Most news sources are funded by corporations and investors. Their goal is to drive people to advertisers while pushing the corporate agenda. NationofChange is a 501(c)3 organization funded almost 100% from its readers–you! Our only accountability is to the public. Click here to make a generous donation.
Four Contemptible Examples of Corporate Tax Avoidance
CEOs are legendary for defending their tax paying records, and eager to imply that government is responsible for any of their tax delinquencies. Apple CEO Tim Cook announced, "We pay all the taxes we owe - every single dollar." Whole Foods co-founder John Mackey supported the iPhone maker, saying "It's not Apple's fault that they're seeking to avoid paying taxes. They're not lying, cheating or stealing. They're following the rules that were created by governments. If the government doesn't like the rules, they can change them."
Mackey didn't mention that changing the tax rules is a specialty of big business. As is flouting the tax rules. The following four tales of corporate malfeasance are particularly disturbing.
1. Just 32 companies avoided enough in 2012 taxes to pay the ENTIRE 2013 federal education budget.
In 2012 an Apple executive protested, "We shouldn't be criticized for using Chinese workers. The U.S. has stopped producing people with the skills we need." His comment was somewhat accurate. Half of the companies surveyed by The Chronicle said they couldn't find qualified graduates for positions within their organizations.
Yet one of the major reasons for job-unpreparedness is quietly ignored by the big companies, just as their taxes are. A Pay Up Now analysis of SEC tax filings found that the total 2012 income taxes (federal and foreign) of thirty-two large companies amounted to just 17% of pre-tax worldwide income. The result was the same in 2011. The figures are consistent with a recent analysis of 2010 data by theGovernment Accountability Office.
The shortfall from the required 35% statutory rate comes to about $72 billion, about the same as the federal education budget for 2013. Apple Corp., the biggest offender by far, avoided more than the combined National Science Foundation and Small Business Administration budgets.
This helps to explain why "the U.S. has stopped producing people with the skills we need."
2. Bank of America: 82% of Revenue in U.S., $7 billion loss. (But big foreign profits.)
Bank of America CEO Brian Moynihan once complained that nobody understood "how much good" his employees do. But his company, with a whopping 82% of its 2011-12 revenue in the U.S., declared $7 billion in U.S. losses and $10 billion in foreign profits.
Citigroup is close behind. With 42% of its 2011-12 revenue in North America (almost all U.S.), it declared a $5 billion U.S. loss and a $27 billion foreign profit.
Also scornworthy is Pfizer, which had 40% of its 2011-12 revenues in the U.S., but declared almost $7 billion in U.S. losses to go along with $31 billion in foreign profits. After the SEC questioned Pfizer in 2012 about four straight years of U.S. losses despite large worldwide incomes, the company responded by declaring a fifth straight U.S. loss.
3. Relative to workers' payroll tax, corporate taxes have dropped from $1.00 to 7 cents.
In 1953, as the most productive era in U.S. history was beginning, corporations contributed over a dollar for every 33 cents paid by workers. In 2011, the corporate contribution was about 7 cents for every 33 cents paid by workers.
For those who believe that entitlements are the problem, Urban Institute figures should help them reconsider. The typical two-earner couple making average wages throughout their lifetimes will receive less in Social Security benefits than they paid in. Same for single males. Almost the same for single females.
4. Sales tax on school supplies: 10%. Sales tax on $1,000,000,000,000,000 of financial securities: ZERO.
Estimates of the financial derivatives market vary, from $708 trillion to $1.2 quadrillion to $3 quadrillion to a gazillion. This money is a largely speculative and unproductive figment of the financial fantasy world. But speculative financial activity is so inflationary that the world's total wealth, according to the authors of the Global Wealth Report, has doubled in ten years, from $113 trillion to $223 trillion, and is expected to reach $330 trillion by 2017.
The sales tax on the U.S. portion of a quadrillion dollars of trades? Zero. Only a tiny fee is charged to cover SEC expenses.
"If the government doesn't like the rules, they can change them." Except that the people with the money and the power like the rules just the way they are.