The centerpiece of the Sawyer Economic Recovery Forum (don't read anything into the acronym), is the elimination of Corporate taxes. I do, however, restrict the tax breaks to include only "C" Corporations for 3 reasons: (1). "C" Corporations shareholders pay double taxation (On before-tax profits, and on dividends paid out to investors; (2) Corporations add their taxes to the price of their products, so the taxes are passed on to us, the consumers; and (3) If all corporation taxes were eliminated, EVERYONE with a brain or a tax lawyer (choose one) would form an "S" Corporation and nobody would pay any taxes.
Then where would Congress get the money to pay for all of their crazy spending sprees? Hmmm, I'M THINKING.
PARTNERSHIPS & SOLE PROPRIETORSHIPS
A partnership is a type of business entity in which partners (owners) share with each other the profits or losses of the business. Partnerships are often favored over corporations for taxation purposes, as the partnership structure does not generally incur a tax on profits before it is distributed to the partners (i.e. there is no dividend tax levied). However, depending on the partnership structure and the jurisdiction in which it operates, owners of a partnership may be exposed to greater personal liability than they would as shareholders of a corporation.
A Sole Proprietorship, is governed by the same rules as the Partnership, except you don' t have to answer to your brother-in-law, and when the going gets tough, the buck stops right between your eyes.
The existence of a corporation requires a special legal framework and body of law that specifically grants the corporation legal personality, and typically views a corporation as a fictional person, a legal person, or a moral person (as opposed to a natural person). Corporate statutes typically empower corporations to own property, sign binding contracts, and pay taxes in a capacity separate from that of its shareholders, and now (thanks to the enigmatic Supreme Court decision - Citizens United v. Federal Election Commission, No. 08-205, January 10, 2010) to donate to election campaigns.
A corporation is an abstraction. It has no mind of its own any more than it has a body of its own. When the stockholder dies, the business goes right on (like the geranium on the windowsill, teacher . . . ).
Ownership of a corporation is through its investors (stockholders or shareholders) who, by statute, elect members to a board of directors to run the company. Typically, but not always, the Board hires someone to manage the corporation. The stockholders and the board are sheltered from personal liability resulting from losses or lawsuits incurred by the corporate entity (except in cases of personal negligence or fraud).
Owners (Shareholders) receive compensation through dividends paid on each share of stock that htey hold ( Note: these dividends are paid AFTER the corporation pays Federal and State corporations taxes on profits).
LIMITED LIABILITY CORPORATION (LLC)
In an LLC, shareholders of a modern business corporation have "limited" liability for the corporation's debts and obligations. As a result, their losses cannot exceed the amount which they contributed to the corporation as dues or payment for shares. Limited liability further allows corporations to raise large amounts of finance for their enterprises by combining funds from many owners of stock. Limited liability reduces the amount that a shareholder can lose in one company, and shelters the investor's other businesses from losses from the LLC.
Thus, e.g.: a Window manufacturer from, say, Miami, can open a separate business in Fort Myers after a hurricane, using its established name but under an LLC, without losses from the Fort Myers business affecting the Miami business. If the LLC goes under, and loses its customers' deposits, the Miami Company is not liable.
Is this a great country or what. My advice to consumers - don't give deposits to LLC's. You can check the status of any registered business in any state and the Peoples' Republic of Michigan on the internet. There are reasons that these companies are LLC's and few, if any, of those reasons are designed in the best interests of the consumer.
"Free Markets" as conservatives like to call them.
"S" Corps operate exactly as do "C" Corps, with a board of directors, etc. (sorta). But in reality it is a sole proprietorship and a "C" Corp rolled into one. Popular with small businesses, the owner (shareholder) enjoys the protection from personal liability, enjoyed by the "C" Corp., but the profits are paid out as ordinary income, and corporation taxes are eliminated.
Which makes the Citizens United decision look even dumber.