Monday, May 18, 2009

Chicago Tribune on Obama and Corporate Income Taxes

Chicago AM Monday, May 18, 2009

Voice of the People, Chicago Tribune


Your editorial of Saturday, May 9 "A bad tax idea" made good points about President IBM's lack of understanding of the relationship of foreign trade and corporate income taxes. The US Commerce Department's 2009 Statistical Abstract of the US has an interesting figure on this subject: Of the total Federal income of $2.692 trillion in 2007 (the latest year given), only $396 billion (14.7%) came from corporate income taxes.

A maybe even more significant figure from the Abstract is that 62% of that total federal income was withheld from employee wages, so nearly 2/3 of the actual dollars that came into the general fund were from employer bank accounts (even though it is strongly implied that if this money was not with held, employers would have given it to employees as wages.)

Of course, employers pass all of this on to customers in higher prices, resulting in almost 2/3 of federal income coming from a near invisible national sales tax. This has been going on since the Current Tax Payment Act of 1943, but because of a regularly expanding national economy, it's all but painless to voters, resulting in their lack of interest in what Congress does with all that money.

This problem could be fixed by 218 house members, 60 Senators, and an agreeable president changing paragraph 3402 of USC Title 26 — 'Internal Revenue Code' Subtitle C 'Employment taxes' Chapter 24 'Collection Of Income Tax At Source On Wages'... from "every employer making payment of wages shall deduct and withhold upon such wages a tax..." to "every employer making payment of wages shall pay all of those wages to the employee...." leaving the tax calculation with the employer but insisting that she also send a stern note telling the employee how much the feds are expecting him to send in within 30 days.

Would this be inefficient? Certainly for an insatiable federal bureaucracy. But it should also make voters a lot more interested in who they send to Congress.

Arnold H Nelson 5056 North Marine Drive Chicago 60640

[Don't worry - if they had printed it, I would tell you.]

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