GAO Study: Most US corporations avoid income tax
By SilentPatriot Friday Aug 15, 2008 11:00am
...which is precisely why John McCain's plan to give them more tax breaks is exactly what our ailing economy needs, right?
Most U.S. and foreign corporations doing business in the United States avoid paying any federal income taxes, despite trillions of dollars worth of sales, a government study released on Tuesday said.
The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.
[...] During that time corporate sales in the United States totaled $2.5 trillion, according to Democratic Sens. Carl Levin of Michigan and Byron Dorgan of North Dakota, who requested the GAO study.
Unfortunately the report failed to name names. Hopefully some intrepid reporters will get to the bottom of it. I wonder where the oil companies stand in this whole mess. I can't imagine it being good for John McCain's case if, say, ExxonMobil was getting huge government subsidies while also avoiding paying income taxes.
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Government of the corporations, by the corporations, for the corporations… and their buddies.
I sound like a broken record.
He is their buddy, they make it very good for him.
its very vague.
naming names would give it some teeth.
dentures just don't cut it.
Who is going to tell on McGoo? The Corporate Media, not likely.
"Most US corporations avoid income tax"
DUH!
Doesn't everyone know this?
yea more taxes would be just what we need when we're losing jobs every day.
This is exactly why I haven't paid taxes in 20 years. These corporations know taxes are illegal, and they are daring the Government to do something about it.
If you pay taxes, you are a sucker.
Back in 2000, the Repimplicans said that it was time for a Business major to run the country. Now that they've siphoned all of the money out of the public treasury to the corporations, it is again time for a change.
It is time to nationalise all of the large corporations. It is time to visit capital punishment on corporations such as Halliburton and KBR for the murder of millions.
It is time to imprison,for life, the criminal CEOs with the rest of the dangerous common criminals.
Hopefully some intrepid reporters will get to the bottom of it.
Thanks for the belly laugh!
stephen @ 6:
Well, there's a non sequeter.
OK, I agree that corporations get away with way too much under our tax code, but I don't see the big deal with the excerpt from this particular study. The phrase is "for at least one year between 1998 and 2005." It's not terribly unsurprising that half of U.S. companies would pay no federal income tax for at least 1 of 8 years. All it takes is one year where the company reports an accounting loss. If any of us made no money in a given year, we'd "avoid" income tax that year too.
So this stat by itself is largely meaningless (though I do think the ability of corporations to "carry-forward" losses from past years for income tax purposes should be curtailed). A far more compelling statistic is the fact that corporate income tax as a share of GDP has fallen considerably over the past several decades (http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=263).
pershingwarrier Says @ 7
This is exactly why I haven’t paid taxes in 20 years. These corporations know taxes are illegal, and they are daring the Government to do something about it.
If you pay taxes, you are a sucker.
And of course you have a whole fleet of tax lawyers to keep you out of jail once the govt. finds this out?
this is old news, about 5 years or more.
Yes, paying for services is for suckers. Being a deadbeat is cool. But the minute my garbage isn't collected, I'll squeal like the little repugnican piggy that I am.
So why aren't names being named? Doesn't the average taxapayer have a right to know who they are supporting ?
Oh, come on. This is stupid. This is just horrible presentation of the numbers. So at least ONE YEAR from '98-'05 companies didn't pay taxes? Wow, so during the '01-'03 downturn, as well as the beginning of this downturn the majority of companies haven't made enough money to pay taxes? Is that big news?
And basic knowledge of business would remove the notion of "sales" as the anchor here. Companies don't pay taxes on sales. They pay taxes on profit. If they aren't making profit, they aren't paying taxes.
If this author wanted to actually tell an accurate story, he would clarify his data by detailing which were the years that most companies didn't pay taxes, what was average % per year. None of it. Just a specious conclusion based on a horribly inept interpretation of data.
You want to show that companies are undertaxed, that's fine. But don't do it in such a laughably transparent way.
The Government Accountability Office said 72 percent of all foreign corporations and about 57 percent of U.S. companies doing business in the United States paid no federal income taxes for at least one year between 1998 and 2005.
.
Meaning more than one.
sheeesh.
Can't really blame them for taking advantage of a U.S. tax code written by politicians the corporations bought and paid for themsleves.
Remember the day Reagan got such traction out of the story about the "welfare queen" who took a $10 food stamp, bought an orange with it, then used the cash change to go buy a bottle of vodka and make a screwdriver? That was used as an example of how the poor were ripping off the government, and they promptly closed that loophole in the food stamp program.
Don't expect corporate loopholes in the tax code to be changed as quickly.
What a racket..to be able take soooooooooooooooooooooooo much and yet give back nothing.Nada.Zilch.
Our corporate tax rate is the 2nd highest but the effective tax collection rate is the 7th lowest in the developed world.
Corporations pay dividends which make the underlying securities worth more.
The capital gains on these securities are taxed at a much lower rate than income.
The trickle down theory is a Ronald Regan fairy tale.
Stephen a lesson in RichSpeak, When the wealthy RichSpeak about raising taxes - translated into ordinary English that means not paying their fair share.
For example, Bubblevision (CNBC) is pushing the idea of rebuilding the infrastructure of the USA by increasing the highway fund but BubbleVision doesn't call that a tax, they say it's making the roads better.
And after the last 8 years of no corporate tax collections and low rate wealth taxes coupled with the most business friendly Administration in the history of America we are loosing jobs and the economy is in danger. Taxes are not evil unless they are spent by the Do Everything Wrong Republicans and end up tanking the economy.
Jeff Akston @ 16:
Funny, then care you to explain why during the economic downturn I still had to pay income tax?
The logical dissonance of the free market apologist is deafening...
BTW, We have gone from corporate taxes representing 30% of the federal tax revenue in the 50s, to it being around 9% in the last decade. Ironically the percentage of personal (income,etc) taxes went the other way. We are getting shafted, and some fools are none to happy to defend the screw.
Just like Carlin predicted: "The IQ and the life expectancy of the average American recently passed each other going in the oposite direction."
Rico @ 18:
Ugh I remember the whole "Welfare Queen" which was code for single black mother.
Aaaaah, memories of Raygun... the asshole who figured out it was more cost effective to have mental patients on the street than institutionalized. The asshole even got to enjoy Alzheimer's, so he did not have to remember any of the shit he pulled in his twilight years.
This study is very misleading. Most US companies are incorporated small businesses such as LLCs. When LLCs turn a profit at the end of the year, their books are normally zeroed out by dividing the profits between the owners. The owners then pay income tax on that profit. Although the company isn't paying taxes, taxes are paid on its profits.
In the 1950's corporate taxes were responsible for over 40% of the federal government's tax revenue. Now it's down to around 10%. So who covers the difference to fund this beast of a government?
It's no wonder that we are not just a debtor nation, but a bankrupt corporation.
Well think of it this way
If you're married and have a child
You incorporate your family with you as the president, the spouse as the vice-president, and your child as the CFO.
And your tax situation will be just hunky-dory.
(wouldn't hurt to call yourself a church too.)
When "Googling" for taxes paid by Exxon-Mobile, I found that it paid something like
$24 Million in taxes for calendar year 2007, based upon PROFITS of $67.4 BILLION.
However, much of those taxes were not paid to the IRS, but paid to foreign countries
from which it obtains and produces a large percentage of it's oil/gas.
wait what? an average of 2/3s of the corps dont pay taxes? im not paying taxes anymore. why should i when i dont make enough in the first place.
im serious
CEO
The rich pay very little in taxes, period.
there wont be a Normandy beach event to save America from the enemies that have hijacked her government - and her military.
America is an engine.
And the idiot lights are blazing red, and the sounds from under the hood are horrible.
You cannot fix a broken engine while its still running.
you have to shut it down.
you're foolishly naive if you think/believe that something such as an election is going to alter this reality of a mafia-styled, proto-fascist government.
C&L might want to link to this video:
http://www.youtube.com/watch?v=0aUDMmAnnOI
Intrepid reporter? you mean fiction?
warren buffet said he pays less income tax (percentage of income) than his secretary...
Of course corporations don't pay very much in taxes. But that is NOT the question. The question is WHY do the ignorant American people continue to pay income tax. Check out the book 'cracking the code' to find out the truth about income tax, and to find out how to legally STOP paying it.
constituent @ 33:
T. Boone Pickens say that his turbines generate more wind energy than all the combined hot air blow by ALL of the Oil and Gas industry.
Here's a 2003 article:
The Decline of Corporate Income Tax Revenue
"Treasury Department figures show that actual corporate income tax revenues fell to $132 billion in 2003, down 36 percent from $207 billion in 2000."
"As a result of these low levels, corporate revenues in 2003 represented only 1.2 percent of the Gross Domestic Product (the basic measure of the size of the economy), the lowest level since 1983, the year in which corporate receipts plummeted to levels last seen in the 1930s."
"Corporate revenues represented only 7.4 percent of all federal tax receipts in 2003. With the exception of 1983, this represents the lowest level on record (these data go back to 1934)."
"In general, however, the share of corporate profits that is ultimately taxed is much lower than the maximum statutory rate of 35 percent. According to a new Congressional Research Service report, since 1993 (when the top statutory rate was set at 35 percent), the effective corporate tax rate — that is, the share of total corporate profits that is paid to the federal government in corporate income taxes — has averaged 26.3 percent for non-financial corporations, or about one-quarter lower than the 35 percent statutory rate.[9] CRS notes that the effective tax rate is “a better measure of the true burden of the [corporate income] tax.”
So do you think the DEMS are above the level of corruption that the REPUKES have attained. The DEM Delegates will have bags presented to them in Denver with a logo under the Obama campaign logo of the great criminal enterprise of AT&T. Yea the very telecom organization that Jay Rockefeller and Steny Hoyer were in direct negotiations with when they were writing the great FISA Telecom immunity legislation that Obama felt all of a sudden was so important to vote for.
The DEMS love the AT&T corruption and flaunt it to us mere serfs from the great DEM Convention in DENVER.
http://www.youtube.com/watch?v=7nI9GghmD1U&feature=related
Corruption is bad when they rub our faces in it as they laugh at us. DEMOCRAT PIGS.
Doggiebobo @ 35:
alert....disconnect.....alert... disconnect??
Mugsy @ 31:
Just more evidence of who John McGaffe REALLY works for.
This woman, Nancy Pfotenhauer, McGramp's senior economic adviser is just another plastic mannequin, marketing corporate interests as our interests. She is repulsive.
Jeff Akston @ 16:
According to the GAO, in 1960, businesses paid approximately 25% of all federal taxes. As of 2004, that percentage was around 10%. Does that satisfy your claim of inept data interpretation? If there was a mandatory BUSINESS flat tax based on a percentage of gross receipts, all of the flat-tax advocates would start whining how we're killing corporate initiative.
John - really disappointed by the Democratic Party @ 37:
the military industrial complex just don't play the Republicans in the Grand Chessboard (Brzezinski-nod).
the whole system is a fraud.
built on lies.
enforced by hired muscle.
its actually a clever form of serfdom/slavery/in-debt-ured servitude.
Fat cats...
http://www.neatorama.com/images/2005/fat-cat.jpg
The well-documented decline in tax revenues from business is more complicated than the tax rates. These revenues would be 40% higher today if we had not allowed "pass-through" business entities such as limited liability companies to develop as domestic tax havens.
http://jurisvodcast.com/2008/08/14/corporate-taxes-economic-justice/
Here's a two-minute video with links to the GAO study and to another paper with relevant IRS statistics.
super rich "tax cheats" two european banks UBS and LGT
have approx. 1.5 trillion dollars for about 100billion in tax revenue....whistle blower from LGT bank came forward. warren buffet on this video he pays 17% taxes his secretary pays approx. 34% of income...check out this video.....obama on board/legislation to close loophole
http://bravenewfilms.org/blog/47653-super-rich-tax-cheats
These numbers really are quite silly and (without more) don't show much of anything. The relevant question to focus on if you belive corporations are paying too little is how capital is taxed (overall) versus how labor is taxed (overall).
When corporations earn income, it is really their shareholders who are earning that income. Thus, you have to look at the combination of corporate income tax and capital gains tax to assess whether corporations are paying what you consider to be their "fare share." Significantly increasing the income tax rates paid directly by corporations is probably not the wisest policy because it would tend to make U.S. companies/companies with U.S. operations less profitable relative to companies/operations overseas.
Where our attention should be focused is on the capital gains tax structure, which provides a variety of loopholes/work-arounds that enable wealthy individuals to pay far less tax (on a percentage basis) on the money they "earn" in the market than the taxes that American workers pay on the money they "earn" in the workplace. Our country's tax code gives very favorable treatement to income earned from capital versus income earned from labor. That's the main reason why Warren Buffet pays less income tax on a percentage basis than his secretary.
This is a perfect example of what inevitably will happen when income distribution is so skewed and those with money have greater access to politicians via contributions.
Truth B Told got it right!!
And to this little Fascist-
"pershingwarrier Says @ 7
This is exactly why I haven’t paid taxes in 20 years. These corporations know taxes are illegal, and they are daring the Government to do something about it.
If you pay taxes, you are a sucker."
Would you let me move onto your property, use what I may, ruin what I will, and not pay you a dime in rent?, that is the system you just described.
So please, don't ever drive on public roads, please refrain from calling the police or fire departments. Please, never attend a state or community college, or use the postal system again.
Interesting that "Libertarians" consider welfare recipients deadbeats, while they consider themselves, benefitting from public services and works, the height of sophistication and honor.
Hypocrisy and contradiction define the current American Conservative.
Truth B Told @ 42:
Indeed!
In fraud we trust.
Fraud bless America.
Fraud willing, we will succeed.
One nation under fraud.
I want to play devil's advocate, since I heard something about this last week:
How many of these corporations are S Corps, where you have to pay taxes on profits as an individual rather than as a corporation? If a majority of US Corporations are S Corporations, it would make sense that they wouldn't pay "corporate" income taxes, but rather "individual" income taxes.
So again, not defending corporations that SHOULD pay taxes and don't, but rather wondering how many of these corporations aren't required to pay "corporate" income taxes at all, but rather individual income taxes.
Al B Tross @ 48:
Actually, at the federal level, income taxes don't pay for any of that stuff you described. In fact, our tax money only goes to pay mandatory expenses (interest on the federal debt to the Federal Reserve system, Social Security, and Medicare). All the other federal expenses are paid by taking out loans against the value of our dollar, which is why it continues to lose value so long as we keep getting ourselves more in hock to the Fed and foreign nations that service our debt.
So that poster is right, we are suckers for paying our taxes while believing they pay for Congressional salaries, VA benefits, our military, environmental protection, NASA research, etc.
Charles @ 40:
Speaking of "McGaffe", I added an RSS feed to my "Master List of McCain Flip-Flops & Gaffes" because it gets updated so frequently.
Progressive Libertarian @ 46:
Aaahhhh... But surely you jest, right?
Are libertarians too stupid to know the difference between profits, dividends, and corporate revenue?
Hint; revenue....
Tyler Durden @ 21:
Easy. Because you had income. Thus you paid taxes. These companies did not have income in at least one of the years; no income means no taxes.
This just makes me sad. These companies are a part of this country. They use everything I use as an individual taxpayer and yet they are not paying for those services. Are they their own country? Their not part of the USA. Are they above this country? Are they guests here? If not they have to start paying for what they use or stop using the services.
And if I hear the bullshit about "well then we'll have to move our company out of the US." I say move out but move out completely. Don't keep one foot in both doors. My mother has always told me that I am not indispensable at the work sight. That is true for everybody. If the company leaves I am sure another company will be there to take its place with a president and CEO who isn't gouging the consumer.
And another thing, as long as I'm at it, I don't want cheaper goods. I don't buy the crap out there because it isn't worth the money I would spend on it. I go to stores that have nice quality clothing to shop. The shirts out there are tissue paper and the styles are hideous.
I could go on and on.
More to the point, here are some numbers that actually put this into context:
About 75% of US businesses have no payroll, meaning the owner is the sole "employee" (well, possibly family members). An example of this sort of thing would be a professional (engineer, geologist, whatever) who sets up a consulting business, but then for whatever reason goes back into industry for a while as an employee but keeps his/her business license up to date so they can do consulting work if they want to. Company does zero business, has zero income, so if course it doesn't pay income tax.
Whether big companies who actually do make money are paying their fair share of tax is a completely different issue than the number of companies who are paying tax. And I'd remind people that even big corporation can have years in which they don't have any net income because they've suffered a loss of money. I believe people are aware of General Motors?
Although I agree with the notion that corporations get too many lopholes and such in regards to taxes the statistics used in this article are terrible. Trumping this type of stuff IMO does us no favors because it's so easily shredded.
Jeff Akston @ 54:
Care to explain how a company without income manages to stay in business? Pixie dust?
alicia01 @ 57:
Attitudes like that are the reason why liberalism is extinct for all intents and purposes in this country.
How I miss the old world, where liberals aren't afraid of showing their teeth instead of taking up the proverbial rear opening.
Tyler Durden @ 53:
It's not about libertarians being too stupid (do we have to resort to name calling?) but rather the IRS regulations being far too complex. Yes, it is all revenue to us mere mortals, but to the mighty IRS, different sources and types of revenue are taxed differently. I assume you knew this, but not sure why you called this poster stupid for pointing out what an American with above average knowledge would already know.
As I said in an above post, this poster's point is very valid because depending on how that revenue is classified will determine whether it falls under individual taxes (as individual income in the case of an S Corp), as dividend taxes (to an individual on a dividend distribution), or as corporate income taxes (filed on a 990 rather than 1040).
If you all are really fed up with corporations getting away with all this, then the problem lies with Congress, and with us for electing them, as they (Congress) are the ones who have grown Title 26 (Internal Revenue Code) to an ungodly large amount of pages with various loopholes and definitions of what would appear to be the same damn thing.
If you want a simplified tax system, vote out the bastards who side with accountants and tax attorney and large corporations to make the tax code so incredibly complicated that it takes a department of lawyers to determine whether you actually even owe taxes, and how much to pay.
Yes, common sense would dictate that you made money, so you owe at least a little bit to the government for you gains. Unfortunately, common sense is not very common in government. But we all already knew that.
So again, the blame ultimately lies with Congress and We the People for electing them, not with the Corporations. They are just using the loopholes that Congress has provided them. You mean to tell me if you saw a $5 bill on the sidewalk you wouldn't pick it up? This is the same concept applied at a much larger scale.
Tyler Durden @ 59:
The poster is right though, liberals are supposed to be the champions of truth and facts. If this information can be pulled apart and skewed to various points of view, then it is of little to no value in the grand scheme of things. When we have something concrete that can't have holes poked in it or be pulled apart, then we should go boldly forward and attack like venomous pit bulls. Until then, let's keep researching this and find out EXACTLY who SHOULD be paying more taxes and isn't.
Keith @ 56:
Wow, are pleople really this #@$@# ignorant?
Corporation taxes do not only involve profits.
If that was the case, then everyone should lose money in vegas... after all if you lose more money than you make, the IRS will understand when you decide to skip on your taxes.
Good luck with that.
Seriously, for such a capitalistic society, Americans at large don't have a clue how monetary/revenue systems work. No wonder they are so easily duped.
James in Colorado @ 61:
Where are the wholes in factual information like this: corporate taxes have gone from 30% to 10% in 4 decades?
In fact, you can plot corporate tax rate vs. federal debt and see an interesting trend.
The country is in flames, and some people seem more concerned with the grammar of the cry for help.
Tyler Durden @ 63:
Oh, I do not dispute that corporate taxes have decreased over the last few decades. No argument here on that. What I do dispute, however, is exactly who is subject to corporate income taxes versus individual taxes. Again, if most US corporations are sole proprietorships and S Corps (or even limited partnerships), then their taxes would be paid as individual rather than corporate taxes.
BUT, if there are large corporations that SHOULD be paying corporate income taxes and aren't we should most definitely call them out on it and make them answer for it. I especially believe we should call out those large corporations who receive government subsidies and yet do not pay taxes.
And yes, corporate taxes should be raised.
James in Colorado @ 60:
Sorry for the name calling, probably not enough coffee... mea culpa.
The issue that I have is with the approach of dealing with corporations by viewing taxable entities only in the form of dividend/profit.
Which makes it ideal for the Corporation to get away with the biggest issue left out of the picture: without taking into consideration its real footprint (for example resources it requires to conduct business) a corporation will never be fairly taxed, and that is not just an issue of the inequality of capital vs. labor taxation rates.
That and the fact that a lot of American corporations incorporated in tax heavens long ago, while at the same time sucking the public contract tit.
James in Colorado @ 64:
I don't think you understood my percentage:
I am talking about overall portion of the federal tax raised. It has gone from 30% to 10%. Even if there were 1 billion 1 person corporations, that does not change the fact that the corporations contribute less to the federal pot than individuals. That is a big problem, because over all... corporations receive more benefit from those public funds than individuals, this is they contribute less but they obtain more.
That is a very simple argument, I have no clue what more embellishment or bulletproofing you are requesting.
Here is some info to illustrate what I was talking about when I say some corporations will not pay corporate taxes (SOURCE: wikipedia)
S Corp: In general, S Corporations do not pay any income taxes. Instead, the corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.
Sole Proprietorship: A sole proprietorship is not a corporation; it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made, making accounting much simpler. A sole proprietorship does not have to be concerned with double taxation, as a corporate entity would have to.
Partnership: Partnerships are often favored over corporations for taxation purposes, as the partnership structure does not generally incur a tax on profits before it is distributed to the partners (i.e. there is no dividend tax levied).
Considering a majority of US businesses are classified as a sole proprietorship, it is not surprising that so few corporations are not paying corporate taxes:
"Many visitors from abroad are surprised to learn that even today, the U.S. economy is by no means dominated by giant corporations. Fully 99 percent of all independent enterprises in the country employ fewer than 500 people. These small enterprises account for 52 percent of all U.S. workers, according to the U.S. Small Business Administration (SBA). Some 19.6 million Americans work for companies employing fewer than 20 workers, 18.4 million work for firms employing between 20 and 99 workers, and 14.6 million work for firms with 100 to 499 workers. By contrast, 47.7 million Americans work for firms with 500 or more employees."
(SOURCE: Outline of the US Economy) That's a good overall site for the statistics and functions of the different types of corporations.
The America.gov site also states that about 3/4ths of all US companies are classed as a sole proprietorship. I think I've read before about 20% are the corporations subject to corporate income taxes. So that would leave the other 5% as partnerships or other types of arrangements, I would assume.
So in reality, if about 2/3rds of US companies aren't paying taxes, I bet a majority of those are self-employed consultants who are hiding their income or otherwise small businesses that maybe don't know better or else are trying to hide their income.
But no matter who it is or how large the company, they should all be paying what they are liable to pay within the bounds of the law. The problem is (as my manager when I worked for the IRS said) "The little fish don't fight back". In other words, large corporations have the resources to hire tax lawyers and accountants to find these loopholes Congress has created and use them to their advantage to reduce or eliminate their tax burdens. Small businesses and self-employed/sole proprietorship taxpayers do not have this same advantage. You want to make the system fair? Stop electing politicians who create more loopholes and start electing those who would fight to streamline the tax process.
Unfortunately, on paper, that means electing libertarians and classical republicans, and I doubt you actually want that. So a larger tax code with benefits to the wealthiest is what we are fated to have until the end of our nation or until people get fed up enough to turn off American Idol and CNN and do something about it.
Tyler Durden @ 65:
I concur for the most part. I just wondered are you talking about externalities (such as pollution, etc) in your larger paragraph? It would be nice if we could some how quantify that and make corporations liable for it. But as it stands, it's tough to quantify something that is a public good (not good as in "That's some good soup" but rather good as in a commodity). Granted, they made the pollution, but unfortunately, we all own it until we can find an effective way to make them pay for it without passing on the costs to consumers.
Tyler Durden @ 66:
Tyler, what it comes down to is this. Most corporations are small single owner corporations, and as such, pay individual rather than corporate taxes. In addition, many of these corporations receive SBA loans or other support to businesses owned by Women and Minorities. So yes, they are getting public benefits without paying a dime of corporate taxes. But chances are they are paying individual taxes. So as long as they are paying something in, I have no substantial problem with small businesses getting subsidized loans or other governmental support as it is in the greater interests (at least from my perspective, as I like to have more competition in the market place).
So again, when you take into consideration most corporations are owned by one or a few people, and are taxed as individuals rather than corporations, it is no wonder individual taxes far outweigh corporate taxes. The downside is that the tax burden for these individuals is higher as they are taxed at the higher individual rates rather than the lower corporate and dividend rates, but it makes up for it in simpler accounting and tax preparation as there are trade-offs with any corporate type.
blockquote>
Aaahhhh... But surely you jest, right?
Are libertarians too stupid to know the difference between profits, dividends, and corporate revenue?
Hint; revenue....
I have a finance background, so give it a rest. Not sure what corporate "revenue" has to do with anything, except I see @65 you seem to be arguing that corporations should be taxed on revenues rather than incomes (so as to take into consideration their "full footprint"). What on earth are you talking about? Some businesses naturally have much higher margins than others. The costs associated with earning a dollar of income are generally going to be much higher if you're running an airline than if you are running a consulting business. A system that taxed based on a percentage of revenue would fundamentally distort the market by disproportionately increasing the costs even of low-margin producers. Why would this would be a good thing?
Revenue-Costs=Profits
Yet oil corporations are reporting record costs and record profits at the same time, an economic impossibility. Additionally they charge shipping their product--when their own shipping department ships it, and charge legal and accounting fees-- when they have their own legal and accounting departments work on the contracts and books..
As for whether the corporation pays the income taxes or it's individual stock holders that's essentially a shell game, potentially disastrous to pension and mutual funds that middle-class workers are depending on more and more for their retirement.
Do they have their own chefs to cook the books?
Did anyone ever stop and consider that Corporations DON'T PAY TAXES?! Sure they write the check, but everyone that buys their products pays the tax. Every time you buy something at Wal-Mart, buy gas for your car, etc., you have to pay an extra costs to cover the corporate income taxes on the revenue generated. Stated another way, if Wal-Mart paid $6Billion in taxes last year, that represented approximately 2% of sales, so your can of tennis balls was $2.04 instead of $2.00. This is the most effectively hidden and regressive tax in the US today. We would be better served with a complete eliminate of the corporate tax and all the wasted and misdirected resources it creates. 1/2 the tax attorneys and lobbyist would be out of work. Global companies would flock to the US creating jobs and increasing wages and therefore income tax receipts. Am I the only one that sees this incredibly simple solution!?
I wonder if we're seeing something new in the corporate world. Used to be you had to pierce the corporate veil to discover the corporation behind facade corporations; do we now have to pierce the personal veil as well?
Tyler Durden @ 58:
Are you that dense? Income does not = "revenue". Income = "net profit".
Yet oil corporations are reporting record costs and record profits at the same time, an economic impossibility. Additionally they charge THEMSELVES shipping their product–when their own shipping department ships it, and charge THEMSELVES legal and accounting fees–-when they have their own legal and accounting departments work on the contracts and books.
These are the costs they face.
That and bribing local and federal legislators.
Jeff Akston @ 73:
Still a good question though, if there's no dividends to draw upon for their own salaries, by Smithian economics, they would be driven out of business, or leave the business to find more profitable pursuits.
And by your own definition they used the term income correctly. To rephrase it "Care to explain how a company without net-profits manages to stay in business? Pixie dust?"
How long would any of us stay at our jobs if we weren't paid?
The answer is they're paid in:
http://www.templeofdagon.com/swedish-fish/images/pixie-sticks.jpg
I hope all you folks aren't thinking that corporations don't pay taxes just because of Republicans. Democrats have been part and parcel of the thievery that's been going on for decades.
"Intrepid reporters is an oxymoron.
The standard conservative movement retort to this kind of information is to use it as yet another reason why the wealthy and corporations shouldn't be taxed at all. "The wealthy and the powerful managed to avoid paying MOST taxes anyway. So why not let them off the hook altogether. Then we can lay off some people at the IRS and save even MORE money, and make govt. even SMALLER. Yeah. And then those companies can take the money that they save on finding new and creative ways to avoid taxes, and spend it on JOB CREATION, and it will trickle down, and stimulate the economy, and ..."
*blargh*
Jeff Akston @ 73:
Are you that dense? Income does not = "revenue". Income = "net profit".
What?!? Only money left over after paying expenses is income? Gee, it sure would be nice if individual taxpayers were only paying taxes on "net profit". Revenue = income.
When did you folks get the idea that taxation was an OBLIGATION?
It's not. As a matter of fact, the Supreme Court has ruled MANY TIMES, that citizens have NO OBLIGATION to pay more taxes than they have to.
The tax code says that income tax is imposed on PROFITS. If a corporation doesn't show profit, then it doesn't have to pay income tax. So, what most of these corporations do is write profit-sharing checks at the end of the year... But make no mistake, THOSE PROFIT-SHARING CHECKS GET TAXED, when the sharehol;ders claim the profit sharing checks on their tax returns. So the rumor that corporations don't pay income tax, while true, is misleading, because it gives the impression that corporations pay NO TAX, which is just not true.
Corporations get sales-taxed whenever it buys or sells a product. It gets taxed on the property it owns. It gets taxed either on profits, or the shareholders pay taxes on the profit-sharing checks. And lastly, ANY company that pays payroll taxes has to mark up their payroll expenses by TWENTY PERCENT because of payroll taxes.
No. The people writing that article isn't giving the whole picture...
Are any of you aware of the fact that ANY company, large, or even SMALL, can play this same game? But none of your populist writers want to come down 'hard on the small business", even though they can take advantage of the SAME EXACT RULES?!?!
What? You don't want to punish small business, but you do want to punish some "evil" corporation? At exactly what size of the corporation does the the cut-off occur?
If you're uopset with the disparity of the present tax system, blame it on those who think a progressive wage tax is the answer
We really should be eliminating income tax altogether, since, after all, the only thing that income tax is used for is to pay the INTEREST on our debt to the Federal Reserve anyway!
That's right folks, we pay interest on OUR OWN MONEY!!!
But no, the problem is with the corporations... who pay paychecks, and provide products for the consumer.
What does the Federal Reserve give us in exchange for our money? More interest...
Wake up America.
Corporations are trying to play two games at the same time. They're Legal Persons under the law so the corporations can sue, have trials of the entity but not necessarily the individual corporate officer (unless he/she breaks corporate rules as well as the law), and also have the benefit to appeal decisions against them.
But then they also try to define terms so narrowly and so abstractly that they become in effect abstractions themselves.
79 James
I have no problems with income taxes, since most of us earn wages only.
Income is from rents, investments dividends etc, working for your daily bread is wholly different.
Of course FICA takes a lot of the payroll taxes from workers.
ysbaddaden @ 75:
Last attempt. The report talked about "revenue", not "income" or "profits". Revenue - COGS = Gross Profit. But then that minus all their expenses, rent, salaries, etc = "income" or "net profit" or "net income before taxes". That is what is taxed. If that's a negative number, then there is no tax. The article said that 57% of the companies didn't pay taxes in "at least one year". So in as little as one year, these companies had depressed revenues while still having the same bloated infrastructure. If the company is losing money, then they don't pay taxes.
As to how do companies stay in business without profit? Well, first, non-profits say in business for centuries. Why? Because companies can raise capital through investors aside from their sales. If you want to tax assets as opposed to income, then OK, that's another discussion. Second, they aren't going stay in business for long if they are losing money. But then, this article only said "at least one year" while erroneously making it look like 57% of companies don't pay taxes.
This was irresponsible reporting.
Additionally, we're ignoring half the article here. While corporations are playing odd games with their books to lower the amount of tax they pay, they soak the government for millions provided by other taxpayers like us.
The corporations pay for politicians campaigns to keep them in office, the politicians pass tax laws favorable to the corporations--and loosen all kinds of regulations on things like safety and the environment, pass regulations to restrict new competition in the field, offer lucrative government contracts sometimes without rival bids, so the corporations can continue to operate at taxpayers expense. Meanwhile the infrastructure, social safety nets, education, healthcare and households are suffering from lack of tax supports.
We send our sons and now our daughters to fight in support of the government's interest in specific corporations and their needed raw materials against any nascent attempts in other countries to forge their own destinies and economic priorities.
This is the classic definition for fascism.
82 Jeff Akston
You were talking about incomes too. 58 Tyler Durden phrased his question after your statement in:
54 Jeff Akston
"These companies did not have income in at least one of the years; no income means no taxes."
You're slipping between different terminologies. It appears to be an attempt to Argumentum ad Abstractum.
Oh and investors would bail on a company that paid out no dividends or even worse lost the investor's money bit-by-bit. And as for non-profit corporations these are generally tax supported or charities, so that's like comparing apples and oranges.
A strong reason why there is no universal health plan in the USA.
Oh boy. The GAO report is being reported as sensationalist and stupid as possible. The fact is that, at times, Corporations don't make money and thus, don't pay taxes. There's nothing wrong with this, and it's not uncommon. What's wrong is that it's clear that this issue is over the heads of most of the whiners on this thread and they feel the need to act as if a crime has been committed.
Even though every one of these big corporations is audited, by the IRS, every year. Seriously, they're audited every year. They have on-site IRS agents who do nothing but audit them. Day-in, day-out, every year.
Now, if you want to talk about REAL issues in taxation, that can be talked about.
But this is horse-crap. And anyone that's lost money on a dog of a stock, like FORD, GM, Chrysler, etc., that have had long periods of losses (and thus pay no taxes) can tell you that.
I doubt that there are any multi-billionaires posting their opinions in this forum. Therefore none of you really know what you are talking about. It's all speculation and rhetoric based on your limited knowledge of taxes. If Rupert Murdoch states that he only pays about 17% and doesn't even have an accountant to take advantage of loopholes, then basically most of you are full of shit and have no idea what you are talking about. Why would Rupert lie about how little he pays in taxes. Bottom line, a lot of rich folks are getting away with paying half the percentage of taxes that I am.
If some of you are so smart and so easily to dismiss this report then why don't you take Rupert up on his challenge. He will give any corporate executive 1 million dollars if they can prove they pay more of a percentage of taxes then their secretary. Any takers???
Here is my source. http://bravenewfilms.org/blog/47653-super-rich-tax-cheats
God knows I'm no accountant... I can barely fill out my tax forms, but why don't we tax something that corporations have every incentive to report and to report large? Like "earnings". Isn't every company required to report earnings, and aren't stock purchase decisions primarily made on the publicly reported P/E, price/earnings ratio? And isn't it always good for the stock price to have high earnings? So don't companies always try to report high earnings if they can?
So why don't we simply have a straightforward tax on earnings? Get rid of deductions for all that stuff... I don't know... new equipment... because, what, companies aren't going to buy new equipment to increase their "earnings"? Of course they will. They don't need deductions. The tax rate can be lower to compensate for the absence of deductions... and it will be based on a number that companies have an incentive to inflate because doing so increases their stock price (even if it would also increase their tax.)
So just take a percentage of reporting earnings, and end of story. Why isn't this simple? Is it possible that there is some fine point of corporate tax law that I haven't heard about?
Somebody pull the video of Bush telling us the People that the gov't does not go after the higher ended salaried worker's is becuase they would just get a tax atty and find a way around the law, so the gov't doesn't need money? That is my conclusion and the tax laws are just a ploitical tool.
WTF!,
Will somebody stand up do the right thing... Foreign companies always have U.S. subsidiaries that lose money or break even. Get a clue. It is by design. If you do not make money, you do not pay the tax. The parent company off shore makes the profit and subsidizes the U.S. shell company. Hence, no tax liability. Not rocket science.
The only way to even the playing field is a Value Added Tax. Eliminate the corporate income tax ( which no company with a competent accountant pays now) , impose a VAT, and we can legally impute that tax on any goods imported to this country. It is not a tariff.
No trade issues, just level the playing field.........
91 David Sherbula
The trouble with VAT is usually it's imposed not on corporations, but on the consumer. That was George HW Bush's solution to "not raising" taxes. By increasing the cost of the goods. Like with a loaf of bread, you raise the tax just enough on every link of the chain, the wheat farmer, the miller, the baker, the grocery store, and all the shipping companies in between to link them all.
ysbaddaden
The most easily enforceable tax laws are sales tax and VAT. You have no scams to avoid them. You can easily calculate what they owe ( from their accounting records) , even if they lie.
I believe most people would want everybody to pay their fair share. Since the corporations and foreign shell companies haven't been, I think you would be surprised at the amount of money that would be generated.
I didn't complete my thought. All those VAT taxes are fairly small along the link of the chain, but hit the consumer significantly when they have to purchase a loaf of bread. When done on a bushel of goods, it increases the cost of household living expenses while technically not being a new income tax or an official recession.
88 MGB
By your example if you're not a mutli-billionaire you shouldn't be expressing an opinion here.
You, and far too many Americans have what sociologists call False Consciousness. You identify with a class above your own as if their interests were yours and our interests. Democracy depends on everyone petitioning the government for redress of their own grievances and those of their own class.
Otherwise you're saying corporate/national interests are one-in-the-same which is again nascent fascism.
93 David Sherbula
You forget sales taxes and VAT are both regressive. Although the wealthier would pay more in actual dollar figures, the less wealthy would be paying a higer percentage of their annual net worth. Therefore it becomes a question of whether to buy food, shoes, medicines or to pay the doctor to remove grannie's infected ass tattoo.
And on top of that it would short change the government who presently have two wars going, a rotting infrastructure to repair, disaster relief etc. Then there are the Black Book accounts, so called because they pay for our defense, and at least 16 security agencies, so the information on their part of the annual budget is classified. The corporations wouldn't like not having government contracts, and incentives, and tax rebates to ooperate if the government can no longer afford these benefits, due to the lesser revenue streams predicated by sales taxes and VAT taxes only.
And white americans think it's Mexicans and poor black people that are living off the taxpayers. When are we gonna get it together people?
And for those saying the income tax pays for services, you have to check where the money goes. It goes to paying off just the interest of the national debt (which is even more ridiculous since the Fed Reserve banks creates the debt and the money from thin air). But most of our services come from the taxes we pay when we buy goods, not from income tax. In fact the actual tax amendment is specifically for corporations, not the average citizen.
IMO all the tax laws and economics is a big scam. We shouldn't have to pay for anything at all. What's the point of building cities, having people labor to keep the city running, and then having them pay for basic human needs, like food and shelter. Money is just another mindcontrol scam to create classes amongst people. And since we are all fighting for this worthless paper, we never stop to realize that we shouldn't be using it in the first place.
If a corporation doesn't pay it's "fair" share of taxes, benefits from government loans and bail-outs, even shapes laws through the powers of their campaign contributions, what we're doing is taking the "fictional person" status of corporations and turning them into an elite "fictional person."
Could you imagine even trying to pay for the clean-up after Katrina if the government only had sales taxes, subject to the whim of shoppers who might try to cut back on their own expenses and do less shopping?
Then there's Fannie Mae and Freddy Mac and other corporate bailouts.
The only way a sales tax or VAT tax could conceivably hope to work is if we returned to antebellum days when the average American was a rural subsistence farmer.
I'd prefer allowing people to defer their "income" taxes with labor. Doctors, lawyers etc could take pro-bono cases. But for the non-professionals I'm not sure that can work. It would also probably be a violation of Amendment XIII. And as for non-professional since they primarily pay payroll taxes, ultimately they'll receive their money back and then some. Usually for every dollar paid into Social Security the government pays two.
However, Social Security is no personal savings account, so what we're paying for is the preceding generation's retirement, not our own, which will be paid by those that follow. In fact, savings rates are at about 0 right now, and people are going further and further into debt borrowing on their credit cards and their houses while credit is now being crunched because of irresponsible banks and other small corporations sub-prime lending practices. Meanwhile, because corporate interests convinced far too many people that it was our money, many states have gotten rid of Homestead exemptions, so more-and-more people are facing foreclosure and could go homeless. This includes the middle-class who used the sub-prime mortgages to gain a little liquitity, and find themselves unable to pay back what amounts to balloon payments.
But what do I know, I'm not a multi-billionaire.
This'll probably be my last statement as my dial-up is bogging down, but it's all I can afford.
96 Chris Says: And white americans think it’s Mexicans and poor black people that are living off the taxpayers. When are we gonna get it together people?
Illegal immigration is costing America a great deal. Not only do they tend to work for less, either low pay, or with no benefits, it skews our employment records. It looks like more citizens are working, when non-citizens fill such roles. They send large portions of their incomes home, so it leaves America's revenue stream entirely. They do pay taxes which are included in their rents, and any sales taxes, but meanwhile cost local counties a great deal in emergency hospital visits, and jails with the increased crime in lower-income sectors. They additionally take up large amounts of the local real estate thus driving up the quantity demand for real estate, and therefore lowering the quantity supply and increasing the cost to all.
As for blacks, they suffer perenially from under-education. Education takes little priority in our country, despite the fact that most experts say Democracy can only flourish in a region with a well-educated, middle-class citizenry. I'm not sure about other regions but here in Texas schools are supported by property taxes. The only problem is that means the higher-class neighborhoods have more funds for education than the lower-class neighborhoods, creating in effect a violation of Brown v the Board of Education, but by class, not race (but disproportionally represented by non-whites.)
However, one can still get, I daresay, an education if they so wish. But in my case I had to depend on the Hazelwood act in Texas. As a Texan who volunteered for military service I got free tuition. Of course that's paid for by state taxpayers. The only problem was I had to pay for lab fees and textbooks that were often more than the tuition itself. I remember paying for a used Legal textbook that cost me $90.00. But then the publisher might've changed a couple of footnotes, put out a new edition, and I was left high-and-dry when I tried to sell it back to the college bookstore.
And now what do I have to show for it? Despite having two associate degrees and a bachelor degree, I have a low paying clerical job, and increasing medical expenses, which going to the VA helps defray, but I do have to pay deductibles. Although I keep my face in an expression of indifference, I've been told my eyes seem indicative of some kind of pain.
That's why I'm always cracking jokes, particularly on this site, I suppose to cheer myself up, and if it amuses others so much the better.
But I really have to stop now, I'm drunk off my ass.
matx @ 78:
What?!? Only money left over after paying expenses is income? Gee, it sure would be nice if individual taxpayers were only paying taxes on "net profit". Revenue = income.
Actually, individuals do have this opportunity, it's called Itemizing. If you have more tax deductible expenses than your standard deduction, it is wise to itemize (nice rhyme :D) You can actually itemize whenever you want, but if it's not more than the standard deduction, it's not really worth it since you'll cut your taxes less.
Corporations get to do the same thing, generally speaking, which is why they are taxes on their net receipts once they have deducted all those deductions allowed by law.
Again, if you want to raise taxes on corporations and reduce loopholes, you REALLY have to quit electing the same people every other year. I know you folks on here (generally, not all) don't like third parties, but if you want things to change, that's really your only choice at this point. Unless you can somehow guarantee that these new breeds of Democrats you are trying to get elected will actually hold middle and lower class interests to heart when they vote.
Frankly, as Ben Franklin said, Insanity is doing the same thing over and over and expecting different results. You can't keep electing the same no-talent hacks to office and expect them to actually change anything when they've shown no propensity or even desire to change anything at all.
Perhaps a minor quarreling point, but the AP corrected their initial report. Appears the "bad read" is already spreading like wildfire.
TPRA
3 days ago
WASHINGTON (AP) — In an Aug. 12 story about corporate income taxes, The Associated Press reported erroneously that large corporations accounted for 25 percent of the U.S. corporations that did not pay federal income taxes in 2005. The report by the Government Accountability Office actually said 25 percent of large U.S. corporations had no federal tax liability that year.
____________________
Remember, remember
Come this November,
The neo-con treason & plot!
I know of no reason
The neo-con treason
Should ever be forgot!
mike @ 89:
It's a great recommendation, but again, never forget that common sense doesn't work in government. Simple is NEVER the answer. I know this is no kind of answer, but yet, it is the only answer pretty much any of us can give. Double book systems are used so that they can inflate earnings to Wall Street and report decreased profits to the IRS and reduce their taxes. WorldComm did this as well as Enron and Qwest. Why do we allow it to happen? As I've said 1,000 times before, because we keep electing the bastards that allow them to get away with it.
You want a simple system, you want things to change? Then quit electing the same politicians every other year and try something new.
James in Colorado @ 101:
Are you people really this ignorant about finances? It doesn't give a good name to liberalism when you people appear like D+ high school students when it comes to economics and accounting.
What you are recommending is EXACTLY how it is right now. When these companies have NO EARNINGS they don't pay taxes. This is high school level understanding of business. And you fail.
James in Colorado @ 99:
Actually, individuals do have this opportunity, it's called Itemizing. If you have more tax deductible expenses than your standard deduction, it is wise to itemize (nice rhyme :D) You can actually itemize whenever you want, but if it's not more than the standard deduction, it's not really worth it since you'll cut your taxes less.
Corporations get to do the same thing, generally speaking, which is why they are taxes on their net receipts once they have deducted all those deductions allowed by law.
Again, if you want to raise taxes on corporations and reduce loopholes, you REALLY have to quit electing the same people every other year. I know you folks on here (generally, not all) don't like third parties, but if you want things to change, that's really your only choice at this point. Unless you can somehow guarantee that these new breeds of Democrats you are trying to get elected will actually hold middle and lower class interests to heart when they vote.
Frankly, as Ben Franklin said, Insanity is doing the same thing over and over and expecting different results. You can't keep electing the same no-talent hacks to office and expect them to actually change anything when they've shown no propensity or even desire to change anything at all.
Yes, only revenue left over after paying expenses is income. Read an accounting book. To make individuals and corporations on equal terminology: Your salary is equivalent to their revenue. Your deductions reduce your taxable income. Just like their expenses do. Things like rent, salaries, cost of good sold, etc for them are expenses. These are not equivalent to your house and car and food because the corporations expenses are A REQUIREMENT for them to make their revenue - and therefore they are deductible. Your rent and food and car are only in extremely rare instances a requirement for you to get your "revenue/salary" from your job, and therefore they are not deductible. Your So it's not like they are getting a free ride.
But just like a company, if your expenses are larger then your revenue/salary, you pay no taxes. If a company doesn't make any profit, they pay no taxes. Again, this article, which for some stupid reason talks about "revenue" is foolish. The author is either frighteningly ignorant about business, or is just lying to present a case that appears much more sinister than it is. Pick one. Neither is very complimentary.
Mick Piobr @ 14:
Exactly!
America will see Europe, Asia and South America reach new heights of success economically and militarily as America controlled by the regressive right wing ideologs spirals this nation into irrelevance!
Jeff Akston @ 102:
Excuse me but "most" companies listed in the S and P 500 (and let's venture a guess, the market as a whole) do not have negative PE ratios. Ergo, there should be some tax revenue available from "most" companies, if we tax earnings straight up.
Jeff Akston @ 102:
You failed to read my post, I think the point earlier posters were trying to make was that with our double book system, companies have been able to report different numbers to Wall Street versus to the IRS. This is FACT, as evidence with WorldComm, Enron, and Qwest, among others.
What the earlier poster suggested was eliminating this double reporting system and requiring companies to report the same number to both Wall Street and the IRS and be taxed on that amount. This is the way it SHOULD work, but it is rarely enforced, at least in the days before Sarb-Ox requirements. Maybe it's better enforced now, but I doubt it knowing that the IRS never has the resources to really investigate these sorts of "accounting irregularities".
stephen @ 6:
Stephan, did you read the article? GAO says MOST don't pay any, therefore your statement should be "TAXES would be just what we need..." Cause you understand most are paying NO -- ZERO -- ZIPPO taxes? While you are at it -- if you are going to shill for big business, how about we make small business (that usually pay taxes) illegal, after all they are taking money out of the pocket of Imperial Business. Republicans talk free trade, open market, competition, benefit to the community -- when all they try to do 24/7 is to stack the deck for their benefit.
Again,
Simply put, value added taxes and sales taxes are the easiest taxes to design, collect and enforce. They can be designed not to be regressive. And they can be applied to foreign companies doing business in the US of A. Foreign companies with US subsidiaries never show a profit, by design. No profit, no tax. The parent company charges the US subsidiary whatever they need to in order to break even, or show a loss.
You do not need be wealthy to enjoy the benefits of the system I am suggesting. Most of Europe already employ's this system with great success.
We can decide which products, commodities are subject to the tax.
i.e. Food, no. Cars, yes.
Think about it..
If sales taxes did not work as well as they do, why does every state have one?
Simple, effective and can be tailored to impact the people most able to pay them.
P.S. I am only referring to a targeted corporate VAT, not a blanket national sales tax that would impact food and other basic human needs.
gregory zurbay @ 107:
Wow, let's try this again:
Small businesses and most US Corporations pay zero CORPORATE taxes. This is not to say they pay NO tax. There are different types of taxes. And since most small businesses and even most US corporations are owned by one or a few individuals, they are usually required to pay taxes on their INDIVIDUAL income tax return, not as a corporation, but rather as an individual.
We automatically assume it's the large corporations skipping out on paying taxes. Fact is, it's actually the 75% of small corporations that pay ZERO CORPORATE taxes. Why? Because they pay them as individual taxes.
I think everyone should work for the IRS for a year to actually understand how this stuff works. I'm glad I did.
109 James in Colorado
Your schema is still NO corporate taxes, only taxes paid by individuals who can then escape them with off-shore banking, tax shelters etc., to the point that the average janitor or secretary in a corporation pays more than the big boys pulling down 800 times what they're making, and can afford the expensive tax attorneys to defend them.
Until about 20 years ago and Ronnie Raygun it wasn't unusual but standard practice for corporations to pay taxes and then the individuals. That is again because of the fictional person legal status of corporations, complete with the benefits and the obligations.
Also since then, the IRS primarily audits those who are middle-class or below to give the impression they're doing the job, while ignoring vaster greater crimes against the tax code by corporations.
Meanwhile the big boys running the corporations get excessive executive compensation, golden parachutes, government contracts (which routinely go over the contracted time and expense estimates), local tax rebates etc., all at the regular tax payers expense.
What was it Robin Hood said in the Erroll Flynn version? It was roughly:
Robin Hood: The people are over-worked, over-taxes and paid off with a club, a whip or a rope.
Prince John: You are speaking treason then?
Robin Hood: Fluently.
ysbaddaden @ 110:
This is true, but again, this is NOT the fault of the corporations, rather, the fault lies squarely with Congress and we who re-elect them every other year. If it were not for such a complex system that allowed for the richest to use the loopholes to their advantage, then we would have a far fairer system. But as such, we elect those with Corporate interests in mind when they design the tax code, to the detriment of the middle and lower classes who don't have the time to research 14000+ pages of tax code or else don't have the money to hire tax lawyers to do it for them.
In sum, hate Corporations all you want, it won't change a damn thing until you quit electing those who allow them to exploit the system they created: Congress.
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