[wordup] bush needs corporations to pay just a little early.

[Adam Shand]

lukily our president came from a business background and so understands
why he'll be helped out of a jam here.

From: http://www.cnn.com/2001/ALLPOLITICS/08/23/corporate.taxes/index.html

Surplus relies on corporate taxes -- paid early
>From Major Garrett
CNN White House Correspondent

CRAWFORD, Texas (CNN) -- The Bush White House is counting on corporate
America to save its surplus.

But the corporations might not show up for duty. And if they don't, the
president's budget could be in very hot political water.

The White House is expecting American corporations to voluntarily pay $5
billion in taxes two weeks ahead of time, something corporate tax analysts
doubt will occur. That extra $5 billion in revenue the White House expects
corporations to pay ahead of time is very important indeed.

Without it, the Bush budget surplus would be $5 billion smaller, and that
would mean Bush has tapped into the Social Security surplus, something he
has repeatedly vowed not to do. The White House released revised surplus
numbers Wednesday, showing a federal surplus of $158 billion, a mere $1
billion more than the Social Security surplus.

But that $158 billion surplus only exists if American corporations pay $5
billion in taxes two weeks early.

"There is zero chance any member of the Fortune 100 would ever pay
corporate taxes ahead of time," said Clint Stretch, director of tax policy
for the accounting firm of Deloitte & Touche. "Corporations do not have
the slightest interest in paying corporate taxes early. They're not going
to volunteer money to the government."

Stretch says large corporations pay the lion's share of corporate taxes.
All employ sophisticated teams of accountants and would never send the
government millions in revenue it could hold and gain interest from.

The $1.35 trillion tax cut Bush signed this year shifted $33 billion in
corporate tax collections from this fiscal year to the next fiscal year.
That pushed the deadline for sending corporate taxes to Washington from
September 15 to October 1.

Stretch said major corporations would fire any tax director or head of
accounting that sent millions in revenue to Washington two weeks ahead of
time.

White House Budget Director Mitch Daniels was nonchalant about the
expected corporate windfall.

"Folks at Treasury believe that some folks will go ahead and pay it (this
year) anyway," Daniels said. "Didn't get the memo, I guess, but that's the
answer."

But Stretch said it is highly unlikely large and midsize corporations are
unaware of the date change. He said even smaller corporations monitor such
information and build it into their payment schedules. The exception, he
said, would be very small corporations that use "automatic pilot" software
to calculate times to send tax payments to Washington.

"But that's not where the revenue comes from," Stretch said, saying large
and midsize corporations account for at least 90 percent of all corporate
tax revenue.

Michelle Davis, a spokeswoman for the Treasury Department, said that in
the past some corporations paid taxes ahead of time, but she could not
cite any dollar figures. "We have seen similar behavior in the past," she
said.

Davis said that when Congress gave the airlines two extra months to pay
excise taxes in 1997, the government collected 30 percent of the revenue
ahead of the new deadline.

She said there was no way of knowing whether corporations would follow
suit this time, saying the $5 billion estimate was based on an "average
behavior pattern."

"I doubt if it's high-minded civic duty," Davis said.

White House Press Secretary Ari Fleischer, when asked if Bush or any
senior White House official asked any corporations to pay their taxes
ahead of time, said: "Not that I'm aware of."

Fleischer also suggested big corporations would not mind sending taxes to
the government ahead of time.

"As you can imagine, any time there is any calendar-driven deadline, some
actions can fall before it, some after it," Fleischer said. "And even
though they are allowed to pay it later, they choose not to. For them,
it's just a short number of days, really, that's a difference."

When the administration unveiled new budget numbers this week that showed
the nation's surplus had shrunk from a projected $281 billion in April to
$158 billion in August, it took a lot of flak from congressional
Democrats. Among the charges: Democrats said Bush had squandered the
surplus.

The White House said the country was still running the nation's second
largest surplus in history and that Bush had kept his promise not to touch
excess Social Security tax revenue. Social Security payroll taxes this
year will exceed benefits paid by $157 billion. This amount is known as
the Social Security surplus, and Bush and congressional Democrats have
vowed not to spend this surplus.

If the surplus reported by the White House had been lower than $157
billion, Bush would have broken his promise not to tap the Social Security
surplus.

And unless corporate America comes to the rescue with those early tax
payments, that's exactly what could happen.