Category Archives: Taxes

26 top American corporations paid no federal income tax from ’08 to ’12 – report

26 top American corporations paid no federal income tax from ’08 to ’12 – report 26 top American corporations paid no federal income tax from ’08 to ’12 – report

Twenty-six of the most powerful American corporations – such as Boeing, General Electric, and Verizon – paid no federal income tax from 2008 to 2012, according to a new report detailing how Fortune 500 companies exploit tax breaks and loopholes.
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The report, conducted by public advocacy group Citizens for Tax Justice (CTJ), focuses on the 288 companies in the Fortune 500 that registered consistent profit every year from 2008 to 2012. Those 288 profitable corporations paid an “effective federal income tax rate of just 19.4 percent over the five-year period — far less than the statutory 35 percent tax rate,” CTJ states.

One-third, or 93, of the analyzed companies paid an effective tax rate below 10 percent in that timespan, CTJ found.

Defenders of low corporate taxes call the US federal statutory rate of 35 percent one of the highest companies face in any nation. But the report signals how the most formidable corporate entities in the US take advantage of tax breaks, loopholes, and accounting schemes to keep their effective rates down.

“Tax subsidies for the 288 companies over the five years totaled a staggering $364 billion, including $56 billion in 2008, $70 billion in 2009, $80 billion in 2010, $87 billion in 2011, and $70 billion in 2012,” CTJ states. “These amounts are the difference between what the companies would have paid if their tax bills equaled 35 percent of their profits and what they actually paid.”

Just 25 of the 288 companies kept tax breaks of $174 billion out of the $364 billion total. Wells Fargo received the largest amount of tax subsidies – $21.6 billion – in the five-year period. The banking giant was joined in the top ten on that list by the likes of AT&T, ExxonMobil, J.P Morgan Chase, and Wal-Mart.

26 top American corporations paid no federal income tax from ’08 to ’12 – report 2 26 top American corporations paid no federal income tax from ’08 to ’12 – report

 

About 1 in 11 of the 288 companies paid a zero percent effective federal income tax rate in the five years considered. Pepco Holdings – which supplies utility services to Delaware, the District of Columbia, Maryland, and parts of New Jersey – paid a cumulative five-year effective rate of -33 percent, the lowest of any company in that period.

In fact, utilities came out particularly well among other industries.

26 top American corporations paid no federal income tax from ’08 to ’12 – report 3 26 top American corporations paid no federal income tax from ’08 to ’12 – report

 

“The sectors with the lowest effective corporate tax rates over the five-year period were utilities (2.9 percent), industrial machinery (4.3 percent), telecommunications (9.8 percent), oil, gas and pipelines (14.4 percent), transportation (16.4 percent), aerospace and defense (16.7 percent) and financial (18.8 percent),”CTJ reported.

CTJ said the companies are allowed to pay such low federal rates based on factors that include offshore tax sheltering, accelerated asset depreciation based on continued investment, stock options, and industry-specific tax breaks.

“Of those corporations in our sample with significant offshore profits, two thirds paid higher corporate tax rates to foreign governments where they operate than they paid in the U.S. on their U.S. profits,” according to CTJ.

The non-profit group says this lax taxation climate among the most powerful US corporations comes amid an aggressive push by lobby and trade groups on Capitol Hill “to reduce the federal corporate income tax rate, based on the claim that our corporate tax is uncompetitively high compared to other developed nations.”

Just this week, US House Ways and Means Committee Chairman Dave Camp (R) introduced a tax reform proposal that would lower the maximum federal effective tax rate to 25 percent. Though, tellingly, this aspect of the plan – among other attempts at bipartisan consensus in the proposal – renders it no chance of even getting a hearing in the Republican-dominated House during a mid-term election year, when such a conciliatory offering can be used as a cudgel against disapproving conservatives.

26 top American corporations paid no federal income tax from ’08 to ’12 – report 4 26 top American corporations paid no federal income tax from ’08 to ’12 – report

 

Companies have already disputed CTJ’s report, saying that the study only looks at federal income taxes while ignoring other tax burdens they face, such as on the state and local level. In addition, the companies say low effective rates are part of congressional attempts to offer tax relief to corporate America in order to create larger economic opportunity.

To reverse low corporate federal tax rates, CTJ recommends Congress end corporations’ ability to“defer” taxes on offshore profits; limit use of executive stock options that reduce taxes by “generating phantom ‘costs’” the companies don’t really incur; end accelerated depreciation opportunities; restore the corporate Alternative Minimum Tax; and strengthen corporate income and tax disclosure regulations.

“These findings refute the prevailing view inside the Washington, D.C. Beltway that America’s corporate income tax is more burdensome than the corporate income taxes levied by other countries, and that this purported (but false) excess burden somehow makes the U.S. ‘uncompetitive,’” CTJ concluded.

Source: RT

Colorado’s legal pot market far exceeds tax expectations

Colorado’s legal pot market far exceeds tax expectations Colorado’s legal pot market far exceeds tax expectations

Recreational pot sales were always expected to give Colorado some sort of economic boost, but the latest budget proposal by state Governor John Hickenlooper suggests the returns are going to be even higher than originally estimated.
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Released on Wednesday, the proposal expects the marijuana market in Colorado to bring the state around $98 million in taxes off of $610 million in sales, significantly more than the $70 million projected back when voters first voted to legalize recreational pot.

Since pot use became legal on January 1, Colorado has levied a 12.9 percent sales tax on all transactions, with medical marijuana taxed at 2.9 percent.

According to the Associated Press, Hickenlooper’s budget proposes spending the incoming cash on substance abuse programs and youth marijuana prevention. Specifically, $45.5 million would be set aside for youth prevention purposes, $40.4 million for substance abuse treatment, and $12.4 million for public health. Additional proposals were made for campaigns that spread the word regarding marijuana’s health risks.

“We view our top priority as creating an environment where negative impacts on children from marijuana legalization are avoided completely,” Hickenlooper wrote in a letter to legislative budget writers, the AP noted.

On top of the sales tax, though, Colorado has also implemented a 15 percent excise tax on the drug. The state intends to spend the earnings from this tax on school construction, and Hickenlooper expects to reach the $40 million level originally projected.

Pot sales have been strong in Colorado ever since shops began selling the drug, which is moving at even higher prices than predicted. As RT reported in January, sales exceeded $5 million in the month’s first week, and the state is even attracting visitors from other states interested in experiencing “pot tours.”

Meanwhile, the only other state that’s legalized recreational marijuana has also released its own projections regarding tax proceeds. As reported by the Yakima Herald, Washington is expected to rake in $190 million in pot taxes over a four-year period beginning in 2015. As in Colorado, those numbers are subject to revision once consumers can actually get their hands on the product.

“Voters and state lawmakers around the country are watching how this system unfolds in Colorado, and the prospect of generating significant revenue while eliminating the underground marijuana market is increasingly appealing,” Mason Tvert, of the Marijuana Policy Project advocacy group, told the AP.

While other states continue to forge their own path on pot – Alaska will vote on legalization this August, as may Oregon and Washington, DC – 18 congressional members recently petitioned the White House in an attempt to reclassify marijuana or simply remove it from the illegal substances list. President Barack Obama had previously ruled out unilateral action on the matter, though these members believe it’s within his power to have the Justice Department take action.

 

Source: RT