Should Tax Data Be Public Domain

[thegreekdog]

There was recently a proposal in the California legislature that would have disclosed the name, tax liaiblity, and other information of companies in California. It failed in the California senate 15-19.

Do people think that a company's tax information should be public knowledge (even if the company is not a public company)? If so, why or why not?

[Phatscotty]

I voted no. But what is the friggin deal with Cali???? Are taxpayers and job creators not fleeing the "golden" state fast enough???

[BigBallinStalin]

If it's not a public company, then no.

If you're not a free market kinda guy, then imagine the additional burden this policy would place upon small Mom & Pop's shops. It would be another unnecessary regulation.


Besides, that "other information" condition can be serious. If you can see what, when, and where a company is investing (i.e. it is not allowed to protect its trade secrets), then presuming no real harm is being done, then this would be disadvantageous to companies.


Question:
There's a lot of information already out there on big companies anyway. People just don't care, so what would be the point of this policy, TGD?

[Phatscotty]

We should be interested in protecting privacy in as many ways as we can and wherever possible

[Night Strike]

Although this could finally cause people to realize that most small businesses pay taxes at personal tax rates, it's completely wrong to force those individuals to publicize their taxes. It's fine to have publicly traded companies disclose their records, but not for private businesses.

[Timminz]

I voted for "public companies only". It's none of the public's goddamned business how much taxes privately owned co.s pay, but if a company wants to list its shares for public ownership, they need to disclose all sorts of things. Taxes paid should not be an exception.

[notyou2]

I voted for "public companies only". It's none of the public's goddamned business how much taxes privately owned co.s pay, but if a company wants to list its shares for public ownership, they need to disclose all sorts of things. Taxes paid should not be an exception.

This

[thegreekdog]

I also voted "only for public companies." I think this makes sense.

[Woodruff]

I voted no. But what is the friggin deal with Cali???? Are taxpayers and job creators not fleeing the "golden" state fast enough???

If by "job creators" you're accurately referring to consumers, then I would guess not. If you're inaccurately referring to "job creators" as "rich people", then perhaps.

[Woodruff]

We should be interested in protecting privacy in as many ways as we can and wherever possible

Except when it's something that Phatscotty doesn't like, and then not so much.

[Lootifer]

If you're not a free market kinda guy, then imagine the additional burden this policy would place upon small Mom & Pop's shops. It would be another unnecessary regulation.

Correct me if im wrong as I am not that familiar with tax in the US, but, the extra burden of a policy like this isnt going to be very large? Dont you already hire tax accountants or invest in time/effort to gather and analyse the information anyway; the disclosure is the easy bit I would have thought? What extra costs are there?

Besides, that "other information" condition can be serious. If you can see what, when, and where a company is investing (i.e. it is not allowed to protect its trade secrets), then presuming no real harm is being done, then this would be disadvantageous to companies.

I agree that disclosure should always stop short of competitive advantages; but im a big supporter of everything up until that point. The old adage of "the only time you'd be opposed to telling the truth is when you have something to hide" rings true here.

But how is profit, loss and a few generic cost and income buckets going to ruin a companies competitive advantage? I would have thought the policy would be capped at that or did they want to list shit like reciepts and whatnot?

Question:
There's a lot of information already out there on big companies anyway. People just don't care, so what would be the point of this policy, TGD?

Anything in the public domain is mostly voluntary, or something the company isnt bothered about keeping hidden. Therefore its only what the companies want you to see (think of it like marketing; how many cleaning products open with the line "you will need to wear gloves otherwise this product will dissolve your skin" in their commercials).

That means that not only do players have imperfect information on which to make a decision, but that imperfect information is not any way neutral*. Its specifically tailored to make any positive decision appear more rational than it may very well be in reality.

I have no issue at all with policy enforcing transparency as long it draws the line at clear cut competitive advantages (sorry bro, me knowing that you spend 37% of your profits on "research and development" doesnt hurt your competitive advantage).

So its a yes (assuming intelligent implemention) for me... well well, isnt that a surprise; god im even dissapointing myself with my predictability... fml.

* its the neutrality of the imperfect information i have issue with, not the imperfect information in itself, obviously.

[BigBallinStalin]

I also voted "only for public companies." I think this makes sense.

Don't companies, which are publicly traded, share that information on financial statements?

I thought they would have to in order to show total revenues--after-tax...????

[BigBallinStalin]

If you're not a free market kinda guy, then imagine the additional burden this policy would place upon small Mom & Pop's shops. It would be another unnecessary regulation.

Correct me if im wrong as I am not that familiar with tax in the US, but, the extra burden of a policy like this isnt going to be very large? Dont you already hire tax accountants or invest in time/effort to gather and analyse the information anyway; the disclosure is the easy bit I would have thought? What extra costs are there?

Sure, they're marginal, but unnecessary. Resources could be spent more efficiently on more useful matters. Besides, the costs could increase--depending on the requirements, so who knows, but let's say it could range from $10 per each small firm up to $100 or $1000. Either way, that's money and time better spent elsewhere.

And, hey, if this new policy was implemented into a new bureau/bureaucracy, then this minor cost from this one regulation would very likely not be the end of it.

Besides, that "other information" condition can be serious. If you can see what, when, and where a company is investing (i.e. it is not allowed to protect its trade secrets), then presuming no real harm is being done, then this would be disadvantageous to companies.

I agree that disclosure should always stop short of competitive advantages; but im a big supporter of everything up until that point. The old adage of "the only time you'd be opposed to telling the truth is when you have something to hide" rings true here.

But how is profit, loss and a few generic cost and income buckets going to ruin a companies competitive advantage? I would have thought the policy would be capped at that or did they want to list shit like reciepts and whatnot?

To answer that question, it depends on what "other information" means, e.g. there was a big hoop-la over public companies being forced to disclose significantly more information on their overseas operations (Honestly, can't remember the exact regulation. It was in-the-making, I think from the SEC. It was mentioned in the WSJ about 3 weeks ago). Anyway, since the information becomes public, other companies based in foreign countries won't face the same disadvantage, so they can hide their information while gleaning critical information on what their US competitors are doing. With this information, they could undercut the US firms, understand their future strategy and head them off that way, etc.

Question:
There's a lot of information already out there on big companies anyway. People just don't care, so what would be the point of this policy, TGD?

Anything in the public domain is mostly voluntary, or something the company isnt bothered about keeping hidden. Therefore its only what the companies want you to see (think of it like marketing; how many cleaning products open with the line "you will need to wear gloves otherwise this product will dissolve your skin" in their commercials).

That means that not only do players have imperfect information on which to make a decision, but that imperfect information is not any way neutral*. Its specifically tailored to make any positive decision appear more rational than it may very well be in reality.

I have no issue at all with policy enforcing transparency as long it draws the line at clear cut competitive advantages (sorry bro, me knowing that you spend 37% of your profits on "research and development" doesnt hurt your competitive advantage).

So its a yes (assuming intelligent implemention) for me... well well, isnt that a surprise; god im even dissapointing myself with my predictability... fml.

* its the neutrality of the imperfect information i have issue with, not the imperfect information in itself, obviously.

RE: R&D, it doesn't affect you, but that information enables the competitors to more accurately estimate which markets the firm is planning on entering---depending on how much information is required to be released. Therefore, it would affect competitive advantages.

By "information," I'm talking about knowledge of a firm's trade secrets, strategies, (what exactly they're doing with their R&D), etc., but this all hinges on what exactly "other information" entails.

[Lootifer]

Yeah I agree; would quickly switch my vote from yes to no if the regulation required anything more granular than the high level buckets (compare "research into stem cells and their application on cell phone processor chips" vs "research and development" for example).

And I dont buy your slippery slope argument regarding the inability of beauracracy limit itself at a rational point. Thats what you're here for durr!

[BigBallinStalin]

Yeah I agree; would quickly switch my vote from yes to no if the regulation required anything more granular than the high level buckets (compare "research into stem cells and their application on cell phone processor chips" vs "research and development" for example).

And I dont buy your slippery slope argument regarding the inability of beauracracy limit itself at a rational point. Thats what you're here for durr!

hey, Loot. Suppose you establish a bureaucracy which oversees problem A. Now, suppose you solve problem A. Would your bureaucracy become no longer necessary?


Would you like to lose your job, your prestige, and your authority?

[KoolBak]

Tax liability? So what.....just another level of bureaucracy added into the mix.

"Other Information"? Bullshit. No legal difference between privately held companies and individuals; ALL our personal shit may as well be listed. Cali was first on the anal gun laws....why not this next?

PS - Public company info is already available to the public

[thegreekdog]

Wow... lots of questions and eyerolls.

(1) Let's start with the eye roll - Yes, certain tax data is available for public companies. Go open up a 10-K and look at the tax data for a company. Just pick a random company and let me know who it is. Then tell me how much federal, U.S. state, and foreign taxes the company paid. Then tell me how much California tax the company paid. Good luck! Not to spoil, but it is very difficult, if not impossible, to read a 10-K and determine how much tax a company has paid in California.

(2) The point of the California potential law is purely political. The law is supported by labor unions and opposed by the business community. Shocker. Anyway, ostensibly the point is to let the public know which companies actually pay tax in California and which companies don't and why they don't pay tax. It makes it easier for politicians to point to a company and say "See? They are taking advantage of a loophole [that we specifically added to the law two years ago so that we would get campaign contributions from those companies]." I added the bracketed text. I also suspect the state thinks this would make the auditing burden easier. The state could pick out companies to audit based upon tips from the public.

(3) The "other information" includes things like whether the company uses single sales factor or three factor apportionment to apportion income to California (a legislative election mind you) as well as other state tax technical items that you all probably don't care about. In other words, the "other information" is all tax information.

(4) The extra burden on the company from a reporting perspective would likely not be large. But I'm not entirely sure. It largely depends on what "other information" is required to be reported.

[Lootifer]

So, um, you are neutral on the issue? Some pros and some cons?

[BigBallinStalin]

He's a tax lawyer. He's neutral until he realizes the profit opportunity which the new legislature may demand from his employers.

Or maybe he's torn! Maybe he will miss chopping through the 10-K jungles and finding that long-sought treasure...

[Symmetry]

There was recently a proposal in the California legislature that would have disclosed the name, tax liaiblity, and other information of companies in California. It failed in the California senate 15-19.

It's kind of tough to exam the merits of the proposal if you don't give us a link.

[thegreekdog]

So, um, you are neutral on the issue? Some pros and some cons?

I think public companies should disclose what they pay in taxes depending upon how their shareholders vote on the issue. If the shareholders don't want to disclose anything, so be it. If the shareholders want to disclose some things and not others, fine with me. If the shareholders want to disclose everything, nice.

It's kind of tough to exam the merits of the proposal if you don't give us a link.

Yeah, like you're going to read it.

http://www.leginfo.ca.gov/pub/11-12/bil ... n_v93.html

LEGISLATIVE COUNSEL'S DIGEST


AB 2439, as amended, Eng. Corporation taxes: disclosure.
The Personal Income Tax Law and the Corporation Tax Law impose
taxes on, or measured by, income. Existing law requires the Franchise
Tax Board to make available as a matter of public record each
calendar year a list of the 250 largest tax delinquencies in excess
of $100,000, and requires the list to include specified information
with respect to each delinquency.
This bill would, on or before December 1, 2013, and annually
thereafter until January 1, 2018, require that the Franchise Tax
Board publish a list of the 500 largest corporate taxpayers per
taxable year, including that includes
each taxpayer's tax liability , charitable
contribution information, and income apportionment information,
as provided. This bill would also make findings and declarations
regarding the intent of the Legislature.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. The Legislature finds and declares all of the
following:
(a) Publicly traded corporations are required to disclose their
federal and state corporation taxes to the federal Securities and
Exchange Commission through the Form 10-K. State corporation taxes,
however, are aggregated without regard to state, so the information
available at the federal level does not specify corporation taxes of
particular states.
(b) Recent changes in the state's Corporation Tax Law, which
provide for the elective use of single-sales factor apportionment,
combined with other provisions in this area of tax law, have had
little analysis and scrutiny with regard to their impact on taxpayers
and California.
(c) Therefore, it is the intent of the Legislature, in adding
Section 19573 to the Revenue and Taxation Code, to supplement federal
tax reporting requirements for those corporations filing a Form 10-K
by requiring the Franchise Tax Board to publish a list of the 500
largest corporate taxpayers filing a Form 10-K.
SEC. 2. Section 19573 is added to the Revenue and Taxation Code,
to read:
19573. (a) (1) (A) Notwithstanding any other law, on or before
December 1, 2013, and each December 1 thereafter, the Franchise Tax
Board shall publish on its Internet Web site a list of the 500
largest taxpayers subject to tax under Part 11 (commencing with
Section 23001), as measured by gross receipts, less returns and
allowances, that filed a Form 10-K with the federal Securities and
Exchange Commission for that taxable year. The list shall include the
name and tax liability of each taxpayer , any charitable
contributions made by the taxpayer, and whether the taxpayer
made an election to apportion its income in accordance with Section
25128.5.
(B) The determination of the taxpayers to be included on a list
shall be based on timely filed original tax returns for the taxable
year at issue. In the case of a taxpayer that is included in a
combined report, the determination to include that taxpayer on a list
shall be based on the gross receipts, less returns and allowances,
of the combined reporting group.
(2) The list published on or before December 1, 2013, shall
reflect the tax liability, as of October 1, 2013, for the 2010 and
2011 taxable years. Each subsequent annual list shall reflect the tax
liability for the taxable year that closed two years before the
publication of the list.
(3) For two years after the publication of a list, the Franchise
Tax Board shall, on or before December 1, update that list to reflect
any changes in the tax liability of each taxpayer as of October 1 of
that year.
(b) For purposes of this section:
(1) "Tax liability" means the amount of tax owed as a result of
the taxes imposed under Part 11 (commencing with Section 23001),
after the application of any credits and excluding overpayments,
estimated tax payments, withholding, and any other amounts paid.
(2) "Gross receipts" shall have the same meaning as set forth in
Section 25120.
(c) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.

[PLAYER57832]

I voted "only for public companies", basically thinking it was already law that they disclose.. then I read greekdog's post and realized how untrue that is.


The bottom line is that we need tax clarity, not so much having everyone know your income and taxes. A lot of politicians, including Romney, talk like they will do that, but the reality is that when details emerge, its stuff that will impact more middle class and lower upper class individuals than those at the top, who are more likely to have other options (be they offshore tax havens, multiple corporate offices and operations allowing them to essentially decide where to pay taxes, or just the fact that they can afford to hire high-pwered accountants and tax attorneys to fight for them). Romney, for example, will apparently eliminate the mortgage deduction, though nailing him on specifics is pretty difficult.

A big example is the Alternative tax. It was supposed to make sure that wealthy folks could not use multiple deductions to pay almost no tax (several prominent examples existed at the time). Instead, its wound up mostly hurting those just above middle class, who have multiple kids, etc.

The more money gets concentrated at the top, the more those folks will be able to engineer things to suit them -- not the moderately OK, like greekdog, but the actually wealthy folks, many of whom have names you probably won't recognize.

EDIT: Then again, since corporations are now allowed to give whatever they wish to pacs who can then place multiple ads, spend money to spread their message in ways average people cannot do, then well, the least they should do is assure us they are paying what they owe us.

[Night Strike]

Institute either the Flat Tax or the Fair Tax and everyone will know what percentage everyone else pays.

[Symmetry]

So, um, you are neutral on the issue? Some pros and some cons?

I think public companies should disclose what they pay in taxes depending upon how their shareholders vote on the issue. If the shareholders don't want to disclose anything, so be it. If the shareholders want to disclose some things and not others, fine with me. If the shareholders want to disclose everything, nice.

It's kind of tough to exam the merits of the proposal if you don't give us a link.

Yeah, like you're going to read it.

http://www.leginfo.ca.gov/pub/11-12/bil ... n_v93.html

LEGISLATIVE COUNSEL'S DIGEST


AB 2439, as amended, Eng. Corporation taxes: disclosure.
The Personal Income Tax Law and the Corporation Tax Law impose
taxes on, or measured by, income. Existing law requires the Franchise
Tax Board to make available as a matter of public record each
calendar year a list of the 250 largest tax delinquencies in excess
of $100,000, and requires the list to include specified information
with respect to each delinquency.
This bill would, on or before December 1, 2013, and annually
thereafter until January 1, 2018, require that the Franchise Tax
Board publish a list of the 500 largest corporate taxpayers per
taxable year, including that includes
each taxpayer's tax liability , charitable
contribution information, and income apportionment information,
as provided. This bill would also make findings and declarations
regarding the intent of the Legislature.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. The Legislature finds and declares all of the
following:
(a) Publicly traded corporations are required to disclose their
federal and state corporation taxes to the federal Securities and
Exchange Commission through the Form 10-K. State corporation taxes,
however, are aggregated without regard to state, so the information
available at the federal level does not specify corporation taxes of
particular states.
(b) Recent changes in the state's Corporation Tax Law, which
provide for the elective use of single-sales factor apportionment,
combined with other provisions in this area of tax law, have had
little analysis and scrutiny with regard to their impact on taxpayers
and California.
(c) Therefore, it is the intent of the Legislature, in adding
Section 19573 to the Revenue and Taxation Code, to supplement federal
tax reporting requirements for those corporations filing a Form 10-K
by requiring the Franchise Tax Board to publish a list of the 500
largest corporate taxpayers filing a Form 10-K.
SEC. 2. Section 19573 is added to the Revenue and Taxation Code,
to read:
19573. (a) (1) (A) Notwithstanding any other law, on or before
December 1, 2013, and each December 1 thereafter, the Franchise Tax
Board shall publish on its Internet Web site a list of the 500
largest taxpayers subject to tax under Part 11 (commencing with
Section 23001), as measured by gross receipts, less returns and
allowances, that filed a Form 10-K with the federal Securities and
Exchange Commission for that taxable year. The list shall include the
name and tax liability of each taxpayer , any charitable
contributions made by the taxpayer, and whether the taxpayer
made an election to apportion its income in accordance with Section
25128.5.
(B) The determination of the taxpayers to be included on a list
shall be based on timely filed original tax returns for the taxable
year at issue. In the case of a taxpayer that is included in a
combined report, the determination to include that taxpayer on a list
shall be based on the gross receipts, less returns and allowances,
of the combined reporting group.
(2) The list published on or before December 1, 2013, shall
reflect the tax liability, as of October 1, 2013, for the 2010 and
2011 taxable years. Each subsequent annual list shall reflect the tax
liability for the taxable year that closed two years before the
publication of the list.
(3) For two years after the publication of a list, the Franchise
Tax Board shall, on or before December 1, update that list to reflect
any changes in the tax liability of each taxpayer as of October 1 of
that year.
(b) For purposes of this section:
(1) "Tax liability" means the amount of tax owed as a result of
the taxes imposed under Part 11 (commencing with Section 23001),
after the application of any credits and excluding overpayments,
estimated tax payments, withholding, and any other amounts paid.
(2) "Gross receipts" shall have the same meaning as set forth in
Section 25120.
(c) This section shall remain in effect only until January 1,
2018, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2018, deletes or extends
that date.

This ain't saying what your OP said.

[thegreekdog]

It's not? Explain please.

Here's my opening post:

There was recently a proposal in the California legislature that would have disclosed the name, tax liaiblity, and other information of companies in California. It failed in the California senate 15-19.

Do people think that a company's tax information should be public knowledge (even if the company is not a public company)? If so, why or why not?