Big profits, zero taxes for large U.S. companies

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"The official federal corporate income tax rate in the U.S. is 35%, but plenty of the nation’s largest publicly traded companies are paying no taxes — even getting money back from the government in some cases — in years when they reap big profits, according to a new report."

http://www.marketwatch.com/story/big-profits-zero-taxes-for-large-us-com...

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I remember when this site used to be fun. Now it's all about bitching and baiting.

Patience is a great virtue.

That's not the Don Wert that I know.....

If Mel Stottlemyre dusts you off the plate with some chin music, you can't go running back to the dugout crying to Chuck Dressen! You dust yourself off, dig in a little harder, keep those hands back & serve that next pitch back through the box.

Pink Slip

Whoa! Careful there, Pinkster! Don Wert is all kinds of crazy, and taunting him can only produce the most terrible of results. After all, we've known the following for years:

■ Warning: Pregnant women, the elderly, and children under 10 should avoid prolonged exposure to Don Wert.
■ Caution: Don Wert may suddenly accelerate to dangerous speeds.
■ Don Wert contains a liquid core, which, if exposed due to rupture, should not be touched, inhaled, or looked at.
■ Do not use Don Wert on concrete.

Etc.

....just like individuals who take deductions for things like mortgage interest, earned income tax credit and charitable donations, companies can take deductions to reduce their taxable income. I don't blame any company or person for taking advantage of the existing rules to reduce how much they have to fork over to the government.

But if you don't like the fact that the companies aren't paying taxes in a particular year, then take it up with the politicians (yes, on BOTH sides of the aisle) who write the 'exemptions' and create the deductions. In the case of taxes, the problem isn't the person/company following the rules - it is the people who make the rules in the first place.

I think the current tax code is so complicated and confusing (which is why companies hire entire firms to do their taxes) that it's nearly impossible to understand or find out whether or not anyone (individual or company) is paying their 'fair share.'

I just don't have any faith that we can ever get to a more simple code as too many entities would advocate for exemptions - and I'm talking about ALL exemptions, from things like mortgage interest for individuals to R&D for companies.

I agree with you 100% Maggie. The "evil corporation" is a myth. They will do whatever they can to maximize profits--and they should. I point the finger at government for this.

Pink Slip

The problem is, every time anyone even dares to talk about closing loopholes, people start screaming class warfare. But yes, most of the loopholes affect the rich and corporations. The middle and lower class simple don’t have enough income to even think about taking advantage.

Sensor your post couldn't be more wrong.

First, Even the GOP is for closing loopholes. It's not the GOP screaming "make them pay their fair share" without defining what fair is now are they?

"The middle and lower class simple don’t have enough income to even think about taking advantage." Wrong. In fact, very wrong. Everyone has enough money, Because we choose our lifestyle. The problem is as most people expand their wallets through raises, tax breaks, additional income their lifestyle also increases. Many, overexpand their lifestyle so the raise ends up costing more.

Here's and example. For the last 6 years I've taken my tax return and paid off bills. A good friend of mine has taken a 2k tax return and taken his kids on a vacation. Well that pays for the Disney cruise but the Disney Cruise takes up almost all of the 2k. They then need to pay for plane tickets, a hotel the night before the cruise and spending money on the cruise. That 2K windfall turns into a 4k bill when it's all said and done.

Additionally, do the middle and lower classes not get to deduct their mortgage? THAT is a loophole and a prime example. Yet, we overlook that one. The loopholes go from the top down and everyone has a chance to take advantage.

MikeyA

"Additionally, do the middle and lower classes not get to deduct their mortgage? THAT is a loophole and a prime example."

Funny story, that. 75% of the total dollars claimed under the MID are gathered in the top 3 or 4 metropolitan areas of the USA. You know, where the upper middle class and rich like to live.

The MID is particularly regressive. The common man won't give it up, though, since even at a pittance for himself, it's still something.

Fortunately when things get this out of control, the system must change regardless. Since we're fairly stupid as a nation, this change must be implemented not only unfairly but catastrophically.

Very true GZ.

Like Social Security you can show everyone how unviable it actually is but they won't give it up.

I remember showing my parents, on paper, how much more money they could have at the end of the year if they paid their mortgage off early. They refused because they wouldn't have their deduction. Too bad that 5k mortgage came at the price of about 10k more in interest.

I love my parents but they are not rich because of their own lack of smart financial decisions. The lower classes have the market cornered on one thing....stupidity.

MikeyA

You totally off track here Mike. There is no way for me to reduce my tax burden to zero through deductions, while a multi-national, billion dollar company can. It’s not a matter of choosing my lifestyle. As a matter of fact, the last company I was will got a nice tax deduction for paying for my MBA, which I intern, had to claim as income and pay taxes on it.

Ah but you can. A very close friend did just that with his "corporation".

He and his brother bought his mother's home, they incorporated, the home took a major loss. He nor his brother are rich. They incorporated so when their mother goes into a nursing home or hospice (she's very ill) they won't lose the home. He has totally reduced his tax burden because of his company's "loss".

MikeyA

Good to know that your friends have gamed the system...

You call it gaming the system. I call it a smart financial move.

Especially not bad for a guy who maybe makes 50k a year with his traditional job. You know... a part of that 1%.

MikeyA

I'm not sure if you're being facetious, but $50K personal income puts you in the top 25%.

http://en.wikipedia.org/wiki/Personal_income_in_the_United_States

nm

MikeyA

You can't claim a loss until you sell the property. If your friend is claiming unrealized real estate losses on their personal taxes, he's an idiot and he's potentially looking at a stint in federal prison.

There's a city full of walls you can post complaints at

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