Reviews for Detecting Earnings Management

The average rating for Detecting Earnings Management based on 2 reviews is 4 stars.

Review # 1 was written on 2019-09-23 00:00:00 Andrij Usztan This book proves the Tea Party wrong beyond all reasonable doubt, and should be required reading for all those seeking or working in public office. Tax cuts do not create jobs, they leave companies raping communities, not paying their fair share, destroying jobs, infrastructure and schools, leaving a large footprint, and absconding with the riches. I took notes for a forthcoming fuller review. There is plenty of hard data, citations of studies, and implementable solutions to the problem. It's a shame this book was not touted heavily while Mitt Romney was crafting his asinine "job creator" language or claiming that only 46% of Americans pay taxes (both untrue). "to that end, according to the gospel, states must not be allowed to compare notes to determine whether companies are lying about competing subsidy bids or cheating on their income taxes. Instead, states can only be allowed to compete to see which will tax the least corporate income, or which will give the biggest tax gift to a trophy deal" (4). According to Michael R. Bloomberg, "Any company that makes a decision as to where they are going to be based on the tax rate is a company that won't be around very long...If you're down to that incremental a margin you don't have a business." (43, quoting from the New York Times, November 8, 2001) Robert Ady, formerly of Fantus and now the head of his own site relocation company, Ady International, says "[I]n the facility location process, taxes are not relatively important when compared to other cost factors such as labor, transportation and utility and occupancy costs... In summary, site selection data do not suggest any correlation between low taxes and positive economic growth, or between high taxes and slow growth. the location requirements are many, the process too complicated, and other factors too important to justify a strong relationship." (50, citing New England Economic Review, March/April 1997) Professor Peter Fisher of the University of Iowa demonstrates that when corporate tax revenue goes down, so do public services, and that the return on investment for such breaks is so low, about ten businesses for every 100 that actually exist in the community in the high growth of the 1990s, which Le Roy likens to catching fish with dynamite. (58) Businesses know that the tax abatements are, as Dennis Cuneo of Toyota put it, "pennywise but dollar-foolish" Toyota chose Alamo City, near San Antonio, in spite of larger subsidy promises in four other states, and even voluntarily paid $34 million in taxes to the local school district, because the resources in the other bidding locales were not as good (61). 63 64n33 74 1st paragraph "Business friendly"=low quality of life. (81). 96-97 101 2nd full paragraph 102 lying Chicago school 117 Fort Wayne foolishness "After Sony announced the closure of its Springfield, Oregon, CD factory, which had enjoyed a five-year enterprise zone property tax break, the Eugene Register-Guard investigated 76 other abated companies--6 big firms that got 95 percent of the tax break dollars and 70 smaller ones. It found that the big companies--Hynix, Weyerhaeuser, and Symantac--had fallen short of their job projections but renegotiated deals to keep some or all of the breaks. The net outcomes with the smaller companies were far better. Although 11 had closed, the small companies as a group created almost as many new jobs as the six big companies did--with just 5 percent of the dollars. Cost per job at the small companies: $2,100. At the big companies: $32,000" (118). "Louisiana also gave enterprise zone rebates and credits; in just four years, these totaled another $188 million. One of the zone subsidies is a $2,500 tax credit for each new employee hired. Shell Oil collected seven such credits for hiring workers at its plant in Norco--to replace seven wokrers killed in a 1988 explosion. The tax credits far exceeded the $3,630 fine imposed by the Occupational Safety & Health Administration for the fatal tragedy" (119-120). "Toledo businesses complain that the poor schools make it hard to find well-trained workers--at the same time those businesses are taking big property tax rates." (121) Those businesses are hypocrites, creating the problem and then complaining about it--"Why should we lose profits to pay for good schools, even though we want them?" is not a valid question. "Instead of good new jobs, workers are getting low wages and taxpayers are getting poor public services. The South Carolina Department of Commerce brags, on its website, that the state has the lowest rate of unionization and that its manufacturing wages are 10 percent below the national average. But as jobs and population grow, public systems get strained and services suffer. With overcrowded roads, South Carolina has the nations sixth highest rate of auto fatalities. With poorly funded public healthcare systems, its infants are the sixth most likely to die. with low school funding, children fare poorly on SAT scores: lowest among the states in verbal and second lowest in math" (124). "Can you imagine your local school board passing a resolution that allows a company to pay no property tax for the fire department and the police department--without those departments having any say in the matter? Of course not. But that is exactly what's happening to school boards in most states. This is terrible public policy, a telling sign of our collective disrespect for education, at a time when education matters more than ever for our economy" (125) 126 paragraph 3 137 paragraph 1 139 n 30 141 1st full and 2nd paragraph 142 n 38 143 n 39 149 third full paragraph 152 Wal-Mart welfare 162 n 13, n14 163 n 15 174 175 first full paragraph 176 $8.8 million per job On page 177, LeRoy shows a table from the Institute on Taxation and Economic Policy that demonstrates the higher your income bracket, the lower your state and local taxes, a disparity shown to increase between 1989 and 2002. "In Florida...the lowest income families pay 14.4%of their income in state and local taxes, while the top 1 percent pay just 2.7 percent. In Texas, the poor pay 11.4 percent vs. 3.2 percent for the ultra-rich" (177-8). "In Washington state, families making an average of just $9,600 in 2002 paid a whopping 17.6 percent of their income in state and local taxes, while families in the top 1 percent income bracket paid just 3.1 percent. So the world's richest person, Bill Gates [himself the son of high-powered attorneys for the government--SAH] (with an estimated worth of $48 billion) is just like every other Washington state personal resident in paying no state income tax there--while the Evergreen State gives Boeing and the aerospace industry a $3.2 billion subsidy for the 7E7 "Dreamliner deal. That's some serious redistribution of wealth--upward!" (178), yet the Tea Party never complains about upward redistribution of wealth, while condemning downward as theft, when clearly, the reverse is true. "[I]nstead of creating lots of new jobs, the tax cuts increased corporate profits and made the federal budget deficit bigger, while the nation suffered a 'jobless recover.' Between 2001 and 2003, U.S. corporate pretax profits rose 26 percent, yet federal corporate income tax payments shrank 21 percent in the same period. Job creation was worst since the Great Depression. From the start of the recession in March 2001 through November 2004, the U.S. economy had a net loss of 1.2 million private-sector jobs" (179). The U.S has third lowest corporate tax rates, behind only Germany and Iceland (181), yet the Two Party thinks they are too high and opposes the socialist programs that make Germany and Iceland so livable. "In this area of heightened capital mobility, investments in skills and infrastructure are especially wise because, unlike a call center or a widget plant, they don't up and run away. If a business fails or moves, at least the tax payers in the area retain the value of their past investments: the dislocated workers will take their skills to new jobs, and the infrastructure will still be there, helping other businesses" (198).

Review # 2 was written on 2013-05-01 00:00:00 John pearmon Pearmon This books is, once again, one of those books that will not be read by the persons who really need to read it. I knew by instinct that the ubiquitous tax packages given to most big companies these days were bad, but I didn't have the personal knowledge as to why. This book spells it out in black in white. Furthermore, author Greg LeRoy went to the horses mouth, the consultants that help negotiate these sweetheart deals, and proved that most of these time companies decide where to relocate FIRST and THEN go to cities and states with fake competing cities to try to get any deal they can. In most cases the promised numbers of jobs are never delivered. Other companies have taken the money and ran. In most cases until relatively recently there were no contract provisions to get money back from corporations that reneged on the deal. The jobs that have been created usual cost the state thousands of dollars in lost revenue and in some extreme cases cost more than one million dollars each! Numbers also show that they don't create the "downstream" or "upstream" jobs promised by a significant number. Overall, independent studies have shown that these deals are almost always not a good use of money (except in some instances where used for truly blighted areas), however the use of tax abatement deals continue year after year. By their own admission, Corporations look for good quality of life, needed resources, and skilled labor pools before they look at taxes. If they can get the tax breaks it's simply icing on the cake. This, of course, completely defeats the reasoning of handing out tax abatements: to encourage business in areas where it otherwise wouldn't have been. Needed tax revenue gets lost for no reason, moving the tax burden on lower and middle classes. It all ends up becoming a downward spiral: with less revenue the schools and roads lose funding, making the "business basics" behind the area decline, making businesses flee, making revenue decline, etc... The independent figures listed in this book make the job creation ideas, especially proposals of reduction of corporate tax rates, absolutely laughable. In many states a majority of major corporations are paying the minimum tax or even achieving a NEGATIVE income tax rate. The numbers show that since Federal tax reductions in the Bush administration corporate profits have soared with no corresponding increase in labor investment. This book successfully unearths how much of our future we're giving away while benefiting only the top tier of the corporate ladder. I wish every taxpayer could read this as we go into another election year filled with "ideas" that will do nothing to solve a constantly deepening jobs crisis. The ideas, however, will serve to line of the pockets of corporate contributors.