Monday, August 01, 2011

taxing the corporations

Why, you might ask, are politicians from both political parties trying to balance a $14 trillion debt by cutting off food aid for grandma? Because the majority of them, particularly those on the right wing, are religiously devoted to the idea that taxes are bad. Taxes are evil. Taxing people, especially rich people, is a sin.

After all, they argue, taxing businesses kills jobs, right? Wrong.

In terms of any company of notable size, the corporate tax rate is 35%. That's 35% after deductions. Deductions to corporate rates can be pretty high, if you've got really good accountants and really good lobbyists (to bribe Congress into doing what you want). What do corporations really pay in taxes? Let's look.

Here's a list of companies that paid a lot less in taxes lately than you have. The list was compiled by U.S. Senator Bernie Sanders and his office.

Exxon Mobil (NYSE: XOM) made $19 billion in profits in 2009. Exxon not only paid no federal income taxes, it actually received a $156 million rebate from the IRS, according to its SEC filings.

Bank of America (NYSE: BAC [FREE Stock Trend Analysis]) received a $1.9 billion tax refund from the IRS last year, although it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.

Over the past five years, while General Electric (NYSE: GE) made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.

Chevron (NYSE: CVX) received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.

Boeing (NYSE: BA [FREE Stock Trend Analysis]), which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.

Valero Energy (NYSE: VLO), the 25th largest company in America with $68 billion in sales last year received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.

Goldman Sachs (NYSE: GS)in 2008 only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.

Citigroup (NYSE: C [FREE Stock Trend Analysis]) last year made more than $4 billion in profits but paid no federal income taxes. It received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury.

ConocoPhillips (NYSE: COP), the fifth largest oil company in the United States, made $16 billion in profits from 2007 through 2009, but received $451 million in tax breaks through the oil and gas manufacturing deduction.

Over the past five years, Carnival Cruise Lines (NYSE: CCL) made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.

That's just a snapshot of some of the biggest, most egregious examples of corporate income taxes being at or below zero. And yet, we're told that grandma has to die without food and medicine so these same corporations can avoid paying higher taxes (or in these cases, really ANY taxes)? How is that even a legitimate debate point in this country?

A similar argument is made that corporations need lower taxes, so they can take that tax money and use it to hire more workers. The idea is that lower taxes lead to more jobs. That sure sounds reasonable on some level, doesn't it? How does it work in practice?

Well, as of now, corporate America is sitting on $2 trillion (and climbing) in cash. They're not hiring. In fact, in many cases, corporations are downsizing, despite booming revenues! You don't even have to listen to me on this one. How about this quote, from that noted left-wing socialist/communist rag "Fortune" magazine?

"The Fortune 500 generated nearly $10.8 trillion in total revenues last year, up 10.5 percent. Total profits soared 81 percent. But guess who didn't benefit much from this giant wave of cash? Millions of U.S. workers stuck mired in a stagnant job market."

[via Subu. Note: I didn't write the above, so if you agree or disagree, write to benzinga not to me]

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