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Biggest Corporations Pay Only 9% of Income as Federal Tax

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Anonymous

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Biggest Corporations Pay Only 9% of Income as Federal Tax


While there has been a huge amount of discussion about whether rich individuals should pay more tax or less, there has been surprisingly little discussion about the top corporate rate. Currently it is 35%, but in practice big companies pay only about 9%. Some of the difference is due to credits they get for paying foreign taxes, but much of the reduction is due to clever accounting tricks. For example, a multinational with offices all over the world can sell its patents to its subsidiary in, say, the Cayman Islands. Then when the company needs to use these patents, it pays massive licensing fees to the subsidiary. These fees are a cost of doing business and are deductible for the corporation's U.S. tax, reducing its U.S. profit and thus tax. Of course, the subsidiary in the Cayman Islands will have enormous income and no expenses so it will have a very large taxable income there. But fortunately for the corporation, the Cayman Islands do not levy a corporate income tax. This is perfectly legal and schemes like this are widespread. Clearly one way to reduce the federal deficit is for Congress to change the law so as not to recognize transactions that have no business value, only tax value. But that doesn't seem to be on the agenda.

Full story: http://www.nerdwallet.com/blog/markets/2012/corporate-taxes-only-9-percent/#.UCEmOkSfuL
 

Big Muddy rancher

Well-known member
Oldtimer said:
Biggest Corporations Pay Only 9% of Income as Federal Tax


While there has been a huge amount of discussion about whether rich individuals should pay more tax or less, there has been surprisingly little discussion about the top corporate rate. Currently it is 35%, but in practice big companies pay only about 9%. Some of the difference is due to credits they get for paying foreign taxes, but much of the reduction is due to clever accounting tricks. For example, a multinational with offices all over the world can sell its patents to its subsidiary in, say, the Cayman Islands. Then when the company needs to use these patents, it pays massive licensing fees to the subsidiary. These fees are a cost of doing business and are deductible for the corporation's U.S. tax, reducing its U.S. profit and thus tax. Of course, the subsidiary in the Cayman Islands will have enormous income and no expenses so it will have a very large taxable income there. But fortunately for the corporation, the Cayman Islands do not levy a corporate income tax. This is perfectly legal and schemes like this are widespread. Clearly one way to reduce the federal deficit is for Congress to change the law so as not to recognize transactions that have no business value, only tax value. But that doesn't seem to be on the agenda.

Full story: http://www.nerdwallet.com/blog/markets/2012/corporate-taxes-only-9-percent/#.UCEmOkSfuL

You'd think Obama would have been on top of that in the last 4 years. :shock:

Might have interfered with golf and campaigning. :roll:
 

hypocritexposer

Well-known member
Why should a company pay US Federal Tax on their total GLOBAL EARNINGS?


Why not investigate a story, before you pass along their lies and stupidity?


From your article:





For example, Exxon Mobil conducts the majority of its business outside the U.S. and paid $28.8 billion in taxes to foreign governments


plus the 2% on the $73.3 Billion to the US Government ($1.5 B) = $30.3 Billion, or 41.3% of their pre-tax earnings.


If you want them to pay more tax in the US, then allow them to operate more in the US.

You Liberals want to push all these companies off-shore and then you complain, becausee they are not paying enough in tax.

25% of ZERO, is ZERO
 

Mike

Well-known member
Corporations pay no income tax. It is paid by their customers through a increase in prices.

Abolish it........................................
 

hypocritexposer

Well-known member
Mike said:
Corporations pay no income tax. It is paid by their customers through a increase in prices.

Abolish it........................................


DING, DING, DING


We have a winner. (next time you get to Calgary, dinner is on me)
 

Mike

Well-known member
hypocritexposer said:
Mike said:
Corporations pay no income tax. It is paid by their customers through a increase in prices.

Abolish it........................................


DING, DING, DING


We have a winner. (next time you get to Calgary, dinner is on me)

I will look forward to it!!!!!!!!!!!!!!!!!!! :wink:
 

Steve

Well-known member
Big Muddy rancher said:
You'd think Obama would have been on top of that in the last 4 years. :shock:

Might have interfered with golf and campaigning. :roll:

considering Obama had two full years with both houses under democratic control,, it should have been as easy as ramming through the unpopular healthcare plan.. and given the Obama cult another victory to brag about.. :roll:

or do the liberals prefer to whine about what Obama failed to accomplish..
 

Tam

Well-known member
Isn't it funny how many things Obama didn't accomplish because of the Party of NO. I would love to know what he would have got done if he hadn't had a FILIBUSTER PROOF Senate and Majority in the House. Gee many he would have got a BUDGET PASSED. The only party of no that Obama was dealing with was Reid that wouldn't put anything to a vote in the Senate. :roll:
 

MsSage

Well-known member
Nice twist on the numbers.
the 35% is AFTER all the credits.....dang I hope your NOT the one who does your companies returns......
 

cutterone

Well-known member
Trying to hack away at a monster's tail will never kill it. One must go straight for the jugular and cut it's head off. Repeal the 16th amendment and replace it with a national sales tax with NO exemptions for any individual or business and you take away with Congress's ability to substidise, pick winners and loosers, and their poor spending habits. This, term limits, and a balanced budget amendment are the only path to stopping the madnes and controling DC.
 

Sandhusker

Well-known member
Mike said:
Corporations pay no income tax. It is paid by their customers through a increase in prices.

Abolish it........................................


Agreed. Taxes affect the right side of the ledger the exact same as labor, materials, overhead, etc... and have the exact same effect on pricing.
 

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