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Nirek On May - 6 - 2014



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


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?

Written by Nirek

Proud progressive Vietnam Vet against WAR! Can't stomach chickenhawks.

30 Responses so far.

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  1. Nirek says:

    This is a list of the top 10

    http://www.sanders.senate.gov/top-10-corporate-tax-avoiderstax avoiders

    America’s Top 10 Corporate Tax Avoiders

    1. General Electric

    From 2008 to 2013, while GE made over $33.9 billion in United States profits, it received a total tax refund of more than $2.9 billion from the Internal Revenue Service.

    G.E.’s effective U.S. corporate income tax rate over this six year period was -9 percent.

    In 2012, GE stashed $108 billion in offshore tax havens to avoid paying income taxes. If this practice were outlawed, GE would have paid $37.8 billion in federal income taxes that year.

    During the financial crisis, the Federal Reserve provided GE with $16 billion in financial assistance, at a time when its CEO Jeffrey Immelt was a director of the New York Federal Reserve.

    GE has been a leader in outsourcing decent paying jobs to China, Mexico and other low-wage countries.

    Mr. Immelt has a retirement account at General Electric worth an estimated $59 million and made $19 million in total compensation last year.

    • Nirek says:

      This is just the top five. Note that they put money in off shore accounts. Corporate welfare is costing us tax payers billions! Do these corporations need welfare? I don’t think so. They are making obscene profits yet pay nothing in taxes.

      2. Boeing

      From 2008 to 2013, while Boeing made over $26.4 billion in U.S. profits, it received a total tax refund of $401 million from the IRS. Boeing’s effective U.S. corporate income tax rate over this six-year period was -2 percent.

      Boeing is one of the top recipients of corporate welfare in the United States and has outsourced tens of thousands of decent paying jobs to China and other low-wage countries.

      Boeing even has its own taxpayer-funded bank known as the Export-Import Bank of the United States. Boeing has received so much corporate welfare from this bank that it has been dubbed “the Bank of Boeing.”

      Boeing CEO W. James McNerney, Jr. made $23.3 million in total compensation last year. Mr. McNerney, as a member of the Business Roundtable, wants to raise the eligibility age for Medicare and Social Security to 70 and make significant cuts to Social Security.

      3. Verizon

      From 2008 to 2013, while Verizon made over $42.4 billion in U.S. profits, it received a total tax refund of $732 million from the IRS.

      Verizon’s effective U.S. corporate income tax rate over this six-year period was -2 percent.

      In 2012, Verizon stashed $1.8 billion in offshore tax havens to avoid paying U.S. income taxes. Verizon would owe an estimated $630 million in federal income taxes if its use of offshore tax avoidance was eliminated.

      In 2013, Lowell McAdam, the CEO of Verizon made $15.8 million in total compensation. He wants to raise the eligibility age for Medicare and Social Security to 70, and make significant cuts to Social Security as a member of the Business Roundtable.

      4. Bank of America

      Bank of America received a $1.9 billion tax refund from the IRS in 2010, even though it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of more than $1.3 trillion.

      In 2012, Bank of America operated more than 300 subsidiaries incorporated in offshore tax havens like the Cayman Islands, which has no corporate taxes.

      In 2012, Bank of America stashed $17.2 billion in offshore tax havens to avoid paying U.S. income taxes. Bank of America would owe an estimated $4.3 billion in federal income taxes if its use of offshore tax avoidance strategies were eliminated.

      Last year, Bank of America CEO Brian Moynihan made $13.1 million in total compensation, but he wants to raise the eligibility age for Medicare and Social Security to 70, and make significant cuts to Social Security as a member of the Business Roundtable.

  2. Nirek says:

    Instead of voting for tax cuts for the rich they should be voting for more money to go to the VA to care for our veterans.

    Vote Summary
    Question: On the Motion (Motion to Waive All Applicable Budgetary Discipline Re: S.1982 )
    Vote Number: 46 Vote Date: February 27, 2014, 02:26 PM
    Required For Majority: 3/5 Vote Result: Motion Rejected
    Measure Number: S. 1982 (Comprehensive Veterans Health and Benefits and Military Retirement Pay Restoration Act of 2014 )
    Measure Title: A bill to improve the provision of medical services and benefits to veterans, and for other purposes.
    Vote Counts: YEAs 56
    NAYs 41
    Not Voting 3
    Vote Summary By Senator Name By Vote Position By Home State

    Alphabetical by Senator Name
    Alexander (R-TN), Nay
    Ayotte (R-NH), Nay
    Baldwin (D-WI), Yea
    Barrasso (R-WY), Nay
    Begich (D-AK), Yea
    Bennet (D-CO), Yea
    Blumenthal (D-CT), Yea
    Blunt (R-MO), Nay
    Booker (D-NJ), Yea
    Boozman (R-AR), Nay
    Boxer (D-CA), Yea
    Brown (D-OH), Yea
    Burr (R-NC), Nay
    Cantwell (D-WA), Yea
    Cardin (D-MD), Yea
    Carper (D-DE), Yea
    Casey (D-PA), Yea
    Chambliss (R-GA), Nay
    Coats (R-IN), Nay
    Coburn (R-OK), Nay
    Cochran (R-MS), Nay
    Collins (R-ME), Nay
    Coons (D-DE), Yea
    Corker (R-TN), Nay
    Cornyn (R-TX), Nay
    Crapo (R-ID), Nay
    Cruz (R-TX), Nay
    Donnelly (D-IN), Yea
    Durbin (D-IL), Yea
    Enzi (R-WY), Nay
    Feinstein (D-CA), Yea
    Fischer (R-NE), Nay
    Flake (R-AZ), Nay
    Franken (D-MN), Yea
    Gillibrand (D-NY), Yea
    Graham (R-SC), Nay
    Grassley (R-IA), Nay
    Hagan (D-NC), Yea
    Harkin (D-IA), Yea
    Hatch (R-UT), Nay
    Heinrich (D-NM), Yea
    Heitkamp (D-ND), Yea
    Heller (R-NV), Yea
    Hirono (D-HI), Yea
    Hoeven (R-ND), Nay
    Inhofe (R-OK), Nay
    Isakson (R-GA), Nay
    Johanns (R-NE), Nay
    Johnson (D-SD), Yea
    Johnson (R-WI), Nay
    Kaine (D-VA), Yea
    King (I-ME), Yea
    Kirk (R-IL), Nay
    Klobuchar (D-MN), Yea
    Landrieu (D-LA), Yea
    Leahy (D-VT), Yea
    Lee (R-UT), Nay
    Levin (D-MI), Yea
    Manchin (D-WV), Yea
    Markey (D-MA), Yea
    McCain (R-AZ), Nay
    McCaskill (D-MO), Yea
    McConnell (R-KY), Nay
    Menendez (D-NJ), Yea
    Merkley (D-OR), Yea
    Mikulski (D-MD), Yea
    Moran (R-KS), Yea
    Murkowski (R-AK), Not Voting
    Murphy (D-CT), Yea
    Murray (D-WA), Yea
    Nelson (D-FL), Not Voting
    Paul (R-KY), Nay
    Portman (R-OH), Nay
    Pryor (D-AR), Yea
    Reed (D-RI), Yea
    Reid (D-NV), Yea
    Risch (R-ID), Nay
    Roberts (R-KS), Nay
    Rockefeller (D-WV), Yea
    Rubio (R-FL), Nay
    Sanders (I-VT), Yea
    Schatz (D-HI), Yea
    Schumer (D-NY), Yea
    Scott (R-SC), Nay
    Sessions (R-AL), Nay
    Shaheen (D-NH), Yea
    Shelby (R-AL), Nay
    Stabenow (D-MI), Yea
    Tester (D-MT), Yea
    Thune (R-SD), Nay
    Toomey (R-PA), Nay
    Udall (D-CO), Yea
    Udall (D-NM), Yea
    Vitter (R-LA), Nay
    Walsh (D-MT), Yea
    Warner (D-VA), Yea
    Warren (D-MA), Yea
    Whitehouse (D-RI), Yea
    Wicker (R-MS), Not Voting
    Wyden (D-OR), Yea
    Vote Summary By Senator Name By Vote Position By Home State

    Grouped By Vote Position
    YEAs —56
    Baldwin (D-WI)
    Begich (D-AK)
    Bennet (D-CO)
    Blumenthal (D-CT)
    Booker (D-NJ)
    Boxer (D-CA)
    Brown (D-OH)
    Cantwell (D-WA)
    Cardin (D-MD)
    Carper (D-DE)
    Casey (D-PA)
    Coons (D-DE)
    Donnelly (D-IN)
    Durbin (D-IL)
    Feinstein (D-CA)
    Franken (D-MN)
    Gillibrand (D-NY)
    Hagan (D-NC)
    Harkin (D-IA)
    Heinrich (D-NM)
    Heitkamp (D-ND)
    Heller (R-NV)
    Hirono (D-HI)
    Johnson (D-SD)
    Kaine (D-VA)
    King (I-ME)
    Klobuchar (D-MN)
    Landrieu (D-LA)
    Leahy (D-VT)
    Levin (D-MI)
    Manchin (D-WV)
    Markey (D-MA)
    McCaskill (D-MO)
    Menendez (D-NJ)
    Merkley (D-OR)
    Mikulski (D-MD)
    Moran (R-KS)
    Murphy (D-CT)
    Murray (D-WA)
    Pryor (D-AR)
    Reed (D-RI)
    Reid (D-NV)
    Rockefeller (D-WV)
    Sanders (I-VT)
    Schatz (D-HI)
    Schumer (D-NY)
    Shaheen (D-NH)
    Stabenow (D-MI)
    Tester (D-MT)
    Udall (D-CO)
    Udall (D-NM)
    Walsh (D-MT)
    Warner (D-VA)
    Warren (D-MA)
    Whitehouse (D-RI)
    Wyden (D-OR)
    NAYs —41
    Alexander (R-TN)
    Ayotte (R-NH)
    Barrasso (R-WY)
    Blunt (R-MO)
    Boozman (R-AR)
    Burr (R-NC)
    Chambliss (R-GA)
    Coats (R-IN)
    Coburn (R-OK)
    Cochran (R-MS)
    Collins (R-ME)
    Corker (R-TN)
    Cornyn (R-TX)
    Crapo (R-ID)
    Cruz (R-TX)
    Enzi (R-WY)
    Fischer (R-NE)
    Flake (R-AZ)
    Graham (R-SC)
    Grassley (R-IA)
    Hatch (R-UT)
    Hoeven (R-ND)
    Inhofe (R-OK)
    Isakson (R-GA)
    Johanns (R-NE)
    Johnson (R-WI)
    Kirk (R-IL)
    Lee (R-UT)
    McCain (R-AZ)
    McConnell (R-KY)

  3. jjgravitas says:

    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!

    • monicaangela says:

      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? 😉

    • Nirek says:

      JJ, I couldn’t agree more.
      Everything you say is true. Like you I was raised thinking that the two party system was good. That changed really after Ike. The GOP has steadily gone down hill and who knows how far down that hill goes.

  4. Kalima says:

    Good Morning Nirek.

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

    Have a good Thursday.



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


    • Nirek says:

      Kalima, it seems that one person can have an affect on corporations now with social media. Getting involved one way or another is what we need all citizens to do, but more than that we need them to VOTE! Voting is still important and can affect the outcome of an election.

      • Kalima says:

        Well if one determined guy can do this much, imagine a hundred, a thousand and one million concerned citizens around the globe. Yes, voting each time, especially in local elections that people tend to think of as unimportant, is the way to unseat the traitors to your Constitution and well being of Americans.

  5. Nirek says:

    I want to thank Kalima for the help she gave in editing this article.

    THANKS Kalima!

    • Kalima says:

      You are very welcome, Nirek.

      Sorry I haven’t commented yet, have been really busy and hubby arrived back from Germany yesterday.

      Your son took the words right out of my head when he asked if corporations are people, why don’t they pay as fairly as the rest of us do?

      The Tory government won on a campaign promise to tax the rich fairly. Four years later we are still waiting for this to happen. Like the U.S. the conservatives are funded by the rich, so I can’t see them ever biting the hand that feeds them. There need to be more worldwide protests or we can aways just try to vote the greedy buggers out.

  6. AdLib says:

    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.

    • Nirek says:

      Ad, that is true. I wanted to start a conversation about the economy. About the disparity between the 1% and the rest of the people 99% income wise.
      Corporate welfare is just another part of the mix that has to be addressed.

  7. AdLib says:

    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.

    • Nirek says:

      Ad, wouldn’t it be great if we could get all the 99%ers to wake up and vote the GOP obstructionists out? Get them to see that a vote for the GOP candidate is a vote against their own best interests?

  8. monicaangela says:

    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.

    • Nirek says:

      I have to agree Monica. Think how the US budget would look if these corporations paid their fair taxes. Think how much workers could be paid if there were not greed in the hearts of the wealthy. $10.10 is not a very high wage.

      • monicaangela says:

        $10.10 in my opinion is a slave wage to say the least. Any person that has to buy food clothing and pay to keep a roof over his or her head can barely do so with that wage, imagine a person with a family, that family may be able to successfully complete two out of three of the items I mentioned, but believe me they would be hard pressed to complete all three and still have money for savings. I believe any man or woman that has to work should make enough money to take care of their daily needs, food, clothing and shelter, and still have money left over to enjoy the time they have away from work, and also enough to put some away for a rainy day.

        Republicans especially should be ashamed of themselves for not helping to pass a bill to increase the minimum wage, but democrats, the President included should be ashamed of themselves for offering such a low increase to 10.10 an hour. The minimum wage should be increased to keep up with inflation IMHO.

        • Nirek says:

          Monica, I could not agree more. $15 would be a good minimum wage with COLA every year. :)

          • monicaangela says:

            Exactly, that would be a good starting point in my opinion. Imagine the salaries of CEO’s for many of the companies that pay minimum wage, it is mind boggling to think they would accept those salaries realizing that the people that are doing the majority of the work have to apply for assistance from the government just to be able to have the bare necessities. I have no sympathy for small business owners either, a part of a good business plan is to first make sure you have an excellent product, the next thing is well paid loyal employees, and after that you don’t have to worry about making a profit, and whatever profit you make after taking care of those two things is what you deserve IMHO. :)

  9. NirekJunior says:

    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. :)

  10. Beatlex says:

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

    • Nirek says:

      Beatlex, there are some good corporate citizens. Most of them are smaller and run by reasonable, responsible, caring people.

      Thanks for commenting.

  11. jjgravitas says:

    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.

    • Nirek says:

      JJ, thanks for the input. You are right the majority of the GOP are “bought and paid for” and do their “owners” bidding.

      I may be wrong, but I think there is bribery going on. What do you think?

      • jjgravitas says:

        There is bribery of a sort, when big money pays the big bucks for the campaigns of pols whose only stated purpose is to cut taxes and regulations, giving corporations and the wealthy a free ride while everyone else suffers. That’s bribery enough for me.

  12. Nirek says:

    Young Turks on youtube.

    Just to help the conversation get started.

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