Posts Tagged Corporation

Entrepreneurship: The Ultimate White Privilege? – Jordan Weissmann – The Atlantic


Entrepreneurship: The Ultimate White Privilege?

JORDAN WEISSMANNAUG 16 2013

 

A new study finds that future entrepreneurs score high on measures of teenage delinquency. They’re also disproportionately white, highly educated, and male. Here’s why that might not be a coincidence.



One of the great privileges that comes with being born wealthy, white, and male in the United States of America is that you can get away with certain youthful indiscretions. Indiscretions like, oh, smoking prodigious quantities of marijuana, for instance. If you’re an upper-middle-class caucasian, chances are the cops aren’t going to randomly stop and frisk you in the street under dubiously constitutional pretenses. And if you do somehow get caught baggie-in-hand, your parents can likely afford a decent lawyer to help plea bargain your way into some light community service. It’s a cushy setup. 

Today, I’m finding myself wondering if that leeway —  that societal room to do a little law breaking, punishment free — isn’t part of the reason why so many of the successful entrepreneurs in this country are, yes, white guys

Sorry if that sounds a bit out of left field, but let me explain. Ross Levine, an economist at the University of California, Berkeley, and Yona Rubinstein, a professor at the London School of Economics, have released a fascinating working paper exploring the demographics, personality traits, and earnings of entrepreneurs. Among their findings, they conclude that:

A) Entrepreneurs are “disproportionately white, male, and highly educated”; and

B) As teens and young adults, they’re far more likely than the average American to have partaken in “aggressive, illicit, risk-taking activities,” such as skipping class, smoking pot, gambling, and shoplifting. 

It does not strike me as a coincidence that a career path best suited for mild high school delinquents ends up full of white men. That, again, is part of white privilege; youthful indiscretions have fewer consequences that might, say, keep you out of a good college.

That said, while Levine and Rubinstein’s findings hint at the role race might play in entrepreneurship, they don’t flesh it out fully enough for us to draw hard conclusions. So with that in mind, let’s wade into some of the details about precisely what this study does and doesn’t tell us. 

We’ll start with the demographic data, shown below based on the census figures from 1994 to 2005. The group we care about here are the self-employed workers with incorporated businesses, at the far right of the table. Why just them? Because they’re who we traditionally consider entrepreneurs, as opposed to everyday small business proprietors. Unincorporated businesses tend to be tiny operations — think of a bodega, or a carpenter who works alone out of a pickup truck — with little chance of growing. As Levine and Rubinstein find in their study, the people who run them tend to earn less than salaried workers. Incorporated businesses, on the other hand, are actual companies (yep, with 1st Amendment rights and everything). They can be anything from a chain of gyms to an accounting firm to a small tech startup. But the important thing is they’re independent legal entities and are often set up to attract investment and grow. 

And, as you’ll notice, 84 percent of the incorporated self-employed (people who, for the purposes of this piece, we’ll just shorthand as “entrepreneurs”) are white, compared to 71 percent of the whole prime working-age population. They’re also 72 percent male. 

Entrep_Table.jpg

So, again, entrepreneurs are overwhelmingly and objectively white guys. What else do we know about them? To gather more info, Levine and Rubinstein turn to the NYLS79, a government survey that began tracking more than 12,000 14 to 22 year olds over the course of their lives starting in 1979. The young folks who eventually became entrepreneurs tended to be from wealthier families with more educated parents. They generally reported higher self esteem, and, importantly, performed better than average on learning aptitude tests. The most successful entrepreneurs, measured by income, also tended to fare well in salaried jobs before making the leap to running their own business. 

And, yes, they were frequently rule breakers. In 1980, the survey subjects were asked to fill out a 23 question “Illiict Activity Index” that covered “themes associated with skipping school, use of alcohol and marijuana, vandalism, shoplifting, drug dealing, robbery, assault, and gambling.” The future entrepreneurs were turned out to be real louts; if their high schools were “The Breakfast Club,” they’d be the Judd Nelsons of the crew. They were more likely to have “used force to obtain things,” to have stolen something worth less than $50, and to have been stopped by police. On the combined illicit activity index, they scored 21 percent higher than their average peer. Salaried workers scored 1 percent lower. 

Illicit_Activity_Index.jpg

So who’s most apt to become an entrepreneur? In the end, Levine and Rubinstein find that it’s the smart rule-breakers. Workers who scored above average on both learning aptitude and illicit activities were 60 percent more likely to become entrepreneurs than their peers, controlling for other characteristics. 

“It is a particular mixture of traits that seems to matter for both becoming an entrepreneur and succeeding as an entrepreneur,” the paper concludes. “It is the high ability (as measured by learning aptitude and success as a salaried worker) person who tends to “break-the-rules” (as measured by the degree to which the person engaged in illicit activities before the age of 22) who is especially likely to become a successful entrepreneur.”

And, once again, the people with this combination of traits tend to be overwhelmingly white and male. 

That’s what the study tells us. Here’s what it doesn’t. First, the paper says little about the specific kinds of misbehaviors future entrepreneurs are partial to. The analysis is also silent on whether smart, rule-breaking minorities are equally likely to become entrepreneurs as their white peers, or if their lives end up running a different course. Knowing that information could help us understand whether white kids essentially get a free pass on their behavior, or if smart teens are just generally good at staying out of lasting trouble. The paper also doesn’t tell us whether smart young minorities are more or less prone to illicit behavior than their white peers, which might tell us how many potentially match the profile of a successful entrepreneur to being with. 

But even without those answers, here’s my preliminary take-away: To be successful at running your own company, you need a personality type that society is a lot more forgiving of if you’re white. Privilege indeed. 

 Entrepreneurship: The Ultimate White Privilege? – Jordan Weissmann – The Atlantic.

 

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Sen. Levin, Small Businesses Push for Corporate Tax Hikes


Sen. Levin, Small Businesses Push for Corporate Tax Hikes

By Niraj Chokshi  //  December 14, 2012 | 1:05 p.m. 
Updated: December 14, 2012 | 2:27 p.m.

 

AP PHOTO/CHARLES DHARAPAK

Sen. Carl Levin, D-Mich.

 

It’s time to raise corporate taxes, Sen. Carl Levin, D-Mich., and small business owners said on Friday.

Tax-evasion tactics have led to an increasingly smaller effective tax rate for big corporations, putting smaller businesses at a competitive disadvantage, Levin and two small business owners said on a conference call with reporters. But the current fiscal negotiations offer a chance to right that wrong.

“It is very unfair to the American taxpayer, it robs the U.S. Treasury of needed revenues, it’s unfair to any competitors who don’t use these offshore gimmicks and these corporate loopholes,” Levin said. It’s time, he said, to return corporate taxes to historical levels.

Levin was resistant to putting an explicit target on how much revenue should be raised by ending what he called “tax tricks,” but he did offer a range for the next decade.

“I would think if you can get two to three hundred billion in additional corporate tax revenue over that ten-year period that that would be a significant contribution to deficit-reduction,” he said.

Some executives have pushed for “revenue-neutral” reform, which would simplify the corporate tax code, but leave the amount corporations pay roughly the same. 

Despite what he called “a huge effort” by big corporations to reduce their tax burden, he said he was convinced a revenue-neutral proposal would make it past neither the Senate nor President Obama.

Earlier this week, the Business Roudntable, a group which counts as members the heads of many of the nation’s largest companies, called for all options to be put on the table in talks to avert the $500 billion in year-end tax hikes and spending cuts that comprise the fiscal cliff. 

Tax-evasion tactics have led to an increasingly smaller effective tax rate for big corporations, putting smaller businesses at a competitive disadvantage, Levin and two small business owners said on a conference call with reporters on Friday. But the current fiscal negotiations offer a chance to right that wrong.

“It is very unfair to the American taxpayer, it robs the U.S. Treasury of needed revenues, it’s unfair to any competitors who don’t use these offshore gimmicks and these corporate loopholes,” Levin said. It’s time, he said, to return corporate taxes to historical levels.

Levin was reluctant to put an explicit target on how much revenue should be raised by ending what he called “tax tricks,” but he did offer a range for the next decade.

“I would think if you can get two to three hundred billion in additional corporate tax revenue over that ten-year period that that would be a significant contribution to deficit-reduction,” he said.

Some executives have pushed for “revenue-neutral” reform, which would simplify the corporate tax code, but leave the amount corporations pay roughly the same. 

Despite what he called “a huge effort” by big corporations to reduce their tax burden, he said he was convinced a revenue-neutral proposal would make it past neither the Senate nor PresidentObama.

Earlier this week, the Business Roundtable, a group which counts as members the heads of many of the nation’s largest companies, called for all options to be put on the table in talks to avert the $500 billion in year-end tax hikes and spending cuts that comprise the fiscal cliff. 

Friday’s call was hosted by the American Sustainable Business CouncilBusiness for Shared Prosperity and the Main Street Alliance, which are collecting signatures for a letter to Congress and President Obama to reform the tax system in a way “that is fair and provides sufficient revenue for the public services and infrastructure that underpin our economy.”

 Sen. Levin, Small Businesses Push for Corporate Tax Hikes.

 

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Russia MiG Plane Maker Big ‘Money Loser’ :: Air-Attack.com News


Russia MiG Plane Maker Big ‘Money Loser’

 

Published: Thu October 25th, 2012 via: RIA Novosti

 

Russia’s aircraft making corporation MiG is a loss-making enterprise, parliamentary defense committee head Vladimir Komoyedov said on Thursday.

“MiG Corporation has been a loss-making enterprise in recent years. The less than optimal distribution of manufacturing infrastructure causes some concern,” he said.

The Defense Ministry has been reducing the share of MiG aircraft, which used to be the core of fighter aviation in the USSR, he said.

He did not elaborate.

A press handout distributed ahead of the committee meeting said MiG has completed modernization of the first six MiG-29 UPG fighter jets for the Indian Air Force, under a contract signed in March 2008.

It also said MiG Corp. has more than 100 standing contracts with 20 countries worth more than $6 billion.

 Russia MiG Plane Maker Big ‘Money Loser’ :: Air-Attack.com News.

 

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Free Wood Post – Corporation Concept Aborted Before Becoming an Actual Person


Corporation Concept Aborted Before Becoming an Actual Person

July 9, 2012

By Sarah Wood

It is still questionable when a corporation is first considered a person, but recently a corporate concept that was even given initial investment funding has been aborted due to the economic recession, and lack of interest by the consumer.

George Ferryton just wasn’t ready for his conception of a traveling bingo parlor to become a full person and wanted to end his corporation before fully allowing it to become a person. He said,“I just couldn’t see it fully becoming a person and then going bankrupt and dying on its own. It would just be too heartbreaking to have to go through that, so my partner and I decided to dissolve the corporation before it showed signs of life.” 

Ferryton wishes more people would notice the failure of these ideas before even conceiving them, but at least he feels good in his decision to end his corporation early on. He feels that if he had waited longer, he might not have been able to do it, and would have built the parlor to its full capacity to adopt it out to those that may have been a better fit for its industry. That way it would’ve been able to thrive on its own.

 

Looking back on his decision, Ferryton has no regrets other than wishing he had sought legal protection in the first place so that he wouldn’t have been taken advantage of.

This was one corporation out of thousands that never got to exist as a person, but Ferryton and his partner plan on trying again soon when they are ready. There is still the question of whether a corporation’s life begins at conception or when it incorporates. Unfortunately, this will be a debate that will continue on for years to come.

 Free Wood Post.

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Americans Pool Together $945.23 To Counteract Corporate Money’s Influence In Politics | The Onion – America’s Finest News Source


Americans Pool Together $945.23 To Counteract Corporate Money’s Influence In Politics

JUNE 22, 2012



WASHINGTON—Spurred into action by the surge of Super PAC donations ahead of November’s general election, the American people this week collectively managed to raise $945.23 to offset the influence of corporate spending on politics. “Today we take a stand against big money’s stranglehold on the U.S. electoral system and give a voice back to the voters,” said spokesman Danny Bader, an unemployed carpenter who scraped together $1.10 as part of the effort to counteract the unlimited number of undisclosed independent expenditures corporations are legally allowed to make. “With these funds, we will print some pamphlets and hopefully get a website up, and we will send a clear message that billions in shadowy spending will not buy this election.” At press time, the American people were struggling to raise an additional $65 for another dozen T-shirts.

 Americans Pool Together $945.23 To Counteract Corporate Money’s Influence In Politics | The Onion – America’s Finest News Source.

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United States of corporate tax welfare « occasional links & commentary


United States of corporate tax welfare

Posted: 3 November 2011 by David F. Ruccio
Tags: corporations, taxes, United States, welfare

 

In the United States, we don’t tax corporate profits. We give corporations lots of ways of not paying taxes. The result is the effective tax rate on corporations is less—in many cases, much less—than the much-ballyhooed official corporate tax rate of 35 percent.

The Citizens for Tax Justice has just issued a new report, “Corporate Taxpayers & Corporate Tax Dodgers, 2008-2010″ [pdf]. Their conclusion:

Over the three years covered by our study, the average effective tax rate for all 280 companies was only 18.5 percent. For the past two years, 2009 and 2010, the effective tax rate for all 280 companies averaged only 17.3 percent, less than half of the statutory 35 percent rate.

Of the 280 companies they studied, only 71—or 25 percent of the total—paid effective three-year tax rates of more than 30 percent (their average effective tax rate was 32.3 percent). An almost equal number of companies, 67, paid effective three-year tax rates of less than 10 percent (their average effective tax rate was zero). Another 30 companies paid less than zero percent over the three years (their effective tax rate averaged –6.7 percent).

What kinds of welfare do U.S. corporations receive? They benefit from:

·         “accelerated depreciation” (tax breaks that allow companies to write off their capital investments considerably faster than the assets actually wear out),

·         “stock options” (companies can take a tax deduction for the difference between what executives pay for the stock they receive as part of their pay and what it’s actually worth when they exercise their stock options),

·         “industry-specific tax breaks” (i.e., tax subsidies to companies that engage in certain activities. such as: research; drilling for oil and gas; providing alternatives to oil and gas; making video games; ethanol production; moving operations offshore; not moving operations offshore; maintaining railroad tracks; building NASCAR race tracks; making movies; and a wide variety of activities that special interests have persuaded Congress need to be subsidized through the tax code), and

·         “offshore tax sheltering” (these typically involve various artificial transactions between U.S. corporations and their foreign subsidiaries, in which revenues are shifted to low- or no-tax jurisdictions, while deductions are created in the United States).

Here is a summary of the effective tax rates of the 280 corporations by industry:

Why is this important? It’s important for two reasons: First, corporate lobbyists are demanding even more tax breaks, including a tax holiday on foreign earnings, in order to maintain and improve their “competitiveness.” Second, much of the surplus in the United States is captured in the form of corporate profits (over the three years, the 280 companies in their survey reported total pretax U.S. profits of almost $1.4 trillion.) Corporate profit taxes are the only way the rest of society has some say in what is done with those profits. In the end, when effective corporate profit taxes are low, the tax burden is shifted to individuals and households and government programs for entities other than corporations are undermined.

Because of the welfare provisions in the U.S. tax code, the corporations that are run by the 1 percent gain— both before and after taxes—at the expense of the 99 percent who are forced to have the freedom to work for those corporations. On top of this, they are threatened with higher taxes and less generous social programs.

As they become aware of the nature and extent of this program of corporate tax welfare, the participants in  Occupy Wall Street may turn it into Occupy All Streets.

 United States of corporate tax welfare « occasional links & commentary.

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No time for a corporate tax ‘holiday’ – The Washington Post


 

Published: October 30

A DEMONSTRABLY BAD idea in pursuit of a possibly worthy goal is still a bad idea. In this instance, the demonstrably bad idea is giving corporations a federal tax break — make that another tax break — on “repatriated profits,” money they earn overseas and bring home. The goal is an infrastructure bank to help build roads and other projects. Such an entity could help rationalize the hodgepodge of politically dictated projects and leverage private capital. But arithmetic’s basic laws must prevail: You can’t pay for an infrastructure bank with a tax break that costs money.

U.S. firms can now defer paying corporate tax on profits they earn overseas until the money is brought to the United States. The notion of a repatriation tax holiday is that the high U.S. tax rate, 35 percent, deters firms from reinvesting overseas profits and “traps” enormous sums, as much as $1.4 trillion, from being put to productive use in the United States. A temporary tax holiday — a reduced tax rate — would boost revenue in the short term as companies took advantage. But it would cost tens of billions in the longer run from lower taxes on income that would have been brought back eventually. The congressional Joint Committee on Taxation has estimated that cutting the tax rate to 5.25 percent would generate $25.5 billion in the first two years but end up costing $79 billion over 10 years.

Meanwhile, the holiday is not apt to create jobs. A Goldman Sachs analysis concluded that “the short-term economic benefit of such a policy would likely be minimal.” A tax holiday would not produce “a significant change in corporate hiring nor investment plans,” Goldman found, because “most firms with large amounts of overseas profits are likely to have adequate access to financing, so the availability of cash on hand is unlikely to be a constraint on investment.” It would reward companies that maneuvered to shift profits to tax havens. Finally, a tax holiday could have the perverse effect of encouraging companies to shift operations — and jobs — overseas in the expectation of another break down the road.

This is a provably bad idea. Congress passed a repatriation tax holiday in 2004. The Congress­ional Research Service reported “little evidence” that new investment was spurred. A recent study by the Democratic staff of a Senate subcommittee found that the 15 companies that repatriated the most profits, more than $150 billion, ended up cutting their U.S. workforces by nearly 21,000 jobs.

Multinational firms have mounted a furious lobbying campaign for the tax break. They argue that even if companies do not use the money for investment, shareholders who receive higher dividends will boost the economy.

The corporate tax code is a mess of perverse incentives. It should be fixed, not gamed — and in a way that bolsters the country’s bottom line instead of further depleting the national treasury.

 No time for a corporate tax ‘holiday’ – The Washington Post.

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