I am so tired of hearing how corporations pay 35% of their income to the Internal Revenue Service. That fiction needs to stop- now. There are a slew of companies that paid nome o corporate inctaxes in 2012 (and years prior).
We have some companies that paid no taxes in 2012, because of disasters. Alpha Natural Resources bought Massey Coal – which had a disaster that afforded the the firm the ability to write off $ 2.8 billion. As such, they paid no taxes on $ 7 billion in revenue. But, this is a bad example- because, except for fines for poor management, losing money is not a taxable event.
But, Lear Jet? It made $ 680 million on sales of $ 14.6 billion. At the same time, it received more than $ 600 million in tax credits. That situation, however, is more understandable than Verizon, which got a $ 660 million tax credit on sales of $116 billion and profits of almost $ 10 billion- because of expenses that will happen in the future because of Hurricane Sandy… (Yup, wanna bet they never “make” those expenses?)
Or, DR Horton that had its best quarter in 18 years- with profits for the year of $ 322 million on sales of $ 4.7 billion. That firm received tax credits of $ 673 million.
But, even these examples are simply one year numbers. Let’s consider these exemplary firms… GE with profits of $ 81 billion and a tax credit of $ 3 billion..Boeing with $ 21.5 billion in profits getting a refund…Kraft with $ 13.5 billion in profits and a tax credit…Dow with $ 10 billion with a tax credit…ExxonMobil paid all of 1% of its profits in taxes- not including the oil subsidies it received (and, therefore, paid no real taxes).
But, the bigger problem is that this is not the information they report to their stockholders. The actual numbers describing their tax payments are hidden from view.
Take Apple Computer, for example. In 2009, they reported to their stockholders that their tax liability was $3.8 billion- yet, they really paid only $1.68 billion. In 2010, they advised their shareholders they would be paying $3.88 billion- yet, they only shelled out $ 1.2 billion. And, in 2011, they claimed they would pay $6.98 billion, while the tax payment was closer to $2.58 billion. Now, are you surprised that Apple is sitting on that reported boatload of cash?
The real problem? The companies that do pay these high corporate rates? Small businesses that don’t hire the right tax accountants (like us).
Yikes! This is news. Washington is lying to us? There’s corruption in big business, please Roy, say it ain’t so!!? This sounds suspiciously like redistribution of wealth–take from the little companies that can’t afford years of lawyer fees, and give to the big companies that have special deals with the guys in charge. Hey, here’s a thought: abolish the entire tax system AND the I.R.S. and just start over with something much, much simpler.
Amy recently posted..Guest post on “What’s To Eat?” all about my lovely buns!
Oh, wait till you see my Thursday post, Amy. I have an idea that will be truly fair- but that’s why it will have a hard time getting approved…
This is NOT an IRS problem. Because the rules are clear. It is how the system is set up by Congress, though.
What I don’t get is why these companies are not penalized (which would also increase our coffers) for lying to the their stockholders and withholding information- that’s an SEC violation. (Oh, wait, there’s a certain party that does not want the SEC to regulate companies, too…)
The great fiction that people gobble up. This post should go viral, that is if people are willing and wanting to learn a truth. Simplicity, Roy, we need it in our tax codes because anything else fosters this. I also think, in an odd way, if criminals are afforded public defenders…then why can’t small businesses have similar to aid with their taxes. That may only make sense in my own mind, I’ll admit.
Lisa recently posted..I Am Not For Sale by Lisa Brandel
Wait till you see tomorrow’s post. I’m asking you- and everyone else- to send it to their congresspersons AND senators to make it the law of the land!
You got it Roy…though I still think you’d make a fine leader yourself.
Lisa recently posted..I Am Not For Sale by Lisa Brandel
I just hate to see all these folks believing every fairy tale they are told- and never verifying a thing for themselves, Lisa.
Almost as much as I hate corporations providing us “facts” that have no bearing on reality.