What the Top US Companies Pay In Taxes 658
theodp writes "If you've ever wondered how it's possible that you pay more to the IRS than General Electric, Forbes has an explanation. You, my friend, do not have the tax benefit of overseas operations. Microsoft, for example, has its overseas subsidiaries license software to its US parent company in return for handsome royalties that get taxed at lower overseas rates. Exxon limits its tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda, and the Cayman Islands that shelter cash flow from operations in the likes of Angola, Azerbaijan, and Abu Dhabi. As a result, of the $15B it paid in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas. Likewise, GE has $84B in overseas income parked indefinitely outside the US. Now quit your carping and get back to filling out that 1040!"
Re:So, what now? (Score:5, Informative)
No, a mixture of the customers, employees, and shareholders do. Your statement is only true if all other factors (like rate of profit, and size of bonuses) are fixed, which there is no particular reason for them to be. If you take money out of a corporation, where it comes from depends on the elasticity of all the other factors. Some corporations can easily cut salaries; other corporations can easily cut dividends; other corporations can easily raise prices; most end up doing some mixture of things, depending on market conditions.
Text Of the Slides Here (Score:5, Informative)
Here is all the text of the slides in a readable list.
No. 1: Wal-Mart Stores
Sales: $401 billion Pretax income: $20.9 billion Income taxes: $7.1 billion Tax rate: 34.2%
$1.2 billion of Wal-Mart Stores' taxes are international.
No. 2: ExxonMobil
Sales: $311 billion Pretax income: $35 billion Income taxes: $15 billion Tax rate: 47%
None of ExxonMobil's income taxes were paid in the U.S. In 2008 the company's income tax bill was $36 billion.
No. 3: Chevron
Sales: $172 billion Pretax income: $18.5 billion Income taxes: $8 billion Tax rate: 43%
Chevron paid $19 billion income tax in 2008. Of this year's taxes, just $200 million were paid in the U.S.
No. 4: General Electric
Sales: $157 billion
Pretax income: $10.3 billion
Income taxes: (-$1.1 billion)
Tax rate: N/A
GE's financial services unit, GE Capital, keeps the overall tax bill so low. Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. and make lots of money overseas, where tax rates are lower.
No. 5: ConocoPhillips
Sales: $152 billion Pretax income: $10 billion Income taxes: $5 billion Tax rate: 51%
ConocoPhillips paid $13 billion in taxes in 2008.
No. 6: AT&T
Sales: $123 billion
Pretax income: $19 billion
Income taxes: $6.2 billion
Tax rate: 32.4%
AT&T's executive officers are eligible to bill the company $14,000 a year for their own income tax preparations.
No. 7: Bank of America
Sales: $120 billion
Pretax income: $4.4 billion
Income taxes: (-$1.9 billion)
Tax rate: N/A
How did Bank of America not pay any taxes on $4.4 billion in income? Because of deductions like $860 million in tax-exempt income, $670 million in low-income housing credits and a $600 million loss on shares of foreign subsidiaries. With a provision for credit losses of $49 billion, Bank of America probably won't be paying taxes for a long time.
No. 8: Ford Motor
Sales: $118 billion
Pretax income: $3 billion
Income taxes: $69 million
Tax rate: 2.3%
Ford's tax rate is so low because of past years' losses from U.S. operations.
No. 9: Hewlett-Packard
Sales: $115 billion
Pretax income: $9.4 billion
Income taxes: $1.75 billion
Tax rate: 18.6%
HP's low tax rate is due to lower tax rates in foreign countries. The company says in its annual report that President Obama's proposals to end tax deferrals on international operations would mean a big tax hike.
No. 10: Berkshire Hathaway
Sales: $112 billion
Pretax income: $11.5 billion
Income taxes: $3.5 billion
Tax rate: 30%
No. 11: JPMorgan Chase
Sales: $100 billion
Pretax income: $16 billion
Income taxes: $4.4 billion
Tax rate: 27.5%
Chief Executive Jamie Dimon has spoken out against an Obama proposal to levy a special tax on banks to recoup bailout costs. "Using tax policy to punish people is a bad idea," said Dimon. "All businesses tend to pass costs on to customers."
No. 12: Verizon
Sales: $108 billion
Pretax income: $11.6 billion
Income taxes:
Meh. (Score:1, Informative)
I don't suppose anyone here knows squat about the double taxation trap corporations face. Oh no, it's much more fun to rant and flame when you're uninformed.
Re:'twas ever thus (Score:5, Informative)
It is the duty of corporate officers to (legally) minimise tax burden.
It is the duty of governments to ensure equitable distribution of wealth, without discouraging wealth creation.
Guess who's doing a better job...
That's because corporations hire the best accountants, while government is run by the best liars.
Tax Scholar Comments (Score:0, Informative)
I am a tax scholar. I don't know if anyone here actually cares, but exactly all of the commenters here are ignorant and unsophisticated when it comes to tax theory. I don't even know where to begin.
First of all: any debate about the fairness or unfairness of corporate tax policy must begin with the recognition that corporations do not "bear" the cost of their taxes. Corporations are not people. Only people bear costs. In the case of corporate tax, those people might be the shareholders (whose value decreases when the corporate bank accounts are used to pay the tax) or the workers (who are paid less than they otherwise would be if the corporation was taxed less heavily) or the consumers (who pay more than they would from an otherwise tax-free corporation). While many of you probably have a "soak the rich fat-cats" attitude and are fine with penalizing the stockholders, you would do well to realize (a) evidence shows that shareholders bear relatively little of the cost of taxes and (b) pension funds and insurance companies are significant shareholders in the marketplace, and their holdings are often representing the "little guy". Debate all you want about the regulatory framework and how to put the tax burden where it belongs but that is not a debate about the corporate income tax; corporations just pass that tax along.
Second of all: corporations sometimes make money and sometimes lose money. When they lose money, they "should" get to offset that loss with earnings from a different year. I say "should" in scare-quotes because departing from this norm of equity requires justification. Two corporations, otherwise equal, but one has income of 3x in even years with a loss of 1x in odd years. Compare to a corporation with 1x income every year. The yearly tax interval is completely arbitrary. Why should they be treated differently?
Note that this is *not* the same for individuals, who do not have "losses" in the ordinary sense. Except when they do (capital losses, passive activity losses, etc) in which case we do allow them to offset income earned in other tax years.
Third of all: international tax policy is vastly complex, and even leaving aside the political and economic-development considerations, plain equity demands different results depending on what you want to equalize. Look up "capital import neutrality", "capital export neutrality" and "national neutrality" -- being "tax neutral" among these possibilities requires conflcting tax policy. Which is why international tax policy is so complex. Add on to that the fact that loopholes (exceptions) are opened on purpose in order to further specific policy goals that are believed to benefit US workers, shareholders, or other persons. It's not about the "greedy corporations" or "greedy stockholders" taking advantage of the system to ruin it for the "little guy."
If you want to complain about tax policy, complain about the unjustified tax preferences such as the home-mortgage interest deduction (regressive, favors homeowners over renters -- which is already too heavily favored for other reasons; witness 2008 housing bubble & crash) or special-interest tax deductions applicable to a few narrowly-tailored interests (oil & gas industries)
But this is /., who am I kidding. Everyone here thinks they've got it all figured out already.
Comment removed (Score:4, Informative)
Re:If I could do it, I would! (Score:3, Informative)
Stop wasting your time with useless comments like that. You've been provided more than enough information to look up and counter the claim -- you don't need a hyperlink. In fact, you wouldn't HAVE a hyperlink in any paper source -- just a reference to where you can look it up.
And since ALL SCOTUS decisions are published, you have that.
Now, STFU, agree with the GP, or prove him wrong.
Re:If I could do it, I would! (Score:2, Informative)
Excuse me, who died and left you referee?
I chose to be. Too bad, if you don't like it.
That's really weak. If individual's rights didn't get such short shrift in the USA the problem you describe wouldn't exist -- the principals of the corp, being actual people, would simply be recognized and respected as possessors of the necessary rights.
Pretty sad rebuttal from a guy who is stopped cold by a list of publicly available, but unlinked facts. The point behind the legal fiction of recognizing a corporation as a person is precisely to uphold the rights of the people who work for or own the corporation. It is also recognized that there is great value in having a type of business in which the owners of the business have limited rights and responsibilities.
Re:If I could do it, I would! (Score:3, Informative)
Sure, they can hire lobbyists, run ads on TV, etc. but in the end, they can not vote
Frankly, the effect of corporate lobbying is much more significant than one vote (due to the sheer magnitude of resources they can spend on it), so they still get the better end of the deal there.
Re:If I could do it, I would! (Score:3, Informative)
But if you think it's bad in Ireland now, try raising the corporate tax rate. How many of those companies will stay in Ireland?
It's a matter of balance. E.g. when you have no income tax, sure, you have plenty corporations - but you don't get a dime from that. Oh, right, their employees pay income & sale taxes? Well, problem is, they only have a headquarters in your country, minimally staffed - all actual R&D happens in some other country which has low personal income tax.
So, ultimately, you don't get anything at all out of the arrangement. It's as if your country (with no corporate income tax), and the other country (with no personal income tax) are helping the corp screw each other. The only one that gets anything out of it is the corp.
Re:Close the loop holes (Score:3, Informative)