Earlier today I had my first article in a major media publication. http://www.marketwat…axes-2011-04-12
A sharp eyed reader has identified a more serious error in the paragraph below than I initially realized when he first contacted me.
Corporations pay taxes each quarter based on what they expect their quarterly net income will be. That means that on March 16, one day after most corporations paid their estimated quarterly taxes, we should have had a very good idea of how they were doing for the current quarter. The government collected $36.1 billion in corporate taxes in the first quarter. That’s down 31% from the first quarter of 2010.
The numbers for the quarterly comparison are correct, but they represent almost entirely the year end 2010 tax due, which is due on March 15, not taxes for the first quarter, which are due on April 15. The 31% difference therefore represents mostly the net taxes due for 2010 overall, and not for Q1 2011 as I stated. This is a serious error because my premise was that the number represented first quarter earnings. It does not. The daily collections data shows an ongoing downtrend after March 15 and through April 11, but this fact cannot yet logically lead to a conclusion about Q1 until the April 15 number is in.
I pride myself on getting the facts straight, but the fact checking side of my brain went to sleep with regard to the March tax date being annual, not quarterly. While the trend clearly shows that something negative has been going on, and the data since March 15 suggests the first quarter is likely to continue the trend, without the April 15 data, it is not yet a fact. That’s the heart of my mistake, and it is material, in my opinion.
Needless to say I am horrified. If the article were on my site, I’d retract and rewrite the piece to incorporate what I have covered above.
Now I know how Bill Buckner felt.
So, if you will excuse me, I need to go puke now.