Post by Rick Warder on Dec 30, 2005 9:13:04 GMT -5
NEW YORK, NY - The Big Board closed down 68 points on news of the FY 09 budget passing, finishing at 11,458 (-0.59%). Though investors praised the small business tax incentives advocated by President Rick Warder, they bemoaned the closing of corporate tax loopholes and investment exemptions which will cost corporate America $60 billion per year. "A lot of corporations were relying on those tax exemptions to iron out their long term planning," said Erin Smith, an investment analyst at Goldman Sachs, one of Wall Street's biggest banking houses. "In reality, America has a very high corporate tax rate, at 39%. Even most European countries have lower rates; the German rate is around 25%."
The companies hurt most by the elimination of tax exemptions are the large ones, such as IBM, General Motors, General Electric, DuPoint I.E. Nemours and other blue chips, since they are also subject to the strictest accounting standards and regulatory compliance rules. Smaller companies will probably continue to slip under the radar. Secretary of the Treasury Phil Kurtzner said that "the loopholes being closed is overdue; whether we lower corporate taxes is another question, but the previous system was a windfall for accounting firms." Also, Dr. Kurtzner said that the loopholes and exemptions were an invitation for corrupt reporting practices to try and squeeze as much money as possible out of the tax code.
"It's great that small businesses are getting a break, and it's wonderful that the deficit is being decreased, but we're worried that America's large corporations, which drive economic growth and technological advancement, are being asked to pick up the tab," said a chief executive of a major American manufacturing firm, who spoke on the condition of anonymity.
The companies hurt most by the elimination of tax exemptions are the large ones, such as IBM, General Motors, General Electric, DuPoint I.E. Nemours and other blue chips, since they are also subject to the strictest accounting standards and regulatory compliance rules. Smaller companies will probably continue to slip under the radar. Secretary of the Treasury Phil Kurtzner said that "the loopholes being closed is overdue; whether we lower corporate taxes is another question, but the previous system was a windfall for accounting firms." Also, Dr. Kurtzner said that the loopholes and exemptions were an invitation for corrupt reporting practices to try and squeeze as much money as possible out of the tax code.
"It's great that small businesses are getting a break, and it's wonderful that the deficit is being decreased, but we're worried that America's large corporations, which drive economic growth and technological advancement, are being asked to pick up the tab," said a chief executive of a major American manufacturing firm, who spoke on the condition of anonymity.