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What the Top US Companies Pay In Taxes 658

Posted by kdawson
from the or-don't dept.
theodp writes "If you've ever wondered how it's possible that you pay more to the IRS than General Electric, Forbes has an explanation. You, my friend, do not have the tax benefit of overseas operations. Microsoft, for example, has its overseas subsidiaries license software to its US parent company in return for handsome royalties that get taxed at lower overseas rates. Exxon limits its tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda, and the Cayman Islands that shelter cash flow from operations in the likes of Angola, Azerbaijan, and Abu Dhabi. As a result, of the $15B it paid in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas. Likewise, GE has $84B in overseas income parked indefinitely outside the US. Now quit your carping and get back to filling out that 1040!"
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What the Top US Companies Pay In Taxes

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  • I thought this was generally common knowledge.

    Not the details, perhaps, but the tone of the summary and the bits of the article I read appear to imply this is some new discovery - that companies use tax havens as tax havens.

    Or maybe it's just that British business is more tax-averse than those over the pond...

  • So, what now? (Score:4, Insightful)

    by Jurily (900488) <jurily@NETBSDgmail.com minus bsd> on Saturday April 03, 2010 @07:52PM (#31719744)

    If you tax them, they move to India. Shareholders don't care.

    Maybe the goverment should try spending less for a change.

    • Re:So, what now? (Score:4, Insightful)

      by DesScorp (410532) <DesScorp.Gmail@com> on Saturday April 03, 2010 @08:01PM (#31719792) Homepage Journal

      If you tax them, they move to India. Shareholders don't care.

      Maybe the goverment should try spending less for a change.

      They should, but lets get back to the tax rates issue. I'd be happy to ban these overseas shenanigans if we would simply lower US corporate rates. Our rates are nearly the highest in the world, second only to Japan [alhambrainvestments.com].

      Fine, eliminate the loopholes, but cut the rates. Think about where corporate profits are going; if they're not being sank right back into the company, then they're being payed out in dividends to shareholders.... where they're taxed again as personal income.

      While there's no real excuse for these kind of slight of hand tax dodges, neither is there a justification for a tax rate near 40 percent on companies.

      • by Vellmont (569020)


        Our rates are nearly the highest in the world, second only to Japan.

        If you only consider income tax, I'll bet you're right. There's more to taxing business than income tax however. Ever heard of the value added tax [wikipedia.org]? The US doesn't have one, but most EU countries do. Picking the income tax and ignoring VAT when comparing how we tax corporations is extraordinarily misleading.

      • Re:So, what now? (Score:5, Interesting)

        by ThreeGigs (239452) on Saturday April 03, 2010 @08:41PM (#31720058)

        Aside from my reluctance to take financial wisdom seriously from someone who uses "payed" instead of "paid", (sank / sunk notwithstanding) you seem to be forgetting the huge number of corporations who _aren't_ listed on the stock exchange, and who don't pay dividends. Lowering corporate tax rates would take a huge chunk of income away from the US, and do little to encourage companies to move back from... say.. Ireland, with its 12.5% rate.

        Oh, and the way most companies avoid paying taxes? They expand. Got 10 million in profit you don't want to pay taxes on? Open some new locations. Do R&D. Hire some more people. Basically incur expenses. That 40% tax rate you disparage so offhandedly is responsible for influencing decisions that generally lead to more jobs.

        • Re:So, what now? (Score:4, Insightful)

          by khallow (566160) on Saturday April 03, 2010 @10:32PM (#31720858)

          Lowering corporate tax rates would take a huge chunk of income away from the US, and do little to encourage companies to move back from... say.. Ireland, with its 12.5% rate.

          Lower it to 0% and they'll come running. No reason to tax corporate income at all. For that matter, no reason to tax income at all. Tax something that can't run to another country like real estate. That'll become a lot more valuable with 0% taxes on income.

          • by sjbe (173966) on Sunday April 04, 2010 @09:28AM (#31723552)

            Lower it to 0% and they'll come running. No reason to tax corporate income at all.

            Naively optimistic.

            For that matter, no reason to tax income at all.

            There are alternatives to be sure but ANY tax scheme you come up with will have trade offs. There is no perfect tax system.

            Tax something that can't run to another country like real estate. That'll become a lot more valuable with 0% taxes on income.

            Your argument is that we should inflate the price of and tax burden on real estate instead of having an income tax? It would solve some problems but create many more.

            Some places do most of their taxation based on real estate. Hong Kong [wikipedia.org] for instance which manages to do it because of their somewhat unique circumstances but not without problems. Problem is you are basically tying your nation's ability to tax to a single cyclical industry (real estate) instead of the entire economy. Works great when the real estate market is hot and tax revenues crater massively when the real estate market cools off. Asset price bubbles become a HUGE problem. Our current fiscal crisis would be FAR worse if the US relied solely on tax revenues from real estate. There is a reason you diversify your stock portfolio and the same thing applies to sources of government revenue. Do you really want to eliminate that much diversification in sources of tax revenues? I think you haven't really thought this through.

            Another problem is that it is very easy these days to locate facilities elsewhere. There is a reason not a lot of manufacturing takes place in Hong Kong or Manhattan any more. Price of land is too expensive. Admittedly those are extreme examples but companies will make decisions about where to locate because of a single dollar per square foot in cost. Drive up the price of real estate and companies will locate where real estate is cheap. Companies will decentralize massively if there is enough tax savings to do so. Remember that labor in the US isn't especially cheap either.

        • Re:So, what now? (Score:4, Insightful)

          by DesScorp (410532) <DesScorp.Gmail@com> on Sunday April 04, 2010 @02:44AM (#31721962) Homepage Journal

          Aside from my reluctance to take financial wisdom seriously from someone who uses "payed" instead of "paid"

          I typed i pretty quickly, and I'll just have to beg the court's mercy for the typo.

            you seem to be forgetting the huge number of corporations who _aren't_ listed on the stock exchange, and who don't pay dividends.

          And why is that different? Instead of shareholders, you have owners. And they're still doubly taxed, as the profits that flow to them are still taxed again as personal income.

            Lowering corporate tax rates would take a huge chunk of income away from the US, and do little to encourage companies to move back from... say.. Ireland, with its 12.5% rate.

          Apparently it wouldn't, as the subject of the story is tax shelters that help such companies avoid high US taxes. The whole point of my proposal was "take away the tax shelters, and in exchange lower domestic corporate rates". If a company is paying the equivalent of Irelands' rate in the US, isn't that better than a lower sum via tax shelters?

          Oh, and the way most companies avoid paying taxes? They expand. Got 10 million in profit you don't want to pay taxes on? Open some new locations. Do R&D. Hire some more people. Basically incur expenses.

          Uh, we already tried such foolishness once before. FDR's Undistributed Profits Tax [wikipedia.org] did much of what you're suggesting, with predictably disastrous results. And when you get right down to it, don't people go into business to profit? You're essentially suggesting that they escape higher taxes by never taking home the profit they make, or at least a lot less of it.

          That 40% tax rate you disparage so offhandedly is responsible for influencing decisions that generally lead to more jobs.

          Where do higher taxation rates equal more jobs, especially in the long run? Higher rates are job killers. Even the Europeans have accepted that. The only thing higher tax rates get you is a bigger government payroll, a sector that grows no wealth in the economy.

          • by einar2 (784078)
            Offtopic, but I think noteworthy: "Even the Europeans..."
            I am always a bit amused by this pattern of "us and the others" thinking. To me, this feels a bit old-fashioned. And if you need this small jabs against "the others" then this looks a bit small too. Sorry.
    • Re: (Score:2, Insightful)

      by kqc7011 (525426)
      Corporations do not pay taxes. The customers of the corporations pay the tax.
      • Re:So, what now? (Score:5, Informative)

        by Trepidity (597) <delirium-slashdo ... org minus author> on Saturday April 03, 2010 @08:27PM (#31719948)

        No, a mixture of the customers, employees, and shareholders do. Your statement is only true if all other factors (like rate of profit, and size of bonuses) are fixed, which there is no particular reason for them to be. If you take money out of a corporation, where it comes from depends on the elasticity of all the other factors. Some corporations can easily cut salaries; other corporations can easily cut dividends; other corporations can easily raise prices; most end up doing some mixture of things, depending on market conditions.

    • Re:So, what now? (Score:5, Insightful)

      by Xyrus (755017) on Saturday April 03, 2010 @09:10PM (#31720242) Journal

      Even if you don't tax them, they'll still move to India.

      Corporations are not altruistic. They are not working for the good of the world or their fellow humans. They have no patriotic loyalty. The people who run them possibly less so. Corporations are looking for profit. More importantly, profit with the least amount of cost. They will do anything and everything they can to meet this end, including illegal activities if the penalties are small compared to the potential profit.

      But the best part comes later. When a corporation becomes as large as Citibank or AIG, there's hardly any measures that can be enacted to punish them without having grievous consequences elsewhere. The people at the top have so much money and so many resources that trying to get their asses in jail is like trying to nail jello to the wall with a nail made out water and a hammer made out of meat.

      Companies have all the rights of citizen with none of the penalties. In fact they have more rights than citizens do. They are meta-citizens. This wouldn't be a problem if they had a shred of human decency. The only time good works come into play is when there is profit (monetary or political goodwill).

      Point being, it doesn't matter what we do. The corporations are going to go where it is most profitable. It doesn't matter what we tax or what kind of legislation is passed, they'll just go somewhere else. In any case, a company doesn't need to be anywhere near you to rake your ass over the coals these days.

      ~X~

  • by sqrt(2) (786011) on Saturday April 03, 2010 @07:57PM (#31719770) Journal

    These types of tricks should be unacceptable. Close the loops that allow this to happen, and let it be known that if you are going to do business in the US and benefit from our educated labor pool, infrastructure, markets, and resources you are going to pay taxes like everyone else. These shenanigans should demonstrate exactly why a corporation should not be treated as a legal person. They are immortal, and can skirt current law and tax codes by existing simultaneously in multiple places and jurisdictions at the same time.

    • by Tuzanor (125152)
      The vast majority of the "dodged" income is foreign earned and merely just doesn't enter the US, otherwise it would be taxed. It's merely a response to incentives. Honestly, do you expect these companies to just go "oh, lets move the money into the united states where a lot more of it will be taken away than if we move it to Bermuda; especially since we already often paid taxes where it was originally earned"? Do you take advantage of mortgage interest deductibility? Retirement tax shelters? It's the sa
    • As much as I wish it was that simple, a lot of these huge corporations just threaten to move overseas [crunchgear.com] (more than they are already) rather than pay taxes.
    • by nurb432 (527695)

      Make it too costly for them to do business here, they wont.

  • by kurokame (1764228) on Saturday April 03, 2010 @08:00PM (#31719780)
    Leo Gold: "Don’t believe me? It’s all in the numbers. For a hundred years, there’s been a conspiracy of plutocrats against ordinary people."
    JC Denton: "Do you have a single fact to back that up?"
    Leo Gold: "Number one: In 1945, corporations paid 50 percent of federal taxes. Now they pay about 5 percent. Number two: in 1900, 90 percent of Americans were self-employed; now it’s about two percent."
    JC Denton: "So?"
    Leo Gold: "It’s called consolidation. Strengthen governments and corporations, weaken individuals. With taxes, this can be done imperceptibly over time."

    Fictional conspiracies aside - WTF?
  • by ForexCoder (1208982) on Saturday April 03, 2010 @08:01PM (#31719794)
    We need to switch to a transaction tax like http://www.apttax.com/ [apttax.com] This would make sure that corporations like those paid their fair share of the taxs.
    • by kothmac (1609535) on Saturday April 03, 2010 @08:20PM (#31719910)
      Wow, the APT tax is one of the worse ideas since FairTax. No thanks.
  • I gave up after 5 or six slides - I have *never* seen that many ads on a non-game site.
  • These are the same companies that want you to buy "local" products. Patriotic crap. They pay where its cheap, I buy where its cheap.
  • *cough*end-scene-of-fight-club*cough*
    • by ErikZ (55491) *

      Why are you coughing and being oblique?

      Stop being a pussy and just say "We can solve this by destroying those companies."

      You'd be wrong, of course. But sheesh, say what you mean.

  • 'twas ever thus (Score:5, Insightful)

    by Bearhouse (1034238) on Saturday April 03, 2010 @08:10PM (#31719856)

    The rich get richer, the poor, well, stay poor.
    Nothing has changed since the times of Pareto...http://en.wikipedia.org/wiki/Vilfredo_Pareto
    (Take a look - the original '80/20' was 80% of the land was owned by 20% of the people)
    These days, it's more like 90% of the world's wealth belongs to 10% of its population.

    If you've got the money to have to worry about these things, then you can pay smart people to avoid tax.
    Note I said avoid, (legal), not evade, which is not.

    It is the duty of corporate officers to (legally) minimise tax burden.

    It is the duty of governments to ensure equitable distribution of wealth, without discouraging wealth creation.

    Guess who's doing a better job...

    • Re:'twas ever thus (Score:5, Informative)

      by dbet (1607261) on Saturday April 03, 2010 @09:31PM (#31720388)

      It is the duty of corporate officers to (legally) minimise tax burden.

      It is the duty of governments to ensure equitable distribution of wealth, without discouraging wealth creation.

      Guess who's doing a better job...

      That's because corporations hire the best accountants, while government is run by the best liars.

  • FTA: Those low-tax countries are almost anywhere but the U.S. "When you add in state taxes, the U.S. has the highest tax burden among industrialized countries,"

    So, to attract tax payers, just lower the US taxes and those same companies (and maybe even non-US corps) will pull the same "shenanigans" to not pay the lower foreign taxes, but, rather, would make their earnings declaration in the US... whatever is cheaper, right?
  • Value Added Tax (Score:3, Interesting)

    by MyLongNickName (822545) on Saturday April 03, 2010 @08:31PM (#31719984) Journal

    I like the idea of a Value Added Tax over income tax.

    Imagine we have two scenarios: The US with a 20% income tax (both personal and corporate) and one with a 20% sales tax (not the same as VAT, but for simplicity sake we will stick with sales tax). In both cases we have a competitor country with a 20% sales tax.

    In each scenario, imagine a good that costs $100 to produce in each country if there were no taxes

    In scenario 1, an item that would cost $100 to make in the United States costs more as labor costs more due to taxes. It also costs a bit more as there is a tax on the company to make. Now, they ship it overseas were trading partner levies a 20% tax on the consumption of that item.

    In the same scenario, foreign trading partner builds the thing for $100, no tax on the company, no tax on the labor. They ship over here for less than the U.S. can sell it for. Basically the trading partner gets a competitive advantage and forces down the price of items sold in its borders. It makes its money off of the US corporation.

    In scenario 2, there is equality between the trading partners.

    Now, a VAT would have to allow for some type of "kick back" to lower income individuals due to the regressive nature of the tax. But overall, it would go a long way to helping our economy and balancing trade.

    • Re:Value Added Tax (Score:4, Interesting)

      by Darkness404 (1287218) on Saturday April 03, 2010 @08:51PM (#31720130)
      People should only pay for the government they use. VAT is unfair in that respect. What did the government do to deserve 20% of what I buy? Income taxes also make no sense. What we need is a tax that people pay when they use government services. Received $3,000 worth in welfare? Once you get a steady job you are taxed until you can pay back that $3K you "borrowed" from the government. Drive on government roads? Pay a fee when you get your first care licensed*. Add in a town tax for fire/police.

      Governments should follow the same basic economic rules like businesses do, if I don't have an Xbox does it make sense for me to pay for Xbox live which I will never use? No, of course not. Yet that is effectively what VAT and income taxes do.

      *One person isn't going to drive multiple cars at the same time, so it makes little sense to tax someone more if they own 3 cars compared to 1 because the wear on the road is going to be about the same
      • Re:Value Added Tax (Score:5, Insightful)

        by KibibyteBrain (1455987) on Saturday April 03, 2010 @09:35PM (#31720420)
        The problem with this logic is it doesn't take into account the indirect benefit of government services. If someone never drove a car, but bought products from local stores which were able to provide those products at a decent price, if at all, due to the government maintained road system, he is still benefiting. Likewise, building a bridge might not benefit you if you never traveled between the linked destination, but the economic growth it might cause in your town will. There are many more complex levels of indirect services people benefit from daily.
        This is not to imply, however that most government services are not useless, if not legal ways to blatantly embezzle funds, and should not exist, just that direct accounting is far too simple to work.
        • Re: (Score:3, Insightful)

          by Darkness404 (1287218)
          But it still would. The people who would drive the cars to provide business would still have to pay the fee for driving on the roads. They would pass it on in a small increase of shipping fees. If we applied the taxes equally, it is equal for everyone because they are paying for the fees themselves when they use the service. If they don't want to pay the fee, walk everywhere* and don't use shipping for goods. But in the end, it wouldn't amount to much of an increase for people. Think about it this way, a UP
      • Re:Value Added Tax (Score:5, Insightful)

        by beefstu01 (520880) on Sunday April 04, 2010 @03:59AM (#31722260)

        Here's the problem- can you tell me, straight up, the value of the governmental services that you use? You've got your simple direct ones ones- roads/public transit, local schools and whatnot. Then you've got the slightly harder to count ones- fire and police, though we can count these as insurance-type costs. Now we get to the ones that are impossible to enumerate. What's the price of having the armed forces protect our country? What's the value of providing student loans to people, thus giving us an educated workforce? What's the cost of having someone tell us what the weather is going to be like, or predicting the next hurricane or earthquake?

        You say that governments should follow the same basic economic rules businesses do, but would this really help or hinder private business? By this token Google, Cisco, and just about every major company should be paying the US government obscene royalties for using the internet. DARPA did, after all, invent it, so it's only fair to license it for what it's worth. How about medical research, or the stuff that's come out of NASA? The government has given so much away, whereas any private corporation would have patented and licensed the crap out of it. Let's be honest- how many private companies are financing risky research nowadays?

        There are many reasons to be against the taxation proposed here. I think that any money made overseas shouldn't be taxable in the US because, quite honestly, the money wasn't made here. I'd be fine with companies bringing cash back to the US tax-free because that'd be more money that can be spent in our borders. Your argument, however, is silly. You can't tabulate how much government you use because it's everywhere. Hell, I think throwing 30+% of your profits to taxes is a pretty fair deal considering we live in a pretty stable society. There's also an issue of fairness- if you get rich because of a underpaid populous that's denied basic benefits (and the government steps in to provide them), it's only fair that you actually pay for the benefits needed for the workers that are used. As broken as the system is, the gov't does provide a basic safety net that corporations don't, and this is something we indeed need.

      • Re:Value Added Tax (Score:4, Insightful)

        by cyber-vandal (148830) on Sunday April 04, 2010 @08:08AM (#31723124) Homepage

        Sounds like a recipe for a much larger and more expensive bureaucracy to me. Rather than taking a simple 20% you have to monitor every single use of government services by every individual.

  • Don't click on that first link about GE's tax bill. It's worse than goatse.

    Seriously, I think I'm going to throw up.

  • has its overseas subsidiaries license software to its US parent company in return for handsome royalties that get taxed at lower overseas rates

    And thats only when you talk about taxes. How about foreign aid projects? Quote the job at domestic rates (it is a subsidy to local industry after all) then outsource the work to your subsidiary at half the cost. Funded internal projects: send your own managers to the offshore site to organise local implementation then invent reasons why the cost is going to rise. Hire consultants at the offshort site who actually work for you to siphon money out of the project. Put the operation on hold for the two days th

  • by meburke (736645) on Saturday April 03, 2010 @08:42PM (#31720070)

    ..."What you tax, you get less of." According to legend, The Zhou Emperor (China, about 1100 B.C.E) laid a heavy tax on salt. Enterprising traders found they could dissolve 20 times the volume of salt in fermented soy. Since there was no tax on liquids, people became more accustomed to salting and preserving their foods in soy. Should the peasants have been "patriotic" and insisted on paying higher prices for the salt?

    Lay a tax on items and services, and you will get less of those items and services; lay a tax on businesses and you will get less of those businesses. Yup, they will move to friendlier shores. (For those of you thinking about this, what are the implications for Health Care? Arithmetically, price controls are form of taxation, and the new Health Care Reform imposes both controls and taxes.)

    At the present time, Americans in the USA have very favorable prices for petroleum products compared to the rest of the world. What would the cost of gasoline be in the USA if we had to pay taxes on all the oil revenues including the taxes on where the oil is produced? (My estimate is around 9.44 per gallon, YMMV.) Then consider the implications for the Chemical Industry and consumer products.

    You want jobs? Jobs are provided by profitable businesses. The more profitable businesses there are, the more jobs available. The more jobs available, the more competition for qualified employees. The more competition for qualified employees, the better the wages, conditions and benefits. There are equilibrium points with in the system, but when non-productivity costs (like taxes) get too burdensome, it makes it profitable for business to put up with the hassles and expense of moving to those friendlier shores.

  • by mykos (1627575) on Saturday April 03, 2010 @09:08PM (#31720232)
    Corporations have attained supercitizenship and are immune to many of the concerns of common citizens. What if the judicial system could find a company guilty of crimes to a degree that it could give the company the equivalent of a life sentence or a death sentence, or the equivalent of prison in general (with the government overseeing every aspect of the company's life)? That would keep them on their toes.
  • by Killshot (724273) on Saturday April 03, 2010 @09:19PM (#31720310) Homepage
    F*ck you, Forbes. I hate slide shows!
    Here is all the text of the slides in a readable list.
    No. 1: Wal-Mart Stores

    Sales: $401 billion Pretax income: $20.9 billion Income taxes: $7.1 billion Tax rate: 34.2%

    $1.2 billion of Wal-Mart Stores' taxes are international.

    No. 2: ExxonMobil

    Sales: $311 billion Pretax income: $35 billion Income taxes: $15 billion Tax rate: 47%

    None of ExxonMobil's income taxes were paid in the U.S. In 2008 the company's income tax bill was $36 billion.

    No. 3: Chevron

    Sales: $172 billion Pretax income: $18.5 billion Income taxes: $8 billion Tax rate: 43%

    Chevron paid $19 billion income tax in 2008. Of this year's taxes, just $200 million were paid in the U.S.

    No. 4: General Electric

    Sales: $157 billion
    Pretax income: $10.3 billion
    Income taxes: (-$1.1 billion)
    Tax rate: N/A

    GE's financial services unit, GE Capital, keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. and make lots of money overseas, where tax rates are lower.

    No. 5: ConocoPhillips

    Sales: $152 billion Pretax income: $10 billion Income taxes: $5 billion Tax rate: 51%

    ConocoPhillips paid $13 billion in taxes in 2008.

    No. 6: AT&T

    Sales: $123 billion
    Pretax income: $19 billion
    Income taxes: $6.2 billion
    Tax rate: 32.4%

    AT&T's executive officers are eligible to bill the company $14,000 a year for their own income tax preparations.

    No. 7: Bank of America

    Sales: $120 billion
    Pretax income: $4.4 billion
    Income taxes: (-$1.9 billion)
    Tax rate: N/A

    How did Bank of America not pay any taxes on $4.4 billion in income? Because of deductions like $860 million in tax-exempt income, $670 million in low-income housing credits and a $600 million loss on shares of foreign subsidiaries. With a provision for credit losses of $49 billion, Bank of America probably won't be paying taxes for a long time.

    No. 8: Ford Motor

    Sales: $118 billion
    Pretax income: $3 billion
    Income taxes: $69 million
    Tax rate: 2.3%

    Ford's tax rate is so low because of past years' losses from U.S. operations.

    No. 9: Hewlett-Packard

    Sales: $115 billion
    Pretax income: $9.4 billion
    Income taxes: $1.75 billion
    Tax rate: 18.6%

    HP's low tax rate is due to lower tax rates in foreign countries. The company says in its annual report that President Obama's proposals to end tax deferrals on international operations would mean a big tax hike.

    No. 10: Berkshire Hathaway

    Sales: $112 billion
    Pretax income: $11.5 billion
    Income taxes: $3.5 billion
    Tax rate: 30%

    No. 11: JPMorgan Chase

    Sales: $100 billion
    Pretax income: $16 billion
    Income taxes: $4.4 billion
    Tax rate: 27.5%

    Chief Executive Jamie Dimon has spoken out against an Obama proposal to levy a special tax on banks to recoup bailout costs. "Using tax policy to punish people is a bad idea," said Dimon. "All businesses tend to pass costs on to customers."

    No. 12: Verizon

    Sales: $108 billion
    Pretax income: $11.6 billion
    Income taxes:

  • by Bob9113 (14996) on Saturday April 03, 2010 @10:35PM (#31720884) Homepage

    To me, this screams for a simplification of tax law. Here's a thought:

    Step 1: Eliminate corporate taxes. (and as another commenter opined, eliminate the ludicrous notion of corporate person-hood while you're at it)

    Now, once you've done step 1, guess what? The argument about capital gains being double-taxation disappears. So:

    Step 2: Eliminate any distinction between capital gains and any other form of income in terms of taxation. Treat all income as just income.

    The big corporations aren't paying corporate taxes anyway, and all it really does is incentivize them to dump their profits into advertising to increase their market cap.

  • why don't we hear it from the right?

    corporations are:

    completely unpatriotic. in fact, as this tax situation shows, they are basically anti-patriotic: their actions actively undermine the country

    corporaitons work against individual rights, liberties, privacy, and freedoms

    they threaten to hollow out the country into a corporatocracy, they actively turn your representatives into shills for corporate interests, not interests of the citizens

    we have been hearing these howls on the left for decades

    but how come we don't hear it from the right?

  • Patriotism? (Score:4, Interesting)

    by Chowderbags (847952) on Sunday April 04, 2010 @12:38AM (#31721508)
    Given how so many people get riled up over patriotism and the like, why don't we point out that these companies not paying their fair share to help America through what amounts to a shell game undermines all the rest of us. If you've got a group of friends ordering pizza and one guy tells the group that he'd totally be good for it but he doesn't have any money, all his money is being held by an offshore company operated by a wholly owned subsidiary that's completely owned by him, you'd tell him to fuck off and go get his own pizza and stop mooching off everyone else.
  • by Animats (122034) on Sunday April 04, 2010 @01:13AM (#31721656) Homepage

    A good first step would be to make interest paid by corporations non tax deductible.

    There are three ways a company can pay for its capital. It can pay out dividends, borrow and pay interest, or buy back its own stock. All should get equivalent tax treatment.

    This would make leveraged buyouts and private equity transactions much rarer, because those are basically equity-to-debt conversions. If the tax advantage of debt payments over dividends went away, we'd see less dept-heavy corporate structures and more dividends. This leads to sounder companies more able to weather bad times.

  • by MtViewGuy (197597) on Sunday April 04, 2010 @10:39AM (#31724002)

    Because here in the USA we impose taxes on _earning_ money, no wonder why American businesses large and small are moving both blue-collar and white-collar jobs out of the USA, corporate headquarters included! No wonder why we have problems with unemployment.

    Maybe it's time to completely rethink our national taxation system and switch to taxing consumption instead. This is the gist of FairTax (H.R. 25/S. 296--yes, it's a real bill in Congress) that would end all forms of income taxation--along with repealing the 16th Amendment--in favor of a singular 23% consumption tax, with a "prepayment" once a month to every legal household in the USA to pay for the consumption tax up to the Federally-defined poverty level. Note that this tax does not apply to business-to-business sales, sales of used goods (including sales of existing homes), and college tuition.

    By eliminating the entire current income tax system in favor of FairTax, we get these huge benefits:

    1) We save ourselves somewhere between US$350 and US$500 BILLION per year in income tax compliance costs.
    2) Congress can no longer use the income tax code to favor or punish financially even the smallest constituency--the most insidious form of corruption in the USA right now.
    3) American residents and businesses will no longer need to hide their liquid assets outside the USA to keep them out of the reach of the IRS. That means the US$2 TRILLION now participating in the illegal cash-only underground economy and US$13 TRILLION in liquid assets sitting in offshore financial centers beyond US borders--both done as income tax dodges--return to the USA, providing a US$15 TRILLION liquidity boost to the US financial system that would start a new economic boom and then some--the world's largest "private bailout."
    4) American businesses will no longer need to outsource jobs beyond US borders as a tax dodge. That could mean millions upon millions of jobs return to the USA under better tax circumstances, immediately lowering the unemployment rate.
    5) Foreign companies will do a land rush to expand US operations, since the USA is now the world's largest legal income tax haven.
    6) Shipping companies would quickly register their ships under the US flag, since there is no more taxes on the income earned from shipping for a US-flagged ship. That could mean hundreds of thousands of new and repatriated blue-collar jobs as new ships are now constructed and repaired at US ports free from income taxation.

    So what are we waiting for?

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