Tax rebates for big-profit brands are startling, unfair

[Panich52]

Charleston Gazette

By Gary Zuckett
Across the state and nation this past month, individuals filed and paid their personal federal and state income taxes. However, there was one notable exception — the Fortune 500 companies singled out in a recent Citizens for Tax Justice report called “Fifteen Reasons Why we need Corporate Tax Reform.”

This report is an eye opener for a number of reasons. All of these profitable big name companies paid either zero federal income tax or actually had a “negative” tax rate and got a check back from the government. These companies are just the tip of the iceberg and represent a broad range of our economy. Here are a few on the list:

n Broadcaster CBS Corporation enjoyed $1.8 billion in U.S. profits last year, and received a federal income tax rebate of $235 million.

n Toy maker Mattel, which has paid zero federal income taxes over the past five years, received a tax rebate of $46 million in 2014.

n The financial services corporation Prudential avoided all federal income taxes on its $3.5 billion in U.S. profits in 2014.

n Ryder System, which provides truck rentals and services, paid a negative 0.3 percent federal income tax rate in 2014 and over the past five years a negative 0.5 percent rate.

. .....

These companies are not just using the high-profile offshore tax shelters to hide their profits. They are taking advantage of the seemingly endless loopholes carved into our domestic tax laws. One of the most onerous is the one used by Priceline to more than zero out its taxes. It actually got $9 million back from Uncle Sam by writing off the value of executive stock options. Priceline has used this to generate negative tax rates all the way back to 2010 and, unless the law is changed, will likely do so years into the future.

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http://www.wvgazette.com/article/20150425/GZ04/150429482/1453

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Makes one wonder just why corporations bother to do so much bitching about high biz taxes.

While this op-ed is about fed taxes, NY's ads about tax breaks for biz show the burden passes on to state & local as well.

Wouldn't it be nice if corps were attracted to a state because of the high education standards instead of how much of their biz's tax burden will be subsidized by citizens?

[SamKnause]

1. K&R

[Snarkoleptic]

2. Plus they're bleeding state tax revenue through employee withholding schemes,

which makes this phenomenon seem uglier and more personal.

http://www.huffingtonpost.com/2012/04/12/big-companies-state-taxes-workers_n_1419582.html

Across the United States more than 2,700 companies are collecting state income taxes from hundreds of thousands of workers - and are keeping the money with the states' approval, says an eye-opening report published on Thursday.

The report from Good Jobs First, a nonprofit taxpayer watchdog organization funded by Ford, Surdna and other major foundations, identifies 16 states that let companies divert some or all of the state income taxes deducted from workers' paychecks. None of the states requires notifying the workers, whose withholdings are treated as taxes they paid.

General Electric, Goldman Sachs, Procter & Gamble, Chrysler, Ford, General Motors and AMC Theatres enjoy deals to keep state taxes deducted from their workers' paychecks, the report shows. Foreign companies also enjoy such arrangements, including Electrolux, Nissan, Toyota and a host of Canadian, Japanese and European banks, Good Jobs First says.

--snip--

Deals cut with the states over the past two decades diverted $5.5 billion from public purposes to private gain, the report says. Close to $700 million more was diverted last year, Good Jobs First estimates.

New Jersey approved $73.2 million in new deals in 2011 on top of $178 million diverted that year alone under previous deals. I calculate that at nearly $80 per household in corporate welfare based on New Jersey's 3.1 million households.

These deals typify corporate socialism, in which business gains are privatized and costs socialized. They also mean government picks winners and losers, interfering with competitive markets. Leaders in both parties embrace these giveaways because they draw campaign donations from corporate interests and votes from people who do not understand that they are subsidizing huge companies.