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I wonder how much the following companies spent on  lawyer fees (pronounced liar), and accountant fees, and bribes?

http://www.usatoday.com/story/money/business/2013/10/23/big-companies-pay-no-taxes/2480281/

Verizon: $146.4 MetLife: $53.9 Eaton: $32.7 Regeneron Pharmaceuticals: $29.6 Public Storage: $29.5 Ventas: $19.3 Avalonbay Communities: $17.4 Agilent Technologies: $16.9 Vornado Realty Trust: $16.8 Boston Properites: $16.7 Seagate Technology: $15.9 Broadcom: $15.7 News Corp.: $9.8 Lam Research: $8.8 Kimco Realty: $8.6 Waters: $8.5 Macerich: $8.3 Plum Creek Timber: $8.4 PulteGroup: $6.4 Apartment Investment & Management: $4.3 Perkin Elmer: $4.2 All of these companies have paid zero taxes ! Are they being honest? Is what they do ethical? Can you and I use their tactics and get away with it?
“Offshore transfer payments. One of the favorite ways for companies to slash their tax bills is by setting up foreign subsidiaries to make raw materials and components in countries with low tax rates. The companies’ U.S. operations then purchase these parts from the foreign units at well above cost. By doing this, the overseas unit makes a large profit, which then escapes U.S. taxes, as long as it stays in the foreign country, Yee says. Transfer payments are used at Bristol, Forest Labs, Agilent Technologies, Eaton and Lam Research, he says. Many companies are likely waiting for a U.S. tax-holiday, giving them a chance to bring the cash to the U.S. tax-free, Yee says. Agilent and Bristol declined to comment. The other companies didn’t respond.” Is it creative accounting?  Can we do these things and not be audited?

“Accounting rules. A big reason that Verizon’s effective tax rate is so low, coming in at a negative 4.8%, is largely due to accounting. The company’s sped-up depreciation, severance and pension costs are large credits that contribute to pushing the company’s taxes down, says Jonathan Schildkraut of Evercore. But there’s also a distortion caused by the company’s 55% interest in Verizon Wireless. Vodafone, which owns 45% of Verizon Wireless, pays taxes on its share, but the entire profit is reported on income. Adjusting for this, Verizon’s effective tax rate is closer to 30%, the company says. Verizon is buying Vodafone’s stake, which will eliminate the issue in the future. Similarly, real estate investment trusts have low effective tax rates because they pass profit to shareholders, who then pay the taxes.

The question for investors is whether or not companies paying low effective tax rates might, eventually, attract the attention to regulators. “They are slow at getting at these issues,” Yee says.”Tax evasion and tax avoidance reduce government revenues. If there are loopholes that allows these companies to avoid paying taxes we need to close them. It is hurting America and its citizens who are paying their taxes. Even the stockholders of these companies are paying their taxes (for the most part). The company pays the dividend to the share holder and he then has to pay taxes on his income. I have no problem with this but I do have a problem with the companies “legal” avoidance of taxes.

Lets start a conversation about this problem. Do you agree that it is a problem? Do you think there is bribery involved?

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jjgravitas
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jjgravitas

What we need is to put an end to the conservative movement, put the religious right, the tea party & the GOP completely out of power. Get those normally voting republican to understand that they are voting against themselves. The GOP don’t exist anymore as anything but a distraction. When the GOP are in power they only make bad decisions. When they are slightly out of power, they do nothing but hold everything up. I was raised to believe that a two party system was a good thing. But not when one party – the GOP – is committed to ruining the country to benefit a few really rich guys. Pres. Clinton paid off his economic debt in eight years. It will take us longer than that even if we are entirely rid of the GOP. Vote out the liars!

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monicaangela
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I agree with your statement regarding the GOP, it is sad, the fact that in this nation where freedom has been since inception a sought after goal. The southern strategy is the reason so many unfortunate republicans vote against those things that would make their lives and that of many others like them much better. Hate is a powerful thing isn’t it? 😉

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Kalima
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Good Morning Nirek.

Thought you might appreciate this from this morning’s MB.

Have a good Thursday.

Peace.

—-

It cuts both ways: The man who took Caffe Nero to task over its tax affairs

http://www.independent.co.uk/news/uk/home-news/it-cuts-both-ways-the-man-who-took-caffe-nero-to-task-over-its-tax-affairs-9334208.html

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AdLib
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Nirek, also just heard that there will be a nationwide protest next week by fast food workers for raising the minimum wage.

We need to keep in mind that not only do these corporations evade paying taxes but they drain billions in taxes that everyone else pays by paying their workers wages that aren’t liveable which have to be supplemented by government safety net programs.

Raising the minimum wage and ridding the tax code of these massive loopholes that allow billion dollar corporations to pay no taxes would turbo charge our economy, eliminate the deficit and raise the standard of living for everyone while addressing the economic inequity out there to at least a small degree.

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AdLib
Admin

Many good points you bring up here, Nirek. The central issue is of course that the corporations and wealthy have succeeded over the years to get their paid-for congresspeople to pass tax laws that allow them to escape paying taxes. And of course, the Republican hypocrisy on the deficit proves how dishonest they are, the deficit only matters when the subject is the 99% getting services and aid but they won’t budge on fixing the tax loopholes or raising taxes. So the deficit really doesn’t matter to them, does it?

It is an enormous outrage that billion dollar corporations pay no taxes but their employees do. Our government and democracy has fallen apart at this point, Congress serves the oligarchy over the people as that recent report pointed out.

This isn’t sustainable and one way or another it will have to change. Whether it’s another economic crash or a populist uprising that sweeps across the nation (and across the world?) and demands its interests are addressed above the oligarchs.

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monicaangela
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Excellent article Nirek. I truly believe this avoidance of taxes is merely a manner in which the wealthy can continue to shift money from one to another. Imagine having a racket where you can hire say your brothers and sisters are aunts and uncles to do a job for you that would allow you to avoid paying your taxes. I believe the idea of getting lawyers and accountants to help a person avoid paying taxes is repugnant to say the least, and even more repugnant is the fact that the same people who find the loopholes own the companies that the wealthy utilize to avoid paying their fare share, profits circle at the top and in my opinion it is a you scratch my back, I’ll scratch yours game. Capitalism is rife with this type of behavior, those at the top work diligently day in and day out to keep the profits among themselves.

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NirekJunior
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NirekJunior

If you follow the Republican ‘logic’ – companies are people. If companies are people, they ought to be subject to the same tax laws and penalties for tax evasion that everyday people are subject to. Of course it’s absurd that companies are people, and absurd that companies and the wealthiest 1% don’t pay their fair share of taxes. The tax laws in general should be radically simplified, and there should be a cap on what CEOs make – no more than say ten times what the lowest paid employee makes. As long as money controls politics though, and by extension as long as corporations control politics with their ‘donations’ (one might read that as bribes) thing won’t change – at least not in any real substantial way. Just my thoughts. 🙂

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Beatlex
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Beatlex

Whatever happened to good Corporate citizens? Did they ever exist? It is all greed now.Good post Nirek

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jjgravitas
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jjgravitas

There is most certainly a problem with corporations not paying taxes. It’s a complex problem that probably will never be addressed until Democrats are in full control of Congress. The GOP only want to cut taxes so they’ll never touch it. The GOP & especially the Tea Party are funded almost entirely by corporations and other billionaires. And SCOTUS is entirely on the side of corporations as well. It’s practically a stalemate at this point.

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