WASHINGTON POST: "THANKS TO *BERNIE SANDERS, WE NOW KNOW HOW MANY BIG CORPORATIONS *DON'T PAY TAXES"

[appalachiablue]

"Thanks to Bernie Sanders, We Now Know How Many Big Corporations DON'T PAY TAXES", by Max Ehrenfreud, The Washington Post, April 15, 2016.



Bernie Sanders asked federal accountants to tally up how many major corporations pay nothing in federal income taxes, and now we know the answer.
On the stump, Sanders has been denouncing the special treatment that he says big firms get from the government. It's been a crucial part of his pitch to voters throughout his unexpectedly successful presidential campaign so far.
The data the senator from Vermont requested from the Government Accountability Office do indeed suggest that the vast majority of firms don't pay federal corporate income taxes, but the report also complicates the story Sanders has been telling on the campaign trail. Of the 1.6 million corporations active in the United States in 2012, 70 percent had no federal corporate income tax liability. (These firms likely pay other taxes, of course, such as payroll taxes and local sales taxes.)
Big firms, however, were more likely to pay at least some taxes than smaller firms. Just 42 percent of large companies -- those with assets over $10 million -- paid no corporate income tax. Of those that didn't, many weren't making any money anyway: 20 percent of profitable large firms paid no income tax.

*CHART: MOST FIRMS PAY NOTHING IN FEDERAL INCOME TAX*
http://img-s-msn-com.akamaized.net/tenant/amp/entityid/BBrLg64.img?h=768&w=1366&m=6&q=60&o=f&l=f

On average, these large corporations with profits paid 14 percent of their income in federal income taxes between 2008 and 2012. By contrast, the rate on the books is 35 percent.
"LARGE CORPORATIONS CANNOT CONTINUE TO GET MORE TAX BREAKS WHEN CHILDREN IN AMERICA GO HUNGRY," Sanders said in a statement. "THAT MEANS CLOSING CORPORATE TAX LOOPHOLES TO RAISE THE REVENUE NECESSARY TO REBUILD AMERICA AND CREATE MILLIONS OF JOBS."

There a couple of reasons that corporations that are making money might not pay taxes on that income to Uncle Sam.
For one, when corporations lose money, they can count the losses against their income in the future, reducing how much they owe. According to the report, about 15 to 19 percent of corporations -- including equal shares of large and small firms -- got out of paying taxes by telling the federal government their earnings were just making up for losses in past years.
Corporations are also allowed to pay less in taxes when they invest in things like equipment and facilities. As a result, even when they're making money, firms sometimes don't have to pay any income taxes if they reinvest their profits. The authors of the report couldn't calculate how many firms were in this category, but given that more large firms are paying corporate income taxes in general, it seems safe to assume that small and middle sized firms are taking advantage of this provision of the tax code, too.

Liberal analysts argue this provision amounts to a giveaway for big firms that does little to stimulate the economy, but conservative observers contend that taxing companies on their investments means the company's shareholders are effectively taxed twice. The Joint Committee on Taxation has projected that the provision will allow corporations to save about $28 billion a year on their taxes over the next decade. As for other kinds of corporate breaks, the report from the Government Accountability Office concluded that very few firms did not pay income taxes because tax credits made up for what they owed -- less than 1 percent.
More: http://www.msn.com/en-us/money/markets/thanks-to-bernie-sanders-we-now-know-how-many-big-corporations-dont-pay-taxes/ar-BBrLinR?ocid=spartandhp
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[Perogie]

1. Why didn't Hilliary when she told them to.....

[appalachiablue]

4. She told them they better stop! All it took, Snap! And NO 2008 BURNDOWN...Wait!? :(

[peacebird]

2. Corporations need to pay their fair share. There is NO reason for taxpayers to subsidize Exxon

[appalachiablue]

3. "Enough is enough, is enough!"~ State Sen. Nina Turner of Ohio & Sen. Bernie Sanders of Vermont.

[BernieforPres2016]

5. The WaPo reporter who wrote that clearly knows nothing about accounting

"conservative observers contend that taxing companies on their investments means the company's shareholders are effectively taxed twice"

There is no suggestion of "taxing companies on their investments" by anybody. Businesses are supposed to be taxed on their profits. If they choose to reinvest their profits in equipment (because they expect the investment to produce more future profits), they are not taxed on that investment under anybody's proposal. If some of the tax deductions on business investments are eliminated, it doesn't constitute a second tax.

The writer of this article acts as if 20% of large profitable U.S. based corporations paying NOTHING in federal income taxes is lower than expected.

If you listen to the business lobby and Republican politicians, they will talk about how U.S. corporate tax rates are among the highest in the world and say that they need to be cut. But few corporations pay the 35% top tax rate. And they use bullshit transfer pricing to shift a lot of their profits into countries that are notorious tax havens with low corporate tax rates.

http://www.theatlantic.com/business/archive/2016/04/corporate-tax-avoidance/478293/

<Large corporations such as Pfizer, Walmart, IBM, and Apple have stashed billions of dollars via more than 1,500 subsidiaries in tax havens like the British Virgin Islands and the Cayman Islands, according to the report, which analyzed the companies’ Securities and Exchange Commission filings. Though this practice isn’t illegal, keeping profits offshore lowers the taxes owed in the United States, and this ends up costing the U.S. government about $111 billion each year in lost revenue, by Oxfam’s calculations.>

<Over the past several decades, corporations have been paying a smaller and smaller share of taxes, according to a Pew Research Center analysis. In 1952, corporate income taxes funded about 32 percent of the federal government. That shrank to 10.6 percent by 2015. While tax havens aren’t the sole cause of this shift, it’s worth noting that the share of corporate profits reported in tax havens has increased tenfold since the 1980s.>

That $111 billion lost in government revenue each year cited above would more than cover the $70 billion a year Bernie says free tuition to public colleges and universities would cost.

[Major Hogwash]

6. Tax reform is desperately needed.

But, I doubt if any of those loopholes will be closed unless Bernie becomes President.