Everybody knows multinational corporations are not paying U.S. taxes. Yet instead of making corporations cough up, our government is busy planning more screw jobs on the U.S. middle class and labor force, all under the guise of reducing spending.
Senator Bernie Sanders is trying to draw attention to the insanity with a top ten list of the worst corporate tax avoiders.
Here is the list from Sander's floor speech.
- Exxon Mobil 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 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 made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS.
- Chevron received a $19 million refund from the IRS last year after it made $10 billion in profits in 2009.
- Boeing, 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, 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 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 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, 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 made more than $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.
Did you know G.E. didn't pay any taxes? That's right, in 2010, G.E. made $14.2 billion in global profits, $5.1 billion inside the United States, paid zero taxes and got a $3.2 billion dollar refund from Uncle Sam.
Literally Obama put G.E., yes that G.E., in the White House.
It appears the Obama administration somehow believes shipping jobs overseas and letting multinational corporations manipulate the U.S. corporate tax code magically creates jobs. This insanity is assuredly touted by some corporate lobbyists explaining in great detail how . Yes, corporate lobbyists do literally attempt to spin math to politicians. If there was ever a need for better mathematical skills, frankly, it's in the White House and Congress to see through this baloney. Literally Obama claimed he thought about jobs as soon as he woke up and before he went to sleep. That's one scary statement, for the obvious, stop offshore outsourcing them has magically never been brought up as a remedy for the jobs crisis.
We're not alone in noticing the insanity of putting a corporate tax dodger, labor arbitrager and offshore outsourcer in the White House to create American jobs. Seems Russ Feingold has formed an organization to get G.E. out of the White House. Yet Obama, he's standing by his
campaign donor man, G.E. CEO Immelt.
Someone like Immelt, who has helped his company evade taxes on its huge profits -- and is now looking to workers to take major pay cuts after his compensation was doubled -- should not lead the administration's effort to create jobs.
In Stop the Freeloaders, one op-ed out of many demanding we stop this never ending corporate welfare, we have more damning facts:
GE spent $200 million to lobby for loopholes in the federal income tax code over the past decade, made $26 billion in American profits over the past five years, and not only paid absolutely no federal income taxes, but got itself a $4.1 billion rebate from the IRS.
That is far from an anomaly. Two out of every three U.S. corporations paid no federal income taxes from 1998 through 2005, according to a report by the Government Accountability Office. And the situation hasn’t improved since then.
Lest one focuses exclusively on G.E., there are many, many multinationals doing the same thing, offshore outsourcing jobs, squeezing workers and manipulating tax codes. In fact it's so bad, the we want to be a Chinese company Cisco Systems is demanding a tax holiday to bring their ill-gotten offshore outsourcing gains back to the United States tax free. This latest screw the nation tax agenda is all about distributing parked profits to shareholders and of course, corporate executives. In 2010, corporations made record profits, all the while offshore outsourcing jobs in the biggest jobs crisis since the Great Depression.
In 2008, the GAO found 23% of U.S. corporations pay zero tax in a given year. From 1998 to 2005, we have:
For large U.S. corporations -- defined as those with at least $250 million in assets or gross annual receipts of at least $50 million -- the GAO found that 25% reported owing no federal income tax in 2005. That percentage has been falling significantly since 2001, when it reached a peak for the period of 38%. The study also found that about 24% of these large U.S. corporations reported no tax liability for at least four of the eight years being studied.
Also, 72% of large foreign-owned corporations that do business in the U.S. reported no tax liability for at least one year during the period, the GAO found.
There are many ways corporations avoid paying taxes, such as Google's Double Dutch or manipulation of transfer pricing. Manipulation of corporate tax codes is so common, literally one can lay out the steps as a glorified HOWTO: Not Pay Uncle Sam:
Step 1: U.S. firms rely on aggressive "transfer pricing" to sell, at bargain prices, high-profit U.S. assets or business opportunities to their low-taxed foreign subsidiaries in countries like Ireland. It cannot be simply the luck of the Irish that explains the extraordinary profitability of the Irish subsidiaries of U.S. firms relative to their European sister companies.
Step 2: U.S. multinationals move income from higher-tax foreign countries, where their customers actually are located, to lower-taxed ones not only through transfer pricing but also through "earnings stripping." For example, a corporation funds its German subsidiary with loans secured in Ireland, so the interest is deductible in Germany.
Step 3: Not satisfied with low corporate tax rates in Ireland (12.5%) or in other countries, U.S. firms set up exotic internal funding structures -- with such names as "Double Irish Dutch Sandwich" -- to shift income from these countries to zero-tax havens like Bermuda.
Step 4: Firms arbitrage what remains of their U.S. tax base by parking their global external-debt financing here, which creates interest deductions to shield their U.S. income. They then overstuff their low-taxed foreign subsidiaries with equity capital.
Step 5: Having put their stateless-income generating machines in motion, U.S. firms let their ultra-low-taxed foreign income accumulate abroad. Microsoft, for example, has accumulated $29.5 billion in offshore indefinitely reinvested earnings. Its financial statements suggest that its effective foreign tax rate from selling its products and services to customers located primarily in populous and relatively high-tax countries is in the neighborhood of 4%.
Step 6: With more than $1 trillion in low-taxed earnings offshore, the firms complain to Congress that U.S. tax law impedes their ability to reinvest their foreign earnings back home because they have not yet paid U.S. taxes on them. They demand a special tax holiday from Congress so they can complete the circle and repatriate all those earnings at nominal cost.
So, do you think Congress will do anything about this and stop screwing the nation and her people? Not on your life for now more than ever, corporate welfare is an inside job.