Friday, December 12, 2003

Capitalism and the Law: Who's the real Christmas Grinch?

Businessmen get blamed for everything. Consider the following AP story:

Some bonus.

Hourly workers at Tower Automotive received $15 gift cards redeemable at Meijer grocery-retail stores before Thanksgiving. Then the automotive supplier decided the cards were "same as cash" gifts subject to federal and state income taxes totaling 36.75 percent.

That means the "gift" will take $5.51 out of the workers' next paychecks, the Traverse City Record-Eagle reported Friday.

"It's got a lot of people ticked off," said Donald McKee of Kingsley, a welding technician who's worked almost 13 years at the plant in Grand Traverse County's Garfield Township. "This is the lowest they've gone yet to give us something and then take it back."

A Tower manager who didn't want to be named told the newspaper the situation was "very unfortunate." Tighter accounting standards in the wake of Enron and other corporate scandals have prompted more scrutiny of employee benefits, including minor payouts like the gift card, he said.

United Auto Workers Local 5110, which represents about 300 hourly workers, has filed a contract grievance over the matter. Some workers also have returned the gift cards rather than pay the tax, Tower said.
Is there some new law out there that says when a company gives an employee money in the form of a year-end bonus, that money is exempt from taxation? Under the tax code, a payment like a gift certificate is taxed at its fair market value, which in this case, was $15.00. Just what was Tower Automotive supposed to do? Defy the Internal Revenue Service? Break the corporate accountability laws that promise businessmen criminal penalties if any part of a financial statement is false? Last I checked, there’s no exemption in the law for under the table gifts.

Yet notice how sniveling and whiny the report reveals Tower Automotive’s workers to be. And the leaders of United Auto Workers Local 5110 aren’t far behind them. What do they expect? That their contract grievance is going to hold because their employer had the audacity to follow the law?

What a bunch of idiots. If I ran Tower Automotive, I’d take the cards back and tell my employees to send a thank you letter to Congress.

No comments: