Posted on 02/12/2003 10:26:10 PM PST by lewislynn
Feb. 12, 2003, 11:36PM
By DAVID IVANOVICH
Copyright 2003 Houston Chronicle Washington Bureau
WASHINGTON -- Congressional investigators will reveal "eye-popping" details today about executive compensation practices at Enron Corp., as they walk lawmakers through the elaborate strategies the company used to manipulate its taxes and accounting, a key lawmaker said Wednesday.
Staff member from the Joint Committee on Taxation will present their findings from a yearlong examination of Enron's tax records to the Senate Finance Committee. These congressional tax experts were asked to determine whether Enron's Byzantine tax strategies were legal.
Senate Finance Committee Chairman Charles Grassley, R-Iowa, said he has been told by the staff the report will be an "absolute barn-burner."
"In addition to an eye-popping account of executive compensation, the report provides for the first time the complete story of Enron's efforts to manipulate its taxes and accounting," Grassley said at a confirmation hearing for two Bush nominees for seats on the U.S. Tax Court. "The report is very disturbing in its findings."
Finance committee staffers declined to provide further details about the report. Grassley has said lawmakers hope to use investigators' analysis of Enron's tax strategies to help shape future legislation aimed at curbing questionable tax practices.
A study by the watchdog group Citizens for Tax Justice found in January 2002 that Enron paid no federal taxes in 2000 and received a $278 million rebate on a tax break from stock options cashed in by employees.
The Washington-based group claims Enron avoided paying taxes in four of five years from 1996 to 2000, during which the company collected $381 million in tax refunds.
While Enron's financial reports reflect that it paid millions in taxes in recent years, the footnotes indicate the company used its network of offshore subsidiaries and stock-option deductions to reduce its tax liability to zero.
"The number that is featured, and is what most people see, bundled together all of the taxes they paid and didn't pay," said Robert McIntyre, who analyzed Enron's reports for Citizens for Tax Justice. "But when you get to the footnotes, you see that a lot of those taxes were paid to foreign governments and a lot of those taxes were deferred. You see that they did not include stock-option credits."
Enron received $382 million in tax refunds between 1996 and 2000 by taking advantage of stock-option deductions. In this strategy, when employees exercise stock options, the company can claim a tax deduction.
In addition, McIntyre's analysis indicates that Enron avoided paying some taxes by funneling profits through subsidiaries based in countries exempt from U.S. taxes.
The joint taxation committee's inquiry was among more than a dozen congressional investigations into Enron's collapse.
According to Enron's former top tax executive, Robert Hermann, the Houston-based company boosted its reported profits by another $1 billion or so by using tax schemes between 1995 and 2001. Hermann has defended the practices as legal.
Some experts say that even if that is the case, the complex transactions may have helped Enron paint a false picture of its financial situation and profits.
The Associated Press contributed to this report.
Yea right because all corporation's tax burdens would be shifted directly to you the consumer. It's becoming more and more obvious that Republicans aren't the party of less spending. Where else do you think the money would come from to fund the ever growing government scams?
If that's the case the ultimate tax reform would be to eliminate taxes on all individuals and tax only corporations.
You've never had a business have you?
A few payoffs and everything will be ok.
The crooked ones always seem to slip away without so much as a slap on the wrist.
A friend of a friend that knows the brother of the judge will take care of the whole situation.
Just have to wait until the public is tired of hearing about the whole thing and it stops being newsworthy.
Then it will just quietly fade away.
The ones that made millions will still have millions and the ones that lost everything will still have nothing.
And who said that money can't fix everything.
So where do you get your information?
I'm never in favor of Big Stupid Government getting more loot. And I'll brook no "if they pay more, we pay less" crap. Everyone always pays more, as long as Big Stupid Government gets its way and American Revolution 2.0 continues to be postponed. The first one started with a 3% tax on tea. They steal a lot more than that now.
Does that mean we don't have to send them any too?
If it's us or them I'll take them. You of course would take us.
You know as well as I do that the media's reporting on Enron and its abuses is designed to embarass or implicate the Bush administration, even though all their fraud occurred during the Clinton watch. A fact they conveniently omit.
Do you REALLY think you don't pay a corporation's taxes when you buy their product? Here's a hint...they aren't using any of their money.
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VECTIGALIA NERVI SUNT REI PUBLICAE.
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No... but the added expense of the passed-on tax artificially inflates the price of the purchased good or service, therefore artificially suppressing the buying power of the customer. The end result is that the customer would be able to spend more money on the company's product, if they didn't have to pay a chunk to the government.
Taxes suppress the market. Some taxes are made artificially high specifically for that purpose... excise taxes come to mind.
All of which you know, of course.
All your experience aside. I can tell you I am a business and I, not you or anyone else pays my taxes...Who pays your taxes?
As an example, was there an immediate rise in transportation costs to offset the escalating price of fuel?...NO!...Will all companies raise their prices or will some absorb the cost in reduced profits?...The same is true of taxes.
If companies could automatically raise their prices for taxes, what's stopping them from raising them for no reason?
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