Are Corporate Taxes Too Damn High? Or Too Damn Low? Nobody Knows

by B. Traven

Public companies — those whose shares are traded on stock markets — are required to disclose all kinds of information about their operations in annual government forms like the 10-K. But one thing they aren’t required to reveal is how much they actually owed the IRS that year, says Fortune magazine editor Allan Sloan in a recent Washington Post editorial.

There are more than a dozen tax metrics disclosed in a 10-K — but not the federal income tax incurred for a given year. So when the likes of Paul Ryan talk about needing to cut the corporate tax rate to 25 percent, there’s no possible way that he — or anyone — can compare that with what companies pay now.

While it’s highly unlikely that Congress will ever order companies to reveal what they really owe in tax, there is some hope that the Financial Accounting Standards Board, a private organization that sets accounting standards in the U.S., might make it a requirement.

The group says it will consider implementing the new disclosure rule if enough people express concern about it, which you can do by email at pirteam@faf-fasb.org (and don’t forget to copy asloan@fortunemail.com). As Sloan says, “It may not work, but what can it hurt?”

Photo: ell brown

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