37 Giant Corporations Paid 0 in Taxes Last Year -- Who Are the Cheats?

[one...two...tree 2,762]

In 2010, Verizon reported an annual profit of nearly $12 billion. The statutory federal corporate income tax rate is 35 percent, so theoretically, Verizon should have owed the IRS around $4.2 billlion. Instead, according to figures compiled by the Center for Tax Justice, the company actually boasted a negative tax liability of $703 million. Verizon ended up making even more money after it calculated its taxes.

Verizon is hardly alone, and isn’t even close to being the worst offender. Perhaps most famously, General Electric raked in $10.5 billion in profit in 2010, yet ended up reporting $4.7 billion worth of negative taxes. The worst offender in 2010, as measured by its overall negative tax rate, was Pepco, the electricity utility that serves Washington, D.C. Pepco reported profits of $882 million in 2010, and negative taxes of $508 million — a negative tax rate of 57.6 percent.

Altogether, according to “Corporate Taxpayers & Corporate Tax Dodgers 2008-10,” a blockbuster new report put together by the Citizens for Tax Justice and the Institute on Taxation and Economic Policy that will have you reaching for your hypertension medicine before you finish reading the third page, 37 of the United States’ biggest corporations paid zero taxes in 2010. The list is a blue-chip roll-call.

As the authors acidly note, “Most Americans can rightfully complain, ‘I pay more federal income taxes than General Electric, Boeing, DuPont, Wells Fargo, Verizon, etc., etc., all put together.’ That’s an unacceptable situation.”

The “high taxation” lie

Reading through this report, you will find yourself seized by an irresistible desire to hurl yourself headlong into the nearest OccupyYourLocalCity protest. In an era of crushing government deficits and mass unemployment, corporate America is not only skating blissfully free of its civic responsibilities, but continues to complain that it is paying too much in taxes. Even worse: Congressional Republicans and many Democrats agree! Listening to our politicians talk, you would imagine that corporate America’s neck is permanently under the tax man’s steel-tipped boot. When, in fact, the exact opposite is the truth.

The list of companies that paid zero taxes is only the beginning of the travesties documented by the report. The authors looked at the tax filings from 2008-2010 of 280 of the nation’s biggest, most successful corporations. These companies reported $1.4 trillion worth of profit during a period when most Americans were struggling to stay afloat. The authors discovered that the average effective tax rate — what the companies really paid after government subsidies, tax breaks and various tax dodges were taken into account — was only 18.5 percent, less than half the statutory rate. Fully a quarter of the 280 companies paid under 10 percent.

Remember that fact, the next time someone tries to tell you that American corporations pay the highest income taxes in the free world. The only number that counts is the “effective tax rate.” One of the interesting tidbits provided by the authors is that in many cases, the tax rate on foreign income for many of these companies is actually higher than the effective U.S. rate.

The most distressing part of the tale is the big picture: The overall trend line is pointed in exactly the wrong direction. If you break out just the years 2009-2010, the effective tax rate was 17.3 percent. “In 2008, 22 companies paid no federal income tax, and got $3.3 billion in tax rebates. In 2010, 37 companies paid no income tax, and got $7.8 billion in rebates.” When measured as a percentage of total GDP, over the last three fiscal years, “total corporate income tax payments fell to only 1.16 percent of the GDP … a new sustained record low since World War II.

Corporate taxes paid for more than a quarter of federal outlays in the 1950s and a fifth in the 1960s. They began to decline during the Nixon administration, yet even by the second half of the 1990s, corporate taxes still covered 11 percent of the cost of federal programs. But in fiscal 2010, corporate taxes paid for a mere 6 percent of the federal government’s expenses.

How have these companies managed to cut their tax liabilities so far? The answer includes a mixture of targeted tax breaks that impact specific industries or companies, accounting games that corporations play with stock options, and sweeping adjustments to tax law such as changes in the rules in how companies can write off the value of depreciating equipment. The accounting rules for so-called accelerated depreciation are now so accommodating that companies can write off 75 percent of the cost of new equipment immediately.

A look at the list of the 10 corporations receiving the biggest tax-subsidy breaks from the U.S. government will defeat the ameliorating effects of anymedication: Wells Fargo, AT&T, Verizon Communications, General Electric, International Business Machines, Exxon Mobil, Boeing, PNC Financial Services Group, Goldman Sachs Group, and Procter & Gamble. “56 percent of tax subsidies,” write the authors, “went to four industries: financial, utilities, telecom, oil/gas/pipeline.”

The companies that pay

However, not all companies are tax dodgers. Of the 280 companies analyzed by the authors, about 25 percent of the total paid close to the statutory rate, a little over 30 percent. But there’s no rhyme or reason to who pays or who doesn’t.

DuPont and Monsanto both produce chemicals. But over the 2008-10 period, Monsanto paid 22 percent of its profits in U.S. corporate income taxes, while DuPont actually paid a negative tax rate of –3.4 percent. Department store chain Macy’s paid a three-year rate of 12.1 percent, while competing chain Nordstrom’s paid 37.1 percent. In computer technology, Hewlett-Packard paid 3.7 of its three-year U.S. profits in federal income taxes, while Texas Instruments paid 33.5 percent. FedEx paid 0.9 percent over three years, while its competitor United Parcel Service paid 24.1 percent.

The authors conclude on a wistful note, with a list of what Washington could do to bring sense and reason to corporate taxation, while providing the government with desperately needed revenue. But as the authors themselves readily acknowledge, their recommendations exist in an alternate universe from the one that we actually happen to live in.

Unfortunately, corporate tax legislation now being promoted by many in Congress seems stuck on the idea that as a group, corporations are now either paying the perfect amount in federal income taxes or are paying too much. Many members of the tax writing committees in Congress seem intent on making changes that would actually make it easier (and more lucrative) for companies to shift taxable profits, and potentially jobs, overseas. Meanwhile, GOP candidates for president are all promoting huge cuts in the corporate tax or, in several cases, even elimination of the corporate income tax entirely.

And that, ultimately, is the most enraging fact about the new report from the Citizens for Tax Justice and the Institute on Taxation and Economic Policy. It won’t make a darn bit of difference.

http://www.alternet.org/occupywallst/152958/37_giant_corporations_paid_0_in_taxes_last_year_--_who_are_the_cheats/?page=entire

[luckytxn 2,264]

I am sure a few here understand how and why they paid little or no taxes but I promise to come in with links and show how and why. It may surprise most that they did pay taxes and way more than they would have if they had made the earnings here. They are allowed to deduct the taxes they had to pay overseas. They are also allowed to deduct expenditures. Say they make purchases they can deduct a certain amount. This helps the economy as they would probably not make the purchases if they couldn't. Also a company the size of Exxon has employees in the range of 75-80 thousand and each of these are paid a salary that is taxed. That tax is a part of their earnings from Exxon. They also have to pay huge taxes on the raw materials they get. (I know because I used to have to do tests to determine how much for the IRS to collect.)

From the beginning to the end they have to pay taxes on everything they buy to make their product. All of these expenses are now tax deductible. Most of the earnings from a huge corporation of this sort is usually made overseas. Companies are allowed to deduct many things as ALL companies are allowed to and ANY citizen can do so. This is a few things. Closing these loopholes would cause more harm too as many large purchases may be delayed if bought at all. This can harm employment and the taxes that come with that.

There are about half of the citizens in this country that pay NO TAXES at all though and many get a REFUND from us taxpayers. This is a lot and very harmful to a country that wants to be Socialist. Also there is a huge new industry that does get HUGE SUBSIDIES and even get no tax at all and that is the Green Industries.

In short we spend too much and need to learn to live within our means. This playing the class warfare is easy to be shown to the masses and will fail as we have the internet and are not spoon fed as we used to be by the big 3-4 Networks. The Federal government can roll back to the levels they had a decade ago and all would still get their welfare check and the SS checks would still come and the Socialism will still be alive but we could abolish the IRS. It is all about living among ones means. If we did that the markets would perk up. Companies would start hiring and recovery would quickly come around.

Why do we not do all this? Well they love to control the citizenry first and foremost. The power they have and feel they have is huge by intertwining themselves to us little people. The last thing anyone should want is to hear the words, "we are the Feds and we have come to help."

Socialists love to think they are God.

[Misha & Ira 113]

I am sure a few here understand how and why they paid little or no taxes but I promise to come in with links and show how and why. It may surprise most that they did pay taxes and way more than they would have if they had made the earnings here. They are allowed to deduct the taxes they had to pay overseas. They are also allowed to deduct expenditures. Say they make purchases they can deduct a certain amount. This helps the economy as they would probably not make the purchases if they couldn't. Also a company the size of Exxon has employees in the range of 75-80 thousand and each of these are paid a salary that is taxed. That tax is a part of their earnings from Exxon. They also have to pay huge taxes on the raw materials they get. (I know because I used to have to do tests to determine how much for the IRS to collect.)

From the beginning to the end they have to pay taxes on everything they buy to make their product. All of these expenses are now tax deductible. Most of the earnings from a huge corporation of this sort is usually made overseas. Companies are allowed to deduct many things as ALL companies are allowed to and ANY citizen can do so. This is a few things. Closing these loopholes would cause more harm too as many large purchases may be delayed if bought at all. This can harm employment and the taxes that come with that.

There are about half of the citizens in this country that pay NO TAXES at all though and many get a REFUND from us taxpayers. This is a lot and very harmful to a country that wants to be Socialist. Also there is a huge new industry that does get HUGE SUBSIDIES and even get no tax at all and that is the Green Industries.

In short we spend too much and need to learn to live within our means. This playing the class warfare is easy to be shown to the masses and will fail as we have the internet and are not spoon fed as we used to be by the big 3-4 Networks. The Federal government can roll back to the levels they had a decade ago and all would still get their welfare check and the SS checks would still come and the Socialism will still be alive but we could abolish the IRS. It is all about living among ones means. If we did that the markets would perk up. Companies would start hiring and recovery would quickly come around.

Why do we not do all this? Well they love to control the citizenry first and foremost. The power they have and feel they have is huge by intertwining themselves to us little people. The last thing anyone should want is to hear the words, "we are the Feds and we have come to help."

Socialists love to think they are God.

[Usui Takumi 1,562]

In 2010, Verizon reported an annual profit of nearly $12 billion. The statutory federal corporate income tax rate is 35 percent, so theoretically, Verizon should have owed the IRS around $4.2 billlion. Instead, according to figures compiled by the Center for Tax Justice, the company actually boasted a negative tax liability of $703 million. Verizon ended up making even more money after it calculated its taxes.

Verizon is hardly alone, and isn’t even close to being the worst offender. Perhaps most famously, General Electric raked in $10.5 billion in profit in 2010, yet ended up reporting $4.7 billion worth of negative taxes. The worst offender in 2010, as measured by its overall negative tax rate, was Pepco, the electricity utility that serves Washington, D.C. Pepco reported profits of $882 million in 2010, and negative taxes of $508 million — a negative tax rate of 57.6 percent.

Altogether, according to “Corporate Taxpayers & Corporate Tax Dodgers 2008-10,” a blockbuster new report put together by the Citizens for Tax Justice and the Institute on Taxation and Economic Policy that will have you reaching for your hypertension medicine before you finish reading the third page, 37 of the United States’ biggest corporations paid zero taxes in 2010. The list is a blue-chip roll-call.

As the authors acidly note, “Most Americans can rightfully complain, ‘I pay more federal income taxes than General Electric, Boeing, DuPont, Wells Fargo, Verizon, etc., etc., all put together.’ That’s an unacceptable situation.”

The “high taxation” lie

Reading through this report, you will find yourself seized by an irresistible desire to hurl yourself headlong into the nearest OccupyYourLocalCity protest. In an era of crushing government deficits and mass unemployment, corporate America is not only skating blissfully free of its civic responsibilities, but continues to complain that it is paying too much in taxes. Even worse: Congressional Republicans and many Democrats agree! Listening to our politicians talk, you would imagine that corporate America’s neck is permanently under the tax man’s steel-tipped boot. When, in fact, the exact opposite is the truth.

The list of companies that paid zero taxes is only the beginning of the travesties documented by the report. The authors looked at the tax filings from 2008-2010 of 280 of the nation’s biggest, most successful corporations. These companies reported $1.4 trillion worth of profit during a period when most Americans were struggling to stay afloat. The authors discovered that the average effective tax rate — what the companies really paid after government subsidies, tax breaks and various tax dodges were taken into account — was only 18.5 percent, less than half the statutory rate. Fully a quarter of the 280 companies paid under 10 percent.

Remember that fact, the next time someone tries to tell you that American corporations pay the highest income taxes in the free world. The only number that counts is the “effective tax rate.” One of the interesting tidbits provided by the authors is that in many cases, the tax rate on foreign income for many of these companies is actually higher than the effective U.S. rate.

The most distressing part of the tale is the big picture: The overall trend line is pointed in exactly the wrong direction. If you break out just the years 2009-2010, the effective tax rate was 17.3 percent. “In 2008, 22 companies paid no federal income tax, and got $3.3 billion in tax rebates. In 2010, 37 companies paid no income tax, and got $7.8 billion in rebates.” When measured as a percentage of total GDP, over the last three fiscal years, “total corporate income tax payments fell to only 1.16 percent of the GDP … a new sustained record low since World War II.

Corporate taxes paid for more than a quarter of federal outlays in the 1950s and a fifth in the 1960s. They began to decline during the Nixon administration, yet even by the second half of the 1990s, corporate taxes still covered 11 percent of the cost of federal programs. But in fiscal 2010, corporate taxes paid for a mere 6 percent of the federal government’s expenses.

How have these companies managed to cut their tax liabilities so far? The answer includes a mixture of targeted tax breaks that impact specific industries or companies, accounting games that corporations play with stock options, and sweeping adjustments to tax law such as changes in the rules in how companies can write off the value of depreciating equipment. The accounting rules for so-called accelerated depreciation are now so accommodating that companies can write off 75 percent of the cost of new equipment immediately.

A look at the list of the 10 corporations receiving the biggest tax-subsidy breaks from the U.S. government will defeat the ameliorating effects of anymedication: Wells Fargo, AT&T, Verizon Communications, General Electric, International Business Machines, Exxon Mobil, Boeing, PNC Financial Services Group, Goldman Sachs Group, and Procter & Gamble. “56 percent of tax subsidies,” write the authors, “went to four industries: financial, utilities, telecom, oil/gas/pipeline.”

The companies that pay

However, not all companies are tax dodgers. Of the 280 companies analyzed by the authors, about 25 percent of the total paid close to the statutory rate, a little over 30 percent. But there’s no rhyme or reason to who pays or who doesn’t.

DuPont and Monsanto both produce chemicals. But over the 2008-10 period, Monsanto paid 22 percent of its profits in U.S. corporate income taxes, while DuPont actually paid a negative tax rate of –3.4 percent. Department store chain Macy’s paid a three-year rate of 12.1 percent, while competing chain Nordstrom’s paid 37.1 percent. In computer technology, Hewlett-Packard paid 3.7 of its three-year U.S. profits in federal income taxes, while Texas Instruments paid 33.5 percent. FedEx paid 0.9 percent over three years, while its competitor United Parcel Service paid 24.1 percent.

The authors conclude on a wistful note, with a list of what Washington could do to bring sense and reason to corporate taxation, while providing the government with desperately needed revenue. But as the authors themselves readily acknowledge, their recommendations exist in an alternate universe from the one that we actually happen to live in.

Unfortunately, corporate tax legislation now being promoted by many in Congress seems stuck on the idea that as a group, corporations are now either paying the perfect amount in federal income taxes or are paying too much. Many members of the tax writing committees in Congress seem intent on making changes that would actually make it easier (and more lucrative) for companies to shift taxable profits, and potentially jobs, overseas. Meanwhile, GOP candidates for president are all promoting huge cuts in the corporate tax or, in several cases, even elimination of the corporate income tax entirely.

And that, ultimately, is the most enraging fact about the new report from the Citizens for Tax Justice and the Institute on Taxation and Economic Policy. It won’t make a darn bit of difference.

http://www.alternet.org/occupywallst/152958/37_giant_corporations_paid_0_in_taxes_last_year_--_who_are_the_cheats/?page=entire

Here is an interesting snippet from the report -

Corporate lobbyists relentlessly tell Congress that companies need tax subsidies from the government in order to be successful. They promise more jobs if they get the subsidies, and threaten economic harm if they are denied them. A central claim in the lobbyists’ arsenal is the assertion that their clients need still more tax subsidies to “compete” because U.S. corporate taxes are much higher than foreign corporate taxes.

If high U.S. corporate taxes were really encouraging companies to move operations and jobs abroad, then the simple solution would be to repeal our rule that lets corporations indefinitely “defer” paying U.S. taxes on their foreign profits. Without this “deferral,” companies that pay low foreign taxes on their foreign profits would owe some U.S. taxes on those profits too, so that there would be no income-tax advantage to operating abroad.6 Naturally, the corporate lobbyists are violently opposed to this long-overdue reform.

In any event, it turns out that the corporate lobbyists’ assertion that U.S. taxes are higher than foreign taxes is wrong. In fact, in most cases just the opposite is true.

We examined the 134 companies in our survey that had significant pretax foreign profits (i.e., equal to at least 10 percent of their total worldwide pretax profits), and compared the 2008-10 U.S. and foreign effective tax rates they paid. Here is what we found:

# Two-thirdsoftheseU.S.companiespaidhigherforeigntaxesontheirforeignprofitsthanthey paid in U.S. tax on their U.S. profits.

# Overall, the effective foreign tax rate on the 134 companies was 6.1 percentage points higher than their U.S. effective tax rate — almost a third higher.7

Edited November 5, 2011 by Sousuke

[Karee 4,190]

Verizon has shipped most of their development to India. They have an Indian company called VDSI. They develop the applications there to sell them here. Also, most of their development teams here in the U.S. are H1B workers. I was on a contract there for 2.5 years here in the U.S. I was the only American out of about 20 people in my dept. I liked the job and the people I worked with. However, I always thought something was wrong with the picture. Here's how they do it:

None of the H1B workers that I have met actually work for Verizon on paper. They are contractors hired by other companies that specialize in bringing South Asian workers to the U.S. They work for companies like Infosys who's sole goal is to place H1B candidates. Verizon pays Infosys and Infosys pays the contractor.

Most of the H1B developers here are strictly here to send money back home. They get a 2 bedroom apt. and move 7-8 people in there. They send almost all the money back home. Some of them complained to me about FICA taxes because they are not eligible to receive any SS benefits.

Some of the contractors here would not get paid for months. Of course they were afraid of complaining for fear of having their visas revoked.

At the end of the day I found it odd that the largest telecommunications company in the US is almost cannabalizing themselves. If people cant get a job here, they will not be able to pay for Verizon services. As far as I know Verizon does not offer any services in India.

I had no health insurance or vacation while I worked there. The pay was good.

[Póg mo 1,749]

Good OP, what is not mentioned in the OP is how large corporations are able to avail of countless tax loopholes and state subsidies etc, yet small businesses on the other hand are expected to pay and pay. Instead of subsidizing corporate American, how leveling the playing field a little for companies actually willing to employ more US citizens.

[luckytxn 2,264]

Good OP, what is not mentioned in the OP is how large corporations are able to avail of countless tax loopholes and state subsidies etc, yet small businesses on the other hand are expected to pay and pay. Instead of subsidizing corporate American, how leveling the playing field a little for companies actually willing to employ more US citizens.

None of these get subsidies and are using existing tax laws meant for all companies to use. These are also among the largest employers in the country and contribute the largest inflow of cash into the whole country, states and localities. Just one of these companies employ more employees than most states have on their public payrolls.

The demonizing of them is harmful. Why harm them when they give so much to the country and communities they are in? Taking more from them so that the Socialists can give away to their donors and jobs to their campaign faithful is pathetic. Of course the talking points and actions is now for a complete class warfare so the upcoming elections can divert from Obama the Socialist serious failings and ineptness. Fortunately there are other ways for info to get out to the masses so the few major medias can't now completely brainwash the sheep.

Step right up sheep and start drinking the kool aid again. They are making it double strength this next go around. Oh and ignore that cliff up ahead.

[Gary and Alla 3,694]

so obviously the current system does not work

The problem is NOT that 37 corporations did not pay tax, the problem is that the rest of them DID. They only did so by passing their tax burden on to their customers, employees or stockholders. There is no other possibility. If you tax a corporation, even $1, they have to raise that $1 somehwere to turn it over to the government.

Eliminate all forms of tax on corporations and watch the businesses flood into the US to provide millions of jobs for people who will pay tax on all the money they have to spend. We should have the LOWEST corporate tax in the world and it should be -0-.

FAIR TAX!

Edited November 5, 2011 by Gary and Alla

[Usui Takumi 1,562]

so obviously the current system does not work

The problem is NOT that 37 corporations did not pay tax, the problem is that the rest of them DID. They only did so by passing their tax burden on to their customers, employees or stockholders. There is no other possibility. If you tax a corporation, even $1, they have to raise that $1 somehwere to turn it over to the government.

Eliminate all forms of tax on corporations and watch the businesses flood into the US to provide millions of jobs for people who will pay tax on all the money they have to spend. We should have the LOWEST corporate tax in the world and it should be -0-.

FAIR TAX!

It works in theory but not in practice. Look at the recent FAA situation. Taxes ended but most of the large airlines did not pass on the savings on. Likewise when the tax was reinstated, those airlines actually rolled back their fares.

The market determines prices at the end of the day.

Edited November 5, 2011 by Sousuke

[Usui Takumi 1,562]

None of these get subsidies and are using existing tax laws meant for all companies to use. These are also among the largest employers in the country and contribute the largest inflow of cash into the whole country, states and localities. Just one of these companies employ more employees than most states have on their public payrolls.

The demonizing of them is harmful. Why harm them when they give so much to the country and communities they are in? Taking more from them so that the Socialists can give away to their donors and jobs to their campaign faithful is pathetic. Of course the talking points and actions is now for a complete class warfare so the upcoming elections can divert from Obama the Socialist serious failings and ineptness. Fortunately there are other ways for info to get out to the masses so the few major medias can't now completely brainwash the sheep.

Step right up sheep and start drinking the kool aid again. They are making it double strength this next go around. Oh and ignore that cliff up ahead.

lol well apparently they give more to foreign communities than US one's per the report.

[Gary and Alla 3,694]

It works in theory but not in practice. Look at the recent FAA situation. Taxes ended but most of the large airlines did not pass on the savings on. Likewise when the tax was reinstated, those airlines actually rolled back their fares.

The market determines prices at the end of the day.

Yep. And the FAA situation WOULD have worked if it had been permanent. It was not and everyone knew it. Eventually one of the airlines would have dropped their price, then another and the dominoes would fall. It has happened before.

the market determines price! You said it! If you reduce costs to companies by eliminating taxes, then ONE of those companies s going to try and grab a bit more of the market by dropping its price a bit, then another will top that, then another. It cannot help but happen. Consumers will be demanding it, producers will respond.

It happened in 1981 when the airlines were deregulated. Remember? NM. Suffice to say we used to pay a LOT more for airfare. When the airlines were deregulated we were told it would reduce costs. It did not at first. People (mostly Democrats who had fought Reagan on it) griped "See I told you so" Then American Airlines started the "Super Saver" with up to 50% off and the "airwars" were on!

[Usui Takumi 1,562]

Yep. And the FAA situation WOULD have worked if it had been permanent. It was not and everyone knew it. Eventually one of the airlines would have dropped their price, then another and the dominoes would fall. It has happened before.

the market determines price! You said it! If you reduce costs to companies by eliminating taxes, then ONE of those companies s going to try and grab a bit more of the market by dropping its price a bit, then another will top that, then another. It cannot help but happen. Consumers will be demanding it, producers will respond.

It happened in 1981 when the airlines were deregulated. Remember? NM. Suffice to say we used to pay a LOT more for airfare. When the airlines were deregulated we were told it would reduce costs. It did not at first. People (mostly Democrats who had fought Reagan on it) griped "See I told you so" Then American Airlines started the "Super Saver" with up to 50% off and the "airwars" were on!

Or it could (and does) work the other way. One airline tries to raise fares and then the others match it. The tax becomes irrelevant to the price.

There have been 10 fare increases this year for instance. The latest one failed because other airlines didn't jump. Airlines aim to keep their seats full.

Edited November 6, 2011 by Sousuke

[Gary and Alla 3,694]

Or it could (and does) work the other way. One airline tries to raise fares and then the others match it. The tax becomes irrelevant to the price.

There have been 10 fare increases this year for instance. The latest one failed because other airlines didn't jump. Airlines aim to keep their seats full.

Thats the market at work and it is a good thing.

Interestingly, the Dems, during this brief time the tax was suspended, were making a big deal that the airlines "should" lower their prices. Yet when someone suggests removing a tax permanently would reduce prices..."OH NO IT WON'T"

Yes, it will. The prices we pay now are far lower than what we paid in the 1970s and that is not even allowing for inflation. I can fly to New York for $49 on short notice tomorrow morning and go to the airport and buy the ticket with my debit card from a vending machine, check in at a kiosk and get on the plane. In 1979 that would have been $125 or more and $125 was worth a lot more then, AND you would need a two week advance purchase and stay over a Saturday night. It is also why our airport overflows with cars with Quebec license plates escaping the high ticket prices and taxes in Canada.

You should read the FAIR TAX book, Sousuke. You actually show a spark of intelligence and could probably figure it out

[Usui Takumi 1,562]

Thats the market at work and it is a good thing.

Interestingly, the Dems, during this brief time the tax was suspended, were making a big deal that the airlines "should" lower their prices. Yet when someone suggests removing a tax permanently would reduce prices..."OH NO IT WON'T"

Yes, it will. The prices we pay now are far lower than what we paid in the 1970s and that is not even allowing for inflation. I can fly to New York for $49 on short notice tomorrow morning and go to the airport and buy the ticket with my debit card from a vending machine, check in at a kiosk and get on the plane. In 1979 that would have been $125 or more and $125 was worth a lot more then, AND you would need a two week advance purchase and stay over a Saturday night. It is also why our airport overflows with cars with Quebec license plates escaping the high ticket prices and taxes in Canada.

You should read the FAIR TAX book, Sousuke. You actually show a spark of intelligence and could probably figure it out

What has made seats cheaper is the system of yeild management where actual demand determines the costs of individual seats on a plane (hence you have alot price flux over the same plane). Its interesting because a single plane of 200 passengers might have 50 or 60 different fares. The government system was not as adaptive.

Under the freemarket system, the airline will raise the ceiling if there is market room to do so, independent of other cost pressures, be it fuel, taxes etc.

Edited November 6, 2011 by Sousuke

[Gary and Alla 3,694]

What has made seats cheaper is the system of yeild management where actual demand determines the costs of individual seats on a plane (hence you have alot price flux over the same plane). Its interesting because a single plane of 200 passengers might have 50 or 60 different fares. The government system was not as adaptive.

Under the freemarket system, the airline will raise the ceiling if there is market room to do so, independent of other market pressures, be it fuel, taxes etc.

You were not born then Sousuke, study a bit.

The government used to REQUIRE airlines to provide service to some smaller cities in return for being rewarded the "right" to provide service to a larger city. The government controlled routes. If you wanted to fly the lucrative New York to Chicago route, you also had to provide service to Burlington, Syracuse and Albany, for instance. They did but the fares were crazy expensive because there were not many people flying that route. It amounted to a TAX on the airlines, a government forced expense. Now they are back in smaller cities because there is increased air travel because there are lower fares. It now makes SENSE to fly to New York rather than drive. I can fly to New York for less than what I pay for dinner when I get there! It is $30 to PARK a car in Manhattan, minimum. $13 in tolls to get to the place to park, not counting GAS! $49 to fly there! 40 minutes vs 5 hours.

Seriously, read the FAIR TAX book as it covers many of these examples of when taxes have beenm removed and the results