Time is money. So how much is 7.6 billion hours worth? That’s how much time people waste doing their taxes every year. The most profitable corporations and the richest people in the U.S. pay little or nothing in taxes.
Our tax system is a bad joke. It’s worse, actually, it’s criminal. The corporation hire lobbyists to form loophole and tax breaks, and every year the average Joe pays more and more in taxes. It’s outright stealing, but the government gets away with it. And you go to jail if you don’t pay. Why people continue to participate in this system is beyond me. If ever there was a good reason for a revolution, it would be taxes. IT WORKED ONCE! I guess when you’re a debt serf, beholden to the banksters and government, like most Americans, you do what you’re told.
Abolish The Income Tax: You Won’t Believe Who Is Getting Away With Paying Zero Taxes While The Middle Class Gets Hammered
By Michael, on February 18th, 2013
The federal income tax is a bad joke and it needs to be abolished. All over the nation, hard working American families are being absolutely crushed by oppressive levels of taxation, and our politicians are constantly coming up with new ways to extract money from all of us every single year. Meanwhile, many ultra-wealthy Americans and many of the most profitable corporations in the country pay little to nothing in taxes.
In fact, as you will see below, there are dozens of very prominent corporations that make billions of dollars in profits and yet don’t pay a dime in taxes. Tax avoidance has become a multi-billion dollar industry in the United States. Those that have the resources to “play the game” use shell companies, offshore tax havens and the thousands of loopholes in our tax code to minimize their tax burdens as much as possible. Meanwhile, the rest of us get absolutely hammered. This is fundamentally unfair.
The federal income tax system is irreversibly broken at this point, and it is time to abolish it. If you think that the federal income tax system can be “fixed”, then you probably have never studied it. Our tax code is nearly 4 million words long and it is absolutely riddled with thousands of loopholes that favor big corporations and the ultra-wealthy. We should come up with a better, fairer way to fund the government. The United States once prospered greatly without a federal income tax, and it could do so again.
Many people simply do not believe that it is possible for corporations inside the United States to make billions of dollars in profits each year and not pay a dime in income taxes.
Well, according to a report put out by Public Campaign, that is exactly what is happening. Posted below are numbers that come directly from their report. 30 large corporations are listed, and 29 of them had a tax burden for 2008 through 2010 that was less than zero even though they all made enormous profits. And all 30 of them spent more on lobbying than they did on taxes.
The numbers that you are about to see are for 2008, 2009 and 2010 combined. For “taxes paid”, please note that for 29 of the corporations a negative number is given. That means that the net tax liability for 2008 through 2010 was actually less than zero.
After seeing these numbers, is there anyone out there that is still willing to claim that our tax system is “fair”?…
General Electric
U.S. Profits: $10,460,000,000
Taxes Paid: ‐$4,737,000,000
PG&E Corp.
U.S. Profits: $4,855,000,000
Taxes Paid: ‐$1,027,000,000
Verizon Communications
U.S. Profits: $32,518,000,000
Taxes Paid: ‐$951,000,000
Wells Fargo
U.S. Profits: $49,370,000,000
Taxes Paid: ‐$681,000,000
American Electric Power
U.S. Profits: $5,899,000,000
Taxes Paid: ‐$545,000,000
Pepco Holdings
U.S. Profits: $882,000,000
Taxes Paid: ‐$508,000,000
Computer Sciences
U.S. Profits: $1,666,000,000
Taxes Paid: ‐$305,000,000
CenterPoint Energy
U.S. Profits: $1,931,000,000
Taxes Paid: ‐$284,000,000
NiSource
U.S. Profits: $1,385,000,000
Taxes Paid: ‐$227,000,000
Duke Energy
U.S. Profits: $5,475,000,000
Taxes Paid: ‐$216,000,000
Boeing
U.S. Profits: $9,735,000,000
Taxes Paid: ‐$178,000,000
NextEra Energy
U.S. Profits: $6,403,000,000
Taxes Paid: ‐$139,000,000
Consolidated Edison
U.S. Profits: $4,263,000,000
Taxes Paid: ‐$127,000,000
Paccar
U.S. Profits: $365,000,000
Taxes Paid: ‐$112,000,000
Integrys Energy Group
U.S. Profits: $818,000,000
Taxes Paid: ‐$92,000,000
Wisconsin Energy
U.S. Profits: $1,725,000,000
Taxes Paid: ‐$85,000,000
DuPont
U.S. Profits: $2,124,000,000
Taxes Paid: ‐$72,000,000
Baxter International
U.S. Profits: $926,000,000
Taxes Paid: ‐$66,000,000
Tenet Healthcare
U.S. Profits: $415,000,000
Taxes Paid: ‐$48,000,000
Ryder System
U.S. Profits: $627,000,000
Taxes Paid: ‐$46,000,000
El Paso
U.S. Profits: $4,105,000,000
Taxes Paid: ‐$41,000,000
Honeywell International
U.S. Profits: $4,903,000,000
Taxes Paid: ‐$34,000,000
CMS Energy
U.S. Profits: $1,292,000,000
Taxes Paid: ‐$29,000,000
Con-way
U.S. Profits: $286,000,000
Taxes Paid: ‐$26,000,000
Navistar International
U.S. Profits: $896,000,000
Taxes Paid: ‐$18,000,000
DTE Energy
U.S. Profits: $2,551,000,000
Taxes Paid: ‐$17,000,000
Interpublic Group
U.S. Profits: $571,000,000
Taxes Paid: ‐$15,000,000
Mattel
U.S. Profits: $1,020,000,000
Taxes Paid: ‐$9,000,000
Corning
U.S. Profits: $1,977,000,000
Taxes Paid: ‐$4,000,000
FedEx
U.S. Profits: $4,247,000,000
Taxes Paid: $37,000,000 (a rate of less than 1%)
Total
U.S. Profits: $163,691,000,000
Taxes Paid: ‐$10,602,000,000
Just look at that combined total again.
Those 30 companies had combined profits of more than $163 billion dollars during those three years, and yet the combined net tax liability of those companies was negative $10.6 billion dollars.
I wish I could make my taxes look like that.
Another company that is making headlines because of their taxes these days is Facebook.
It turns out that Facebook made more than a billion dollars in 2012 but did not pay a single dime in federal or state income taxes. The following is from a report that was just released by Citizens for Tax Justice…
Earlier this month, the Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes.
Instead, Facebook says it will receive net tax refunds totaling $429 million.
According to Businessweek, Facebook has an additional 2 billion dollars in tax credits that it will be able to use in future years...
Facebook says that it anticipates reducing its tax liability in the future by an additional $2.17 billion by using further net operating loss carry-forwards that it has banked.
And of course when it comes to abusing the tax system, the big Wall Street banks are some of the worst offenders. The following is an excerpt from a report put out by the office of U.S. Senator Bernie Sanders…
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Here are just a few examples of how the corporations and Wall Street banks these criminal CEOs work for have significantly harmed our economy and the federal budget:
1. Bank of America CEO Brian Moynihan
Number of Offshore Tax Havens in 2010? 371.
In 2010, Bank of America operated 371 subsidiaries incorporated in offshore tax havens. 204 of these subsidiaries are incorporated in the Cayman Islands, which has a corporate tax rate of 0%.
Amount of federal income taxes Bank of America would have owed if offshore tax havens were eliminated? $2.5 billion.
Bank of America has stashed $18.5 billion in offshore tax havens to avoid paying U.S. income taxes. Bank of America would owe an estimated $2.5 billion in federal income taxes if its use of offshore tax avoidance was eliminated.
Amount of federal income taxes paid in 2010? Zero. $1.9 billion tax refund.
Bank of America received a $1.9 billion tax refund from the IRS in 2010, even though it made $4.4 billion in profits.
Taxpayer Bailout from the Federal Reserve and the Treasury Department? Over $1.3 trillion.
During the financial crisis, Bank of America received a total of more than $1.3 trillion in virtually zero interest loans from the Federal Reserve and a $45 billion bailout from the Treasury Department.
2. JP Morgan Chase CEO James Dimon
Number of Offshore Tax Havens in 2010? 83.
In 2010, JP Morgan Chase operated 83 subsidiaries incorporated in offshore tax havens.
Amount of federal income taxes JP Morgan Chase would have owed if offshore tax havens were eliminated? $4.9 billion
JP Morgan Chase has stashed $21.8 billion in offshore tax haven countries to avoid payng income taxes. If this practice was outlawed, it would have paid $4.9 billion in federal income taxes.
Taxpayer Bailout from the Federal Reserve and the Treasury Department? $416 billion
During the financial crisis, JP Morgan Chase received a total of more than $391 billion in virtually zero interest loans from the Federal Reserve and a $25 billion bailout from the Treasury Department, while Jamie DImon served as a director of the New York Federal Reserve.
3. Goldman Sachs CEO Lloyd Blankfein
Amount of federal income taxes paid in 2008? Zero. $278 million tax refund.
In 2008, Goldman Sachs received a $278 million refund from the IRS, even though it earned a profit of $2.3 billion that year.
Number of offshore tax havens in 2010? 39.
In 2010, Goldman Sachs operated 39 subsidiaries in offshore tax haven countries.
Amount of federal income taxes Goldman Sachs would have owed if offshore tax havens were eliminated? $3.32 billion.
Goldman Sachs has stashed $20.63 billion in offshore tax haven countries to avoid paying income taxes. If this practice was outlawed, it would have paid $3.32 billion in federal income taxes.
Taxpayer Bailout from the Federal Reserve and the Treasury Department? $824 billion.
During the financial crisis, Goldman Sachs received a total of $814 billion in virtually zero interest loans from the Federal Reserve and a $10 billion bailout from the Treasury Department.
—–
Are you starting to get the picture?
The big banks and the big corporations make billions, but they pay nothing or next to nothing.
The rest of us bust our rear ends to try to get ahead, and we get gouged by dozens of different taxes.
Over time, the percentage of the overall tax burden shouldered by corporations has gotten smaller and smaller.
Back in 1950, corporate taxes accounted for about 30 percent of all federal revenue. In 2012, corporate taxes accounted for less than 7 percent of all federal revenue.
These days, large corporations have become absolute masters at avoiding taxes. In fact, there are many international tax havens that are doing a booming business in setting up sham headquarters for U.S. corporations. For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.
But corporations are not the only ones doing this kind of thing.
The ultra-wealthy have also mastered the art of legally not paying taxes.
As I mentioned in a previous article, it has been reported that the global elite have up to 32 TRILLION dollars stashed in offshore banks around the globe.
With that amount of money, you could pay off the entire U.S. national debt and still have enough money left over to buy every product and service produced in the United States during an entire year.
It is time to admit that our tax system is broken.
Congress has had decades to fix it, and yet the abuses just keep getting worse.
What we are doing is not working.
We need to abolish the income tax.
If you are still not convinced that the federal income tax is an abomination and that we need to abolish it, here are some more shocking facts about our tax system from one of my previous articles about taxes…
1 – The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.
2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.
3 – 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.
4 – There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.
5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.
6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.
7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.
8 – The IRS spends $2.45 for every $100 that it collects in taxes.
9 – According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes. Back in 1900, “Tax Freedom Day” came on January 22nd.
10 – When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.
11 – Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.
12 – The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.
13 – According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.
14 – Warren Buffett had an effective tax rate of just 17.4 percent for 2010.
15 – The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.
16 – Sadly, as Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.
Please share this article with as many people as you can. We have now entered a time of the year when tens of millions of Americans will be filling out their tax returns, and the pain of going through that process will make people even more receptive than normal to the truth about how broken our system is.
http://theeconomiccollapseblog.com/archives/abolish-the-income-tax-you-wont-believe-who-is-getting-away-with-paying-zero-taxes-while-the-middle-class-gets-hammered
AWD says:
How much time is wasted on taxes in monetary terms? I’ll answer my own question:
7.6 billion hours x $9 per hour (new Obama minimum wage)=
$68.4 billion dollars.
That’s almost as much as is spent on food stamps every year.
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19th February 2013 at 1:05 pm
AWD says:
I wish I only had to pay my accountant $9.00 per hour.
Tax Lawyers and Accountants are getting rich off this tax system. Yippee!
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19th February 2013 at 1:12 pm
card802 says:
So it’s true.
Politicians create the same problems they campaign against.
47% of Americans don’t pay any federal income tax in exchange for a vote……
The elites don’t pay any income tax because they are protected by the other elites……..
Corporations don’t pay any federal income tax and receive tax rebates……..
We do have a revenue problem, but the dumbass’s will continue to vote for more of the same no matter what, right up to the end.
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19th February 2013 at 1:47 pm
Hollow man says:
The corps pay taxes. They just pay directly to the polictico it is cheaper that way.
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19th February 2013 at 2:34 pm
KaD says:
Here’s another idea-end property taxes. Another F*ed up system. People pay it to support the schools that are turning out idiots-even people who DON’T have kids while people who live in apartments with kids pay nothing. There needs to be some way for people to PAY OFF at least one place to live so they aren’t in perpetual debt for life, especially in old age.
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19th February 2013 at 2:50 pm
Llpoh says:
Corp tax should be zero, which would result in many positives.
The statement that the rich pay little in taxes is bullshit. Maybe they pay a low percentage, as there income is capital gains and dividends. Add company tax to those amounts and the percentage skyrockets in many if not most cases.
Fact is that the top 1 per cent pay a lot of the tax collected. Top ten percent pay the bulk, top half pay the rest. The crap that the rich do not pay much tax is a lie. They pay huge amounts of tax in dollar terms.
There should be a flat tax from dollar one, with no deductions. And or a national sales tax.
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19th February 2013 at 2:58 pm
AWD says:
The Bermuda ‘Reacharound’ Triangle Tax Dodge
Submitted by Tyler Durden on 02/19/2013
With sequesters and loopholes the only two words that seem to matter in Washington (the latter more than the former as far as action), we suspect the popularity of the so-called ‘Bermuda Triangle’ tax dodge may raise more than a few eyebrows. Put simply, hedge fund managers create a Bermuda-based re-insurance entity, their clients (high-net-worth individuals) funnel their hard-earned gains through this offshore entity and back to the US hedge funds – dramatically reducing their personal income taxes. The re-insurers do a minimum of business to create the appearance of legitimacy but are enabling hedge fund investors to avoid paying high-rate income tax on any gains from the funds and growing tax-free while in the fund. Of course this is defended as “good tax management.” Funds such as Paulson’s, Third Point, Greenlight, and SAC all use this vehicle according to Bloomberg as a handy way to funnel a US hedge fund investment through a tax haven. It truly is good to be king…
Via Bloomberg,
By recycling the funds through Bermuda-based Pacre Ltd., the Paulson executives are positioned to legally exploit a little-known tax loophole, reduce their personal income taxes and delay paying the bill for years.
“These types of reinsurance companies are permitting U.S. taxpayers to defer — indefinitely — U.S. tax,” said David S. Miller, a tax lawyer at Cadwalader Wickersham & Taft LLP. For some, he said, it’s “an unjustified benefit.”
A decade after the U.S. Internal Revenue Service threatened to crack down on what it said were abuses by hedge-fund backed reinsurers, more high-profile money managers are setting up shop in tax havens. Paulson, SAC Capital Advisors LP’s Steven A. Cohen and Third Point LLC’s Daniel Loeb have started Bermuda reinsurance companies since 2011, following a similar Cayman Islands venture by Greenlight Capital Inc.’s David Einhorn.
Because reinsurers, which sell coverage to other insurers, manage large pools of capital, they’re a handy way to funnel a U.S. hedge fund investment through a tax haven.
At a time when the Obama administration and Congressional leaders of both parties are calling for a corporate tax overhaul that includes eliminating some loopholes, the reinsurance tax dodge is gaining popularity among hedge funds.
By setting up reinsurance companies there, money managers can take advantage of a loophole in IRS rules. Ordinarily, when hedge fund managers invest in their funds, they pay either the 39.6 percent rate for ordinary income or the 20 percent long- term capital gains rate, depending on how frequently securities are traded, plus an extra 3.8 percent health-law surcharge. If they were to move the hedge funds to tax havens, they would incur IRS penalties on earnings from what the agency calls “passive foreign investment companies.”
Here’s the catch: The IRS doesn’t penalize earnings from insurance companies, which it considers to be “active” businesses. As a result, by routing money through a Bermuda reinsurer, which in turn puts its assets back into their own hedge funds, fund managers can defer any taxes until selling the stake. They then pay only the lower capital gains tax rate.
In the meantime, the money grows tax-free, and the savings add up. Investing $100 million in a hedge fund that returns 15 percent annually, and paying the top marginal ordinary income rate on profit, results in a $50 million profit after taxes after five years. If the investment is taxed like a Bermuda reinsurer, the gain is $77 million.
The IRS said some of the offshore arrangements were shams, either because they weren’t selling enough insurance or because the insurance they reported selling was phony. The IRS “will challenge the claimed tax treatment,” government lawyers wrote.
The IRS has rarely if ever done so. Tax lawyers and insurance executives said they were unaware of any company targeted by the IRS, even in private.
“Nobody’s been challenged, so nobody knows whether it’s ironclad or not,” said Faries, the Bermuda lawyer. The IRS declined to comment.
Those involved in establishing reinsurers defend the strategy. “Given the world we’re in, it’s just good tax management,”
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19th February 2013 at 5:06 pm
llpoh says:
In 2007, the top 1% paid 22% of all fed income taxes. Not exactly “little or nothing”, is it? The top 10% paid around half of all fed income taxes. Seems to me that 1% of the population paying 21% of the taxes is WAY more than their fair share. Seems to me half the population paying NO income tax is WAY less than their fare share. That is the fucking definition of unfair. The Tope 10% carry the bottom half, and those in the 10 to 50% bracket carry their own weight.
Anyone who doesn’t understand this can bite me.
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19th February 2013 at 5:16 pm
llpoh says:
BTW – a flat tax with no deductions would actually see the share of taxes paid by the rich remain constant, the share on the middle class would fall, and those in the bottom half would have to pay something.
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19th February 2013 at 5:18 pm
llpoh says:
AWD – the reinsurance scheme is a doozy.
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19th February 2013 at 5:22 pm
DaveL says:
It’s a good thing I’m retired and have a lot of time to do my taxes, but another year or so and my expiration date will go by. What a fucking process filling out Federal and TWO states.
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19th February 2013 at 6:49 pm
Eddie says:
My tax return generally runs forty pages. The accounting bill runs about 10K, and i still pay out the wazoo. Articles that print the truth about way corporations fuck over the people of this country make my blood pressure go up.
We truly do live in a corporatocracy. It’s a crying shame.
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19th February 2013 at 7:45 pm
Eddie says:
“BTW – a flat tax with no deductions would actually see the share of taxes paid by the rich remain constant, the share on the middle class would fall, and those in the bottom half would have to pay something.”
It makes way too much sense for it to ever happen. That’s so regressive…actually expecting poor people to pay taxes instead of giving them my money. How can you be so cruel and insensitive to their plight. You act like it’s their fault.
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19th February 2013 at 7:49 pm
AWD says:
Eddie,
The paper pushers (accountants and tax attorneys) just love our current joke of tax system. It makes them boatloads of money. So, you actually get fucked twice, once by the IRS and once by your accountant/tax attorney.
From Salary.com:
The median expected salary for a typical Tax Attorney in the United States is $127,997.
The median expected salary for a typical Accountant in the United States is $75,588.
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19th February 2013 at 7:56 pm
Mark says:
F@&k the IRS
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19th February 2013 at 8:16 pm
beast rudolfo says:
i thought only the republicans wanted tax breaks for the rich. i’m confused. russia has a flat tax. . .they’re communists. . .usa is a representative republic capitalist system. . .need more coffee with my blue pill . . .that’ll help. . .everything will be ok.
b.r.
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19th February 2013 at 8:57 am
AKAnon says:
KaD-In my borough (county), they quit requiring property tax for your primary residence when you hit 65. Not sure how long that will last, but better than nothing. There are also a fair number of small communities w/o any property tax at all. Again, may not last, but so far, so good. If you want to live in bumfuck Alaska.
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19th February 2013 at 1:13 am