To kick off the tradition of opinion pieces authored by the North Forty News editor, what follows is conversation we’d like to have with the fictitious Warren Buffet (not to be confused with billionaire investor Warren Buffett).
Warren Buffet: I know the North Forty News doesn’t cover national stories, but what do you think about Occupy Wall Street?
NFN: My office, in our second-floor penthouse suite at Kintzley Plaza, doesn’t have windows, so can’t say I’ve seen folks carrying signs. But I do drive the busy crossroads of LaPorte every day and haven’t noticed much action in the activism category.
Not that people don’t have things to protest or pontificate. It’s just that most LaPortites have jobs. You know, they go to work nine, 10 hours day. And occasionally they have the luxury of pitching a tent, but not in the city park and only on their days off.
But I respect people’s right to carry signs filled with platitudes and to protest whatever cause they choose: GMOs, striped summer knits, gravity. Whatever turns their crank.
Warren: So you haven’t seen any sign of an Occupy LaPorte movement?
NFN: Nah. The only occupancy of public spaces I’ve seen lately is Arnold, the aging Chihuahua who keeps a vigilant watch on the sidewalk outside the Poudre Laundromat.
Warren: But what about Occupy Wall Street’s message, you know, about corporate greed and such?
NFN: Ya know, corporations are all around us, even in LaPorte. The hardware store and the gas station kitty-corner to it. The local grocer near the school and the pizza place down the street. They’re the engines of the local, regional and national economy, if you ask me.
Warren: But corporations shouldn’t have so much influence in politics, right? They shouldn’t get the same rights as individuals or be able to influence outcomes of elections. That’s what the protest message is about.
NFN: Not be able to influence outcomes of elections? That’s like taxation without representation. You know, the 1773 Boston Tea Party. Boxes of tea in Boston Harbor and all.
Warren: Don’t be silly. Corporations can afford more taxes. They can just pass them along to their customers.
NFN: Sorry to tell you, but corporations — any business for that matter — face a huge tax burden. An unfair burden in my opinion.
One example is commercial property. Property used for pizza shops, offices and laundromats — even vacant commercial property — is taxed at a higher rate than residential and agricultural property.
And if you work for an “evil” corporation (the protesters’ label, not mine), that corporation pays a portion of your Social Security retirement savings by contributing over and above what you contribute.
Based on wages paid to employees, the same company pays into an unemployment compensation pool that covers unemployed workers everywhere — even if the company’s never had a layoff.
With a 34 percent corporate tax rate on profits, most companies are on the hook for the second-highest corporate tax rates in the world.
Should the business owner choose to take advantage of the oft-maligned “loopholes” during the course of his or her endeavor — like depreciating his pizza oven over eight years — the IRS will be waiting in the wings to recover its share when he or she sells the business.
Because a “write-off” is sometimes never that. It’s just a deferral, and the claw-back (of sorts) provision kicks in at the sale. Delay now via a “loophole,” but pay up later.
And then there’s double taxation. Owners and officers of larger, profitable corporations pay taxes twice. The corporation they own and manage has to dole out a portion of profits to the Feds (at 34 percent). Then, when the profits are distributed to the shareholders (the owners), those profits are — guess what — taxed at the individual level.
Furthermore, if this “greedy” corporate executive is blessed with a successful enterprise and chooses to sell his or her shares at some point, the increase in value of those shares is taxed at the sale in the form of a 15-percent capital gains tax.
So, in effect, many successful business people are taxed three times for their hard work.
Warren: I don’t have much sympathy for greedy Wall Street executives. They make a lot of money — more than they can ever use. Shouldn’t they be paying their fair share in taxes?
NFN: Fair share? The top 1 percent of income earners account for nearly 40 percent of all (individual) income collected by the IRS.
This lessens the tax burden for the remaining 99 percent, including average Joes like you and me. Because of the generosity of the one percent, you and I pay less taxes and can afford more slices of pizza. That’s pretty fair in my book.
Warren: You made some good points, but we’ll just have to agree to disagree.
NFN: Fair enough. It’s lunchtime anyway. Your last name, plus all this talk about pizza, is making me hungry.