Both the Senate and the House of Representatives have passed a new tax credit proposal to save overworked Americans money on their taxes. The tax credit will finally reduce the operating costs for businesses who suffer as a result of large fines for doing nothing more than performing necessary business activities. The burden in recent times has become virtually unbearable.
Pictured above: Lloyd Blankfein of Goldman Sachs, Jamie Diamond of JP Morgan Chase, John Brock of Coca-Cola Company.
This article is from the parody section, as if you can’t tell.
THE NEW ACT REPAIRS THE TAX SYSTEM
The 2016 Financial Employment Opportunities Tax Repair Act (FEOTRA) was inspired by the unprecedented governmental interference in micromanaging quality companies. Companies are running to hide their money in Panama due to no fault of their own. The new refundable credit will be available for any company who receives fines of five billion dollars or more. That is some well-deserved relief for overtaxed small businesses, scholars say.
In prior years, government fines were deductible from expenses but the deduction was limited to total tax paid or to a maximum of only 35 percent of the fine. This rule forced companies to resort to fair market practices. To protect the free market, companies had to send money to tax havens in Panama. Some even resorted to stashing money in the United States, which is as far out of reach from the government as possible. Television economists all agree that these fines cost America 600,000 jobs per year — money out of workers’ pockets.
Under the new FEOTRA law, companies may now apply for a refundable credit of the entire fine face amount, first and foremost, and without regard to taxes paid, taxes due, or other considerations. A company just checks off the box at the top of the tax form and prints in the amount of the fine. Then, the new IRS Fine Refunds Bureau issues the check within 20 minutes including nine percent interest per month from the date the enforcement action began.
TWO CONTROVERSIAL PROVISIONS REJECTED
The bill was very long and cumbersome, with so much bureaucracy that compliance could have been a nightmare, further incentivizing companies to leave America. Two particular proposals were of concern. Fortunately, both provisions were rejected.
First, the section on “Certification of Payment” was removed, leaving fewer words in the overall legislation.This oppressive section would have required an officer of the corporation to certify that a certain amount of the fine was actually paid and limit the credit to that amount. The Tax Foundation issued a statement, “Where there are fewer words, the law is always better except if we disagree with it. We applaud the removal of these words no matter what they said because we know what they said.”
Second, the “Deduction for Fine Repealed” section was removed. This onerous section would have disallowed taking a deduction for fines paid — costing companies small fortunes and costing employment opportunities for you. “If it ain’t broke, don’t fix it,” said Economist Lawrence Tinkeroff. “The transition from allowing deductions for fines that are refunded in full by removing lines of code from accounting programs just to charge companies more taxes would have been like slapping a puppy.”
GOOD INTENTIONS, BAD RESULTS
While many people were happy about this long-overdue correction in the tax law, Lloyd Blankfein of Goldman Sachs is still angry. “This doesn’t go far enough,” he said. “If they are going to hold onto our five billion dollars, we should get double back. What about all those sleepless nights? How about our reputation? What are those things worth? I want reparations!”
A spokeswoman from British Petroleum was furious too. “Why wasn’t this program available when we enhanced the Gulf of Mexico with oil? That area needed a good shake-up. The ecology was becoming boring. But no. We had to pay instead. They need to make this law retroactive or else.”
Jamie Diamond of JP Morgan Chase complained about the entire fine process. “They called me and inquisitioned me in Congress a few years ago, just because of a few bad mortgages. Anyone can make a mistake. We were forced to reveal confidential trade secrets to the whole world. How much value is that worth?” Jamie Diamond makes only $13,500 per hour, near the poverty rate of $19,000 and well-below US household median income of $53,657.
Finally, a loophole in the new tax bill provides unfair benefits to some companies compared to others. John Brock of Coca-Cola Company and many others do not pay enough taxes to take advantage of the deduction. He pointed out, “Hey! Some companies don’t pay much in taxes. Some don’t pay anything. Why should those companies have to suffer without the 35 percent deduction on top of the credit? It’s just not fair at all. The refund should be the fine plus 35 percent for everyone — not just a selected few. How can we compete with these privileged companies?”
Expect more legislation to repair these remaining problems for the good of our country.