WHEN I was significantly younger I used to do a lot of fishing. I often went on salt water party boats. These boats were open to the public. The fishermen each boarded, picked a spot on the rail and paid a fare. The captain would sail the boat to where he thought there were fish. This might be some distance away, so the trip there and back might be long.
Some people would sleep or drink during the trips. Some would play cards for money. The boat had a crew, whose job was to help people,. For some reason it seemed that no one ever had a deck of cards. So a deck, belonging to the “mate,” would be used. Whenever the winning pot was over a certain amount a small amount, perhaps a nickel, would be taken out “for the mate,” as a fee for using his cards. Someone ensured that this happened every time. I wonder now, but did not wonder then, what would happen if we refused to contribute. I never won, and soon stopped playing, so I never did find out.
If the trips were long enough, the only “winner” would be the mate. In a sense everyone lost, as the winners did not receive what they won. It was like betting every number on a roulette wheel. You will “win” many chips, but not quite the number you risked. It is slow but certain way to lose all your money.
I bring up this concept because of a recent news item that seems to have upset many people. GE recently made a huge profit, and yet it paid zero in corporate taxes. One explanation was that a subdivision of the company suffered massive losses. Another was that GE suffered massive losses in other years. In either cases the losses were used to offset the profits. Thus, the legal result was zero tax.
This bothers people. As with the boat card game why would anyone, who did well, object to a small amount of winnings being deducted. Of course the “mate” (who was never there!) did not help us with some of his “winnings” when we lost a hand. The idea of taking taxes from winners, always, and never giving them a break is like taking a little blood---only a little---from a healthy person, every day. If it does not kill him then it will prevent him from staying healthy.
The Supreme Court once ruled that the power to tax is the power to destroy. The “loopholes,” that are so denounced, are simply laws that are intended to prevent the other laws from being too damaging to otherwise healthy companies. It is interesting that some of the Robin Hood legends have him take only relatively small amounts from his victims. Apparently he understood that if he took too much then no more travelers would not enter the forest. It is unfortunate that the current generation of complainers does not understand why he was wise.
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