The comedy of corporate taxes

Posted on December 18, 2012 by

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You may not have ever heard of Bill McDonald, but you have probably heard his jokes. A profile of McDonald explains that, from his Southeast Portland home, McDonald writes jokes for “Tonight Show” host Jay Leno and for about 140 radio stations around the world that feed McDonald’s quips to their on-air staffs—jokes like these from a few years ago:

I’m a little suspicious of these electronic voting machines. They even showed President Bush ahead in Fallujah.

Ricky Williams was asked if he preferred playing on grass or AstroTurf, and he replied, “I don’t know. I never smoked AstroTurf.’”

McDonald also has a keen eye for economic absurdities.  His latest target: “Business” and “employment” taxes. In a recent comment he highlights the Portland region’s peculiar payroll tax used to fund its public transit system, a situation that many taxpayers in many regions face:

Let’s say I wrote jokes that were sent out of state, examined, and then bought outside the state. There is a form called TSE-AP with “Sales Factor Only” on it and “Total within district” where you compute the percentage of sales here versus outside the district.

Stay with me. I assumed that sales within the district would mean….wait for it…the sales within the district. If nobody bought any of my jokes in the state of Oregon and the district was in Oregon that would be zero…..

But what it really means is if you wrote the joke in the district and sold it anywhere in the world, you were to be taxed here so that a train or light rail or bus could be funded, because OF COURSE, I need a bus or train to sit in my basement and write jokes.

Ironically, if I had taken a car out of the district, wrote the joke there, and then sold the jokes to the Mayor of Portland sitting in the heart of the district, that would not be a sale within the district because…oh never mind….

I’ve been around long enough to know why our transit district taxes payrolls the way it does, but McDonald shows that, many times, the difference between what can be taxed and what should be taxed is much like the difference between grass and AstroTurf.

(Note: crossposted from Economics International Blog)

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Posted in: Economy, Oregon, Taxes