R i g h t a r d i a: Urantian Sojourn: Corporate Welfare Queens

Tuesday, March 29, 2011

Urantian Sojourn: Corporate Welfare Queens

GE is, of course, is not the only multi-billion corporation to escape paying any income tax. These companies pay their CEOs and chief execs tens of millions of dollars in salary and bonuses.

Rightrdia has written about this before. Microsoft and Cisco Systems, were notorious for paying no corporate taxes for years. The real problem with corporate taxation is that that are too many loopholes.

Ronald Reagan became aware of this when he discovered GE, America's largest corporation, paid no corporate taxes because it filed a 24,000 page tax form that the IRS could not audit. Today GE files 7,000 tax forms and still pays no taxes.

The GOP complains the corporate tax rate (35 per cent) is too high. Of course, this only applies to C-corporations not the small business S-corporations who pass their taxes and income onto owners and share holders.

Could the corporate tax rate be reduced for C-corporations? Only if thousands of tax exemptions were also removed. If the corporations, who are making record profits, won't hire more American workers, it's time to make them ante up.

From Think Progess :

- BANK OF AMERICA: In 2009, Bank of America didn’t pay a single penny in federal income taxes, exploiting the tax code so as to avoid paying its fair share.

“Oh, yeah, this happens all the time,” said Robert Willens, a tax accounting expert interviewed by McClatchy. “If you go out and try to make money and you don’t do it, why should the government pay you for your losses?” asked Bob McIntyre of Citizens for Tax Justice.

The same year, the mega-bank’s top executives received pay “ranging from $6 million to nearly $30 million.”

- BOEING: 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.

- CITIGROUP: Citigroup’s deferred income taxes for the third quarter of 2010 amounted to a grand total of $0.00. At the same time, Citigroup has continued to pay its staff lavishly. “

John Havens, the head of Citigroup’s investment bank, is expected to be the bank’s highest paid executive for the second year in a row, with a compensation package worth $9.5 million.”

- EXXON-MOBIL: The oil giant uses offshore subsidiaries in the Caribbean to avoid paying taxes in the United States.

Although Exxon-Mobil paid $15 billion in taxes in 2009, not a penny of those taxes went to the American Treasury. This was the same year that the company overtook Wal-Mart in the Fortune 500.

Meanwhile the total compensation of Exxon-Mobil’s CEO the same year was over $29,000,000.

- GENERAL ELECTRIC: In 2009, General Electric — the world’s largest corporation — filed more than 7,000 tax returns and still paid nothing to U.S. government.

It managed to do this by a tax code that essentially subsidizes companies for losing profits and allows them to set up tax havens overseas.

That same year GE CEO Jeffery Immelt — who recently scored a spot on a White House economic advisory board — “earned total compensation of $9.89 million.”

In 2002, Immelt displayed his lack of economic patriotism, saying, “When I am talking to GE managers, I talk China, China, China, China, China….I am a nut on China. Outsourcing from China is going to grow to 5 billion.”

- WELLS FARGO: Despite being the fourth largest bank in the country, Wells Fargo was able to escape paying federal taxes by writing all of its losses off after its acquisition of Wachovia.

Yet in 2009 the chief executive of Wells Fargo also saw his compensation “more than double” as he earned “a salary of $5.6 million paid in cash and stock and stock awards of more than $13 million.”