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Politifact: Rep. Marcia Fudge says some of the largest corporations pay no taxes


Larry

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Link.

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To back up her assertion, Fudge’s office cites media reports about particular companies – like General Electric and Bank of America -- that did not pay 2009 taxes as well as a July 2008 report from Congress’ Government Accountability Office that showed it’s relatively common for big companies to pay no taxes.

Between 1998 to 2005, GAO found that about 72 percent of large foreign controlled companies and 55 percent of large U.S. controlled companies reported zero tax liability for at least one year. About 57 percent of foreign controlled large companies and 42 percent of U.S. large companies paid no taxes in two or more years, and a third of the foreign companies and one quarter of their U.S. counterparts paid no taxes for at least four of those years. Just 45 percent of large U.S. companies and 28 percent of foreign companies reported a tax liability for each of the eight years. The report defined large companies as those with at least $250 million in assets, or at least $50 million in receipts

Observing that they're not claiming that big businesses never pay taxes, just that sometimes they don't.

Still, figured it would be entertaining.

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More than half of large US controlled companies not paying a dime in taxes in eight consecutive tax years kind of takes the edge off the claim that we have the highest corporate tax rates doesn't it?

Perhaps they should lower the rate and close some loopholes?

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More than half of large US controlled companies not paying a dime in taxes in eight consecutive tax years. . .

Actually, what they said was "more than half of large US controlled companies didn't pay a dime in one year (or more) of the last eight".

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Here's something that might add to the discussion (or might not):

usgs_line.php?title=Corporate%20Income%20Tax&year=1970_2016&sname=US&units=p&bar=1&stack=1&size=l&col=c&spending0=3.16_2.38_2.60_2.62_2.58_2.48_2.27_2.70_2.61_2.56_2.32_1.96_1.51_1.05_1.45_1.45_1.42_1.77_1.85_1.88_1.61_1.64_1.58_1.76_1.98_2.12_2.19_2.19_2.15_1.97_2.08_1.47_1.39_1.18_1.60_2.20_2.64_2.63_2.11_0.97_1.32_1.32_2.08_2.42_2.47_2.42_2.36&legend=&source=a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_a_b_b_b_b_b_b

That's total Federal revenues, from corporate income taxes, as a percentage of GDP. (since 1970).

Me, I see a lot of fluctuations (from 1% to 3% is a huge swing). But I don't see any alarming downward trend. (In short, I don't see any evidence, there, that the government has been exempting corporations from taxes, wholesale.)

Although I can see some possible disclaimers for that statement, too. For example, (to make things up), if corporate profits have quadrupled since 70, but taxes have remained constant, then that might indicate something. But then we'd have to find a definition of "corporate profits" that we can agree on.

And I'll observe that the red portion of that chart is a projection. If you look only at the real data, and ignore the projected increases, then I think you could argue that there's a general downward trend.

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Perhaps they should lower the rate and close some loopholes?

Actually, I've been convinced for some time that big businesses (like, really huge gigantic businesses) are a threat to the system. A big enough threat that the government really should be taking steps to discourage corporations from getting too big. (Insert discussion of "how big is too big?" here.)

I've wondered if maybe there shouldn't be some kind of a corporate version of the AMT. Some mechanism whereby, when you get to a certain size, you get taxed no mater how many deductions you have on your 1040.

I've been fantasizing along the lines of a tax of, say, 1%, on all gross revenues (not profits) above, say, a billion dollars.

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http://www.nytimes.com/2010/11/24/business/economy/24econ.html

"Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output. That is the highest share since the fourth quarter of 2006, when they accounted for 11.7 percent of output. "

http://scottgrannis.blogspot.com/2010/08/corporate-profits-are-very-strong.html

[ATTACH]45246[/ATTACH]

Going back to 1980, there is a clear trend in an increase in corporate profits as a % of GDP, and currently, they are higher than any other time going at least back to 1960, except in 2006.

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http://www.nytimes.com/2010/11/24/business/economy/24econ.html

"Corporate profits have been doing extremely well for a while. Since their cyclical low in the fourth quarter of 2008, profits have grown for seven consecutive quarters, at some of the fastest rates in history. As a share of gross domestic product, corporate profits also have been increasing, and they now represent 11.2 percent of total output. That is the highest share since the fourth quarter of 2006, when they accounted for 11.7 percent of output. "

http://scottgrannis.blogspot.com/2010/08/corporate-profits-are-very-strong.html

[ATTACH]45246[/ATTACH]

Going back to 1980, there is a clear trend in an increase in corporate profits as a % of GDP, and in the 2000's, they have been higher than any time post-1960.

Cyclical low in 2008? It was the biggest ****ing recession of the last 50 years! That isn't a "cyclical low". Horrible journalism. No mention of the recession as a factor at all.
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More than half of large US controlled companies not paying a dime in taxes in eight consecutive tax years kind of takes the edge off the claim that we have the highest corporate tax rates doesn't it?

Perhaps they should lower the rate and close some loopholes?

This is a winner.

The "highest corporate tax rates" hit the small business owners who can least afford the extra burden.

Lower rates with fewer loopholes are the best way to go.

---------------------------

Edit: Just keep in "My" loopholes please:)

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Yeah this is why there is always resistance on cable news shows when a republican or conservative wants to suggest "Our corporations are leaving because they have highest tax rate in the world"

Tax rate doesn't mean much, when either a - your taxes are constantly being cut anyway, or b - you are finding loopholes and cracks in the system to get out of paying any and all taxes or even c - a large portion of your wealth is being shielded and/or hidden in an off-shore account, away from where it will be taxed.

Tax rate vs Actual taxes collected are two different things.

Corporations have rebounded, there is no study out there that will suggest otherwise. The problem is, they aren't re-hiring for the positions they dropped during the recession. All the employees who were left with a job, who had to "temporarily" tighten their belt in the tough times, have no discovered that, the increased workload without any extra compensation is now just the norm and will be the new standard going forward. I saw it at the company I worked at in the Spring of '10, until they were finally bought up and everyone was let-go. People were let go, leading up to the sale, we were all told "extra workload is now on you, but don't worry once this happens then....etc etc" six months later, we are all out of a job.

---------- Post added March-17th-2011 at 07:35 PM ----------

Yeah this is why there is always resistance on cable news shows when a republican or conservative wants to suggest "Our corporations are leaving because they have highest tax rate in the world"

Tax rate doesn't mean much, when either a - your taxes are constantly being cut anyway, or b - you are finding loopholes and cracks in the system to get out of paying any and all taxes or even c - a large portion of your wealth is being shielded and/or hidden in an off-shore account, away from where it will be taxed.

Tax rate vs Actual taxes collected are two different things.

Corporations have rebounded, there is no study out there that will suggest otherwise. The problem is, they aren't re-hiring for the positions they dropped during the recession. All the employees who were left with a job, who had to "temporarily" tighten their belt in the tough times, have no discovered that, the increased workload without any extra compensation is now just the norm and will be the new standard going forward. I saw it at the company I worked at in the Spring of '10, until they were finally bought up and everyone was let-go. People were let go, leading up to the sale, we were all told "extra workload is now on you, but don't worry once this happens then....etc etc" six months later, we are all out of a job.

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Cyclical low in 2008? It was the biggest ****ing recession of the last 50 years! That isn't a "cyclical low". Horrible journalism. No mention of the recession as a factor at all.

The recession doesn't explain the change as a function of GDP.

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