Tag Archives: Corporations

March 28, 2011 · 8:14 pm

Two Thirds of US Corporations Pay No Federal Income Taxes

US Uncut held a National Day of Protest over the push to cut vital government programs while major, profitable Corporation pay No Taxes…

Sorry, but this just isn’t right….

From The Nation:

“I’m tired of people calling for shared sacrifice and it’s all coming from the workers and nothing’s coming from the top,” says protester Dave Sonenberg. “I’m sick of companies like Bank of America not paying their taxes.”

Bank of America hasn’t paid a nickel in federal income taxes for the past two years, and in fact raked in an additional $1 billion in tax “benefits.” The bank is enjoying these profits after accepting $45 billion from taxpayers, which the company then got to count as a deduction when they paid back the money.

Big corporations get to play by a whole different set of rules, says tax expert Bob Willens of New York-based Robert Willens LLC:

It’s also not unusual for a company to pay no federal taxes, while still paying state and local taxes, Willens said. Items that can be deducted for federal purposes aren’t always deductible for state and local returns, he said. State taxes can also be based on the amount of capital deployed in a state, not pre-tax income.

This is why two-thirds of corporations in America pay no federal income taxes. If they were forced to, we’re told, the whole country would suffer. Jobs would be lost, salaries slashed. Thank heavens we’ve avoided such calamity by allowing corporations to shape legislation in their favor.

In 2010, Bank of America handed out $2.2 million in campaign contributions to Congressional representatives and PACs (36 percent went to Democrats, 64 percent to Republicans). By throwing around that much cash, huge companies like BoA have a big say when it comes to crafting legislation that permits them to escape paying taxes, according to US Uncut organizer J.A. Myerson.

“The reason it’s not illegal is because they have bought and paid for the people who make the laws. The laws are made to accommodate this sort of nefariousness,” he says, adding that the process is wrong, and ordinarily that would mean approaching Congress to ask them to fix it, but there’s no point in attempting that when the system is so heavily rigged in favor of the rich and well connected. “So what US Uncut is doing right now is not Capitol Hill lobbying because that doesn’t seem like it’s a fruitful avenue. It’s trying to directly undermine the ability of Bank of America to earn record windfall profits by depleting the public trust that they are an upstanding member of society.”

via When Illegal Doesn’t Matter: US Uncut’s National Day Of Protest | The Nation.

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March 26, 2011 · 9:49 am

GE, World’s Largest Corporation, Paid Zero Dollars in U.S. Taxes Last Year | AlterNet

This is really nothing short of disgusting….

You know how we’ve been covering the efforts of U.S. Uncut, the growing campaign to stop corporate tax dodgers from exploiting overseas tax havens? Well here’s an excellent example of why such efforts are desperately needed, from the front page of the New York Times:

General Electric, the nation’s largest corporation, had a very good year in 2010.

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

How can that be, you ask?

The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm….The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

If that doesn’t make your blood boil, I don’t know what would.

Corporations argue that the U.S.’s top corporate tax rate of 35% is prohibitively high and puts them at a disadvantage against foreign companies. But even if you buy that argument (and I do not, because I think corporations should be responsible for paying taxes in countries in which they reap huge profits), it’s hard to swallow when the corporation in question — and not just any corporation, but the biggest in the world — is claiming a tax benefit. Not only did GE not pay any taxes in the U.S. last year, it effectively got money back from the U.S. government.

via GE, World’s Largest Corporation, Paid Zero Dollars in U.S. Taxes Last Year | AlterNet.

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February 23, 2011 · 8:42 pm

Capitalism for the Long Term – Harvard Business Review

Interesting article from the Harvard Business Review…

I think it’s a little optimistic to think Business and Capitalism will reform themselves…

His suggestions seem to be to go back to the way we were…

What are the odds of that happening without Governmental reform and public outrage?

Not likely to happen as long as the Corporations own the Government….

Why reform when you can rig the system to your benefit?

In an ongoing effort that started 18 months ago, I’ve met with more than 400 business and government leaders across the globe. Those conversations have reinforced my strong sense that, despite a certain amount of frustration on each side, the two groups share the belief that capitalism has been and can continue to be the greatest engine of prosperity ever devised—and that we will need it to be at the top of its job-creating, wealth-generating game in the years to come. At the same time, there is growing concern that if the fundamental issues revealed in the crisis remain unaddressed and the system fails again, the social contract between the capitalist system and the citizenry may truly rupture, with unpredictable but severely damaging results.

Most important, the dialogue has clarified for me the nature of the deep reform that I believe business must lead—nothing less than a shift from what I call quarterly capitalism to what might be referred to as long-term capitalism. (For a rough definition of “long term,” think of the time required to invest in and build a profitable new business, which McKinsey research suggests is at least five to seven years.) This shift is not just about persistently thinking and acting with a next-generation view—although that’s a key part of it. It’s about rewiring the fundamental ways we govern, manage, and lead corporations. It’s also about changing how we view business’s value and its role in society.

There are three essential elements of the shift. First, business and finance must jettison their short-term orientation and revamp incentives and structures in order to focus their organizations on the long term. Second, executives must infuse their organizations with the perspective that serving the interests of all major stakeholders—employees, suppliers, customers, creditors, communities, the environment—is not at odds with the goal of maximizing corporate value; on the contrary, it’s essential to achieving that goal. Third, public companies must cure the ills stemming from dispersed and disengaged ownership by bolstering boards’ ability to govern like owners.

via Capitalism for the Long Term – Harvard Business Review.

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