If you wanted to read an article that made your blood boil today, well, here you go. How come us entry-level twenty-somethings have to pay so much of our meager income in taxes, yet our economy is still in shambles? I’m not sure, but maybe it has something to do with the fact that 20 of the most profitable companies in the United States don’t pay ANY corporate taxes.
According to USA Today, 20 major US companies paid ZERO taxes in the second quarter, including General Motors, Seagate, and Merck, the second-largest pharmaceutical company in the country; Merck actually had a -7.5% tax rate in the second quarter which means, you guessed it, they got a tax credit! Bully for Merck! Eight of these companies are real-estate companies, or companies that are involved in real estate.
Without further ado, here’s a list of the 20 companies that managed to stay tax-free this quarter:
Many individuals, including Yahoo Finance Editor-in-Chief Aaron Task, believe that companies who do not pay the corporate tax, are a main reason reason why the US economy is recovering so slowly. “This is insanity because every day we hear people saying the corporate tax rate is a mess and that’s holding back our economy,” said Task.
Others, such as Yahoo Finance’s Henry Blodget, believe that there is no merit to that argument, but something radical has to be done in order to reform the corporate tax system including, possibly, eliminating corporate income taxes all together. “We have to change the system,” says Blodget, “because corporations are doing what anybody with the resources they have would do: minimize the taxes they pay.”
Tax avoidance has become a full-fledged business strategy, according to Steven Rattner, the former “New York Times” reporter turned private investor who led the Obama administration’s auto-industry overhaul, and suggests that rather than tax companies themselves, the government should raise the tax rates stockholders pay on capital gains and dividends, and increase rates on the income of the wealthy.
How does that song go? “See the rich keep getting richer, the poor is getting poorer” Sure, it’s a lyric from a Carlos Santana song, but whatever works.
[via Yahoo Finance]