Paul Jacob

It is not exactly unheard of for governments to levy and collect taxes for one purpose, and then use the funds for another. It's a despicable abuse of power, but many citizens are used to it.

But what happens when a business collects taxes and then does what amounts to the same thing? That is, what do you think of a business that adds a tax item onto your bill . . . and then never pays the tax?

If you are shaking your head in some sort of disbelief, right now, I don't blame you. Businesses aren't supposed to get their money from taxes. Isn't that government's sole prerogative?

Well, for starters, businesses have been turned into tax collectors by governments. In states with sales taxes, for instance, every retail seller collects taxes that are then, later, turned over to the government.

Nothing shocking about that. We're used to it.

But when those businesses neglect to pay the taxes collected, then we expect the government to go after them. It becomes theft. Right? The government looks at it as theft from the government. The consumers might tend to look on it as theft from them, too.

Now there is a new wrinkle in the age-old public-private partnership for plundering the masses. This week the New York Times reported on utilities that collect taxes from their clients, but don't pay those taxes to the government.

And get away with it.

Here's the deal: corporations are taxed in America. The states need their money, you know. This even includes regulated utilities.

But businesses are taxed on profits, not general revenue (this only makes sense). And if a big profitable business like an electric utility is liable for taxes, it's no surprise that the government regulators let them charge the consumers directly. That's how these con jobs — I mean, tax ploys — work.

And if one of those big profitable businesses also owns another business that doesn't make a profit, they can wind up not paying the tax.

Somehow, though, the refund checks just never make it to consumers' mailboxes.

Paul Jacob

Paul Jacob is President of Citizens in Charge Foundation and Citizens in Charge. His daily Common Sense commentary appears on the Web and via e-mail.