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US Corporations Not paying Taxes

Cock Throppled

Well-known member
Oct 1, 2003
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Upstairs
The US is a financial basket case and if they don't get their house in order they'll take the world down with them.

In the US they have been pushed to the brink and finally have to cut spending, but Republicans don't want the richest to pay their fair share.

From NY Times and Forbes I quickly found this tit bit that might explain one part of the problem:

General Electric, the nation’s largest corporation, had a very good year in 2010.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. 

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
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Bank of America paid zero federal income taxes in 2010 and even received a tax break of a billion dollars — not to mention the tens of billions in bailout money they received from the government after the financial meltdown ion 2008.
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Exxon-Mobil, the world’s second-largest company, paid nothing in taxes to the United States government for fiscal year 2009.

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-BOEING: Despite receiving billions of dollars from the federal government every single year in taxpayer subsidies from the U.S. government, Boeing didn't "pay a dime of U.S. federal corporate income taxes" between 2008 and 2010.
 

greatshark

Member
Mar 1, 2006
467
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we haved moved quite a bit in this direction too in the last decade. Cut after cut in corporate taxes but increases in hydro fees, icbc premiums, msp premiums, driver license fees, ferry rates, carbon tax and hst. We get a reduction in services that used to be paid by our taxes (rememberthings like eye exams, and free bus passes to seniors - all gone). The middle class is getting screwed but we keep on voting in the same gang, so we actually get what we deserve.
 

InTheBum

Well-known member
Dec 31, 2004
3,086
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we haved moved quite a bit in this direction too in the last decade. Cut after cut in corporate taxes but increases in hydro fees, icbc premiums, msp premiums, driver license fees, ferry rates, carbon tax and hst. We get a reduction in services that used to be paid by our taxes (rememberthings like eye exams, and free bus passes to seniors - all gone). The middle class is getting screwed but we keep on voting in the same gang, so we actually get what we deserve.
Don't support the system then...Don't have kids, Spend your savings abroad on Vacations, Pay as little taxes as possible, Don't give to charity, etc...
 

Tugela

New member
Oct 26, 2010
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That is because gross profit is being confused with net profit, not the same things.
 

FunSugarDaddy

New member
Aug 15, 2008
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More than anything the taxation of corporations related to a philosophical debate as to whether corporations actually pay tax or if they just pay the tax off to their customers in the form of higher prices. I sort of feel that corporations should pay tax on their net profits, after using whatever loss carryforwards they may have. Corporations such as GE who have revenues of 10's of billions and profits of billions, shouldn't be allowed to be domiciled in countries with minimal to no tax rates.

At the very least they could be taxed pasted on the percentage of income earned in a particular country. So if the generated 25% of their sales in the US then 25% of their net profits should be taxed in the US. That's basically the concept for employment and net rental income.

The other issue of course is the actual corporate tax rate. In the US the rate is one of the highest in the G8 but that said there's all kinds of deductions and tricks that can be used to lower this rate significantly and in some cases, not pay any tax on legitimate profits. But again, that leads us back to the question of who is actually paying the tax, the shareholders' or the consumer?
 

greatshark

Member
Mar 1, 2006
467
3
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Don't support the system then...Don't have kids, Spend your savings abroad on Vacations, Pay as little taxes as possible, Don't give to charity, etc...
You misunderstood my point. i agree with paying taxes, but everyone should pay their fare share and that includes corporations, which in my view they aren't.
 

Cock Throppled

Well-known member
Oct 1, 2003
4,946
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Upstairs
From an article in Rolling Stone, this scam is reportedly going to be part of the current debt crisis agreement in Washington:

Here’s how it works: the tax laws say that companies can avoid paying taxes as long as they keep their profits overseas. Whenever that money comes back to the U.S., the companies have to pay taxes on it.

Think of it as a gigantic global IRA. Companies that put their profits in the offshore IRA can leave them there indefinitely with no tax consequence. Then, when they cash out, they pay the tax.

Only there’s a catch. In 2004, the corporate lobby got together and major employers like Cisco and Apple and GE begged congress to give them a “one-time” tax holiday, arguing that they would use the savings to create jobs. Congress, shamefully, relented, and a tax holiday was declared. Now companies paid about 5 percent in taxes, instead of 35-40 percent.

Money streamed back into America. But the companies did not use the savings to create jobs. Instead, they mostly just turned it into executive bonuses and ate the extra cash. Some of those companies promising waves of new hires have already committed to massive layoffs.

It was bad enough when lobbyists managed to pull this trick off once, in 2004. But in one of the worst-kept secrets in Washington, companies immediately started to systematically “offshore” their profits right after the 2004 holiday with the expectation that somewhere down the road, and probably sooner rather than later, they would get another holiday.

Companies used dozens of fiendish methods to keep profits overseas, including such scams as “transfer pricing,” a technique in which profits are shifted to overseas subsidiaries. A typical example might involve a pharmaceutical company that licenses the rights or the patent to one of its more successful drugs to a foreign affiliate, which in turn manufactures the product and sells it back to the U.S. branch, thereby shifting the profits overseas.

Companies have been doing this for years, to incredible effect. Bloomberg’s Jesse Drucker estimated that Google all by itself has saved $3.1 billion in taxes in the past three years by shifting its profits overseas. Add that to the already rampant system of loopholes and what you have is a completely broken corporate tax system.
 

Big Dog Striker

New member
Nov 17, 2007
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The world of capitalism is not perfect. Sometimes the rich get richer while the poor get poorer. However, I do prefer capitalism anytime of day as compared to its alternative called communism. :thumb:
 

Cock Throppled

Well-known member
Oct 1, 2003
4,946
853
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Upstairs
The world of capitalism is not perfect. Sometimes the rich get richer while the poor get poorer. However, I do prefer capitalism anytime of day as compared to its alternative called communism. :thumb:
You missed the point. It has nothing to do with capitalism vs any other system - it's about fairness. If the rich get richer, it shouldn't be because of fraud.
 

whoisjohngalt

Member
Aug 4, 2009
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Vancouver area
General Electric, the nation’s largest corporation, had a very good year in 2010.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States. 

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
I don't have time to look at all of them but I did have a look at GE's 10-K filed with the SEC for the 2010 fiscal year.

According to their 2010 financial statements, GE did indeed pay US federal income tax, to the tune of just over $1 billion. However their effective tax rate was greatly reduced from the stated 35% rate due to lower taxes paid in foreign jurisdictions, and various other US tax credits.

This is a classic example of why high tax rates are self defeating. They create huge incentives for individuals and corporations to implement costly avoidance schemes and lobbying efforts for new loopholes and exemptions. Recall that when Reagan cut taxes in 1981 government tax receipts actually grew by 8% per year, and the share of taxes paid by the richest Americans also grew.
 

TooLegit

New member
Apr 28, 2011
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The biggest problem with the whole system is the internet in my opinion. With information so readily available, investors keep tabs on their investments several times throughout the day. Corporations have to appease the investor constantly and look for every loophole or scheme they can find to avoid taxes and improve the bottom line.

In the days before the internet, where the best you could hope for was a blurb in the paper about your investments, corporations could afford to wait for long term strategies to come to fruition without investors breathing down their necks. They spent their time growing their company rather than searching for tax code loopholes.

Of course this is an over simplification, but it's definitely a big part of the problem.
 
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