Most firms pay no income taxes - Congress

[Crabtownboy]

Why is it that Congress will not touch these fellows? Why cut benefits to the poor and elderly when rich companies and slick lawyers pay nothing in income taxes.

I assume ... always a dangerous thing to do ... y'all know that corporations have a totally different set of laws when it comes to income taxes.

Why not level the playing field a bit?

NEW YORK (CNNMoney.com) -- Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes, according to a congressional report released Tuesday.

The Government Accountability Office (GAO) examined samples of corporate tax returns filed between 1998 and 2005. In that time period, 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.

http://money.cnn.com/2008/08/12/news/economy/corporate_taxes/

Last week, Forbes magazine published what the top U.S. corporations paid in taxes last year. “Most egregious,” Forbes notes, is General Electric, which “generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.” Big Oil giant Exxon Mobil, which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS:
http://thinkprogress.org/politics/2010/04/06/90299/exxon-tax/

 

[InTheLight]

They need to lower the U.S. corporate income tax rate (it's 2nd highest in the world) and close a bunch of loopholes.

 

[targus]

Some one is talking through their hat.

GE didn't pay any income taxes because they had huge losses which were carried forward from prior years.

 

[Salty]

in addition, they can write off a lot of stuff they pay out

Property tax
social security tax (they are required to match the amount you pay)
medicad tax dittio on the matching
unemploymnet insurance

money they donate to charity

ect
ect
ect

keep in mind, wasnt for that "evil coroporation" you may not have a job

 

[InTheLight]

Some one is talking through their hat.

GE didn't pay any income taxes because they had huge losses which were carried forward from prior years.

Not true. They've made a profit in each of the past 10 years.


http://moneycentral.msn.com/investo...ol=GE&lstStatement=10YearSummary&stmtView=Ann

 

[Crabtownboy]

Not true. They've made a profit in each of the past 10 years.


http://moneycentral.msn.com/investo...ol=GE&lstStatement=10YearSummary&stmtView=Ann

Making a profit and paying taxes are two very different things.

Update: The New York Times mounts what sounds like a pretty convincing defense of its story to Henry Blodget

UPDATE 2: Wow, just when we thought it was over... The NYT may be off the hook, at least on the "federal income tax" assertion. No sooner had we published our conclusion that the NYT's statement was "flat-out wrong" than the NYT came right back and said there wasn't a single factual inaccuracy in its article, which was why GE hadn't asked for a correction. And, more importantly, the NYT sent us an AFP article in which GE spokesperson Anne Eisele--the same spokesperson who wrote the comment below--said the following: "GE did not pay US federal taxes last year because we did not owe any."
Now, that's very different from what Anne told us (see comment below, in which Anne says GE paid US federal taxes and owes them). And it supports the New York Times's position that GE's tax bill was "none." And it suggests that GE is still trying to find a way, any way, to talk its way out of this, even if that means giving out false information. (And it also undermines GE's legitimate gripe that "American tax bill"--the NYT's phrasing--should include things like local, state, and payroll taxes).
We have asked Anne and GE, once again, to explain themselves. They're working on getting us a response...

http://www.theatlantic.com/business/archive/2011/03/did-ge-really-pay-no-us-taxes-in-2010/73178/

GE had plenty of earnings last year -- just not in the United States. For tax purposes, the company's U.S. operations lost $408 million, while its international businesses netted a $10.8 billion profit.

That left GE (GE, Fortune 500) with no U.S. profit left for Uncle Sam to tax. Corporations typically face a 35% federal income tax on their earnings. Thanks to its deductions and adjustments, GE reported an actual U.S. federal income tax rate of negative 10.5%. It got to add a "tax benefit" of $1.1 billion back into its reported earnings.

http://money.cnn.com/2010/04/16/news/companies/ge_7000_tax_returns/

In essence it not only paid no taxes, but received a refund that reports as earnings.

 

[AntennaFarmer]

What General Electric has to say:

http://www.gereports.com/setting-the-record-straight-ge-and-taxes/

...A.F...

 

[InTheLight]

What General Electric has to say:

http://www.gereports.com/setting-the-record-straight-ge-and-taxes/

...A.F...

Nothing in that article refutes what the CrabtownBoy posted.

 

[InTheLight]

GE didn't pay any income taxes because they had huge losses which were carried forward from prior years.

Originally Posted by InTheLight
Not true. They've made a profit in each of the past 10 years.

http://moneycentral.msn.com/investor...y&stmtView=Ann

Making a profit and paying taxes are two very different things. In essence it not only paid no taxes, but received a refund that reports as earnings.

Agreed. My point is that they didn't have any "huge losses which carried forward from prior years".

So I guess the question remains: Why didn't GE pay any U.S. corporate income taxes last year?

 

[Crabtownboy]

http://moneycentral.msn.com/investor...y&stmtView=Ann



Agreed. My point is that they didn't have any "huge losses which carried forward from prior years".

So I guess the question remains: Why didn't GE pay any U.S. corporate income taxes last year?

I suppose smart lawyers and accountants taking advantage of loopholes and other deductions that are not available to individuals.

Someone said that the US has the 2nd highest tax rate on corporations in the world ... however it does not matter if the tax rate is 100% if there are enough loopholes to show a loss regardless of how large the profit really is in reality.

So, why do Congressmen/women not change this. Is it that this is where their large campaign donations come from and they do not want to want to put those donations in danger by helping the middle and poorer class and the elderly? They certainly seem to be working hard on insuring that those folk will foot the bill facing the government.

 

[mandym]

Why is it that Congress will not touch these fellows? Why cut benefits to the poor and elderly when rich companies and slick lawyers pay nothing in income taxes.

I assume ... always a dangerous thing to do ... y'all know that corporations have a totally different set of laws when it comes to income taxes.

Why not level the playing field a bit?

What is with the big bold font?

 

[Robert Snow]

What is with the big bold font?

Yea, you're right. The font of CTB's posting is what is important, certainly not the point he was making, since you didn't comment on it!

I agree with what he is saying. It is a shame to allow corporations to pay no income tax and then not be able to give benefits to our old and poor.

 

[mandym]

Yea, you're right.

Thanks!:thumbs:

 

[AntennaFarmer]

A few questions for clarity:

Do you understand that a "tax benefit" is not the same as a refund?

Do you expect a company to pay taxes to another country (on income received in that country) then also pay taxes on that same income to the U.S.?

Do you expect a company to pay income taxes on their receipts without deducting for expenses?


Here is my favorite quote from one of CTB's sources:

"That's one way of escaping taxes," said Scott Hodge, president of the Tax Foundation. "Companies get to deduct their losses, so if there's no earnings, then they pay no income tax."
​

http://money.cnn.com/2010/04/16/news/companies/ge_7000_tax_returns/
Well DUH!
............................

IMO the more significant problem isn't that corporations can deduct expenses but that individuals can't deduct enough their own living expenses. For example: can you raise a child on the $3,650 Federal tax exemption? I kind of doubt it!

But if you feel hard toward GE and other such companies, you should carefully consider your alternatives. As an example, you can buy products from a company in China who not only pays no U.S. taxes but also employs no U.S. citizens........

Begin rant
It is the political LEFT that created this maze of crazy IRS rules in the first place. Those rules are designed to protect the OLD MONEY while tapping the labors of those who actually work for a living. AND, no matter how much money the Federal government receives in taxes it will continue to spend like a drunken sailor on every stupid project that can be imagined so that it never has enough.

The problem isn't that they send a check to Granny every month. Every person in the entire country seems to think that their own little pet project, individual need or special interest requires a federal grant. After a while the sheer size of the bureaucracy needed to admister the grants and programs dwarfs the productive portion of the economy. It needs to end now. Put the bloated Federal Government on a strict diet until it looses a few hundred pounds!
End rant.

...A.F...

 

[mandym]

We need a tax system where everyone pays the same percentage across the board regardless of income. do away with the IRS and liberal power and kill all the loopholes.

 

[carpro]

Fro the source article:

But many of the companies the report found had paid no tax were likely small businesses that pay other taxes. Generally, many small firms, because they do not have shareholders, are able to shift corporate income to individual income.

"Small businesses that are going to be liable for a lot of income tax are likely to use other tax forms so they only pay individual income taxes," said Eric Toder, a senior fellow at the Tax Policy Center.

Seems to indicate that the percentages used to make the leading point of the thread would change significantly if this information was followed to it's conclusion.

This incomplete survey is just another way for democrats to demonize businesses. All businesses.

Self employed people that work 80 hours a week just to stay afloat and pay a significant amount of taxes are included in the majority that pay no income taxes.

Democrats don't care who they hurt, even dishonestly, as long as they get their cherished tax increases. All so they can continue to waste more of our money instead of curb their spending.

 

[billwald]

>We need a tax system where everyone pays the same percentage across the board regardless of income.

Absolutely boggles my mind that you all can't understand this proposal MUST result in very few people owning all the hard assets in the country?

Answer me this: how long would a Monopoly game last if no one collected any money because they passed "GO?"

 

[mandym]

>We need a tax system where everyone pays the same percentage across the board regardless of income.

Absolutely boggles my mind that you all can't understand this proposal MUST result in very few people owning all the hard assets in the country?

Answer me this: how long would a Monopoly game last if no one collected any money because they passed "GO?"

Boggles my mind you think that is the result.