Paul Buchheit
NationofChange / Op-Ed
Published: Monday 15 April 2013
Despite this betrayal of the American people, neoliberals insist on even less taxes and less regulation and less government. They apparently believe in the words of Dante: “The path to paradise begins in hell.”

Looking for Cheats in Corporate Tax Filings: A Descent into the Circles of Hell

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When Dante descended into the Inferno, guided by Virgil, he passed through Circles of Gluttony and Greed, and of Heresy and Fraud and Treachery.

The modern-day version is the corporate tax filing to the Securities and Exchange Commission (SEC). Navigation through the hellish form is fraught with anguish and pain and bewilderment, causing the visitor to beg for release from its devilish grasp, to shudder when recalling the sign at the entrance: "Abandon all hope, ye who enter here."

The Circle of Betrayal: Big Profits Overseas, Big Losses in the U.S.

Bank of America, Citigroup, and Pfizer can be found here. In the last two years each one of them made much of their revenue in the U.S., but they claimed billions of dollars in foreign profits and billions of dollars in U.S. losses.

Here are the sordid details:

Citigroup, whose 2005 "Plutonomy Memo" said that "the World is dividing into two blocs - the Plutonomy and the rest," had 42 percent of its 2011-12 revenue in North America (almost all U.S.) but declared a $5 billion U.S. loss and a $28 billion foreign profit.

Pfizer had 40 percent 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 went ahead and declared a fifth straight U.S. loss.

Bank of America may be the worst. CEO Brian Moynihan once lamented that nobody understood "how much good" his employees do. But his company, with a whopping 82 percent of its 2011-12 revenue in the U.S., declared $7 billion in U.S. losses and $10 billion in foreign profits.

Circles of Duplicity and Disdain

This is where Dante might have seen the shadowy image of a human face on the body of a venomous barb-tailed dragon. These are companies with US-declared 2011-12 incomes that appear to fall far short of a reasonable amount based on their usage of U.S. resources and privileges.

Abbott Labs had 42 percent of its sales in the U.S., but declared a loss in the U.S. along with $12 billion in foreign profits.

Baxter Labs had about 40 percent of its sales and assets in the U.S., but only 14 percent of its declared income.

Cisco had 50 percent of its sales in the U.S., but just 25 percent of its income.

Dell, with about a 50-50 split in US/foreign revenue, declared only 12 percent of its profits in the US.

Dow had 32 percent of its sales in the U.S., but declared a U.S. loss against foreign profits of over $5 billion.

DuPont listed 38 percent of sales and 67 percent of property in the U.S., but only 20% of income.

Honeywell had almost 60 percent of sales in US, but only 34 percent of its income.

Johnson & Johnson declared 44 percent of its sales and over half of its long-lived assets in the U.S., but only 32 percent of its income.

Microsoft claimed over half its sales in the US, but only about 20 percent of its income.

Circles of Petroleum and Power and Pollution and Pomposity

Exxon has about 39 percent of its employees, 33 percent of its sales, 40 percent of its long-lived assets, and 70-90 percent of its productive oil and gas wells in the U.S., yet declares only 15 percent of its income as earned here. The company pays only 2.2 percent of its total income in U.S. taxes.

Chevron is no better, with "Operable Capacity" and the number of gas stations about equally divided between the U.S. and international sites. About 75 percent of its oil and gas wells and 90 percent of its pipeline mileage are in the United States. Yet the company claims only 20 percent of its income in the U.S., and pays only 3.8 percent of its total income in U.S. taxes.

General Electric, notorious for its non-payment of taxes, has almost half of its employees and income in the U.S., but paid over four times as much foreign tax as U.S. tax.

Circles of Gibberish

In order to track down tax avoiders, the traveler must trudge through corporate tax filing Limbo, an underworld of jargon and drivel and legalese. Among the most incomprehensible findings are these:

Exxon uses something called a "theoretical tax" to account for almost 90 percent of its income tax bill. Here's what The Economist says about theoretical taxes: "Companies have two versions of the truth: the theoretical tax bill, calculated using accounting profits..and the actual cash tax they pay.."

Berkshire Hathaway declares "hypothetical amounts" to write off its tax bill.

IBM, apparently without a computing device, contends that "Quantification of the deferred [unrepatriated] tax liability..is not practicable."

Comcast says, "From time to time, we engage in transactions in which the tax consequences may be subject to uncertainty. In these cases, we evaluate our tax positions using the recognition threshold and the measurement attribute in accordance with the accounting guidance related to uncertain tax positions."

Even Lucifer had to laugh.

The Path to Paradise

The Bureau of Economic Analysis notes that U.S. employment accounted for 68 percent of total worldwide employment in 2010, and that sales by U.S. parent companies in 2010 were almost twice the amount of majority-owned foreign affiliates. Yet 100 of the largest Fortune 500 companies claimed only 44 percent of their collective income in the U.S., and paid only 10.5 percent of their total income in federal taxes.

Despite this betrayal of the American people, neoliberals insist on even less taxes and less regulation and less government. They apparently believe in the words of Dante: "The path to paradise begins in hell."



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ABOUT Paul Buchheit

Paul Buchheit is a college teacher with formal training in language development and cognitive science. He is the founder and developer of social justice and educational websites (UsAgainstGreed.org, RappingHistory.org, PayUpNow.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

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10 comments on "Looking for Cheats in Corporate Tax Filings: A Descent into the Circles of Hell"

ZeteAnomeni

November 30, 2013 10:53am

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Grant Martin

April 22, 2013 8:38pm

The problem with the USA and the world is it's filled with Stupid People.
There is a technology 6 thousand years old that will fix this problem it is called
TM
see

http://www.davidlynchfoundation.org/

http://www.youtube.com/watch?v=TfIqvZLIZz8

http://www.youtube.com/watch?v=z2UHLMVr4vg&NR=1&feature=endscreen

study everything on these sites - watch all the videos
cough up the money to learn TM properly & sit twice a day in silence for 20 minutes
nature will come to save us

Eat only organic food. Preferably food you have grown yourself.

Protect yourselves and let the dumb ones go off eating Stupid Food

If you live in the USA travel to Fairfield Iowa - see their plans
for the future of our dear world ... the light glows bright there.
Good luck !

ZeteAnomeni

November 30, 2013 10:53am

www.sevendesires.com/
ヴィヴィアンウエストウッド マフラー
人気高のイヴ·サンローラン 財布,オロビアンコ長財布,グッチ 財布,ジミーチュウ アウトレット,バリーシューズ,バレンシアガ キーケース,フェンディ バッグ トート,ポールスミス レディース,ヴィヴィアンウエストウッド マフラー激安通販,全品送料無料!大特価で通販
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mamabashums

April 15, 2013 3:21pm

We cant get these people to pay more because they are protected by a wall of
lawyers 20 foot high and 100 yards wide 30 men deep. You have to take from their profits by exposing the toilet paper roll called the double roll with 142 sheets for twelve dollars but you can buy 12 double rolls that have 220 sheets but it is 1 inch smaller in height whats the difference trash them both for their bullshit. I still say we need to create new sources of revenue ie: raffle of realestate and cars so everyone will own a home outright before long with the extra money we can reduce the debt and make new laws like the one that says that if you dont make a profit for four consecutive years that you must now claim your business a hobby thats a real law. Once you have all citizens in homes massive increase in revenue we can create state run banks and change the bankruptcy laws so you never have to go bankrupt again because you can raffle off your house for full amount of debt. You could also create public co ops to compete with the big boys in the very same field as comcast and the others but give hugh tax breaks to them as all work and profits are only us made. Competition will bring them down and we will rise

CTMaloney

April 15, 2013 1:42pm

Yes, the pharma companies are the most abusive and make increasingly bigger profits even now, and they think Americans are willing to pay anything for physical comfort. We are suckers for believing so much in curative medical treatment, also for accepting that Medicare by Congressional decision cannot negotiate with pharma companies about the cost of "medicines."

lois v harrison

April 15, 2013 1:36pm

Where does one begin to process this information? In the end, who will pay? In one breath Americans want less government (less taxes), in the next breath they want more of, well, everything. I think karma has manifest already. Sadly the innocents are karma’s victims of this pervasive ignorance of (ignore) consequences. To my mind the most evil perpetrators of society's decline are pharmaceutical industries... they seem to be yours too? Not only are they desecrating the environment, abusing animals and all species of life, dumbing down human nature - cradle to grave - they have poisoned our brains in the name of profits - shooting sprees a possible side effect. Ripping off governments is just good business. Acceptance. From self indulgence in the ‘American Dream’ to waking up “Homeless” in America you can have it all, the cost is a society in decline. Who pays? It is interesting that children are raised without regard for life, even religion wants to deprive them of witnessing and appreciating the evolution of any form of life, especially their own. Unregulated, unrestrained (high polluting) corporate greed creates poverty by ripping off governments: Dante’s Inferno? What is poverty? My grandmother liked to say “It’s no sin to be poor, but it is a sin to act poor”, she meant a state of mind, not a state of debt. Is poverty ignorance? Apathy? If corporations are ripping off government, then are they ripping off society? If governments cannot afford to care for and protect, nurture and educate society, when Americans are broke, who pays? Well at least individuals still have RIGHTS for what’s important: ‘to bear arms’ the corporate media reminds us. The same corporate news media who preach violence, promote and market their drugs and beauty potions between corporate Reality TV programs demonstrating extreme ignorance for entertainment. Greed plus poverty, ignorance plus despair, drugs plus guns. It’s too much math for my mind. I am going now to meditate on nothingness.

greghilbert

April 15, 2013 1:54pm

I just want to point out that Obama has protected and even aided and abetted these wealthy corporate tax dodgers from the day he took office, that he continues to do so as we speak, and that his coronated 2016 successor Clinton -- who served on Walmart's board of directors -- would do likewise. Repubs openly savage the have nots. Modern-day Dem leaders are masters at PRETENDING to the contrary.

jimbobob13

April 15, 2013 7:08pm

Clinton served on the Walmart Board when the old man was alive, and they bragged about selling American made products. It was the Walton kids who turned it into the hard core screw the poor company it is today. I shopped there in the 70s early 80s, but not since.

leapinleopard

April 15, 2013 11:22am

Excellent observation, JH... yet the prevailing mood amongst the middle class aspirants to the plutocracy accuse the poor and disenfranchised of being nothing but deadbeats, freeloaders, takers, etc. The corporatists have succeeded in turning even the middle class against the have-nots. This is their intended, if not openly stated aim.
As long as the corporatists can keep sucking the teat of the body politic, they will never acknowledge their obligation to maintain the armature of the proletariat.

Jeffrey Hill

April 15, 2013 10:58am

Fortune 500 corporations are deadbeats, moochers, freeloaders, and takers.

Their executives and board members belong in penitentiaries.