Corporate Alternative Minimum tax Plan
CAMP
These suggestions were inspired by Senator Klobuchar’s book “Antitrust.” It was much easier to read than the title led me to anticipate.
As citizens, we have heard much about how little corporations pay in federal taxes. Corporations with profits in the billions pay little taxes, in the realm of 8%, and sometimes none.
We understand there is an Alternative Minimum Tax (AMT) for citizens. (But more detail here is a separate topic.) Here is a suggestion that the same be enacted for corporations. By corporations, we mean all entities, other than privately owned businesses, used to conduct business, including all types of corporations, limited liability companies, and probably more legal entities we have neglected to mention.
This might be called the: Corporate Alternative Minimum tax Plan, CAMP.
CAMP
Begin with a term: HPE means Highly Paid Executives. HPEs are defined as employees, board members, consultants, and anyone who is paid more than, say, 5 or 10 times the medium salary of its non-HPE employees. If the business has sufficient income to pay HPE level salaries, it has sufficient income to pay taxes.
1. All corporations that provide compensation to HPEs shall pay the amount of 10% of the salary paid to those HPEs as federal taxes. This is to include all types of benefits provided to these HPEs. Examples might include stock options and company cars. This is in addition to all other normally calculated taxes. There shall be no deductions that reduce this specific tax.
a. We suspect that some businesses will attempt to circumvent the rule about median salaries. This might be done, for example, through the use of holding companies. Therefore, any legal entity that is owned by said business, and any legal entity for which said business has a controlling interest, is considered a part of said business when calculating the CAMP. Foreign-owned or controlled entities and all their employees are to be included in these counts. There are probably more ways that corporations might employ to avoid this type of tax. Input from readers more knowledgeable on this topic will be greatly appreciated.
2. All corporations that pay dividends to shareholders shall pay a minimum of 10% of those dividends as federal taxes. This is to include any type of benefit provided to any shareholder. This is a minimum tax, not in addition to normally calculated taxes. There shall be no deductions to this tax. If the corporation made sufficient profit to pay shareholders, then it made sufficient profit to pay taxes.
3. All corporations that pay other corporations, other individuals, and/or employed individuals to lobby government officials and/or to pay for advertising to, for, and/or about elected officials or their offices, shall pay 10% of those expenses as federal taxes. This is in addition to all other normally calculated taxes.
a. Partial reasons: The Supreme Court made an outright horrible decision called Citizens United. Without a constitutional amendment, this might do something to reduce how much corporations pay for the goal of owning lawmakers.
b. Lobbying needs some definitions.
c. The term government official refers to any person elected to office and all persons that represent and or advise those elected persons. The definition includes any person who is employed by any government to implement or enforce any government regulation.
d. The term lobbyist refers to any person who contacts a government official with the direct or indirect purpose of affecting any legislation and/or enforcement of any government regulation.
e. When any person, representing any corporation, contacts and discusses any topic with a government official, these discussions shall be referred to as lobbying.
4. All corporations that pay any of the above taxes, indeed, all federal taxes, shall pay state taxes equal to, maybe, 5% of the federal taxes. This amount is to be proportioned among the states where the corporations have offices and conduct business. The goal is to reduce the tendency or need for states to bargain with corporations to get businesses to locate within their states. These competitions can be costly to individual states. The federal government shall provide the appropriate numbers to each state. It may also result in numerous reductions in state tax laws and bureaucracy. States might be encouraged to do the same for counties and cities where corporations reside. Property taxes should probably be unaffected by these laws.
Obviously, the suggested numbers may be adjusted according to calculations regarding the expected amounts of revenue this may generate.