America's Corporate Benedict Arnolds

[Dinner]

Boeing paid $1 billionin taxes then worked out a way to get rebates of %1.7 billion from the government giving it an effective tax rate of -159%!

IBM made profits of $14 billion between 2001-2003 yet they only paid only $260 million in net taxes. That's a 1.3% tax rate. Money didn't seem to be a problem for executive pay since it was more then double the average given in Businessweek's survey.

Time-Warner is another corporate cheat that has an effective tax rate of -7.3% with the CEO getting paid among the highest in the world.

Prudential sucks up an amazingly huge subsidy from the government with their effective tax rate of -43%!

Pfizer has worked themselves out a sweet deal where they only pay an 8% tax rate instead of the 32.5% everyone else must pay.

Saks 5th Avenue worked it out so they only pay 2.2% tax compared to Walmarts 33% tax.

[Saras]

Originally posted by Ted Striker


By the wage gap increasing to a factor of 300 to 1, when it's 12 to 1 in the UK

Then there is the Ted Striker "Carly got fired and made $48 million from it" anecdote.

Hey, it's not like it's money out of your pocket, unlike Dubyas meagre pay

[Ted Striker]

Originally posted by Oerdin
Boeing paid $1 billionin taxes then worked out a way to get rebates of %1.7 billion from the government giving it an effective tax rate of -159%!

IBM made profits of $14 billion between 2001-2003 yet they only paid only $260 million in net taxes. That's a 1.3% tax rate. Money didn't seem to be a problem for executive pay since it was more then double the average given in Businessweek's survey.

Time-Warner is another corporate cheat that has an effective tax rate of -7.3% with the CEO getting paid among the highest in the world.

Prudential sucks up an amazingly huge subsidy from the government with their effective tax rate of -43%!

Pfizer has worked themselves out a sweet deal where they only pay an 8% tax rate instead of the 32.5% everyone else must pay.

Saks 5th Avenue worked it out so they only pay 2.2% tax compared to Walmarts 33% tax.

It's kinda like committing a crime and being a celebrity. If you can afford the best lawyers, you get off.

If you can afford the best creative accountants, you pay less money.

[Saras]

Now corporate welfare

[Ted Striker]

Originally posted by Saras


Hey, it's not like it's money out of your pocket, unlike Dubyas meagre pay

But it comes out of someone's pocket.

This money should be more evenly distributed to the workers in the company. While the leaders deserve more money, (especially if they are the ones that founded the company), they shouldn't receive it to the point that it's grossly exaggerated for what they are returning to the company.

Too many executives have used companies for their own get rich quick schemes. Company performance be damned.

[Dinner]

Originally posted by DanS
Another Oerdin lame ass article posting.

Old Danny boy gets upset when people point out that there is something rotten in Denmark. As far as he is concerned it is apparently A.O.K. that corporations can make billions of dollars in profits but not pay any taxes. In fact many get so many subsidies they actually are a net drain on the national treasury.

Dan, why is it bad to pay for citizen's health care or college educations but it is good to give corporations truly massive subsidies? I'd have had you pegged as being someone who didn't like subsidies but I guess you're more of a partisan then I thought.

Let's keep up with those jobs and unemployment threads. I'd hate to see you stop doing them just because the numbers can't be messaged to look better then they are.

[Saras]

Originally posted by Ted Striker


But it comes out of someone's pocket.

Yes the shareholder'. But it's their call.

This money should be more evenly distributed to the workers in the company. While the leaders deserve more money, (especially if they are the ones that founded the company), they shouldn't receive it to the point that it's grossly exaggerated for what they are returning to the company.

Again, by what standards?

Too many executives have used companies for their own get rich quick schemes. Company performance be damned.

And they should rot in prison.

[Ted Striker]

Originally posted by Saras

Yes the shareholder'. But it's their call.

Or, more importantly, workers in the form of layoffs or lower pay.

Again, by what standards?

Common sense.

[Saras]

Originally posted by Ted Striker
Or, more importantly, workers in the form of layoffs or lower pay.

Companies most often can live with layoffs, and most often can't live without a CEO.

Common sense.

Whose?

[Ted Striker]

Originally posted by Saras


Companies most often can live with layoffs, and most often can't live without a CEO.

That's just messed up. They can get a new one.

What's funny is that sometimes the CEO isn't replaced until they have done more damage to the company than good.

Whose?

Any common person that looked at the situation and came to their own conclusion.

I'm not going down that path where we go back and forth and then you say, "the market! equillibrium! supply and demand! fair market value! blah..blah"

[Saras]

Originally posted by Ted Striker

That's just messed up. They can get a new one.

And they can re-hire people. What's your point?

What's funny is that sometimes the CEO isn't replaced until they have done more damage to the company than good.

Sue their AZZEZ.

Any common person that looked at the situation and came to their own conclusion.

Am I a common person? Are you?

I'm not going down that path where we go back and forth and then you say, "the market! equillibrium! supply and demand! fair market value! blah..blah"

I see. You don't go down a path that will end up with you getting PWND?

[Ted Striker]

Originally posted by Saras

And they can re-hire people. What's your point?

What's YOUR point? You just told me they couldn't live without a CEO?

My point is it's alot easier than a line worker to live off their savings than CEO's that are raking in cash, and you know, getting $48 million severance packages.

I see. You don't go down a path that will end up with you getting PWND?

Not really. Cause that's not the final answer, silly.

Even the government has stepped in, and set limitations on CEO compensation. So, you see, the market isn't always uber alles.

Unfortunatley many companies have loopholed their way around the law by giving out creative total compensation packages.

Saras, I didn't know you were a CEO.

[Flubber]

I haven't researched the companies involved but a couple of points

1. You folks do realize that there are such things as carrryovers and carrybacks of losses. If a company loses 10 billion in year 1, they can make 3 billion, 3 billion and 4 billion in profits over the next 3 years and pay no taxes. Therefore the tax paid versus the profit for a given year is actually a pretty meaningless statistic. The fact that the author uses it repeatedly indicates he wasn't that serious about real analysis.

2. In most countries, corporate profits are taxed again when paid out to shareholders. Is this not the case in the US? If shareholders are taxed as well then the concern should be integration and harmonization so that a dolar earned through a corporate structure would have the same amount of tax paid overall as if it weren't in the corporate structure. The difference in tax treatment in those circumstances would be worthy of study. You have to take the dollar all the way through and out of the corporate structure to assess things though

3. The author complains that a large proportion of corporations pay no tax. Of course they don't. A lot of companies lose money and there are tons that are inactive. I worked at revenue Canada in corporate tax. You would often see filings where a large conglomerate had 2-3 active companies and 10 or 20 that did nothing at all in a given year. I assume similar things happen in the US

4. A methodology question-- The author quotes profits for several large corporations but never breaks out if a significant portion of those amounts are earned outside the US. I presume he wouldn't expect income earned in Canada to be taxed in the first instance in the US.




I'm not saying there isn't a problem with corporate taxation ( I simply don't know) but the stats used in this article are quite frankly GARBAGE. Taxation is much too complex to break down to a simple profit versus tax number in a single year and reach ANY conclusions.

[Flubber]

OH and CEO compensation is frankly no business of the taxman other han the fact that said CEO pays taxes on all that compensation. Its not like the amount you pay a CEO isn't taxed somewhere .

Personally I agree that CEO compensation has gotten too high but thats a shareholders decision. I'm actually more offended by the large amounts earned by movie stars, musicians and sports figures

[Dinner]

Except these are companies which report billions of dollars of profits to share holders then claim they just couldn't possibly survive if they had to pay taxes to the government. These are not companies which are generating loses.

Further more the government taxes transactions so it is a lie to claim that it is double taxation when profits are given to share holders. Legally a corporation is a seporate legal entity very m uch like a person. A share just gives someone rights to one share's worth of profits a company makes and one say in decisions but the share holder is legally a different person then the company. Thus legaly the transfer of money from the company to a share holder is a transaction between two legally different entities. Thus it generates a tax.

The company is covering a contractual obligation buy taking some of its profits and giving them to someone else just like you are when you pay for your household utility bill.