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13 Mindblowing Facts About America’s Tax-Dodging Corporations

TheDemSocialist

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[h=1]A judicious writer avoids adjectives like “mindblowing,” especially when covering political or economic issues. But no other word seems to describe the stunning reality of corporate taxation in modern America, which cries out for the italics-heavy, exclamation-point-driven format made famous byRipley’s Believe It or Not.
Stylistic overkill? Read these thirteen facts and you may change your mind.

1. We’re told we can’t “afford” full Social Security benefits, even though closing corporate tax-haven loopholes would pay for Obama’s “chained CPI” benefit cut more than ten times over!


2. Corporate tax rates are near their 60-year low, even though profits are at a 60-year high!
3. Wells Fargo got $8 billion in tax breaks, even as executives at its subsidiary Wachovia avoided indictment for laundering money for the Mexican drug cartels!
4. Some other huge corporations paid less than nothing, too.
5. The amount of money US corporations are holding offshore is an estimated one trillion dollars!
6. One building in the Cayman Islands is the official location of 18,857 corporations!
7. Conservatives complain about the “official” corporate tax rate in this country, but corporations actually pay roughly one-third of the official rate in actual taxes.
8. Corporations used to pay 30 percent of Federal taxes, and now they pay less than 7 percent!
9. Big corporations paid $216 million to Congress and got $223 billion in tax breaks!
10. We don’t even know who owns some corporations, even though that makes it easier to evade taxes, dodge creditors, avoid paying alimony or child support, and even fund terrorism!
11. Bank of America committed foreclosure fraud, was bailed out by the government, and then paid no taxes on $4.4 billion in profit!
12. What they call “tax reform” would actually prevent our elected representatives from giving businesses financial incentives to improve our lives!
13. Despite their greed, mismanagement, and freeloading, tax-dodging corporations are using shell organizations like “Fix the Debt” and “the Committee for a Responsible Federal Budget” to tell ordinary Americans they have to sacrifice even more to preserve corporate wealth!


Read more @:
13 Mindblowing Facts About America

Man our tax system is so messed up. :doh











[/h]
 

ttwtt78640

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Your points 12 and 13 tell the story well. Our congress critters need campaign cash, but not tax money. Far too many folks believe that marginal/nominal tax rates are the major factor in determining one's tax bill, when AGI/net income are much more important. 80% (or more) of the federal tax code is to support "legal" methods to reduce gross income down to AGI/net income.
 

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Terrible we focus on working class crime when white collar crime is much more serious. Funny how this doesn't make main stream news, TNC ARE ROBBING 3 WORLD COUNTRY'S OF THERE WEALTH
 

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I believe that we should have a 0% corporate income tax and instead rely on a strongly progressive system to collect tax revenues at the individual level. It makes no sense to tax a paper entity when you can very simply tax those that control the company with a rate relative to their level of “control” (pay grade). That said, I believe that this list of items shouldn’t be remedied but instead should simply be eliminated.
That doesn’t mean that these items are not a strong indicator of a system that is quickly becoming top heavy and will violently flip over if something isn’t done. It stands to reason that those at the top are most effected by corporate tax rates – it is under this assertion that economists derive “70%” effective tax rates in our past and largely explains the shift in wealth over the last 30 or 40 years.
 

imagep

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I believe that we should have a 0% corporate income tax...

I've always thought that also. Until recently, when a poster on this forum changed my mind. His point was that investors receive certain advantages of investing in corporations, such as they have no liability in excess of their investment. For such priviledges, they should be willing to pay a price - the price of the corporate income tax. No one HAS to start a C-corp, they do it because it provides special benefits. They do it because they believe that the benefits exceed the price.

But I do agree that the bulk of taxes paid on corporate profits should be taxed at the individual level.

I think that there is a lot of room for a reasonable compromise here. I would love to see the corporate tax rate dropped to a flat 5 or 10% on every penny of profit, with no special tax deal. Combine that with a more progressive personal income tax system where all income, regardless of source, is taxed identically, and simply provide an inflation adjustment for all capital gains so that people who's capital gains profits are only representing conservation of investment don't have to pay any tax due to inflation.
 

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I've always thought that also. Until recently, when a poster on this forum changed my mind. His point was that investors receive certain advantages of investing in corporations, such as they have no liability in excess of their investment. For such priviledges, they should be willing to pay a price.

They do pay a price. They pay for the shares they buy. To me it is ridiculous to raise taxes anywhere. It just allows a corrupt congress to have more money to waste. Start making some serious steps toward reducing the scop and power of federal government and then I can be talked into all kinds of thing, like perhaps reducing the national debt. But to provide money just for the expansion of government will never get support from me.
 

justabubba

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I believe that we should have a 0% corporate income tax and instead rely on a strongly progressive system to collect tax revenues at the individual level. It makes no sense to tax a paper entity when you can very simply tax those that control the company with a rate relative to their level of “control” (pay grade). That said, I believe that this list of items shouldn’t be remedied but instead should simply be eliminated.
That doesn’t mean that these items are not a strong indicator of a system that is quickly becoming top heavy and will violently flip over if something isn’t done. It stands to reason that those at the top are most effected by corporate tax rates – it is under this assertion that economists derive “70%” effective tax rates in our past and largely explains the shift in wealth over the last 30 or 40 years.

business owners today live in the corporation's housing, eat its food, drives its cars, fly its aircraft, attend school on its dime, and enjoy healthcare at the corporation's expense. the principals effectively live off of the corporation's costs, which are then deducted from revenues as expense items to reduce the corporation's tax liability, and yet you would further eliminate the expectation of corporations, which are more profitable than at any time in our history, from paying taxes to support the very economic engine that enables such profitability
 

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business owners today live in the corporation's housing, eat its food, drives its cars, fly its aircraft, attend school on its dime, and enjoy healthcare at the corporation's expense. the principals effectively live off of the corporation's costs, which are then deducted from revenues as expense items to reduce the corporation's tax liability, and yet you would further eliminate the expectation of corporations, which are more profitable than at any time in our history, from paying taxes to support the very economic engine that enables such profitability

You're not exactly correct on some of this, many expenses are NOT deductible for tax purposes to a corporation, or only a portion of them are. Certain fringe benefits are taxable to the receiver, and if they can't prove the use of the corporate jet was for business purposes, it becomes one of those taxable fringe benefits.
 

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You're not exactly correct on some of this, many expenses are NOT deductible for tax purposes to a corporation, or only a portion of them are. Certain fringe benefits are taxable to the receiver, and if they can't prove the use of the corporate jet was for business purposes, it becomes one of those taxable fringe benefits.

Actually he is no way correct about any of what he said.
 

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Actually he is no way correct about any of what he said.

i invite you to show every instance where my presentation was other than factual
 

fmw

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i invite you to show every instance where my presentation was other than factual

None of it is factual. First we define "principals" In a corporation that is the stockholders. Corporations don't provide anything to stockholders except for information and stock dividends. The dividends are taxed as regular income. If, instead of principals you meant senior management, then those folks are employees and are not provided with housing, food, transportation etc by the corporation. The corporation might provide employment benefits such as health insurance but, for the most part, those would be provided to most employees. Stock options and things of that nature are compensation and taxed like anything else. You have a distorted sense of tax law, I think.
 

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Actually he is no way correct about any of what he said.

Some of it is technically correct. The corp can and does pay for meals, either as business expense or charged to employee perks. Corp can pay for health coverage, schooling if it pertains to the business, etc.

Some will stretch it as far as they can, and hope they don't get audited. Some play it by the books, but they are eligible expenses.
 

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Some of it is technically correct. The corp can and does pay for meals, either as business expense or charged to employee perks. Corp can pay for health coverage, schooling if it pertains to the business, etc.

Some will stretch it as far as they can, and hope they don't get audited. Some play it by the books, but they are eligible expenses.

The corp can pay for meals at work or on business trips. It cannot pay for employees' supermarket bills. Bubba is trying to make me think that senior management doesn't have any living expenses because the corporation pays for everything. That is simply not true or even close to true.
 

GottaGo

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The corp can pay for meals at work or on business trips. It cannot pay for employees' supermarket bills. Bubba is trying to make me think that senior management doesn't have any living expenses because the corporation pays for everything. That is simply not true or even close to true.

No, not supermarket bills, at least not legitimately. There are discretionary expenses that fall under 'employee perks' that are in the grey area, but even that is subject to close review.

But some will try anything. I know someone who tried to write off a 40 some foot RV as a "mobile security office". It worked, for a couple of years. The penalties were pretty hefty.
 

justabubba

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None of it is factual. First we define "principals" In a corporation that is the stockholders. Corporations don't provide anything to stockholders except for information and stock dividends. The dividends are taxed as regular income. If, instead of principals you meant senior management, then those folks are employees and are not provided with housing, food, transportation etc by the corporation. The corporation might provide employment benefits such as health insurance but, for the most part, those would be provided to most employees. Stock options and things of that nature are compensation and taxed like anything else. You have a distorted sense of tax law, I think.

let's take an example of an LLC which is owned exclusively by family members, the principal owners
it realizes sales revenues and incurs business expenses, which expenses are deducted from the revenues to realize net taxable income
and it can incur an array of expenses, including the cost of lodging, meals, transportation, health insurance, computer and other equipment, furniture, communications devices and their plans to use them. those expenses can be for any of its employees, including the principals'
those expenditures are expected to be for the benefit of the LLC. but how does the IRS know that the lodging, meals, entertainment, transportation, equipment, furnishings, communication devises/plans are not being personally - even exclusively - used for the benefit of the principals. which is how owners/principals live out of a business, reducing the LLC's tax liability because the inflated expenses incurred for the personal use of the principal owners diminishes the amount remaining as taxable income
hell, that LLC can even loan its owners the business' capital, so that they do not need to realize a substantial taxable income to cover their remaining personal expenses

and again, i welcome your attempt to point to any misinformation found in my posts
 

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let's take an example of an LLC which is owned exclusively by family members, the principal owners
it realizes sales revenues and incurs business expenses, which expenses are deducted from the revenues to realize net taxable income
and it can incur an array of expenses, including the cost of lodging, meals, transportation, health insurance, computer and other equipment, furniture, communications devices and their plans to use them. those expenses can be for any of its employees, including the principals'
those expenditures are expected to be for the benefit of the LLC. but how does the IRS know that the lodging, meals, entertainment, transportation, equipment, furnishings, communication devises/plans are not being personally - even exclusively - used for the benefit of the principals. which is how owners/principals live out of a business, reducing the LLC's tax liability because the inflated expenses incurred for the personal use of the principal owners diminishes the amount remaining as taxable income
hell, that LLC can even loan its owners the business' capital, so that they do not need to realize a substantial taxable income to cover their remaining personal expenses

and again, i welcome your attempt to point to any misinformation found in my posts

I'm an owner of a business and have been for over 20 years. The tax laws for my corporation, despite its tiny size, are no different than the tax laws for Ford Motor Co. How does the IRS know a business owner is cheating by having the company pay for personal expenses? By audit. That is how they encounter all tax cheating. It is illegal for a company to pay personal expenses without reporting it as income and collecting tax for it. You are saying there are businesses that are tax cheats. Of course. There are millions of people who are tax cheats. There are even high ranking government officials who are tax cheats. That doesn't mean it is OK to do that. It is illegal. Again, your post is all misinformation.
 

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I'm an owner of a business and have been for over 20 years. The tax laws for my corporation, despite its tiny size, are no different than the tax laws for Ford Motor Co. How does the IRS know a business owner is cheating by having the company pay for personal expenses? By audit. That is how they encounter all tax cheating. It is illegal for a company to pay personal expenses without reporting it as income and collecting tax for it. You are saying there are businesses that are tax cheats. Of course. There are millions of people who are tax cheats. There are even high ranking government officials who are tax cheats. That doesn't mean it is OK to do that. It is illegal. Again, your post is all misinformation.

i have been coaching small businesses for 32 years
and the successful ones exploit the tax laws, knowing how to document their expenses so that they are able to legally qualify as a write off
and that was my point
businesses already enjoy that tax advantage
we should not then expand it by eliminating businesses from having to pay taxes on their net profits
 

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let's take an example of an LLC which is owned exclusively by family members, the principal owners
it realizes sales revenues and incurs business expenses, which expenses are deducted from the revenues to realize net taxable income
and it can incur an array of expenses, including the cost of lodging, meals, transportation, health insurance, computer and other equipment, furniture, communications devices and their plans to use them. those expenses can be for any of its employees, including the principals'
those expenditures are expected to be for the benefit of the LLC. but how does the IRS know that the lodging, meals, entertainment, transportation, equipment, furnishings, communication devises/plans are not being personally - even exclusively - used for the benefit of the principals. which is how owners/principals live out of a business, reducing the LLC's tax liability because the inflated expenses incurred for the personal use of the principal owners diminishes the amount remaining as taxable income
hell, that LLC can even loan its owners the business' capital, so that they do not need to realize a substantial taxable income to cover their remaining personal expenses

and again, i welcome your attempt to point to any misinformation found in my posts

An LLC is a pass through entity, it is not taxed as a 'corporation', the members of the LLC are taxed their portion of profits.
 

justabubba

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An LLC is a pass through entity, it is not taxed as a 'corporation', the members of the LLC are taxed their portion of profits.

absolutely, which is why that would normally be the appropriate business form
but if the LLC is able to minimize profits realized and passed thru - such as expanding LLC expenditures which benefit the principals while also diminishing profits subject to tax (by the principals) then the principals enjoy the benefit of untaxed revenues used to pay their personally enjoyed expenses
assuming they are willing and able to expose themselves to and prevail in any audit
 

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absolutely, which is why that would normally be the appropriate business form
but if the LLC is able to minimize profits realized and passed thru - such as expanding LLC expenditures which benefit the principals while also diminishing profits subject to tax (by the principals) then the principals enjoy the benefit of untaxed revenues used to pay their personally enjoyed expenses
assuming they are willing and able to expose themselves to and prevail in any audit

Any business, sole proprietor included, can attempt to claim just about anything and write it off to the business. Individuals can do it too, if they want to risk audit, fines, penalties etc.

That doesn't legitimize your argument.
 

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I believe that we should have a 0% corporate income tax and instead rely on a strongly progressive system to collect tax revenues at the individual level. It makes no sense to tax a paper entity when you can very simply tax those that control the company with a rate relative to their level of “control” (pay grade). That said, I believe that this list of items shouldn’t be remedied but instead should simply be eliminated.
That doesn’t mean that these items are not a strong indicator of a system that is quickly becoming top heavy and will violently flip over if something isn’t done. It stands to reason that those at the top are most effected by corporate tax rates – it is under this assertion that economists derive “70%” effective tax rates in our past and largely explains the shift in wealth over the last 30 or 40 years.

While sales taxes developed mostly as a way to accrue needed revenue on the sly, corporate taxes exist because the regulations and protocols of corporations make it relatively easy to hide personal assets in the company ledger.

I'm not a huge fan of directly taxing business either, but it is the least intrusive way of stopping people from hiding assets, since it is a relative simple procedure to investigate inconsistencies in a ledger.

What I don't understand is why loopholes and tax havens are tolerated. They undermine the purpose of having a progressive taxation system to begin with.
 
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justabubba

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Any business, sole proprietor included, can attempt to claim just about anything and write it off to the business. Individuals can do it too, if they want to risk audit, fines, penalties etc.

That doesn't legitimize your argument.

not true
show me a wage earner who writes off his assets in depreciation
or is able to write off his meals as an expense
or transportation
or lodging
or education/training
the wage earner is at a huge disadvantage compared to the business entity/principals relative to tax advantages
and there is no basis to justify furthering that advantage by eliminating the tax on business incomes
 

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not true
show me a wage earner who writes off his assets in depreciation
or is able to write off his meals as an expense
or transportation
or lodging
or education/training
the wage earner is at a huge disadvantage compared to the business entity/principals relative to tax advantages
and there is no basis to justify furthering that advantage by eliminating the tax on business incomes

Individuals can, and some do, jack up their medical expenses, education expenses, business related expenses, mileage, etc., to reduce their tax liability.

Sole proprietors, who are individuals, can write off a great number of things under Section 179 without going through the depreciation schedules that most fixed assets require.
What Is a Section 179 Expense Deduction? | eHow

So, if you remove the tax liability from the business, there are several ways it's a plus:

1. Since business taxes are usually treated as a pass-through tax, the actual cost of the product goes down, therefore the consumer price should go down.
2. Reduction in IRS personnel since they no longer have to audit and review business tax filings.
3. It opens up cash for possible increases in workforce or expansion (purchasing goods).

Businesses aren't doing anything illegal. Perhaps your beef should be with the lawmakers that allow the deductions. If you remove the deductions from a corp and continue to tax them, it isn't going to hit their bottom line, it's going to hit consumer product prices. That should work out well. :wink:
 

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i have been coaching small businesses for 32 years
and the successful ones exploit the tax laws, knowing how to document their expenses so that they are able to legally qualify as a write off
and that was my point
businesses already enjoy that tax advantage
we should not then expand it by eliminating businesses from having to pay taxes on their net profits

There isn't any tax advantage. Businesses pay income tax on net profit. All of it. I was not the one suggesting businesses shouldn't be taxed. I merely explained that the consumer, in the end, pays all business taxes - and expenses for that matter - in whatever they buy. If consumers want to pay higher taxes, then they should talk to their congressman. I, for one, never want taxes increased because all taxes do is expand government even more. That's all I said and I stand by it.
 
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