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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!"
If you tax them, they move to India. Shareholders don't care.
Maybe the goverment should try spending less for a change.
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.
If you build it, nerds will come. Soylentnews.org
Yeah, because Exxon would never benefit from an American war against Iraq.
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.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
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?
Yes, it IS good for them. And bad for you. You're talking about one of the most powerful entities in the world - Exxon Mobil is larger than most countries - with no accountability to anyone. The government that you hate so much is being steadily dismantled BECAUSE private tyrannies (i.e. corporations) are using their vast coffers to break and twist it into the form they desire. Why, exactly, do you think the government gives money to banks or the MIC?
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?
We need to switch to a transaction tax like http://www.apttax.com/ This would make sure that corporations like those paid their fair share of the taxs.
Shit, yeah. As TFA says, corporations have already got it so tough, man.
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.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
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...
If the artificial economic entity has rights, it should pay taxes too.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
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.
Caveat Utilitor
I hate it when this comes up. That "artificial entity" exists to provide the "limited liability" bit. An incredibly valuable perk. Even if we are the opinion that handing that out is worth it at all(since it is pretty much what allows people to treat shares in corporations as abstract economic widgets, to be bought and sold with limited risk), the idea that taxing the resultant artificial entity is "double taxation" is nonsense.
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.
..."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.
"The mind works quicker than you think!"
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?
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.
http://saveie6.com/
I agree. Let's tax the living shit out of the shareholders.
The world's burning. Moped Jesus spotted on I50. Details at 11.
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
Taxation is legalized theft, no more, no less.
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?
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
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.
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.
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.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
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:
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.
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".
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.
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.
FYI, competition in health insurance does not exist. So, because competition and thus the capitalistic venture did not work out... someone had to do something.
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.
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.
The Mongrel Dogs Who Teach
(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.
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.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
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.
Stop-Prism.org: Opt Out of Surveillance
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 unaffected regions to affected regions. When you see the Red Cross (also non-gov't by the way) handing out bottled water keep in mind that Wal-Mart probably delivered that water. FEMA is also supposedly turning to Walt-Mart for help with disaster logistics.
--
Perpenso Calc for iPhone and iPod touch, scientific and bill/tip calculator, fractions, complex numbers, RPN
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 governmental, legal, or commercial alternative to rescue us from ourselves as these entities are simply manifestations of our collective personalities and our culture.
If you want the world to be a better place, take some responsibility for your attitudes towards other humans. Nothing will change until we do.
..Mullah or Pope, Preacher or Poet, who was it wrote: "Give any one species too much rope and they'll fuck it up"?
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?
If I have been able to see further than others, it is because I bought a pair of binoculars.
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."
Exxon is not trying to prevent climate change legislation. Several years ago I heard an Exxon executive arguing in favor of cap and trade.
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.
Simon's Rock College
but think of all the accountants and lawyers who would lose there jobs as an effect ... wont some one please think of the lawyers
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?
intellectual property law is philosophically incoherent. it is your moral duty to ignore it or sabotage it
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.
You've missed the blatantly obvious point "None of them are doing anything for you" means what it says - they are doing it for themselves whether it has a positive or negative impact on you. A single outsider can't change anything either way, which is why a lot of people band together and you get things like governments. You should be seeing a few reports of what uncontrolled local corporations were getting up to in China if you don't want to look back at your own history.
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.
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.
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.
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 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.