March 15, 2006

Collecting Something for Nothing

Here's a thought-provoking article from today's New York Times about utility companies collecting corporate income taxes from customers but then not passing it on to the government:
Many electric utility companies across the nation are collecting billions of dollars from their customers for corporate income taxes, then keeping the money rather than sending it to the government.
In the amounts they charge customers, utility companies include the cost of the corporate income tax they're supposed to be paying to the government. However, as the Times article documents, some utility companies that are part of larger corporate entities have been able to offset the profit their utility companies make with losses they incur from their other interests - this allows corporations to avoid paying any income tax. So in essence, some utility companies are charging customers for taxes they're not even paying. It's this type of tax scheming that destroys the public's confidence and perceived fairness in the tax system.


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