One of President Bush’s strengths is that he isn’t satisfied with incremental change; he wants bold reform. And to his credit, one of his reform goals is overhauling the tax code. A presidential advisory committee recommended two options this week to simplify and restructure the tax code. Its proposals will face a steep political hill, as special interest groups will oppose many of the recommendations. For example, the finance and real estate industries will fight any move to end or limit the mortgage interest deduction. But the tax code is far too byzantine, to the point that citizens and businesses are spending billions of dollars each year just on compliance costs.
Posted by Phillip Brownlee
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73 Comments
The advisory committees recomendation sounds more of the same. No real simplification and no real changes and it will by changes and manipulated by politicans. There is no bold move of this committee.
A bold move would be going to the fair tax bill. No more income tax, deductions or anything. Just a Federal sales tax. Would be the best thing to ever happen to our country. Unfortunantly the k-street lobbist does not like it, and the politicans will loose so much power.
You have to remember that politicans use the tax code to manipulate society to do what they think is best for it to do. You want people to buy homes, you give them a deduction. If you want a company to establish a business in your area, you give them a tax break. So on and so on. They love using the tax code for their advantage.
I rather see a fair playing field with no special treatments to anybody or company.
But this committee, if it was like the BRAC commission, nothing will really get done. All those large bases that were suppose to close, but didn’t (was said to be non-political) Yeah right!
I need new batteries for my keyboard. Sorry! Off Topic.
Just testing. Lagging!
New batteries!
GOOD! :)
Carry on! Sorry!
BUSH REFORM! If it follows the direction of this administration, the rich and corprorations will pay less, the working middle class will pay more, and the aged and poor will just starve.
Good post Joe W.That’s all we need is another big round of cuts for people making 200,000 and up, while the plans have been set to cut medicare, education, farm subsidy, etc.Isn’t this the same crap that sparked the revolution? Middle classes are carrying the tax load while upper classes are sheltered.Who’s looking out for the average working guy?And the BRAC thing!Brownback got another 10 million tucked (hidden) into a bill for KAAP, after it was unanimously voted to shut down the non-performing facility. I know, I worked there! As one of the trades workers there said: We’re retarded from the top down. 10 mil more and they don’t even know how they’re going to spend it! Brownback has never even been there!
Please read the Fair Tax plan before you rail against it. Its at fairtax.org for your perusal. I like the notion of “if you want to pay less tax, spend less”. Would things cost more? Yes, but you would also have more income in your pocket. I also think it should be required by law that prices posted are shown with all taxes included.
Let’s start with the basics. Taxes are what we contribute to live in a civilized society.
The question then becomes how should that tax load be distributed?
What the Bush administration has done is to cut taxes for the rich and make up the shortfall by issuing gov’t bonds that must be paid back at a later date.
He also grew the federal budget by 30 percent in the last four years. The ultra-conservative CATO Institute calls Bush a “big government” conservative.
Bush’s claim is that rich create jobs by investment and entrapreneurship. However, the super-rich who have benefited most from Bush’s tax cuts so far have used their new found wealth to invest in . . . government bonds.
Kind of a vicious cycle, isn’t it.
Because Bush has so rewarded his base “the haves and the have-mores,” any new tax plan he floats should not even be given the time of day.
If Bush wants it, it’s bad. Period.
Worst. President. Ever.
Eliminating the mortgage and local tax deductions are another huge smack-down for the middle class.
But that’s part of the deal–make the struggling working stiffs pay more, so the fat-cats at the top pay less.
The man is consistent.
What we need is a windfall profits tax on the oil industry to enhance our NATIONAL SECURITY ! Danny Newland – Ark City http://dannewland.blogspot.com/
Let start with the basics. Taxes are not your contribution or price you pay to live in a civilized society.
My dear liberal friends. Taxing any large company results in that tax being passed directly to the price of their product plus a small handling fee to pay the accountants and lawyers.Over tax or regulate any industry and it will go away.Windfall profit taxes will assure us of $4 gas.
Joe C.–Yes, overtaxation can be a problem. So can unfair taxation or overspending.
Bush has grown gov’t 30 percent in 4 years, raised the national debt to historically high levels as a percentage of GDP, and cut taxes for the super-rich while forcing local and state gov’t to raise taxes (shifted taxation on the middle class).
Even the conservatives don’t like it–look at the CATO Institute.
Time to face facts–worst. president. ever.
Proudman–
Every modern industrialized country has fairly high taxes.
Why?
Because we prefer our sewage to be treated instead of sitting in a hole in the ground that attracts buzzing flies spreading disease.
We prefer modern highways and bridges. We like to know that the plane we fly on isn’t going to nose-dive into the ground because the CEO deferred maintence that year. We prefer to eat meat that isn’t tainted with botullism and use drugs that have actually been tested first.
We like modern fire departments with their training and equipment so that huge cities don’t burn to the ground like London in 1666 and Chicago in 1871.
If you really insist on low taxes, you might try the alternative of living in Somalia. Their taxes are really low.
However, you probably won’t live long enough to fully enjoy your new-found wealth between the crime and disease.
Galahad,
Some countries have high taxes because the politicians write laws prohibiting private enterprise from meeting all the needs you specify.
If you really want to pay high taxes I suggest you move to France. I hear the riots are great this time of year.
Well, thanks for proving my point.
France may have high taxes, but no one can say it’s uncivilized.
I being to think that PhD Galahad claims to have must be in English. It would certainly explain why his contribution to society is to say “I’m right!”
I don’t have a PhD. I never claimed to have one.
As for expressing my opinion, I thought that was the whole point of this blog.
But I’m sure someone will “correct” me if I’m wrong.
Galahad you’re correct.There you stand corrected.
Interestingly, pe0ple who advocate cutting taxes and services are most in favor of cutting services that they don’t use. Proudman, I don’t think I want private enterprise furnishing interstate road systems. I think that would about garantee that the only good roads would be on the west coast and in the northeast (the profit motive). Private enterprise runs the healthcare system, and look what a disaster that is.As Galahad says, tax cuts and tax reform just pass off taxing to the states. That’s getting old.
Private enterprise does run health care, but it is a highly regulated industry.
If we would only let the free market straighten it out, it would be a lot better.
If someone is good at healing, why should they bother with medical school? Seems completely unnecessary to me. :-)
Tax reform does not necessarily equate to tax cuts. Tax cuts does not necessarily equate to cuts in services. Services could be improved by better program management instead of throwing more money at the program. Novel idea, I’m sure.
Not surprising the same old class warfare comments from the same old sources, but I would venture a guess that the Kennedy and Rockefeller clan have their fair share of tax shelters and would not want a consumption tax, especially alcohol consumption!
If you want to educate yourself on what the REAL breakdown of wages EARNED vs taxes PAID, then go directly to the source (another novel idea) http://www.irs.gov/pub/irs-soi/03in05tr.xls
http://www.cbo.gov/ftpdoc.cfm?index=5746&type=1
Tax reform is not going to happen. Too many on both sides of the isle.
Hmmm…Galahad doesn’t have a PhD. I thought that was a requirement for being a leftist. Never would have figured him for one of the dumb ones.
Galahad, you said “We like to know that the plane we fly on isn’t going to nose-dive into the ground because the CEO deferred maintence that year.”
Could you please explain what taxes — be they high or low — have to do with airlines’ maintenance quality?
The FAA . . . Federal Aviation Administration, supported by taxation.
Well, Galahad, if you feel that government inspection of airlines is necessary, which is what I think you are implying, then doesn’t it make sense to ask the people who fly to pay for this service, rather than the public at large through taxes?
Anti-intellectualism run amok. So, what it seems that some are saying is that being exposed to the most current thinking and the nuances of political science, government, philosophy, science, and economics just makes one less prepared to understand the complecxities of America’s current situation than does a high school class in civics and endless hours of Rush, Hannity and Combes, and the Loonet Toones explanation of our Constitution and economic system.
So, if I follow the “I should only pay for what I use or what is acceptable to me” argument, then only parents should be taxed for schools since people without children don’t use them, and only those who eat meat should have to pay for USDA meat inspectors, or maybe only those in favor of the current war should have taxes earmarked for it.
There are several justifications for compulsory taxation. Taxation of business is justified with the claim that business necessarily involves use of publicly established and maintained economic infrastructure, and businesses are in effect charged for this use. Compulsory taxation of individuals, such as income tax, is based on similar arguments to those for the social contract. In other words, we are a society in which everyone’s welfare is tied to everyone else’s. It’s in the best interests of everyone that we agree to help and support one another.
For you class warriors out there I ask this; How much is enough?
2003 data:
Top 1% of returns paid 34% of taxes recieved.
Top 5% paid 54%
Top 25% paid 83%
Top 50% paid 96%
You say the most productive in our society don’t pay their fair share? How much is enough?
To Brian, the intellectual one.
Businesses don’t pay taxes, you do when you buy their product. It’s just another cost of doing business and it all gets passed on to you just like the cost of raw materials or wages or the light bill.
How much is enough? Well, let’s see. Seems to me enough is enough to cover the annual deficit with some extra tacked on to pay down the outstanding deficit. Some exceptions can be made for recessions, depresssions, national disasters, and wars.
So, either pay for it or cut back on spending. It’s the height of hypocrisy overspend on the one hand and then cry crocodile tears when you’re required to pay for it.
heckler,
yeah, that’s one way of looking at it..the “shit rolls downhill” view of how the system operates. There might in fact be something to removing all corporate taxes.
However, I was speaking of the theory behind corporate taxation..and the theory behind individual taxation.
If you are going to allow the individual to decide what he will pay for and what he won’t, then where has the social contract gone? You as a business owner pay for quality schools (both as a business and as an individual) so that you will have quality employees, regardless of whether you have children or not. You pay for infrastructure even if you don’t drive or commute so that you may have goods and services in a timely and efficient manner. Aside from being an incredibly inefficient way to pay taxes most direct taxes are regressive.
Brian
When I asked how much is enough I was refering to individual taxpayers. Defecit spending is another issue entirely.
Brain! I don’t think people or businesses don’t mind paying taxes, as long as it is precieved to be fair and that it is uncomplicated.
I’m for the fair tax, but any simplification of the tax code is welcomed. I mean there is so much exemptions, special considerations, abatements down to the one company even, because of politicans catering with pork. The tax code is now like 100,000 pages or so. People actually have to go to tax preparer professionals just to comply with their tax returns. That is ridiculous.
Oil Industry on the other hand is the most regulated and most taxed industry the government goes after.
Windfall profits? The most the oil companies make on a gallon of gasoline is 10 cents. Which I believe is fair. The government gets 48 cents. So the government makes more money on gasoline than the oil companies do.
You know how much “windfall” profits the government made on gasoline compared to the oil companies? Oil companies are not the monsters guys. I have no idea why people think that.
Heckler, so was I
If the total tax bill paid was only $1.00 and the top 1% paid 34% while we as a nation spent a trillion..see what I’m getting at? Percentages, while useful, don’t tell you the magnitude.
So, if you consider 34% a reasonable upper bound for the top 1% then they should pay 34% of the outstanding budget for a given year…not 34% of a number shy of the total obligation by 3 or 4 hundred billion.
Thanks, Brian, well said.
The idea that only people who use something should have to pay for it is basically how things work in third world countries.
How’s that working out for them?
The hard core conservatives don’t understand as you Brian rightly pointed out that when people die in aiplane crashes, that affects the families, that affects trade and business, that affects communities.
It’s not just children who benefit from public education, it’s the entire society.
If you don’t believe it, you might look at Mexico which has public education in theory, but it’s so underfunded and the general population so impoverished that large percentages of the population don’t take full advantage of it.
That works very well for the rich. If you’re rich in Mexico, you’re really rich.
For everybody else, it’s not so good, is it.
Well Brian that’s an interesting concept I must admit. It rather puts lawmakers at risk since folks might get a little agitated in February when they figure out their tax bill. It could just be a hell of a way to keep spending down.
Also, the right-wing always trot out that canard of how much the rich pay as a percentage.
Even if you had a totally flat tax, the rich are going to pay a very high percentage of total tax.
Because they make so much money. If you make 4 million dollars a day like a hedge fund manager does, you’re going to pay a helluva lot of taxes.
Similarly, if you’re a hard-working farmer that makes 23,000 dollars on his farming operations, you’re not going to pay too much because you’re not making that much.
But I stand ready to change places with any rich person who feels he or she would rather pay my taxes on my salary.
No one ever wants to take me up on that. Hmmm . . .
The beef I have with our current tax system is that the power freaks in Washington use it to manipulate the manner in which people live their lives. They punish behavior they don’t like,they reward behavior that they like, and the best lobbyists work out sweet little legislation to benefit whoever is paying their salary.
The Fair Tax removes the ability to manipulate society. The folks who spend the most money pay the most taxes. Folks living at or near the poverty line pay no income tax whatsoever. Everything gets paid for out of one bucket because everything goes into one bucket, little room for manipulation.
Businesse pay no income tax so there’s no reason to move headquarters offshore. American companies are on equal footing with foreign companies doing business in the U.S. Talk about spurring investment.
Heckler,
Yes, it’s an interesting proposition. I’m also in favor of a national sales tax. Regressive? Yes it is. But it has been estimated that there is a black market economy almost as large as the real one. The income tax doesn’t touch this but a national sales tax would. Drug dealers, criminals, embezzlers, etc. still need to eat and sleep and most spend their funds on lots of luxury items to boot. So, in one stroke, we double the taxable “income’ base.
Galahad, why do you seem to feel that airlines would not maintain their planes to safe standards unless government regulation forces them to? Isn’t it in the airlines’ own interest to be safe?
Do you really believe, Galahad, that people are not able to look out for themselves, and that they need a paternalistic government to look out for them? How do you think the people in New Orleans feel about the government who looked out for the safety of their levees?
No one really had much incentive to take care of the New Orleans levees, because if they failed, as they did, the government will pay, either through government flood insurance or by just giving money to the victims.
But if the people of New Orleans had to be responsible for themselves, by relying on private insurance, the insurance companies would look out for the levees, just as they look out for the level of fire protection for the people they insure.
Wilson–wasn’t it in Enron’s best long-term interest not to defraud its investors? Weren’t those investors able to look out for themselves? How about the passengers riding with Mohammed Atta when he flew them all into the World Trade Center? Wasn’t it in his “best interest” not to fly the plane into the building?
Was it in the best interest of that Austrian vineyard to put propylene glycol in their wine that poisoned people? How about the Indians living in Bhopal when the chemical plant blew up?
I know I won’t be able to convince you because you have made the “free market” your god and like a pagan, you worship at the shrine of capitalism.
But there’s been a test of your ideas and my ideas–Before FDR, we had low taxes and low gov’t regulation. Millions of children sickened and died from lead in paint and gasoline, from pesticides, and impure food and drugs. Cigarettes were good for you. And Coca-cola gave folks a lift with cocaine.
Banks folded like houses of cards. When a disaster hit, people just curled up and died.
So I kinda prefer things the way they are now . . .
Well, Galahad, the bad things you spoke of, like Enron, happened even though government is supposed to protect us, as you say. You didn’t address how government protected the people of New Orleans.
Also, since you do not know me, I would appreciate it if you would not insult me by telling me who my god is.
Only an intellectual fraud like Galahad could say that a terrorist act is somehow a failure of the free market.
Of all the stupid things I’ve read on this blog this has to be by far the worst.
ProudMan–take a breath. I didn’t mean that a terrorist act was the failure of the free market. That’s absurd, I’ll grant you.
My point is that the idea that people only do things “in their best” interest is a right-wing / free-market shibboleth that just isn’t true.
People do things all the time that aren’t in their best interests. For instance, I’m invested pretty good in the stock market. It would be in my best interest if Bush’s idiotic privatized Social Security plan got implemented.
It would be disasterous for our country however, so I’m against it.
Esod–First you complain that gov’t is too intrusive and airlines will be safe because it’s in their “best interest.”
Then when I bring up Enron, your argument that gov’t didn’t do its job.
Wait . . . I thought gov’t was supposed to control the free market LESS. So which is it? Looks like you contradict yourself and don’t even see the contradiction, so arguing with you is getting rather tiresome.
By the way, if you believe that insurance companies are responsible for maintaining fire protection, you are hopelessly ignorant of the way the world works . . . so much so that you’re far beyond my poor ability to educate you.
And judging from your posts, you do love Mammon over your fellow man.
“Ye shall know them by their fruits.”
Galahad,
The entire discussion of taxes generally boils down to the individual or the group. The problem with the ‘group’ is always how decisions are made for that group. It always ends up in one of two configurations, either a ruling class emerges or it’s tyranny of the majority. Both are wrong. Ruling classes have dominated much of history and in modern society we see a lot of unjust dictates targeted against the minority. However with the individual you can be responsible for your own success or failure.
Once upon a time in this country we decided that it was wrong to hold a man down because of the color of his skin. Is it really any different to discriminate against someone because they have wealth?
What fire insurance companies do is to issue policies with prices based on the risk they perceive they are insuring. The level of fire protection the local government provides to an address is a component of the risk, and therefore the price offered to the customer.
If insurance companies believed that adequate fire protection wasn’t being maintained, they would increase their rates. Customers would notice that and wonder why. They could then take action to correct the lack of protection.
The federal flood insurance program doesn’t work that way. It insures everyone at a price that doesn’t take into account the risk the property faces.
With the government insurance, the taxpayers ultimately have to pay. And while politicians probably don’t like to face an electorate that’s angry about this, by election time all is usually forgotten. That’s not quite the same discipline a private insurance company faces, what with a market and shareholders.
Is that anything like how insurance operates?
My point with Enron is that people were relying on the government to protect them, and it didn’t work. Same for some of the other things you mentioned.
How do you think the people of New Orleans feel about government levees now?
I don’t know if it was me that you were calling ignorant, but it doesn’t hurt me if it was. Namecalling like that gives everyone insight into you.
Okay, this is my last post, because I don’t like hitting my head against a cement wall.
Enron happened not in spite of government, but because the Bush gov’t is doing exactly what you say gov’t should do–give free enterprise more freedom. It was a Texas company with intimate ties to Bush (his baseball team played on Enron FLIPPING Field, for heaven’s sake). The reason the fraud went on for as long as it did is because TeamBush gutted the SEC and used cronyism to protect key officials.
AND THEY’RE STILL DOING IT.
Proudman, let’s have a big pity party for the poor discourage rich man. He’s discriminated against just like a slave.
Nobody knows . . . the trouble I seen, nobody knows, like Jesus,
Nobody knows the trouble I seen . . .
For God’s sake, man, we got people out there who are really hurting because of Bush policies.
NONE OF THEM ARE RICH, you idiot.
And btw, Wilson, here’s some insight for you–yes, you really are ignorant.
Glad to see it really comes down to wealth envy for you Galahad.
Failed public school teachers shouldn’t go around calling others idiots. Let’s face it, wouldn’t the idiots be your fault?
Gee, Galahad, if you’re going to call someone ignorant, you should at least explain why.
Also, weren’t the Enron crimes committed largely while the present president’s predecessor was in office?
There were reasons that government supervision of some aspects of free enterprise were enacted. The initial discovery that rules and regulations were needed occurred during the period from the 1850s up through the Great Depression. You ignore and abandon what was learned at great monetary expense and human suffering if you think the market will take care of itself and all of us to boot.
Enron seems to be the topic of the moment…the collusion among Enron and other energy trading comapnies to rape California and the other west coast states just a few years ago as a result of deregulation is a perfect example.
There are other reasons that government can act to the benefit of all. Remembber the Firestone 500 tire and its tendency to come apart at high speed, or the more recent case of Firestone tires on Ford SUVs that were being employed underinflated? It was through the government’s collecting, tabulating, and analyzing of accident statistics that these problems were brought to light as quickly as they were. You may claim that after several tens of thousands of accidents and hundreds of deaths, the market would have led people to discover the problem and would have made Firestone get its act together by punishing its stock price. At what further expense? The maimed bodies and corpses of the dead come to mind.
That’s a pretty good example, Brian. But read this description of a PBS television program:
—–In “Rollover: The Hidden History of the SUV,” FRONTLINE examines whether America’s most popular vehicle may also be one of its most dangerous, and investigates why automakers and government regulators failed to do more to protect and inform American consumers.
The dangers of SUVs were spotlighted in the fall of 2000, when the sensational Ford-Firestone scandal prompted Congress to launch a series of hearings focusing on deaths and injuries related to faulty Firestone tires mounted on Ford Explorers. But, during the same 10-year period in which Ford-Firestone rollover crashes caused some 300 deaths, more than 12,000 people — 40 times as many — died in SUV rollovers unrelated to tire failure.—–
Should we dare ask why the government is not protecting us from SUVs altogether?
Wilson,
If what you say is true, then yes, some organization needs to step in, and I guess the government is the last, best option.
I’ll give you a counter=example. I suppose we should get rid of the FDA and let legitimate drugs and drug companies compete side by side with snake oil salesmen. Let the market decide. Diet drugs, like fen-phen, that work but kill you, would eventually be discovered to do so. And others, which don’t even work, will be for sale too, delaying your seeking proper medical attention and drugs that are known to be effective. I guess we should dismantle the prescription system too. The consumer should be able to choose whatever medication he/she wants to try.
The FDA serves to make sure that drugs are safe and effective. If you think that “safe and effective” as a market force will trump profits then I think you’re mistaken. The FDA also coordinates data collection and analysis across the spectrum of drug producers, giving the agency access to information that any individual company might not have or might not be willing to share with a competitor. Thus, trends and flags are more likely to be spotted by FDA than by any individual company.
Wilson,
Just a clarification. People die in auto accidents all the time for reasons not related to the safety of the vehicle.
What I meant about the 12,000 SUV events is that IF a link can be made to this number and a correctable design deficiency, like a center of gravity that’s too high or bumpers that are too high, then yes, the government should act. If the 12,000 events appear to be just a fluke with no discernible explanation for them, then there’s no reason for the government to step in.
One can only hope that Wilson himself buys an exploding car or poisoned drug.
Then he can martyr himself for his cause–free enterprise.
Funny, I don’t think the rich CEO’s who make money off his misery will thank him for it.
But, heigh ho, you gotta believe SOMETHING and this is what Wilson believes . . .
He has a RIGHT to die using a unsafe product–and gov’t has no right to protect him from the free market.
galahad why don’t you respond to wilson’s points? You blew off his insurance stuff, and you wont even touch the New Orlens question he asked. All you do is insult him. I’m beginning to agree that you are a fraud.
Steve–
In the immortal words of our beloved Vice-President to Mr. Leahy on the Senate floor:
Go, F*** YOURSELF.
Have a nice day.
Steve–
In the immortal words of our beloved Vice-President to Mr. Leahy on the Senate floor:
Go, F*** YOURSELF.
Have a nice day.
It’s always so nice to see a socialist finally lose it.
I just wanted ol’ Gala-sad to see some of the civilized actions going on in that great land called France. It’s so touching in a 3rd degree burn sort of way.
http://www.foxnews.com/story/0,2933,174533,00.html
Hey, I’m just quoting Cheney.
So you’re saying Cheney’s a socialist who’s losing it?
I won’t disagree with that . . .
Hey, I’m just quoting Cheney.
So you’re saying Cheney’s a socialist who’s losing it?
I won’t disagree with that . . .
BTW, I don’t live in France. Nor do I love the place. It’s just another European country as far as I’m concerned. I prefer Italy and Switzerland to France, if you must know.
Here’s something about AMERICA you might find interesting–
http://www.bushflash.com/prevail.html
Galahad, the Dick Cheney echo chamber.
Now there’s something you never thought you would hear.
Now I know Galahad is a fraud. When he resorts to namecalling and cursing, and avoids the issues.
What? Steve thinks . . . thinks . . . thinks . . . I’M A FRAUD?!
Oh, nooo . . . (SOBS UNCONTROLLABLY) Please, God, no . . . not . . . STEVE!
The BLOG GENIUS . . . anybody but him!
Poor Galahad. Starts arguments, quits when someone challenges him, and then curses and cries.
Galahad please respond to wilson. We need to hear you.
Galahad, are you hiding?
I knew Galahad was a fraud. Everyone knows it now. At least those who can think for themselves.
He insults people, telling them they’re stupid, but turns away from anyone who challenges his pronouncements.
Steve, sorry that misses the point entirely.
Why should WalMart NOT do the appropriate thing and then be rewarded for NOT doing it by having others pick up the tab?
The situation is somewhat similar to what’s happened in the schools. We have a bunch of kids NOT performing but we don’t have the will or facilities to keep them all back so we essentially reward them by ’socially promoting’ them anyway. They’re rewarded for non-performance.
We already pay a lot of WalMart’s bills. Whenever an amployee or an employeee’s dependent has to go to the ER for care because WalMart’s health coverage is inadequate, WE pay the bill. Walmart has foisted off onto the general public a lot of their health care tab. Why should we now, in addition, subsidize their substandard salaries? When do they, as a corporation, do the right thing?
sorry, wrong thread.