Congress, Justice, Politics

Big Corporations and Federal Taxes

Submitted by Lawrence Rafferty, (rafflaw), Guest Blogger

With the constant news reports highlighting the economic woes of the State and Federal governments and the important battle in Wisconsin and other states over the claim that workers need to sacrifice a little more to help out their state governments, it is interesting to learn just how much big corporations pay in Federal Taxes. Would it surprise you if I told you that many of our largest corporations pay zero Federal taxes?

I don’t know about you, but it did surprise me to learn that Bank of America, General Electric, Boeing, Citigroup and Exxon-Mobil pay no Federal taxes. “Indeed, as politicians are asking ordinary Americans to sacrifice their education, their health, their labor rights, and their wellbeing to tackle budget deficits, some of the world’s richest multinational corporations are getting away with shirking their responsibility and paying nothing.” Think Progress   We are not talking about corporations who have had big losses to deal with, but huge profitable companies who are making Billions off of the American public and paying zero taxes to Uncle Sam.

One company on Think Progress’ list is Boeing. Some years ago Boeing moved its headquarters to Chicago and received millions in tax breaks from the State of Illinois and the City of Chicago as an inducement to move to Chicago. I bring up Boeing because it is based out of nearby Chicago and because it is a big military contractor. That means it gets billions in business from the U.S. Military. In fact, Boeing just received a $35 Billion dollar contract to build tankers for the United States Air Force over the next several years. “Despite receiving billions of dollars from the federal government every single year in taxpayer subsidies from the U.S. government, Boeing didn’t “pay a dime of U.S. federal corporate income taxes” between 2008 and 2010.”  Boeing 

Boeing is not alone on the list of these big corporations that does business with the United States Military, but pays little or no Federal tax on its profits. General Electric is another prime example of a company making billions off of the United States, while paying zip in federal taxes. “In 2009, General Electric — the world’s largest corporation — filed more than 7,000 tax returns and still paid nothing to U.S. government. They managed to do this by a tax code that essentially subsidizes companies for losing profits and allows them to set up tax havens overseas.” Think Progress

Why is it that the American public buys products from and supports these huge corporations and yet these corporations don’t have to pay taxes on their profits? The answer is really pretty simple. Who do you think writes or influences Congress to write the tax laws that allow these companies to steal from the American public? Corporate Lobbyists pull the strings and Congress jumps. Tax Analysts   The ability of these big corporations to get away with paying little or no Federal taxes puts a huge burden on the average American taxpayer and corporations that do not take advantage of the loopholes. “According to a report from the U.S. PIRG Education Fund, a $100 billion annual tax burden is shifted to US-based individuals and companies thanks to corporations stowing their profits offshore: Over ten years, an estimated $1 trillion in revenues is lost due to the use of tax havens and the government must make up for this shortfall. This diversion ends up being shouldered by other companies and taxpayers and is transferred as higher debt for future generations.” Wonkroom

The next time your read or hear about the sacrifices that the middle class must make in order to shore up the government’s finances due to an economic disaster that was mainly caused by Wall Street, ask how much extra General Electric or Boeing or Bank of America are going to put into the tax pot to help balance the budget. Maybe Citigroup or Exxon-Mobil or Wells Fargo will be sacrificing in order to restore financial sanity to the Federal budget. If you believe that, then I guess pigs really do fly. Wouldn’t that $1 Trillion dollars of lost tax revenue come in handy right about now?

Submitted by Lawrence Rafferty, (rafflaw), Guest Blogger

111 thoughts on “Big Corporations and Federal Taxes”

  1. 3M chief warns Obama over business regulation

    By Hal Weitzman in Chicago

    Published: February 27 2011 19:27 | Last updated: February 27 2011 19:27

    The head of one of the US’s biggest industrial groups has launched a scathing attack on Barack Obama’s attempts to repair relations with companies, dubbing him “anti-business”.

    Manufacturers could shift production out of the US to Canada or Mexico as a result, warned George Buckley, chief executive and chairman of 3M.

    “I judge people by their feet, not their mouth,” he told the Financial Times. “We know what his instincts are – they are Robin Hood-esque. He is anti-business.”

    The Obama administration has struck a more conciliatory tone towards business since the Democratic defeat in November’s midterm elections.

    Last month, the president created a jobs and competitiveness council, chaired by Jeffrey Immelt, chief executive of GE, and including chief executives such as American Express’s Kenneth Chenault, DuPont’s Ellen Kullman, Antonio Perez of Kodak and Southwest Airlines’ Gary Kelly. Mr Obama also convened a meeting this month with technology chief executives, including Steve Jobs of Apple, Google’s Eric Schmidt, Oracle’s Larry Ellison and Mark Zuckerberg of Facebook.

    Mr Buckley, who has run the diversified manufacturer since 2005, said: “There is a sense among companies that this is a difficult place to do business. It is about regulation, taxation, seemingly anti-business policies in Washington, attitudes towards science.”

    He added: “Politicians forget that business has choice. We’re not indentured servants and we will do business where it’s good and friendly. If it’s hostile, incrementally, things will slip away. We’ve got a real choice between manufacturing in Canada and Mexico – which tend to be pro-business – or America.”

    http://www.ft.com/cms/s/0/bd9b4100-429b-11e0-8b34-00144feabdc0.html#axzz1FGDB62eG

  2. So we can’t tax the corporations because they’ll punish the US by moving jobs oversees. We can’t tax the rich because that is class warfare. So it must be up to us middle and lower class americans to fund the wars, pay for necessary services, and pay for the subsidies of the corporations. Excellent…Great Idea.

    In about 30 years, someones going to say ‘let them eat cake’ and then all hell is going to break loose……

  4. Cannot get this link to paste,but a great article:

    The Monsters Are Due Out On Maple Street
    Marty Kaplan
    truthout.org

  6. I like the idea I’ve heard floating around, that if these corporations don’t pay taxes, they don’t get any of the benefits from those taxes, such as utilities, police and fire protection. They use the roads to get their supplies and deliver their products, but they don’t want to pay their taxes to help maintain it all?
    Go US Uncut!

  9. The top republican donor was Perry Homes. Bob Perry is a Houston home builder who is a close friend of Karl Rove and one of the bankrollers of the Swift Boat Veterans for Truth.

  11. Bank of America

    In his letter to Leahy (PDF), Sturdevant noted, “It seems unlikely that the position of the Bush Administration advanced in the Miller amicus briefs, supporting the Bank of America’s predatory banking practices, would be adopted by the Obama Administration at the expense of millions of elderly and disabled Americans who subsist on their monthly social security and other public benefits.” According to Sturdevant, Leahy’s staff has told him that the senator plans to look into the matter but that he is wary of getting involved in pending litigation.

    GE

    Google GE Obama connections. Too many to post here.

    Boeing

    Asked why he was praising the president when the White House has pledged to stay out of the Pentagon procurement process, Michalski said he’s not naïve.

    “Presidents make a difference, and we all know that,” Michalski told reporters in a conference call after then Pentagon awarded the tanker contract to Boeing on Thursday. “It’s his Cabinet. … He sets the tone.”

    The White House had no immediate comment on Michalski’s assertions.

    Aerospace analyst Richard Aboulafia, though, said the union official had gift-wrapped a top talking point for Boeing’s competitor in the bidding – EADS.

    “That’s like giving them a loaded revolver and a nuclear weapon, both,” Aboulafia said, adding that no one will really know whether politics was involved in the decision until the companies are briefed on the Air Force’s decision.

    Read more: http://www.politico.com/news/stories/0211/50225.html#ixzz1FFqsjoYw

    Exonn and the Oil industry

    NewsWeek Obama’s Oil Spill

    In addition, two oil industry executives are bundling money for Obama – drumming up contributions from individuals and turning them over to the campaign. George Kaiser, the chairman of Oklahoma-based Kaiser-Francis Oil Co., ranks 68th on the Forbes list of world billionaires. He’s listed on Obama’s Web site as raising between $50,000 and $100,000 for the candidate. Robert Cavnar is president and CEO of Milagro Exploration LLC, an oil exploration and production company. He’s named as a bundler in the same category as Kaiser.

    We’re not making any judgments about whether Obama is influenced by campaign contributions. In fact, we’d note that he singles out ExxonMobil in this ad, even though he’s received more than $30,850 from individuals who work for the company. But we do think that in theory, contributions that come in volume from oil industry executives, or are bundled by them, can be every bit as influential as PAC contributions, if not more so.

    Lobbyist Loopholes?
    We’ve noted before that Obama’s policy of not taking money from lobbyists is a bit of hair-splitting. It’s true that he doesn’t accept contributions from individuals who are registered to lobby the federal government. But he does take money from their spouses and from other individuals at firms where lobbyists work. And some of his bigger fundraisers were registered lobbyists until they signed on with the Obama campaign.

    Even the campaign has acknowledged that this policy is flawed. “It isn’t a perfect solution to the problem and it isn’t even a perfect symbol,” Obama spokesman Bill Burton has said.

    Republished with permission from factcheck.org

  12. The upper class: gets all of the money, pays none of the taxes and doesn’t do any work.
    The middle class: pays all of the taxes, does all of the work.
    The poor are there just to scare the shit out of the middle class.

  14. If it was good enough for Capone, raff?

    It’s good enough for the Koch Brothers.

    And don’t forget!

    Capone had syphilis.

  16. They may not be paying Federal taxes but I suspect they are paying many individuals occupying Federal offices … the cost of bribes and campaign donations is certainly passed on to the consumer.

  18. Koch Industries Fails to Disclose Offshore Tax Avoidance
    By Daniel Zoltai

    Found at: http://ecobserver.blogspot.com/2009/10/koch-industries-fails-to-disclose.html – a blog run out of Hungary by student journalists.

    The column reads:

    The IRS Voluntary Disclosure Program for US persons who have not properly reported their non-US bank and other financial accounts and offshore structures, such as foreign trusts and companies controlled by US persons ended on October 15, 2009.
    In the last week, Democrat Senator Carl Levin has offered his Stop Tax Haven Abuse Act as an amendment to the Senate Finance Committee’s healthcare bill, bringing the issue of tax haven abuse back to the table just after the close of the IRS program, a move that is supported by Barack Obama.

    With current reports detailing thousands of individuals coming forward to declare their offshore assets, there has been little disclosure made by major corporations. While public corporations are fairly transparent and often show up in examples of tax haven abuse, privately held corporations are much more likely to hide behind a veil of secrecy and employ complex off-shore structures in order to avoid taxes.
    Take the example of Koch Industries. This the largest privately held conglomerate on the planet, employing approximately 70,000 people worldwide with annual revenues exceeding $100 billion. Their financials are kept strictly confidential and they do not disclose information about their management structure and activities. Koch is known to be aggressive with their tax avoidance strategies, having sued the IRS for $20 million in 2006 claiming that their tax refund was not correct. Public documents available on the Luxembourg government website, Legilux.lu, reveal that Koch operates a complex system of offshore companies and accounts in order to avoid paying US taxes on huge sums of corporate profits. Out of his Kansas office, Global Tax Director for Koch Industries, Craig M. Munson, manages these offshore corporations with the assistance of a shady Luxembourg company, ATOZ s.a., whose partners are primarily former Arthur Anderson staffers – the tax advisory giant that ceased to exist as a result of their felony conviction in the Enron “off-shore and off-balance sheet” debt scandal of 2002.
    With the help of his offshore tax avoidance experts at ATOZ, Mr. Munson has set up a network of companies under the brand name “KoSa” that are used to move and consolidate funds offshore in order to avoid taxes. Some of the companies include “KoSa Foreign Investments” which was formed in June 2009 with over $1.8 billion in capital and “KoSa Luxembourg” which in August of this year declared a capital of over 520 million Euros. There are also vehicle companies such as “KoSa US Receivables Company” which declared a capital of nearly $185 million in August and “KoSa Canada Receivables Company” with a capital of nearly $35 million. These companies, and several others in the “KoSa” structures set up by Mr. Munson and his ATOZ facilitators are shells with no employees or physical operations. They are all incorporated under the “s.a.r.l.” status which has light reporting and governance requirements and is normally used for small businesses. When the sums involved are significant, such as the case here, the use of an “s.a.r.l.” is often cover for money laundering or tax avoidance schemes. In this case, it appears that these companies exist for no reason other than to avoid the payment of taxes. This is not the first time that Mr. Munson’s Luxembourg companies are involved in nefarious activity. In 2002, Arteva s.a.r.l., a Luxembourg company doing business as “KoSa” with Mr. Munson named as manager, was sued by the United States and plead guilty to charges of criminal price fixing.
    A government source, wishing to remain anonymous due to direct proximity with the issue, has confirmed that the IRS will be investigating the matter.

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