You must remember that corporate profits are taxed twice. First at the corporate level and again when shareholders pay taxes on their dividends.
You can surely raise the taxes on corporations - and drive them out of the country. Ireland lowered their corporate rates and has reaped the rewards of many companies flocking to their shores.
Its the same as our lovely state of Illinois with their unfriendly business environment. High taxes and very high workman's comp rates mean our economy is faltering while our neighbors (such as Indiana and Iowa) who have a friendlier environment for employers are attracting businesses and jobs.
greymule wrote:
It might help that the Government gives it our taxpayer's money.
Exxon Pays a Lower Effective Tax Rate than the Average American
Exxon Mobil Corp.s robust balance sheets have become a poster child for what The New York Times dubs the paradox of the United States tax code.
The companys large 2010 profits allowed them to lead Fortune 500s annual ranking of the nations most profitable firms for the eighth time in a row. But the oil giants average effective tax rates are roughly half the 35 percent tax rate that currently stands as the high-water mark for American corporations. Meanwhile, Exxon Mobil and other big oil companies continue to exploit tax loopholes for nearly $4 billion in subsidies each year. These subsidies include write-offs for drilling costs and a deduction for domestic production that was intended for manufacturers, not big oil producers.
Exxon Mobil registered an average 17.6 percent federal effective corporate tax rate on its annual earnings in the three years spanning 2008 to 2010. Its average domestic profits exceeded $6.8 billion. And as a 2011 Citizens for Tax Justice report points out:
Over the past two years, ExxonMobil reported $9,910 million in pretax U.S. profits. But it enjoyed so many tax subsidies that its federal income tax bill was only $39 milliona tax rate of only 0.4 percent.
Even when Exxon Mobil had a record profit of $40 billion in 2008 due to record oil prices it had only a 31 percent effective tax rate. Thats 13 percent lower than the maximum 35 percent despite being Exxon Mobils fifth year as the top corporate earner in Fortune 500s annual listing. The company paid no taxes at all to the U.S. federal government in 2009 on its domestic profits of nearly $2.6 billion. It appears that they avoided the tax man that year by legally funneling their profits through wholly owned subsidiaries in countries like the Cayman Islands, and reinvesting their earnings overseas.
exxon's effective tax rate, 2008-2011
More striking still is the discrepancy between Exxon Mobils rates and those of most American breadwinners. The companys effective rate of 17.6 percent is nearly 16 percent below the average individual federal tax rate, which according to the Congressional Budget Office was 20.4 percent as of 2007.
Individuals in the highest quintile pay an average tax rate just over 25 percent in the United States. Exxon Mobil, meanwhile, paid approximately the same effective tax rate as Americans in the fourth income quintilewhich includes Americans earning from $62,000 to $100,000 a year.
Exxon Mobils accounting methods mask its relatively low effective tax rate. According to CNN Money the $3.1 billion in taxes the company claims to have paid since January 2011 includes both federal and state gasoline taxesthat are really paid by driversas well as employee payroll taxes.
Think Progresss Pat Garofalo rightly observes that Exxon is counting as part of its tax burden [taxes] that it simply does not pay, making the exorbitant subsidies the company receives even more unnecessary.
These strategic maneuverings have not been lost on congressional Democrats. Rep. Tim Bishop (D-NY) introduced a bill to repeal at least one of these tax loopholes for large oil companies including Exxon. The legislation would result in $12 billion in revenue over 10 years by removing the Section 199 domestic manufacturing tax deduction.
House Republicans successfully blocked Democratic attempts to force a vote erasing this unnecessary oil subsidy on May 5 by passing a motion, 241-171, on two drilling bills.
But this promises to be only a temporary respite for Big Oil tax breaks. And a short one at that. The Senate is expected to vote next week on the Close Big Oil Tax Loopholes Act, legislation introduced by Robert Menendez (D-NJ) and other senators to address oil prices and subsidies for the five biggest oil companies.
Seth Hanlon, Director of Fiscal Reform at the Center for American Progress, explains that the glaring contrast between:
Todays high gas prices and inflated profits have undermined the industrys argument that their tax breaks benefit consumers.
Meanwhile, federal budget deficits have sharpened Congresss focus on eliminating wasteful government spendingof which oil subsidies are one of the worst examples.
Right on cue, Rep. Max Baucus (D-MT), on the morning of May 6, called on executives from Exxon Mobil and its Big Five compatriotsBP, Chevron, ConocoPhillips, and Shellto stand before the Senate Finance Committee for a May 12 hearing on "Oil and Gas Tax Incentives and Rising Energy Prices." As of this writing, top-level representatives from each company have confirmed attendance, including ExxonMobil Chairman and CEO Rex Tillerson. He now finds himself with the difficult task of publicly rationalizing Exxons share of billions in subsidies, despite the company reaping enormous profits and paying relatively little in the way of taxes.
This article was from 2011, but still holds true today.
Corporations, especially large corporations, are not friends of the common man. Note that Republicans blocked the effort to remove a small portion of the subsidies for big oil. Republicans are not friends of the common man, despite a widespread mistaken belief that the Republicans are for the common man.
It might help that the Government gives it our tax... (
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