According to a recent analysis of nearly 300 Fortune 500 companies by the Citizens for Tax Justice, the average company was paying just 18.3 percent in taxes.
280 profitable Fortune 500 companies collectively paid an effective federal income tax rate of 18.5 percent, about half of the statutory 35 percent corporate tax rate, while receiving $223 billion in tax subsidies. These corporations include most of the Fortune 500 companies that were consistently profitable from 2008 through 2010. Collectively they paid $250.8 billion in federal income taxes on a total of $1,352.8 billion in U.S. profits. If they had paid the statutory 35 percent tax on their profits, they would have paid an extra $223 billion.
Stashing cash overseas is a legal ploy that as a shareholder you might be inclined to applaud, but is this form of tax avoidance really better for shareholders and the company, let alone the economy?
Business is vocal about the dangers of the deficit—as long as dealing with it doesn’t impinge on them.
But you have to admit, $223 billion a year would go a long way to paying it off.
April 15; day of dread—or not, depending on whether you’re due a refund or not. And believe it or not, I even managed to avoid blah blah tax quotes from politicians. Are you impressed?
Taxes go way back as does the difference between who pays; as Plato said, “Where there is an income tax, the just man will pay more and the unjust less on the same amount of income.”
Ben Franklin’s words are probably the most famous and repeated tax commentary ever said, “In this world nothing can be said to be certain, except death and taxes.”
Arthur Godfrey summed up most of our feelings when he said, “I am proud to be paying taxes in the United States. The only thing is—I could be just as proud for half the money.”
According to common wisdom, “People who complain about taxes can be divided into two classes: men and women.”
John Maynard Keynes seems to have a philosophical view of tax cheats, “The avoidance of taxes is the only intellectual pursuit that still carries any reward.”
Whereas Jean Baptiste Colbert perfectly defines the politics of taxation, “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of squawking.”
Russell B. Long was a U.S. Senator and offers the only perfect, non-partisan description of the loopholes that riddle the US tax code, “A tax loophole is “something that benefits the other guy. If it benefits you, it is tax reform.”
Tomorrow is T day (if you aren’t prepared I hope you have filed your extension), so it seemed like a good time to look at who pays what.
No new books meant President Obama’s income is down nearly a million, but he still paid 20%.
President Obama and his wife, Michelle, reported adjusted gross income of $789,674 in 2011 and paid just over 20 percent of it to the federal government in taxes.
He paid 13.9 percent in taxes on income of $21.7 million for 2010 and about the same rate for the not fully completed 2011 returns.
The current tax code is 5,296 pages long vs. 27 when it was written. The majority of the additional 5,969 pages are descriptions and explanations of how to legally cheat on your taxes.
If economists ran the tax system, there would be virtually no exemptions or loopholes. Instead, businesses, rich people, Congressmen and attorneys spend a shockingly large amount of time lobbying for tax breaks or exploiting the ones that exist.
As is often the case with his activities, just beneath the surface was a shrewd use of the United States tax code.
Just in case you are wondering, here’s some intel on what catches the eye of those who pay in the 15% tax bracket.
Neiman Marcus sold out of pewter-color Ferraris (luggage set matching the interior included) at $395,000 each within 50 minutes of making 10 of them available through its “fantasy” holiday catalog late last month.
But in the great scheme of US taxation, Romney’s 14% is still significantly higher than many of our large corporations pay, especially those in the so-called “Dirty Thirty.”
In January, the two organizations identified 30 corporations whose cumulative profit was $164 billion from 2008 to 2011. These corporations didn’t just avoid paying taxes — they actually collected $10.6 billion in tax rebates, according to the groups. They were dubbed the “Dirty Thirty.”
The media and most people are all enraged because many of the bailed-out companies owe taxes, but I don’t see the big deal.
“Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes…The Government Accountability Office (GAO) examined samples of corporate tax returns filed between 1998 and 2005…an annual average of 1.3 million U.S. companies and 39,000 foreign companies doing business in the United States paid no income taxes – despite having a combined $2.5 trillion in revenue. The study showed that 28% of foreign companies and 25% of U.S. corporations with more than $250 million in assets or $50 million in sales paid no federal income taxes in 2005. Those companies totaled a combined $372 billion in sales for the largest foreign companies and $1.1 trillion in revenue for the biggest U.S. companies.”
This isn’t new; I remember hearing about it decades ago, so why freak out now?
The thing that really gets me is that AIG is suing the US government, which essentially owns it.
“A.I.G. sued the government last month in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company’s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens.”
And even in this day and age $306 million is (or should be) more than small change.
Does this qualify as irony, stupidity or just good, old-fashioned insanity?
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Speaking of taxes…
April 15; day of dread—or not, depending on whether you’re due a refund or not. And believe it or not, I even managed to avoid blah blah tax quotes from politicians. Are you impressed?
The media and most people are all enraged because many of the 
