Oct. 6 (Bloomberg) — How can you tell how much federal income tax a publicly traded company pays in a specific year? You can’t.
Writing in the Washington Post last month, journalist Allan Sloan suggested this can be corrected by demanding that the Financial Accounting Standards Board require companies to disclose this number. This was a follow-up to his critique of a New York Times article published in March reporting that General Electric Co. had paid no U.S. income tax in 2010.
Sloan asked for anyone who supports his call to stand up and be counted. And so we endorse Sloan’s idea and will up the ante: Make the income-tax returns of all companies with shares traded on U.S. stock markets available to the public.
It’s not such a radical idea. In fact, it would restore the intent of the law when the first permanent federal corporate income tax was adopted by Congress in 1909, stating that returns “shall constitute public records.” Over the years, legal rulings and regulations placed limits on disclosure. An impermeable wall was erected in 1976 in response to the Nixon administration’s misuse of tax returns to harass those on its notorious “enemies list” of journalists and anti-Vietnam War protesters, according to a 1981 study by Boris Bittker, a now-deceased professor at Yale Law School.
Copyright 2011 The National Memo