Thread: The Corporate Taxation Myth Exposed

Below is a study of 280 of Fortune's list of the 500 largest American companies. Many people will be appalled to learn that a quarter of the companies in this study paid effective federal tax rates of less than 10 percent. Others may be surprised to learn that an almost equal number of US companies paid close to the full 35 percent official corporate tax rate - less than 10%. While the federal corporate tax code ostensibly requires big corporations to pay a 35 percent corporate income tax rate, on average, the 280 corporations in the study paid only about half that amount - average 18.5%.

Over the 2008-10 period, these 280 companies earned almost $1.4 trillion in pretax profits in the United States. Had all of those profits been reported to the IRS and taxed at the statutory 35 percent corporate tax rate, they would have paid $473 billion in income taxes over the three years. But instead, the companies as a group paid only about half that amount. The enormous amount they did not pay was due to the hundreds of billions of dollars in tax subsidies that they enjoyed.

More than half of the total tax- subsidy dollars over the three years — $114.8 billion — went to just 25 companies, with more than $1.9 billion in tax subsidies average.

Notably, 56 percent of the total tax subsidies went to just four industries: financial, utilities, tele-communications, and oil, gas & pipelines.

Most big corporations give their executives (and sometimes other employees) options to buy the company’s stock at a favorable price in the future. When those options are exercised, companies can take a tax deduction for the difference between what the employees paid for the stock and what it’s worth. These same 25 companies, mentioned above, enjoyed almost two-thirds of the total excess tax benefits from stock options received by all of the 280 companies, getting $8.1 billion of the $12.3 billion total.

http://www.ctj.org/corporatetaxdodge...gersReport.pdf

30 of these companies paid ZERO income taxes between 2008-2010 and many received a refund in the billions.

What supposed "myth" are you referring to? Most corporations are not among the 500 largest corporations and are stuck with uncompetitively high tax rates.

What you've pointed out above is a failure of the legislature to treat their constituants equally. Of course those corps are going to ask for special treatment if they think they can buy it, as would anyone else with a bit of sense.

those are typically very small businesses, all of the income derived from them is taxed as normal income by their shareholders. some of the members on this forum have probably set up their businesses as LLC's.

there's a ton of other corporations in between the little LLC dog grooming business down the street from you and the ones above rich enough to buy senators and presidents. those in the middle are the major job creators which drive the economy and those are the ones getting fucked.

You can have pretty big LLCs & S Corps, I believe its limited more by the number of owners

Report: Big business turns small for tax reasons - politics - msnbc.com (sorry for msnbc, feel free to google another one)