10 Companies Avoided Paying $60.5b Federal Taxes

According to Bill Moyers one company even got $535 million in tax rebates though it paid no income tax at all!

According to a 'Americans For Tax Fairness 2013 report, "America’s 35% tax rate is the highest among industrialized nations, but very few companies pay anything like those rates. Total corporate federal taxes paid fell to 12.1% of U.S. profits in 2011, according to the Congressional Budget Office. The average profitable company in the Fortune 500 paid just 18.5% of its profits in federal income taxes between 2008 and 2010, according to Citizens for Tax Justice, a nonpartisan tax research organization. Dozens of large and profitable companies paid nothing in recent years..

.. In 1952, under Republican President Dwight D Eisenhower, corporate income taxes were nearly a third of the federal government’s receipts but had declined to less than 10% by 2012. This is due to a corporate tax code riddled with loopholes, perks and preferences won by corporate lobbyists and backed by millions of dollars of campaign gifts to Members of Congress."

CommentaryAmong just those 10 companies federal taxpayers are on the hook for $60,500,000,000 more on the national debt along with it's accompanying interest. Overall it cost the U.S. Treasury about $90b a year in lost revenue.

An argument can be made companies don't pull this money out of a hat. They'd instead pass it along to it's customers. Indeed they do. However a very large chunk of these profits now come from their international operations overseas. In other words the entire amount wouldn't be passed down to American consumers alone.

Another gigantic tax loophole concerns how CEO's are paid.

According to the AFTF report, because of congressional legislation passed back in 1993, they are exempt from having to pay taxes on any of their 'performance based' earnings. This is why you see the largest portion of their compensation coming from being issued massive shares of stock. According to the report this tax loss amounts to about $8b a year.

There are a couple of other things you should be aware of. They only have to pay taxes on them when they cash them and only on any gains made from the time they were issued. They are taxed at whatever the current 'capital gains tax' is at that time. Obviously one which is a much lower rate then they would have to pay otherwise if it were considered salaried income.

WAIT DON"T GO AWAY. That's not all there is. Get this, the companies that issued shares of stock to them get to deduct the value of them from their taxes. It's like printing your own money!

I SAID DON'T GO AWAY. Let me run this little scenario past you. Suppose a CEO is looking to getting out. I'm not saying this has happened, but it can. This CEO begins to do a lousy job. The board fires him. Usually these honchos, unlike you or I, are given extremely large severance packages. Thus rewarding someone for doing a lousy job.

This usually happens when a company's earnings stays flat or even loses money. What follows is the value of shares in such a company also remain flat or fall. Like I said it may have or not happened, but there's a huge incentive for a CEO looking to get out for a number of reasons. Remember what I said about them only having to pay taxes on their shares when they gain value. Why wouldn't a CEO be tempted to do a lousy job?

Here's what could happen. (1) He or she could be offered an over the top 'severance package" up front. (2) The CEO could conceivably keep share prices down while he/she is still at the helm. Which would make it a fantastic time to unload his/her shares (they never paid for in the first place) with no tax consequences.

This explains how some wealthy people pay lower rates then you or I. Our current tax laws on corporations and those who run them are filled with more loopholes then a block of Swiss cheese.

This also explains why tax rates for most individuals are the way they are. It's because few at the top are paying their share. Yet, many of the very same people are advocating for even greater tax reductions for they and their corporations. Some companies aren't paying anything at all. The way I understand math, nothing from nothing is still nothing. How can anyone give them a bigger break then that?

Never mind. Sorry I asked. This is how..
     "The Average American Families Pays $6K a Year in Big Business Subsidies""The Cato Institute estimates that the US federal government spends $100 billion a year on corporate welfare. That’s an average of $870 for each one of America’s 115 million families..

It does include payments to 374 individuals on the plush Upper East Side of New York City and others who own farms, including Bruce Springsteen, Bon Jovi and Ted Turner. Wealthy heir Mark Rockefeller received $342,000 to NOT farm, to allow his Idaho land to return to its natural state.

It also includes fossil fuel subsidies, which could be anywhere from $10 billion to $41 billion per year for research and development. Yet this may be substantially underestimated. The IMF reports US fossil fuel subsidies of $502 billion, which would be almost $4,400 per U.S. family..."

In ConclusionAll of this is like a board game we're all forced to play in which only dumb criminals go to jail. Smart crooks seldom do. They get elected, entrenched in commerce and set the rules.

When players get wise there's little they can do other then becoming like them or be the kind of person we hope never to become. As for me, I choose the latter.