

Geoff said...

That's a take I hadn't thought of- shareholders or other beneficiaries of the profits residing outside the jurisdiction providing the infrastructure that enables the corporation to make the profit. On the state taxing level, your argument makes perfect sense to me. Thanks for the new viewpoint! I am still skeptical, though, of the overall benefits of a federal corporate income tax, but, as always, I am open to convincing arguments otherwise.