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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]
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Tax Code should be two lines long:
Corporations pay 15% of income
Individuals pay 20% of income
but… you can’t just…
no wait I actually agree with this.
If you switch it up it would make more sense. 15% to individuals, 0% to individuals who pay a certain amount for student loans so they can be consumers(help the economy) instead of taking on more debt to pay loans and cover cost of living. Capital gains and corporate tax to 18-20 progressive. No loopholes or tax breaks.
How does giving more money to the government actually help anyone? These companies drive the economy, not the government.
I must learn their ways.
The real estate company’s are REIT’s so they aren’t required to pay taxes to the government but are required to pay out 90% of taxable income to shareholders via dividends annually. Many of the other firms have booked huge losses in the recent past and accrued tax credits that way, combined with other legal tax avoidance techniques. There’s nothing wrong with this, however I’m sure the sensationalists will have a field day.
Where do you get that these companies “are the most profitable in America?” Selection to that index is mainly attributed to market cap and trade volume, not profitability. Most of these companies (with the exception of the REITs) posted losses or loss carry-forwards and as such, do not incur tax liability. Plus their shareholders are already taxed on dividends. Please don’t be another uninformed, sensationalist blog-hole. You’re too good for that.
Also, a large portion of corporations who have posted profits decrease their tax bill and gain good will by donating to or operating charities, which are deductible. Take that away, the government has to pick up the slack that is created, and then liberals will bitch more.
I’m just ready for another Butt Stuff article with Humpday Hookup Stories.
The major problem with this national debate is that those that know the least are speaking the most. If you’d taken a finance class you’d know that those real estate companies are REITs, and are required to pass along 90% of their income to shareholders who are then taxed on that income…hence the lack of corporate tax. Uncle Sam still gets his.
Way to go!