 |
|
| Home | Yearly News Archive | Advertisers | Blog | Contact Us |
|
 |
Wednesday, May 22, 2024 |
|
We Need A New Tax Code |
Post Reply 
|
| Author | |
TonyB 
MUSA Citizen 
Joined: Jan 12 2011 Location: Middletown, OH Status: Offline Points: 631 |
 Post Options
 Thanks(0)
 Quote Reply
 Topic: We Need A New Tax CodePosted: Apr 08 2011 at 11:32am |
|
Thought I'd share this story with you to further illustrate my point. 10 of the Biggest Corporate Tax Cheats In America If you or I were running a small business and we kept one set of books showing how much money we were making and a second set for the IRS that painted a picture of an enterprise on the brink of bankruptcy, we'd end up behind bars. But that's standard operating procedure for corporate America. In fact, public corporations have to do it -- the law requires that they keep one set of books for their shareholders, and another for the IRS. As tax journalist David Cay Johnston explained, "Many corporations routinely tell investors they incur millions in corporate income taxes, while the financial records they give the IRS show they owe nothing or are due refunds." In the records kept by the IRS, corporations cook the books "by using tax shelters, offsetting income with losses from years ago, and employing countless other devices that make them look like paupers to the IRS but money machines to investors."We got a peek into this process last week, when the New York Times revealed that multinational giant GE is not only avoiding corporate income taxes this year, but is taking a “tax benefit” of $3 billion. According to the Times, the company's “extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.” But of course, GE is not alone. Here are 10 other big corporate tax evaders (with an assist from an MSNBC analysis of leading corporate tax-dodgers). Keep in mind that neither political party ever actually cuts spending significantly, so every dollar these companies avoid paying is one that will come out of the paychecks of working America. 1. Google CEO: Eric Schmidt (117 on Forbes list of the wealthiest with a net worth of $6.3 billion in 2010.) 2010 Pre-tax Profit: $10.8 billion How Google avoids paying US taxes: According to MSNBC, Google reports income in overseas tax havens and then reports its costs here at home. Google also patents its products abroad, licenses its technologies from its overseas subsidiaries and then writes off the costs of the licenses. Google fun-fact: Google rents 200 goats, complete with goatherd and a border collie, to keep the grass nicely trimmed at Google HQ. Oh, and this week Bloomberg reported that the Federal Trade Commission is considering launching a major investigation into Google's anti-competitive practices. 2. News Corp CEO: Rupert Murdoch (Murdoch ranked 53rd on Forbes' list of highest-paid CEOs and was the 117th richest person in the world last year.) 2010 Pre-tax Profit: $3.3 billion Taxation strategy: In 2008, the Government Accountability Office issued an analysis concluding that one of the companies with the greatest number of subsidiaries in offshore tax-havens was none other than News Corp., which then had more than 150 of them scattered across the world. News Corp. fun-fact: Fox “News” devoted significant airtime to hyping the financial ties between Alwaleed bin Talal, a member of the Saudi royal family, and the developers of the Park 51 Muslim community center planned for downtown Manhattan. Fox implied there was something sinister about the financier, but didn't mention that he is also News Corp.'s second largest shareholder, with 7 percent of the company's stock. 3. Boeing CEO: W. James McNerney (According to Forbes, McNerney is the 101st most highly compensated CEO, pulling in a cool $58 million over the last five years.) 2010 Pre-tax Profit: $4.5 billion How Boeing avoid paying US taxes: According to MSNBC, “despite a double-digit tax rate, Boeing has managed to escape paying federal taxes for the last three years thanks to a plethora of foreign subsidiaries, which act as a tax haven. According to Citizens for Tax Justice, the airplane maker paid 0.3 percent of its pre-tax income in federal income taxes in 2010.” Boeing fun-fact: Boeing may be a defense contractor that's flush with cash, but it reportedly uses prison labor to assemble cable assemblies for the F-15 fighter. At least the jobs are in the US! 4. Pfizer CEO: Ian Read (Read's new on the job, following the sudden departure of former CEO Jeffrey Kindler late last year.) 2010 Pre-tax Profit: $9.4 billion How Pfizer avoids paying US taxes: Pfizer uses “transfer pricing” to record phantom profits in low-tax countries based on sales in other countries. Pfizer fun-fact: The Wall Street Journal, in 2009, noted that “Pfizer agreed to plead guilty to a felony violation 'for misbranding Bextra with the intent to defraud or mislead.' The settlement is the largest in Justice Department history, according to theDOJ’s statement.” It paid $2.3 billion for the fraud. 5. Oracle CEO: Lawrence Ellison (Forbes ranks Ellison as the 6th richest man in the world, with a fortune worth $28 billion.) 2010 Pre-tax Profit: $8.2 billion How Oracle avoids paying US taxes: Transfer pricing again, although MSNBC adds that “Oracle suffered a bit last fall when its Japanese subsidiary had to negotiate an advance agreement with tax authorities in the US and Japan so it wouldn’t get hit with transfer price taxes in Japan... Its stock closed 9 percent below the previous day’s close on the Nikkei, the Japanese stock market. Oracle fun-fact: In 2004, then Attorney General John Ashcroft sued Oracle to block an acquisition on anti-trust grounds. Just three months after he resigned, Ashcroft opened a lobbying shop, Oracle became his biggest client and the right-wing crooner reportedly smoothed the way for its acquisition of Choicepoint, a company made infamous for its part in disenfranchising voters in the 2000 election. 6. Altria (Philip Morris) CEO: Michael Szymanczyk (He's #176 on Forbes' list of the most highly paid CEOs, raking in $6.35 million last year.) 2010 Pre-tax Profit: $5.7 billion How Altria avoids paying US taxes: According to MSNBC's analysis, “Between 2001 and 2003, the cigarette maker took advantage of $3.3 billion in tax breaks, which effectively cut its taxes by one-third.” Altria fun-fact: The word “Altria” is derived from the Latin word for “high,” and was taken to distance itself from the baggage surrounding the name Phillip Morris. According to the Center for Public Integrity, Altria came in second in terms of dollars spent on lobbying between 1998-2004, showering politicians with over $100 million. 7. IBM CEO: Samuel Palmisano (He also serves on Exxon Mobile's board of directors. Palmisano ranked 21st on Forbes' list of CEO pay, pulling down a tidy sum of over $25 million last year.) 2010 Pre-tax Profit: $19.7 billion How IBM avoids paying US taxes: Over three years in the early 2000s, the company exploited “a litany of tax breaks” that allowed it to slash its taxes by 95 percent! Bet you wish you could do that. IBM fun-fact: According to Reuters, IBM has cut 30,000 US jobs since 2003, which is good news for Indian tech workers – the company added 69,000 jobs in India over the same period. 8. Time Warner CEO: Jeffrey Bewkes (Bewkes pulled down $48 million in pay over the past five years, which was good enough for #56 on Forbes' 2010 list of best paid CEOs.) 2010 Pre-tax Profit: $3.9 billion How Time Warner avoids paying US taxes: According to MSNBC, “The entertainment conglomerate managed some swift accounting to use its merger with AOL in 2000 to leave it with little tax to pay. Between 2001 and 2003, Time Warner claimed tax breaks that cut its taxes by 121 percent—and allowed the company to pay nothing at all in taxes for two years.” Time-Warner fun-fact: A Google search of “Time Warner” and “evil” nets 4.2 million results. 'Nuff said – you already know you hate them. 9. Morgan Stanley CEO: James Gorman (After his firm played a starring role in crashing the global economy, Gorman took home a $5.7 million bonus in 2009.) 2010 Pre-tax Profit: $6.2 billion How Morgan Stanley avoids paying US taxes: It took full advantage of offshore tax havens; then, under a 2004 law, repatriated much of that money for a super-low tax rate of just over 5 percent. Morgan Stanley fun-fact: JPMorgan is the largest servicer of food-stamps in the U.S., offering benefit cards in 26 states. As Mary Bottari wrote for AlterNet, “The firm is paid per customer. This means that when the number of food stamp recipients goes up, so do JPMorgan profits.” She adds: “JPMorgan is taking its responsibility to keep the US unemployment rate high by offshoring the servicing of many of these contracts to India, according to ABC News.” 10. Microsoft CEO: Steve Ballmer (With a fortune of $14.5 billion, Ballmer is the 33rd richest person, according to Forbes.) 2010 Pre-tax Profit: $25 billion. Taxation strategy: Microsoft is a master of shifting income through various foreign countries— “to Bermuda via the Netherlands via Ireland” —in order to limit its domestic income subject to taxation. According to the blog MicrosoftTaxDodge, a carefully timed press release threatening to move the company's headquarters out of Washington state resulted in Rep. Ross Hunter, a 17-year former manager at Microsoft, pushing through “two huge gifts [for the company]: a $100 million annual tax cut and an estimated $1.25 billion in amnesty on its 13-year Nevada tax dodge.” Microsoft fun-fact: Both US and European regulators have found Microsoft in violation of anti-trust laws – it's practically the firm's business model. By Joshua Holland | Sourced from 358 Posted at April 5, 2011, 9:37 pm |
|
 |
|
|
TonyB
MUSA Citizen
Joined: Jan 12 2011 Location: Middletown, OH Status: Offline Points: 631 |
Post Options
Thanks(0)
Quote Reply
Posted: Apr 02 2011 at 1:28pm |
|
Vet -just my point. Could they make taxes any more complicated?
|
|
|
|
|
VietVet
MUSA Council 
Joined: May 15 2008 Status: Offline Points: 7008 |
Post Options
Thanks(0)
Quote Reply
Posted: Apr 02 2011 at 10:36am |
|
Sounds great if you are a self-employed business person. Doesn't do squat to help us folks who are the workers.
|
|
|
|
|
TonyB
MUSA Citizen
Joined: Jan 12 2011 Location: Middletown, OH Status: Offline Points: 631 |
Post Options
Thanks(0)
Quote Reply
Posted: Apr 02 2011 at 9:15am |
|
I saw this in an article from the Wall Street Journal and think it brilliantly points out the basis unfairness of the current tax codes. I wonder what other think?
How You Can Pull a GE on TaxesBrett Arends
Friday, April 1, 2011 provided by There's been a firestorm this week over the news that General Electric (NYSE: GE - News) will pay no tax -- at least, no federal corporate income tax -- on last year's profits. But if you're like a lot of people, your first reaction was probably: "Hmmm. How can I get that kind of deal?" You'd be surprised. You might. And without being either a pauper or a major corporation. I spoke to Gil Charney, principal tax researcher at H&R Block's (NYSE: HRB - News) Tax Institute, to see how a regular Joe could pull a GE. The verdict: It's more feasible than you think -- especially if you're self-employed. Let's say you set up business as a consultant or a contractor, something a lot of people have been doing these days. And, to make this a challenge on the tax front, let's say you do well and take in about $150,000 in your first year. First off, says Mr. Charney, for 2010 you can write off up to $10,000 in start-up expenses. (In subsequent years it's only $5,000.) Okay, let's say you claim $7,000. That takes your income down to $143,000. You can also write off all legitimate business expenses. Mr. Charney emphasizes that this only applies to legitimate expenses. He didn't say, but everyone seems to understand, that this can be quite a flexible term. Even if you buy a computer, a cellphone and a car primarily for business use, you can use them for personal purposes as well. If you happen to take a business trip to Florida in, say, January, no one is going to stop you from enjoying the sunshine or taking a dip in the pool. So let's say you manage to write off another $10,000 a year in business expenses. [More from WSJ.com: GE-Whizzes: Everyone's Looking for an Edge on Taxes] That brings your income, for tax purposes, down to $133,000. You'll have to pay Medicare and Social Security taxes (just like GE). Because you're self-employed, you have to pay both sides: the employee and the employer. That will come to about $19,000. However, you can deduct half of that, or $9,500, from your taxable income. So that brings your total down to $123,500 so far. Now comes the creative bit. The self-employed have access to terrific tax breaks on their investment and retirement accounts. The best deal for many is going to be a self-employed 401(k), sometimes known as a Solo 401(k). This will let you save $43,100 and write it off against your taxes. That money goes straight into a sheltered investment account, as with a regular 401(k). Why $43,100? That's because with a Solo 401(k), you're both the employer and the employee. As the employee you get to contribute a maximum of $16,500, as with any regular 401(k). But as the employer you also get to lavish yourself with an incredibly generous company match of up to 20% of net income. Yes, being the boss has its privileges. (And if you're 50 or over, your limit as an employee is raised from $16,500 each to $22,000.) You can save another $10,000 by also contributing to individual retirement accounts -- $5,000 for you, $5,000 for your spouse. If you use a traditional IRA, rather than a Roth, that reduces your taxable income as well. If you're 50 or over, the limit rises to $6,000 apiece. [More from WSJ.com: 30 Last-Minute Tax Tips] If you contribute $43,100 to your Solo 401(k), and $10,000 to two IRAs, that brings your income for tax purposes down to just over $70,000. We haven't stopped there either, says Mr. Charney. Now come the usual itemized deductions. You can write off your state and local taxes. Let's say these come to $10,000. You can write off interest on your mortgage. Call that another $10,000. That's enough to pay 5% interest on a $200,000 home loan. That gets us down to about $50,000 And we're not done. If you're self-employed, health insurance is probably a big headache. But the news isn't all bad. You can write off the premiums for yourself, your spouse, and your kids. And if you use a qualifying high-deductible health insurance plan -- there are a variety of rules to make sure a plan qualifies -- you get another break. You can contribute $3,050 a year into a tax-sheltered Health Savings Account, or $6,150 for a family. You can write those contributions off against your taxable income. The investments grow sheltered from tax. And if you spend the money on qualifying health costs, the withdrawals are tax-free as well. So call this $10,000 for the premiums and $6,150 for the HSA contributions. That gets your income, for tax purposes, all the way down to about $34,000. If you have outstanding student loans, you can write off $2,500 in interest. And you can write off $4,000 of your kid's college tuition and fees. [More from WSJ.com: Help Wanted: Tax-Compliance Gurus] Then there's a personal exemption: $3,650 per person. If you're married with one child, that's $10,950. Taxable income: just under $17,000. That's on a gross take of $150,000. You'd owe less than $1,700 in federal income tax. And it doesn't stop there. Because now you can bring in some of the tax credits. Unlike deductions, these come off your tax liability, dollar for dollar. GE got big write-offs related to green energy. There are some for you too, although on a small scale. You can claim credits for things like installing solar panels, heat pumps or energy-efficient windows or boilers in your home. Let's say you use a home equity loan to pay for the improvements and take the maximum $1,500 write-off. That gets your tax liability down to $200. Can we get rid of that? Sure, says Mr. Charney. If your spouse spends, say, $1,000 on qualifying adult-education courses or training programs, you can claim $200, or 20% of the cost, in Lifetime Learning Credits. (The maximum is $2,000.) That wipes out the remaining liability. Congratulations. You've pulled a GE. You owe no federal income taxes at all. OK, it's just an illustration. Few will be quite so fortunate. On the other hand, it's not comprehensive either. There are plenty of other deductions and credits we didn't mention. You could have written off up to $3,000 by selling loss-making investments. Your spouse may be able to use a 401(k) deduction as well. There are lots of ways to tweak the numbers. In this case, you've paid no federal income tax, and meanwhile you've saved $19,000 toward your retirement through Social Security and Medicare, and $53,000 through your 401(k) and IRAs. You've paid most of your accommodation costs (that is, the interest and property taxes on your home), covered your health-care costs and quite a lot of personal expenses through your business account, paid $4,000 toward your child's college costs and had about $2,000 a month left over for cash costs. Who says GE has all the fun? Write to Brett Arends at brett.arends@wsj.com |
|
|
|
Topic Options
|
Post Reply
|
|
Tweet
|
| Forum Jump | Forum Permissions You cannot post new topics in this forum You cannot reply to topics in this forum You cannot delete your posts in this forum You cannot edit your posts in this forum You cannot create polls in this forum You cannot vote in polls in this forum |
This page was generated in 0.083 seconds.
| Copyright ©2024 MiddletownUSA.com | Privacy Statement | Terms of Use | Site by Xponex Media | Advertising Information |