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What the Top US Companies Pay In Taxes
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 $84B in overseas income parked indefinitely outside the US. Now quit your carping and get back to filling out that 1040!"
No, a mixture of the customers, employees, and shareholders do. Your statement is only true if all other factors (like rate of profit, and size of bonuses) are fixed, which there is no particular reason for them to be. If you take money out of a corporation, where it comes from depends on the elasticity of all the other factors. Some corporations can easily cut salaries; other corporations can easily cut dividends; other corporations can easily raise prices; most end up doing some mixture of things, depending on market conditions.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
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:
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.
I'm sure you think that's a clever gybe, but it's not. The long and short of it is, oil is a fungible commodity and whoever ends up in control of an oil field anywhere in the world is going to be selling that oil in the world market. As it happens, Exxon didn't get the contracts to operate Iraq's oil fields and pipelines.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
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.
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.
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 no personal income tax) are helping the corp screw each other. The only one that gets anything out of it is the corp.
If you only have a few hundred a month to spend on necessities after rent and the bills, that 8% (here in California sales taxes range from 8 to 9.5%)really hurts, especially if you don't have the option of saving any money because expenses like food and gas are equal to or greater than income. The family with a few thousand can afford to save, and has more discretionary income after necessities are accounted for, so they can better afford to take the hit. It's basically a function of marginal utility - to a guy with $500 a month to feed his family, those $60 taxed dollars hurt a lot more than the guy with $2000 paying the same amount but having $1500 left, and take up a larger effective percentage of his income as he has no choice but to spend most or all of his money just to get by, whereas the better-off guy can save or invest, notwithstanding the fact that he can just spend more before the tax becomes onerous. Hence sales tax being a regressive form of taxation.