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Tax Refund Kickbacks March 22, 2004 Greetings Nephew, I was talking to your old math teacher, Orem, on the porch yesterday afternoon. Well, we got to talking politics and finances and I told him I was amazed how the Republicans could mound up so much campaign cash from business. Orem said, “It’s really simple. The CEO’s and other corporate execs who shell out this cash contribute out of their savings.” “What savings?” I asked, “With their high-flyin’ lifestyle – jets and all that – how can they have anything left to save?” “That’s simple Maggie.” he said, “The savings don’t come out of their income. The savings are the taxes they don’t pay anymore because of the government’s tax cuts for the rich. They just shell out some of those tax savings back to the Republican coffers as a kind of tax refund. Then, of course, they get to deduct that money all over again. “Land sakes” I said, “All this shelling out just sounds to me like an old fashioned shell game.” “Well, Maggie, from a business point of view, think of it as a kickback which becomes a deductible expense plus an investment on future returns.” “Uh-Huh.” I nodded and rose up to make us both some lemonade before things got more confusing. I guess it takes a smart mathematician like Orem to get a handle on these kinds of financial shenanigans. Yours truly,
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