Sunday, February 17, 2013

BloggerRhythms 2/17/2013

The technology section of BusinessWeek's, Bloomberg Businessweek on-line carried the following story. "Facebook gets multi-billion dollar tax break. "
 
I mention this one because its right in line with others that lately confirm that government, and the current administration in particular, are no match for those operating successfully in the business world.
 
According to Bloomberg, “It hasn’t drawn much attention, but Facebook’s first annual earnings report contains an accounting gem: a multibillion-dollar tax deduction for the cost of executive stock options and share awards. Even though Facebook reported $1.1 billion in pre-tax profits from U.S. operations in 2012, it will probably pay zero federal and state taxes—and even receive a federal tax refund of about $429 million—according to a Feb. 14 statement from Citizens for Tax Justice (CTJ).”
 
CTJ went on to say that the tax footnotes in Facebook’s Jan. 30 financial statement regarding the deduction are “an amazing admission.”
 
Now, from their choice of words and phrasing, it sounds to me like CTJ believes there’s something wrong, or perhaps even underhanded, in what Facebook did by avoiding taxes, however that’s absolutely not the case. And for CTJ’s sake, I think they should learn the distinction that tax “evasion’s” illegal but tax “avoidance” is not.
 
After reading CTJ’s opinion I Googled them and found out that, “Citizens for Tax Justice, founded in 1979, is a 501 (c)(4) public interest research and advocacy organization focusing on federal, state and local tax policies and their impact upon our nation. CTJ's mission is to give ordinary people a greater voice in the development of tax laws. Against the armies of special interest lobbyists for corporations and the wealthy, CTJ fights for:
 
Fair taxes for middle and low-income families. Requiring the wealthy to pay their fair share. Closing corporate tax loopholes. Adequately funding important government services. Reducing the federal debt. And, taxation that minimizes distortion of economic markets.
 
However, according to Bloomberg, who did the research, “There’s nothing illegal about the breaks the company is claiming. Companies like Facebook are allowed to treat the cost of non-cash compensation, such as stock options, as an expense that reduces profits, essentially the way they treat cash compensation such as salaries.”
 
So, for organizations like CTJ, and government itself, the place to start looking for problems is in the laws as they are written and not the financial statements of businesses who act, file, and report properly. And a word of advice for those who either try to steal from those who rightfully earn their livings, or try to aid and abet that cause such as CTJ does, if they want to be sure of collecting some money, get off the soapboxes and go out and find real jobs.
 
That’s it for today folks.
 
Adios

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