What the Top US Companies Pay In Taxes 658
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!"
Is this news? (Score:2)
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)
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)
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.
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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:4, Insightful)
Two examples:
In the end, countries are competing with each other for corporations.
Re:So, what now? (Score:5, Interesting)
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)
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.
Incentives drive behavior (Score:4, Interesting)
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)
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.
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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.
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Re:So, what now? (Score:5, Informative)
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)
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~
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Corporations may not be patriotic, but does "patriotic loyalty" demand that we take no steps to reduce our taxes?
I don't think I implied that. There's nothing wrong with reducing your tax burden. The problem comes when you eliminate your tax burden entirely.
If you live/work in this country then you should contribute your fair share. That's it.
But companies like Exxon aren't playing fair. The average US citizen can't hide their income streams in offshore accounts or shell corporations that just have a PO box. And if they did they'd get locked up.
Companies like Exxon make large uses of OUR infrastructure, and pay nothin
Close the loop holes (Score:5, Insightful)
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.
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Make it too costly for them to do business here, they wont.
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Or go to a sales tax where everyone can see exactly how much they are paying and everyone pays (with very limited loopholes, perhaps for necessities like food). I live in a state that is allergic to sales taxes, and while I'd only support it instead of a income tax, most people around here wouldn't support one at all it seems.
Re:Close the loop holes (Score:5, Insightful)
Because in capitalism, the government is not a "player", but rather the ultimate "enabler". Who pays for capitalism when there is a crash? Taxpayers via the government.
The tax system has to be kept separate from market rules, because it is used to reboot the system when necessary. That is why, if you live in America and use American capitalist facilities, you should pay your fair share of American taxes (s/America/$COUNTRY/g).
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I realize you're being sarcastic, but a lot of people actually do think that way.
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Sales tax is one of the worst types of regressive taxes there is. I'd be in favor of removing it entirely. You're right in that it does tax consumption equally, but poor people spend a lot more of their income on things that have sales tax. Sales tax punishes poor people. Rich people can easily afford it. So unless you have some sort of sliding scale sales tax based on income, and I don't know how you would accomplish that, then it's not the right way to go.
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Re:Close the loop holes (Score:5, Insightful)
The problem with a sales tax is that it punishes the poor disproportionately because more of their income is spent on necessities than the rich, who can buy lots of frivolous crap. It results in a larger percentage of the taxpayer's income being spent on taxes on necessities. This is why a progressive income tax makes sense. Unfortunately, the system has been perverted by permitting loopholes. Take them away and it will work fine. If the corporations and the richest among us (the top ten of which paid taxes on only 50% of their income in 2000, for example) were actually forced to shoulder their fair share of the load, then the burden on the average American citizen would be quite manageable.
Didn't I see this in "Deus Ex"? (Score:5, Insightful)
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?
Transaction Tax would fix this (Score:5, Interesting)
Re:Transaction Tax would fix this (Score:5, Insightful)
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Steve Forbes backs the Fair Tax because it is very fair for him. The people that astonish me are the ones who think they would be getting a tax cut under the Fair Tax, but really, they would pay quite a great deal more (There are a rather uncomfortable number of people who have no idea what the difference is between their maximum marginal tax rate and effective tax rate).
The article was unreadable ... too many ads. (Score:2)
Support your economy!...right (Score:2, Insightful)
Well....there IS a solution (Score:2)
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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)
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)
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.
Re:'twas ever thus (Score:5, Funny)
That's because corporations hire the best accountants, while government is run by the best liars.
That's because corporations hire the best governments, while accounting is run by the best liars.
There, fixed that for you.
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FWIW, the constitution of India includes a promise that the government will endeavor to make the distribution of wealth more equal (though it doesn't guarantee an actually equal distribution).
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"It is the duty of governments to ensure equitable distribution of wealth"
I don't think I've seen this in any constitution, but I think I know what manifesto this comes from.
Please don't misquote me, AC, by partially quoting me. You left out "without discouraging wealth creation".
I'm far from being a Marxist. Liberal, yeah, I can live with that.
Logically... (Score:2)
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)
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)
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)
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.
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Re:Value Added Tax (Score:5, Insightful)
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)
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 read that first link (Score:2)
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.
Tip of the iceberg (Score:2)
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
An economic principle... (Score:4, Interesting)
..."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.
All the rights, few of the responsibilities (Score:5, Insightful)
Text Of the Slides Here (Score:5, Informative)
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:
Corporate, Capital Gains, Income Tax (Score:4, Interesting)
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.
we hear the anti-corporate refrain from the left (Score:5, Insightful)
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)
Tax interest paid by corporations (Score:3, Interesting)
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.
Maybe it's time for FairTax? (Score:3, Interesting)
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?
Re:If I could do it, I would! (Score:5, Insightful)
Yeah, because Exxon would never benefit from an American war against Iraq.
Comment removed (Score:4, Informative)
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If you screw the businesses in one country they can move to another.
This is also why I support abolishing the corporate income tax. To me, it makes no sense to tax the artificial economic entity, and then tax every employee and owner of said entity. Let's keep our taxes limited to actual, real people.
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Re:If I could do it, I would! (Score:5, Insightful)
I say no individual income taxes, because corporations can afford to hire a staff of full-time accountants.
The big downside to jacking up the corporate taxes is that the corporations can (and do!) flee. People are much more reluctant to emigrate, and it's not clear where they could go anyhow.
Re: (Score:3, Interesting)
corporations can (and do!) flee. People are much more reluctant to emigrate
More accurately, corporations can relocate at will with the host country welcoming them, if not overtly giving them concessions like tax breaks. People, on the other hand, are discouraged (if not outright prohibited) from going to a different country to work. Population is a captive audience.
Re: (Score:3, Insightful)
But then what do I know, Im just a poor schmuck that got genetic diabetis and thus must suffer alone while people who are lucky enough not to get such lifetime diseases can live with their pockets lined with cash. AMIRITE?
In short, fuck you selfish prick.
Re: (Score:3, Interesting)
Re:If I could do it, I would! (Score:4, Funny)
but think of all the accountants and lawyers who would lose there jobs as an effect ... wont some one please think of the lawyers
Re:If I could do it, I would! (Score:5, Insightful)
If the artificial economic entity has rights, it should pay taxes too.
Re:If I could do it, I would! (Score:4, Insightful)
They use the government to ensure they actually own the 1,000 acres in the first place. Is a recognition of the exclusive use of land not a service that should be paid for?
Re:If I could do it, I would! (Score:5, Insightful)
The only reason those fine 2000 acres of land you have aren't taken over within weeks is because the whole damn government is there to threaten anyone who would try. It has nothing to do with "civilisation" respecting "a fence". Hell, there are Western countries which operate rather well but have very lax notions of trespass compared to the US. We're not talking about, say, mindless violence, which is pathological in every species, but a sophisticated philosophical notion of property which goes way beyond the "territory" of high order primates.
The law exists as a pragmatic codification of the common good where elements of "common" are weighted according to the magnitude of your influence.
Re: (Score:3, Insightful)
Somalia is inhabited by niggers. They aren't human and therefore don't have human nature.
Nice point troll, I'm glad you raised it. Some people continue to foster attitudes like this and in doing so they perpetuate the fucked, fucked state of the world as it exists today.
I was raised a racist, leaving me little choice as a child as to what I really believed. As an adult I re-evaluated these beliefs and found them sorely lacking. Racism (among others) is not conducive to the civilised society we profess the desire to live in.
Solving the world's problems begins with us, personally. There is no g
Re: (Score:3, Insightful)
If the government weren't there, they'd just pay for security if the land is worthwhile and productive.
Until someone else pays for an armed force that's stronger than that security. Maybe it's just me, but living in a society where day-to-day life is determined by who has the biggest guns doesn't seem much fun.
Re: (Score:3, Insightful)
The actual government taxing authorities are a bit more direct about it, but it's pretty much the same idea.
Re:If I could do it, I would! (Score:5, Insightful)
I say, tax for what people use. The government should be a service provider. Nothing more. Drive on roads? Pay for the roads. Don't drive? Don't pay. Simple as that.
Corporations as a whole should be taxed based on what they use. If their business required a new road to be put in, have them pay for that road. If the store needs extra police protection have them pay for that.
Corporations need the roads so that their employees, customers, and suppliers can actually reach them. Corporations need the court system to enforce contracts. Corporations need the police and fire systems to keep their workplaces safe and secure. Corporations need electric, garbage collection, and sewage treatment. Corporations need highly trained employees educated by public schools and universities.
Corporations use a lot of services without paying for them. Your proposal would result in corporations paying higher taxes than they are today. To me that sounds good.
Re:If I could do it, I would! (Score:4, Insightful)
You don't just feel better off. You are better off. Even though it would offend the sensibilities of the Fox/WSJ crowd, public policing is in fact way more efficient than private policing. Public fire fighting is more efficient than private fire fighting. There are things that the government does better than private enterprise, because there are such things as public goods.
This is an unpopular viewpoint. That does not make it false.
Re:If I could do it, I would! (Score:4, Insightful)
The same is true of people, though. People can only: hire people, buy stuff, or put money in the bank. What is this "terminal point" you speak of? Everyone pays taxes out of money that has one step previously also had tax money paid on it, because the economy is just a big loop of money flows.
Re: (Score:3, Informative)
Sure, they can hire lobbyists, run ads on TV, etc. but in the end, they can not vote
Frankly, the effect of corporate lobbying is much more significant than one vote (due to the sheer magnitude of resources they can spend on it), so they still get the better end of the deal there.
Re:If I could do it, I would! (Score:5, Insightful)
I'm sorry, but hat's just idiotic. How about instead we:
(1) limit our granting of civil rights to actual, real people, and
(2) limit lobbying to actual, real people.
Re:If I could do it, I would! (Score:4, Insightful)
Sorry, but that's a bad idea. What if companies and business don't get rights, no big deal right?
But what happens when a newspaper or TV show publishes a piece attacking a powerful politician? No right to free speech for that company, so the politician just shuts down the paper or station Venezuela-style.
Or what happens when the local mayor comes by to shake down your family business for campaign contributions and you don't donate? No right to due process, so he fines your business for "health code violations".
Re:If I could do it, I would! (Score:5, Insightful)
(1) limit our granting of civil rights to actual, real people, and
Are you sure you want to do this? There are a lot of important civil rights ruling regarding corporations. Just off the top of my head.
Dartmouth College v. Woodward -- asserting that the College has the right to a binding charter that the government cannot alter at will
New York Times v. United States -- asserting the first amendment right to publish the Pentagon Papers
New York Times v. Sullivan -- asserting that defamation/libel has to be for willful or deliberate falsehood
Near v. Minnesota -- "Morally scandalous" not a good reason to shut down a newspaper
Hustler Magazine v. Falwell -- parodies of public figures which could not reasonably be taken as true are protected by the First Amendment
In all those cases, it would be pretty laughable if the government asserted that because the plaintiff is not an 'actual real person' they don't have constitutional rights.
Re: (Score:3, Insightful)
You've provided not a single link, so your post isn't looking terribly authoritative. However, in at least four of your examples it appears it's actually the individual writers whose first amendment rights were upheld.
Sufficient context was provided. You can google, if you're interested. And the bit about individuals is relevant. When corporations (businesses really) no longer have rights, then you can infringe on the rights of people by attacking their corporation employer. This is commonly ignored in the arguing that corporations shouldn't be given the rights of people. If they can't, then how can the business protect itself and its employees from persecution?
Re: (Score:3, Informative)
Stop wasting your time with useless comments like that. You've been provided more than enough information to look up and counter the claim -- you don't need a hyperlink. In fact, you wouldn't HAVE a hyperlink in any paper source -- just a reference to where you can look it up.
And since ALL SCOTUS decisions are published, you have that.
Now, STFU, agree with the GP, or prove him wrong.
Re:If I could do it, I would! (Score:5, Insightful)
If an artificial legal construct can have income and profit, there seems to be no reason why it ought not to be taxed, the same way as natural constructs who have income and profits are. If taxation of corporations were more costly than limited liability is valuable, people whouldn't incorporate, they'd operate businesses as themselves. The fact that virtually nobody does so, other than the smallest, most ill or un-advised people, should tell you something about whether or not that is the case.
If you don't want your synthetic entity taxed, you don't have to set one up, you can just do business as you. However, if you fuck up, you are on the hook. Corporate taxes are a small price to pay for being able to cap your liability by assigning responsibility to a legal fiction from which you get to extract the wins but not the losses.
Re:If I could do it, I would! (Score:5, Interesting)
Abolishing the corporate income tax sounds great in theory. ... especially if your a conservative economist.
However, Ireland which is Europe's version of India due to its low 12% corporate income tax (lowest in world) is about to join Greece in going bankrupt. We are already under suffocating debt. Cutting spending wont get the income needed to pay for a basic government.
Re:If I could do it, I would! (Score:5, Insightful)
However, Ireland which is Europe's version of India due to its low 12% corporate income tax (lowest in world)
There are places with lower corporate income tax. Bermuda has no income tax, IIRC.
But if you think it's bad in Ireland now, try raising the corporate tax rate. How many of those companies will stay in Ireland?
Re: (Score:3, Informative)
But if you think it's bad in Ireland now, try raising the corporate tax rate. How many of those companies will stay in Ireland?
It's a matter of balance. E.g. when you have no income tax, sure, you have plenty corporations - but you don't get a dime from that. Oh, right, their employees pay income & sale taxes? Well, problem is, they only have a headquarters in your country, minimally staffed - all actual R&D happens in some other country which has low personal income tax.
So, ultimately, you don't get anything at all out of the arrangement. It's as if your country (with no corporate income tax), and the other country (with n
Re: (Score:3, Insightful)
There is a direct correlation between cutting revenue and going bankrupt. If I quit work it has a direct correlation of me going bankrupt.
You can argue complex curves that show a cut in corporate taxes increase economic activity but its not a 1:1 ratio and does not work beyond a certain percentage.
Corporate taxes whether you agree with them or not generate large amounts of revenue.
In the case of the American government which is in debt and spending more than it makes now it will become insolvent when you cu
Re:If I could do it, I would! (Score:4, Funny)
I agree. Let's tax the living shit out of the shareholders.
Re:If I could do it, I would! (Score:5, Insightful)
The more power corporations have, the more they can resist the controlling influence of democracy, the worse off we are. Observe Exxon's use of their power to confuse the debate on global warming for years, assuring that nothing gets done to compromise their profits and that the planet continues to choke on the waste gases their products emit.
As someone who's been an anarchist most of my adult life, I find it bizarre when so-called libertarians cheer the destruction of democratic government and the increasing devolution of power into the hands of the people who have, for the better part of this past century, been largely in control of our society. If you're REALLY in the favor of liberty, why are you such a fan of enabling so much power going into such few hands?
Re:If I could do it, I would! (Score:5, Insightful)
This deserves to be modded "insightful". Nations have constitutions, laws, and face insurrection, mutiny, and revolt if/when they trample people's rights to much. Corporations? Damned thieves can tramply anyone, and everyone, with no repercussions.
Go ahead, people, cheer for the corporations. None of them are doing anything for you. Your government supplies your drinking water, builds your roads, responds in the event of disaster, and much, much more. You have a voice in government in most countries - you have zero voice in any corporation, no matter whether you work for it or not.
Re: (Score:3, Insightful)
I agree with the other reply-ers who have gotten modded to oblivion. This is obviously a dumb statement. No corporation has done anything for us?? That's an ironic statement coming from someone using a computer to post to Slashdot. I'm glad the ol government made all that happen for you.
Re:If I could do it, I would! (Score:5, Insightful)
The important point is they don't care either way because it's not their job to be a public charity. It's not good or evil - it just is.
Re: (Score:3, Insightful)
My government provides me with a lot of services whether I can pay them or not. Corporations won't do anything for me without payment.
Corps sometimes help more than gov't (Score:3, Insightful)
Go ahead, people, cheer for the corporations. None of them are doing anything for you. Your government supplies your drinking water, builds your roads, responds in the event of disaster, and much, much more.
Not true. Wal-Mart and Home Depot did a better job than the gov't during Katrina. Say what you want about Wal-Mart's product sourcing but you have to admit they know more about delivering goods to remote corners of the country than anyone else. Interestingly, Wal-Mart was also a pioneer (1970s) of computerizing inventory and sales and in data mining. Wal-Mart monitors weather reports and when severe storms are *predicted* moves products that history shows will be in demand under such circumstances from
Re:Corps sometimes help more than gov't (Score:5, Insightful)
Wait a moment, now. I'll remind you that I drove truck for years. I delivered many loads of building materials to the devastated areas in Louisiana and Mississippi after Katrina. I'll give Walmart some credit for doing what you say - but Walmart trucks were NOT moving in the most devastated areas. They simply were not. The materials I moved were moved under various contracts, some of which were government contracts. I think it safe to say that ALL of those infamous mobile homes were moved under government contracts. Probably 80% of the early stage building materials were moved under government contract, and that was reduced over time to near zero percent. Medical and other real emergency supplies, as well as water and food started out near 100% government, and tapered off over time.
Wal-mart didn't deliver ANY of the mountains of bottled water that I saw stockpiled around New Orleans soon after Katrina. The National Guard delivered most of it. I can't say where the NG acquired the water - I can only say for certain that the NG unloaded it from their trucks, and from private OTR trucks. Not Walmart trucks.
Be careful that you don't buy into that Walmart corporate propaganda. A few photo ops, and an unlimited marketing budget don't make Walmart the saviours of any disaster. Walmart people were being rescued during and after Katrina, more than they were rescuing.
Re: (Score:3, Insightful)
On the other hand, like it or not, it turns out that money is a really amazing motivator for human behavior. Compare Wal-Mart to FEMA. Wal-Mart gets it right. FEMA doesn't. Yes, Wal-Mart is doing it for a profit, but unlike FEMA they're actually succeeding in it.
So, yes, all of your points are completely true, but I also find them rather irrelevant if the end effect is what we're going for.
Re:If I could do it, I would! (Score:5, Funny)
If people don't like the actions of a corporation they have the right not to fucking buy that corporations products
So if a heavy machinery company opened a factory next door to you and dumped their waste hydraulic fluid in your garden you'll stop buying their bulldozers?
You have the $$$ to sue Exxon? (Score:3, Insightful)
I am not American so please educate me. You're saying an individual would be able to sue Exxon and win? Won't Exxon (etc) just throw a million dollars on the table and say "we can afford this for lawyers, how about you?" and win by default? A million (or ten million) to them is just small change and they won't even blink.
I understand that several noble people have stood up to major corporations and won but this seems to usually be at the cost of giving up their job, using all their life time savings
Re: (Score:3, Funny)
It doesnt have to be hypocritical as long as you recognize the practical limitations on what you're trying to accomplish by not supporting some corporation. I mean at least you tried right?
Not true about Exxon (Score:4, Insightful)
Exxon is not stupid. They have made sure that if cap and trade becomes law, their profits will be protected. They have developed carbon sequestration technology which will allow them to continue to sell oil without polluting. Sure, carbon sequestration is expensive (but cheaper than wars or health care). However, with cap and trade everyone will be forced to do carbon sequestration, and Exxon knows how to do it better than most other groups. Also, keep in mind that Exxon has businesses besides oil and that they have the cash to simply purchase any "green" competition.
So why do people accuse Exxon of funding global warming skeptics? Most likely Exxon is backing both sides. Large corporations will back all sides in any political competition, to make sure that whoever wins rewards them afterwards.
Anyway, do not blame corporate profiteering for global warming. Corporations would be just as willing to make their profits off of "green" energy. They will follow the government's guidance. It is congress that is sitting there and doing nothing.
Re: (Score:3, Insightful)
No, they don't. Companies already price all their products at the highest price the market will bear--- if they could raise their prices, they would have already done so. Corporate taxes generally hurt their profit margins, and to some extent the compensation and bonuses of their top executives.
Which is why they're so against them, incidentally. If corporate taxes mainly hurt the consumer, and had no negative effect on the corporation's executives or shareholders, they wouldn't care, and wouldn't exert all
Re: (Score:3, Insightful)
If a company is forced to pay more tax, it will simply pass those costs along to the consumer ultimately.
Sort of. In the end, everything a corporation pays out has to come from their customers. But since corporate tax rates are based on their profits rather than revenues, the corporation that makes less profit (is poorly managed) pays less tax than the one that makes higher profits (better management).
At first, this would seem to be 'fair' (i.e progressive, in that the 'wealthier' entity pays more tax), corporate profits are very easily manipulated. Corporations can incur expenses that reduce their profits by
Re: (Score:3)
You are 100% correct, but you forgot a even better benefit for running operations outside the US. The new health care bill wants to fine you if you are lucky enough to exceed 50 employees. Why take that hit much smarter to just hire off shore labor and worry about none of that .