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American Morning

Sound Off: Should Corporations Pay Taxes?

Aired January 18, 2002 - 08:43   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: This morning more on the Enron scandal. The company fired its auditor, Arthur Andersen, and "The New York Times" reports that Enron CEO Ken Lay sold some stock within days after getting word from an Enron employee that the company was facing accounting problems.

And as CNN's Allan Chernoff reported in our last hour, not only did Enron hide millions in debt, it also managed to avoid paying taxes in four of the last five years.

From 1996 to the year 2000, the company had $1.7 billion in income, and only paid taxes in 1997, for which it received a $381 million refund. But, the bottom line here is that Enron is not alone. In 1998, Texaco, Pepsico, Pfizer, MCI Worldcom and General Motors also dodged the taxman.

So how can they get away with it. Well, joining us now to "Sound Off" from Washington, syndicated columnist Julianne Malveaux and from New York...

JULIANNE MALVEAUX, SYNDICATED COLUMNIST: Good morning, Paula.

ZAHN: Good morning. Constitutional lawyer Ann Coulter. Good day to you, as well, Ann Coulter.

ANN COULTER, CONSTITUTIONAL LAWYER: Thank you. Good to be here.

ZAHN: Glad to have both of you with us this morning. Just for starters, can we all agree that the tax codes are pretty darned complicated?

(LAUGHTER)

Julianne, do you subscribe to that?

MALVEAUX: Complicated is one thing. Unfair, another.

ZAHN: So the question I have to you, it there any defense for any of these Fortune 500 companies not paying taxes?

MALVEAUX: None whatsoever. Paula, when the companies get away without paying taxes, but a secretary who's there typing making $25,000 a year, is paying 15 percent of her income on taxes, it's absurd. It's such a scandal. And the worst of it is, that our Congress will want to pass some alternative minimum tax to give these people rebates like the $381 billion rebate Enron got. It makes no sense whatsoever.

ZAHN: Ann?

COULTER: If I can make two points about this. One is the more complicated any sort of government scheme is, and in particularly a tax scheme, the more rich and powerful people are going to figure out how to work the system. Whether it's through getting government grants or subsidies, or you know...

ZAHN: Or creating cash havens?

COULTER: ...in this case coming up with expensive lawyers to figure out a way to get around paying taxes. That's point one, which is why -- and that's rich people as well as corporations, and, you know, the middle class doesn't really have the time to figure out how to get that extra, you know, $300 rebate for the extra child, but moreover, I'd say -- I mean, that's why I think we need not only a simple system but a flat tax -- but the second point I'd like to make is this idea of corporations paying taxes is really kind of a fraud.

I mean, it's like saying, trying to tax ranch houses or something. You know, apartments. The apartments aren't paying taxes. Ranch houses aren't paying taxes...

MALVEAUX: Corporations are entities, Ann...

COULTER: ...a corporation, hang on, Julianne...

MALVEAUX: Corporations are entities. No, you're filibustering here.

COULTER: Hang on, Julianne, I'm trying to just make this one point.

MALVEAUX: Okay, please hurry.

COULTER: A corporation is an abstract concept. It is nothing but its shareholders, its employees, it's employers, this is the government against the taxpayer and they try to gen up class warfare to obsure that fact...

MALVEAUX: Oh, Ann. I'm not going to hold on anymore. That's the card --

(CROSSTALK)

ZAHN: Hang on. We can't understand both of you talking to each other. Ann, I think you made your point. She thinks corporate taxes are are -- you call them a fraud, all right. React to that first prong of what she said, Julianne.

MALVEAUX: Well, Paula, when they start talking class warfare, here's what you know, the SEC is going to have to come in. We're going to spend our money that we taxpayers pay to regulate these scoundrels like Enron, who have been paying every politician in the book. There is no such thing as class warfare. Those who have more should pay more. That's a progressive income tax system, it's not class war.

Corporations are legal entities. They're legal persons, and that is why corporations pay taxes. Yes, a shareholders end up paying part of that, but, guess what, those shareholders again, are the wealthy. Why should the tax burden be placed on the backs of the poor? This is what Republicans have been doing, and this is what Mr. Bush is using the cover of terrorism to do with these alternative minimum tax repealing schemes.

ZAHN: Okay, Ann, you know what? I need you to really quickly answer this one, because then I can move on to something I know the two of you will agree on, which is Ted Kennedy urging the deferral of the Bush tax cut.

(LAUGHTER)

Ann, are you saying that no corporation in the United States should be paying taxes? Is that what you're saying?

COULTER: Yes, I'm saying this is a fraud. It's like saying -- it's like saying, you know, blondes aren't paying enough taxes. Well, they're already paying tacks because they're humans. Or ranch houses aren't paying enough taxes. Well, the people who live in the ranch houses are paying taxes. This is a way for the government to get more of our taxes. And for Julianne to say, "Oh, the shareholders are rich," manifestly, that is not the case.

We keep hearing from all these Enron employees...

(CROSSTALK)

COULTER: Julianne, hold on, hold on.

(CROSSTALK)

ZAHN: All right, all right.

(CROSSTALK)

ZAHN: You know what? We've have so much discussing the issue to quickly move on to the Ted Kennedy idea.

(CROSSTALK)

COULTER: I never get to finish my point without interruption.

ZAHN: Yeah, but you know what? Finish your thought on the Kennedy suggestion of the deferral of the tax cut. Is that going to fly? Is he going to gain consensus to that idea?

COULTER: I'd like to point out that, you know, Democrats can never say they want to raise taxes. It's always, you know, this obscure Orwellian language, "deferring a tax cut." Just, you know, tell us. Is it a tax cut or a tax hike? He is going to try to raise our taxes. That's not very popular with voters.

MALVEAUX: What he is trying to do is to defer --

(CROSSTALK)

ZAHN: Why is not deferring a tax cut not raising taxes, Julianne?

MALVEAUX: Because the taxes have not been cut. They are cutting them in a future year. You have this ten-year tax cut thing. So, you're saying, let's stop this -- let's put the brakes on it, because the economic circumstances are different now than they were when we decided to do this. That does not mean you're raising taxes. Ann Coulter, if you want to campaign on that, you go do that. But the fact is that Mr. Kennedy is exercising the kind of fiscal responsibility we simply have not seen from this White House.

COULTER: I don't see any other Democrats rushing out to join him, calling for a tax hike.

MALVEAUX: Well, it's not -- Well, he's not calling for a tax hike. Again, we're have a semantic hair splitting here....

(CROSSTALK)

ZAHN: All right. We are going to have to split hairs on another morning. Can we all agree it's Friday, and after the segment maybe you all can roll off and enjoy your weekend?

MALVEAUX: Absolutely.

ZAHN: Julianne Malveaux, thank you as always for your point of view. Ann Coulter, yours as well.

COULTER: Thank you.

MALVEAUX: Thank you, Paula.

ZAHN: Appreciate it.

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