strengthen Maine

I was intrigued to read the column by Kevin Hancock of Hancock Lumber, as someone who actually understands finances and microeconomics (“Abandon the ‘us versus them’ view of tax reform,” Feb. 5). It contained easy-to-understand language about taxes.

However, there are two points that need clarification, the first being that double taxation is a fallacy. Hancock says, “Any profit distributed to owners or employees in the form of dividends or bonuses is taxed again, this time as personal income.” Corporations are not people; they are a business structure chosen by people to benefit people, usually so that the founder can make even more money than as a sole proprietorship and to be insulated from liability. Owners of shares are treated indirectly like employees and should pay taxes on that income.

There is always the option to spend all that profit on executive salaries and the corporation not be taxed at all. Employee bonuses are written off as an expense and therefore not taxed. AT&T announced it will pay bonuses because it will save the company $28 million in taxes.

Despite the headline given to the column, there is an “us versus them.” Local companies, such as Hancock Lumber, do care about community and reinvest much of their profits and personal energy to helping others, unlike national corporations who divert a tiny amount to local communities as a marketing expense.

Mainers within the locally owned companies live here and want our state to be a great place to live. Big corporations are controlled by a small number of executives in posh communities and thousands of shareholders who care nothing about you and your community.

The only reason those corporations are here is to extract as much wealth from you as possible. If you want stronger, more resilient communities then spend your money at locally owned companies.

Brad Sherwood


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