Corporate Tax reform is a shifty goal. Companies seek to lower the 35% rate while suggesting the other guy’s deductions be eliminated. As the NYT reported today, Facebook received a substantial tax deduction on Founder Mark Zuckerbergs cashless exercise of options….
Facebook is the classic example. Its co-founder, Mark Zuckerberg, had options to buy stock at 6 cents a share, which he cashed in when each share was worth $40. The options earned Mr. Zuckerberg about $5 billion, but he wasn’t the only one to benefit. Even though Facebook did not actually pay out that $5 billion, the company was nonetheless able to deduct Mr. Zuckerberg’s windfall as a business expense. According to the Senate’s Permanent Subcommittee on Investigations, this kink in the tax law permitted Facebook to take an estimated $16 billion tax deduction when the company went public and avoid paying any taxes for several years….
Possibly the answer is a full range of topics brought to the table that will once again allow American companies to compete in the world market place. First topic on the table should be healthcare. Why is this an employer mandated expense? How does this help us compete globally? Until we’re willing to address these issues comprehensively, the petty divisiveness that comes with piecemeal solutions is likely to continue.