A Taxing Approach

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A Taxing Approach
Nice article on state taxes ("Stingers," January). As a Maryland practitioner, CPA, and former Big Four SALT office practice leader, I can tell you that Maryland is going beyond the bounds of Comptroller of the Treasury v. SYL Inc. It is attacking intercompany interest and any intercompany transaction that might result in Maryland tax savings. Maryland is assuming that all holding companies, even those set up for international holding-company purposes, are somehow scamming Maryland. I currently have two cases under appeal. They simply won't listen to those who have not received a Maryland tax benefit from their holding-company structures. They lack the confidence to understand a taxpayer's situation, and want to cookie cut every case.

Joseph Flak
Via E-mail

The man in your January cover story on state taxes is wearing a Rotary International pin. Could it be that he was also applying the Rotary Four Way Test (stated below) to the states' taxing efforts?

Of the Things We Think, Say, or Do:

1. Is it the truth?
2. Is it fair to all concerned?
3. Will it build goodwill and better friendships?
4. Will it be beneficial to all concerned?

Richard Neely
Chief Financial Officer
Charter Holdings
Dallas

The total emphasis of your article on state taxes seems to be to make a case for raising taxes, rather than reducing expenses. Why not work on the states' revenue deficits from both directions? Alternatively, the states in straits might look into using a tabula rasa methodology, by appointing a nationwide commission of state revenue authorities to study how states can finance expenses.

Lawrence A. Tillinger
SFLI
Morristown, New Jersey

Lifting the Ban
In "They Might be Giants" (January) you ask: "It's been nearly two years since Arthur Andersen went under and the Sarbanes-Oxley Act of 2002 was passed. Have the Big Four audit firms changed since then?" Reading that, you might surmise that the American Institute of Certified Public Accountants was in favor of lifting the ban on advertising and solicitation by CPAs.

Yes, it is true that we lifted the ban—in part because of a pending Department of Justice investigation of the AICPA regulations following a U.S. Supreme Court ruling prohibiting similar regulation in the legal profession.

The Department of Justice insisted the ban be lifted on the grounds that regulations restricting advertising limited consumer choice and access to commercial information.

Barry Melancon
President and CEO
AICPA
New York

Greed or Ambition
In your December 2003 editorial, "The Greed Factor," you suggested that greed fuels capitalism. But you also found it necessary to caution that you were not condemning capitalism or advocating socialism; you were merely tolerating greed as a necessity.

Your caution suggests that you have an underlying definition of greed that the editorial does not own. I think you have mistaken greed for ambition. Ambition can be monitored; greed cannot. It must be rejected immediately. Greed is the red flag that shows ambition has run amuck. It is not greed that fuels capitalism. It is ambition.

Further, I wonder why you are so quick to ditch the "bad-apple" theory. Is it really so incredible that in such a bull market so many people would allow their unmonitored ambition to become self-serving greed? The very fact that you (rightly) call for a monitoring of what you consider to be greed implies that every single person with enough ambition to make progress in the world of business has the capacity to become a bad apple. Why else monitor?

You have not ditched the bad-apple theory nor have you accepted greed as an appropriate fuel to the economy. Greed is not the inevitable byproduct of capitalism. Greed is the inevitable byproduct of people with the potential to become bad apples within the barrel of capitalism.

Ray Adams
Vice President of Administration HR/IT
CCG Investor Relations
Sherman Oaks, California

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