🚀 go-pugleaf

hanc...@bbs.cpcn.com writes:
> Even earlier than that--the Western Union Telegraph Company
> reorganized in the 1960s to sell computer services from an
> unregulated subsidiary.  The railroads had for years had 
> real estate and other businesses.
>
> The Penn Central had numerous holdings.  Ironically, it was
> criticized for that, critics saying the holdings were a
> distraction to management and disrupted railroad operations.
> Yet actually most holdings were profitable and helped subsidize
> the money-losing railroad.
>
> (I interviewed at a truck-body/leasing company originally
> created by the PRR and then owned by Conrail.  They had a
> System/3.)

there were previous separate cooperations ... but starting around 1980
there was specific efforts to move profit out of large human intensive
operations ... in part as union negotiating tactic (later also as tax
avoidence). They separated airline operations from ticket sales ... in
such a way that airline operations showed little or no profit ... and
all the profit was booked in a totally separate corporation (where
previously that profit had been part of airline operations). The selling
of a passenger ticket to take an airlline operations flight had all the
profit ... and actual operation of flying was showing little or no
profit.

it wasn't creating a new subsidiary for a totally different business
that operated as a profit to subsidize money loosing business. It was
moving the profit from airline operations into a separate corporation
that sold a ticket for a person to use airline operations.

It would be more akin to creating a company in Ireland for charging for
railroad freight shipped in the united states. customers would pay the
Irish company for US railroad shipping ... the Irish company would keep
all the profit ... and pass on trivial amount to the US railroad that
actually moves the freight (resulting in the US railroad operating at a
loss ... and the billing for US railroad shipping was handled in another
country and operated at large profit).

I've mentioned periodically the 2008 annual economists conference
and economic roundtable discussing advantages of flattax ... eliminating
all tax loopholes and reducing tax rate ... while remaining tax
revenue neutral (same amount of taxes being collected). The big
advantage is it eliminates the enormous congressional graft and
corruption associated with selling tax loopholes and contributes
significantly to congress being considered the most corrupt institution
on earth.

They commented (in 2008) that Ireland is one of the largest operations
lobbying against such a change to US tax laws (and would radically cut
the payments to members of congress). It is part of one of the worst
thing that happened to the country was financialization and financial
innovation that saw big uptic around 1980.

past posts
http://www.garlic.com/~lynn/submisc.html#tax.evasion