Thirty companies paid no income tax 2008-2010: report

[Girl from Celebes 588]

(Reuters) - Thirty large and profitable U.S. corporations paid no income taxes in 2008 through 2010, said a study on Thursday that arrives as Congress faces rising demands for tax reform, but seems unable or unwilling to act.

Pepco Holdings, a Washington, D.C.-area power company, had the lowest effective tax rate, at negative 57.6 percent, among the 280 Fortune 500 companies studied.

The statutory U.S. corporate income tax rate is 35 percent, one of the highest in the world, but over the 2008-2010 period, very few of the companies studied paid it, said the report.

The average effective tax rate for the companies over the period was 18.5 percent, said Citizens for Tax Justice and the Institute on Taxation and Economic Policy, both think tanks.

Their report also listed General Electric Co, Paccar Inc, PG&E Corp, Computer Sciences Corp and NiSource Inc as among the 30 that paid no taxes. All 280 corporations examined were profitable over the period.

Corporations will say rightly that the loopholes that let them slash their taxes were perfectly legal, the report said.

"But that does not mean that low-tax corporations bear no responsibility ... The laws were not enacted in a vacuum; they were adopted in response to relentless corporate lobbying, threats and campaign support," the report said.

As Congress and the Obama administration struggle with a sluggish economy and high deficits, corporations are pressing Capitol Hill for more tax breaks, including one that would let them bring home overseas profits at a reduced tax rate.

The congressional "super committee" tasked with finding at least $1.2 trillion in additional budget savings by November 23 is so far deadlocked across a familiar divide -- Republicans refusing any tax hikes, Democrats defending social programs.

On Tuesday, a panel of budget experts warned super committee members that they would fail the country if they do not meet their goal. Financial markets have been waiting for many months for signs that Washington can get its financial house in order, but few have been forthcoming.

LOOKING BACK AT REAGAN

The report referred back to the 1986 tax reform pushed through by President Ronald Reagan, a Republican, who approved the largest corporate tax increase in U.S. history, largely by ending tax breaks, while cutting individual tax rates.

"Reagan solved the problem by sweeping away corporate tax loopholes," said the report, which was co-authored by Citizens for Tax Justice chief Robert McIntyre. His research 25 years ago played a key role in convincing Reagan reform was needed.

The industrial machinery business enjoyed the lowest effective tax rate during the study period, while the highest rate was paid by healthcare companies, the report said.

What are the tax breaks that corporations enjoy? One big one is accelerated depreciation that lets them write off equipment faster than it actually wears out. Deductions on executive stock options help. So do tax breaks for research and development and for making products in the United States instead of overseas. Offshore tax shelters play a role, too.

The average effective corporate tax rate, as calculated by McIntyre's group, was about 14 percent before the Reagan reforms; afterward it shot up to 26.5 percent in 1988.

As companies found their way around the reforms, the effective rate fell back to about 17 percent by 2002-2003.

Unlike in Reagan's time, taming corporate tax breaks alone will not solve today's deficit problem. Such breaks cost the government about $102 billion in lost revenues in 2011, a year when the federal deficit was an estimated $1.3 trillion.

Corporate loopholes are dwarfed by tax breaks that benefit individuals, such as the mortgage interest tax deduction -- a middle class sacred cow -- on its own worth $104 billion.

Still, said the report, "If we are going to get our nation's fiscal house in order, increasing corporate income taxes should play an important role."

Orginally from here

[Gary and Alla 3,694]

This is not true.

NO company which made a profit paid income tax. It is not possible for a company that makes a profit to pay income tax.

If the company makes a profit at all, even ONE dollar, then all their income tax was paid by someone else.

Customers, employees and stockholders, all individuals, paid the tax.

The problem is that we have "income tax" at all. There should be -0- income tax for businesses, and -0- income tax for anyone else. we should fund our government with sales taxes on money which spent, not money which is "made".

[Girl from Celebes 588]

This is not true.

NO company which made a profit paid income tax. It is not possible for a company that makes a profit to pay income tax.

If the company makes a profit at all, even ONE dollar, then all their income tax was paid by someone else.

Customers, employees and stockholders, all individuals, paid the tax.

The problem is that we have "income tax" at all. There should be -0- income tax for businesses, and -0- income tax for anyone else. we should fund our government with sales taxes on money which spent, not money which is "made".

Accounting is not my knowledge base, Gary, so as simple thoughts I would say why we are, the regular people, working class have to paid taxes and there are big companies can escape from burden like this.And if it is not true, do you think Reuters reporters just forget to drink their pills today and make such article like this?. I would be so curious to see how "smart" they are!

Edited November 3, 2011 by Girl from Celebes

[Gary and Alla 3,694]

Accounting is not my knowledge base, Gary, so as simple thoughts I would say why we are, the regular people, working class have to paid taxes and there are big companies can escape from burden like this.And if it is not true, do you think Reuters reporters just forget to drink their pills today and make such article like this?. I would be so curious to see how "smart" they are!

simple.

"Companies" are nothing but a piece of paper. They have no "money" and no ability to "make money" unless they take it from somewhere else. From where?

So let's say we increase tax on those big bad companies (that employ millions of people) What happens? They have to FIND the money to pay the tax. How?

1. Raise prices on their product so the tax is passed on to their customers (regular people)

2. Cut dividends to stockholders (regular people)

3. Cut pay or benefits to employees (regular people)

4. Cut contributions to employee benefits (regular people)

Companies do not have a money machine to print money to pay tax, they can only COLLECT tax money and pass it on to the government. They have to COLLECT it from someone else...regular people. Businesses have no money, only people have money. Tax takes money from people.

Rueters is using the system we have to promote class envy, class warfare. They did not forget to take their pills, they know YOU didn't. They know they can trick you into believeing you can get something for free and some big bad company will pay for it...and you will vote for the candidate they want in order to get free stuff.

This is why we MUST change our revenue system in this country so it is plain and clear who really pays and so that every person pays for what they receive from the country. Eliminate income tax of any sort and apply a sales tax to replace it. Everyone pays the same rate of tax on things they buy and NO income tax. Rich people pay more because they spend more. There is no tax evasion, no cheating on tax returns, no loopholes and exemptions for companies to exploit. Simple.

TAX needs to be used to generate funds for the government. THAT IS ALL. It should not be used to say "companies pay more than I do" and other social agendas. Raise money to fund the government, get the politics and class warfare our of it.

[Girl from Celebes 588]

simple.

"Companies" are nothing but a piece of paper. They have no "money" and no ability to "make money" unless they take it from somewhere else. From where?

So let's say we increase tax on those big bad companies (that employ millions of people) What happens? They have to FIND the money to pay the tax. How?

1. Raise prices on their product so the tax is passed on to their customers (regular people)

2. Cut dividends to stockholders (regular people)

3. Cut pay or benefits to employees (regular people)

4. Cut contributions to employee benefits (regular people)

Companies do not have a money machine to print money to pay tax, they can only COLLECT tax money and pass it on to the government. They have to COLLECT it from someone else...regular people. Businesses have no money, only people have money. Tax takes money from people.

Rueters is using the system we have to promote class envy, class warfare. They did not forget to take their pills, they know YOU didn't. They know they can trick you into believeing you can get something for free and some big bad company will pay for it...and you will vote for the candidate they want in order to get free stuff.

This is why we MUST change our revenue system in this country so it is plain and clear who really pays and so that every person pays for what they receive from the country. Eliminate income tax of any sort and apply a sales tax to replace it. Everyone pays the same rate of tax on things they buy and NO income tax. Rich people pay more because they spend more. There is no tax evasion, no cheating on tax returns, no loopholes and exemptions for companies to exploit. Simple.

TAX needs to be used to generate funds for the government. THAT IS ALL. It should not be used to say "companies pay more than I do" and other social agendas. Raise money to fund the government, get the politics and class warfare our of it.

Media should out of politics. Endorse some candidates for presidential by media company like New York Times did, would never happened in my country nor would gain benefits for readers but only slamming to each others. Media can mislead people especially those are who just happen being regular persons.

Edited November 3, 2011 by Girl from Celebes