I got an interesting item pushed to me from an online-MBA website blog where today's item was on "10 Big Businesses That Barely Pay Taxes". It looks at companies like GE, duPont, Verizon, ExxonMobil, FedEx, Boeing, Google and others that aggressively maximize the offshoring of profits and the onshoring of deductions (like the "domestic manufacturing" reduction in the tax rate, the research deduction, etc.) in order to tap out on taxes at zero or awfully close thereto.
The companies tend to dislike such coverage of their very low tax rates of only slightly more than 0% when they are quite loudly (and hypocritically) protesting how uncompetitive the 35% statutory rate makes them. The site notes that most of the companies have claimed that they pay a higher rate than the one noted here--usually by counting their financial statement deferred taxes as though they were already paid. Deferred taxes, however, are just an accounting way of noting the possibility of future taxes--they may never be paid (for example, if offshore profits are not repatriated, or if corporations are successful in lobbying for another very-low-tax repatriation holiday), and years of deferral can convert what appear to be substantial taxes into de minimis amounts, since that money is meanwhile invested and earning more money.
Here are some excerpts (not in the same order as in the blogpost itself):
1.Boeing may own and operate factories and research facilities all over the U.S., but the mega-corporation isn’t paying much back to the government for the privilege of doing business in this country. In fact, the company hasn’t paid anything at all for three years running. Over those three years, Boeing made $9 billion in profits but didn’t pay anything in federal income taxes, actually getting back more than $178 million in tax benefits. ...
2. ... A study found that in 2008 FedEx paid no federal taxes, which the company claims is an anomaly caused by depreciation deductions. ...
3. ... Verizon hasn’t paid a cent in taxes for the past three years. ...[i]t actually makes money from the government in the form of tax subsidies and is the third largest collector of these benefits in the U.S., ... . Like GE, Verizon has denied these tax evasion allegations, stating that they pay billions in taxes every year, but like GE, Verizon is counting deferred taxes in these calculations. ...
4.GE has raked in more than $81 billion during the past decade, but little of that profit has been returned to the government in the form of taxes. While the corporate tax rate has held steady at 35%, GE has paid an average of just 2.3% of its income in taxes since 2002. And that’s just an average, some years the company didn’t pay taxes at all, getting off scot-free in 2002, 2008, 2009, and 2010 ...
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