Companies collect state income taxes from employees and keep them

[billwald]

http://www.reuters.com/article/2012/04/12/us-column-dcjohnston-report-idUSBRE83B0XQ20120412

hu Apr 12, 2012 3:45pm EDT
(Reuters) - Across the country more than 2,700 companies are collecting state income taxes from hundreds of thousands of workers - and are keeping the money with the states' approval, says an eye-opening report published on Thursday.

The report from Good Jobs First, a nonprofit taxpayer watchdog organization funded by Ford, Surdna and other major foundations, identifies 16 states that let companies divert some or all of the state income taxes deducted from workers' paychecks. None of the states requires notifying the workers, whose withholdings are treated as taxes they paid.

General Electric, Goldman Sachs, Procter & Gamble, Chrysler, Ford, General Motors and AMC Theatres enjoy deals to keep state taxes deducted from their workers' paychecks, the report shows. Foreign companies also enjoy such arrangements, including Electrolux, Nissan, Toyota and a host of Canadian, Japanese and European banks, Good Jobs First says.

Why do state governments do this? Public records show that large companies often pay little or no state income tax in states where they have large operations, as this column has documented. Some companies get discounts on property, sales and other taxes. So how to provide even more subsidies without writing a check? Simple. Let corporations keep the state income taxes deducted from their workers' paychecks for up to 25 years.

 

[targus]

Also from the OP article:

"Michael Press, a Connecticut consultant on tax incentives, says such deals, however troubling, are an inevitable result of the U.S. Constitution setting up competition between the states.

"In an ideal world we would not provide any corporate subsidies," Press told me. "It looks like corruption. But if you do it right, if you only target those companies whose behavior you change to create jobs or keep jobs in your state then these targeted temporary arrangements are cheaper - much cheaper - and can be more effective than an overall reduction in tax rates."

So what's your problem with this, billwald?

BTW - the employees whose taxes are withheld are still credited by the state as paid - so what's the big deal?

 

[just-want-peace]

I would have a much larger problem with a company that allowed unions to take part of my pay for dues without my consent.

 

[OldRegular]

I do not favor states or localities bribing companies to locate an operation in their jurisdiction.

Also I do not believe that business in general pays no taxes, federal, state, or local. Business must make a profit to stay in business. I believe, but cannot prove, that most if not all tax imposed on business is passed on to the consumer. I am not saying that the business owner or corporate board has a policy to pass the cost of tax to the consumed. It happens because, as stated above, business must make a profit to survive.

 

[billwald]

The Big Deal is that the workers think they are helping support their state government but the money is going to international corporation profits and for building factories off shore.

 

[billwald]

The BIG scam is that state sponsored building projects do not provide jobs for state residents because, for example, construction contracts in union states can go to construction companies in scab states who will bring in their own workers. When the job is done they collect "rocking chair" in the union state for a year or so.

 

[targus]

The Big Deal is that the workers think they are helping support their state government but the money is going to international corporation profits and for building factories off shore.

You should read the articles before you post them.

The taxes that the companies are retaining are in exchange for locating and remaining within the taxing authority jurisdiction and continuing to hire employees within the state - not to build factories off shore.

The employee taxes are going to the state government - and are then in turn going to the company for the above stated purpose.

This is merely a more efficient and less costly way of handling the taxes for the purpose intended.

 

[LadyEagle]

You are correct. Besides if the companies were going offshore, that's the fault of Congress and the trade agreements they made. No fault of the companies.

No big deal as long as the employee gets credit for state and local taxes paid and can claim that on his 1040 as paid taxes. It's called American ingenuity....LOL.

 

[Arbo]

...companies in scab states...

:laugh: Your union hack's bitterness is showing. :laugh:

I'm sure you meant to say "right to work states". :laugh: