How 10% of S&P 500 companies are evading taxes

[BlueStreak]

http://www.bloomberg.com/news/articles/2015-04-14/how-10-percent-of-s-p-companies-opted-out-of-paying-u-s-taxes

"The biggest factor is the recent wave of companies, such as Medtronic Plc and Mylan NV, that have completed what’s known as an inversion, in which they move their tax address overseas. Other companies have declared themselves to be real estate investment trusts, or REITs, which the Internal Revenue Service doesn’t treat as corporations. Just this year, Equinix Inc., a California company that operates data centers, became a REIT to lower its effective tax rate to as little as 10 percent. At 35 percent, the U.S. corporate rate is the highest in the developed world.

"The Congressional Budget Office predicted in January that these techniques, by eroding the tax base, would contribute to a drop in U.S. corporate receipts, from 2.3 percent of gross domestic product in 2016 to 1.8 percent in 2025. By then, receipts will be about 5 percent, or $27 billion a year, lower than they would be without the anticipated erosion, the CBO estimates."

[PoliticAverse]

1. Reced but it should say 'avoiding' rather than 'evading' (which is illegal).

The point of the article is that this is all apparently legal.

[BlueStreak]

2. Everything is legal when you can hire Congress to make it so.

So I think I'll stick with evade because that is exactly what is happening here.

When Reagan took office, the share of Federal tax income paid by corporations was in the mid-20 percent range. Today it is way under 10%. This is tax evasion. The fact that it was accomplished by getting Congress to legalize the means doesn't really change much, as far as I'm concerned.

[hifiguy]

7. When the robbers make the laws

robbery is legal.

[Major Nikon]

3. "the U.S. corporate rate is the highest in the developed world"

Meaningless statement

http://upload.wikimedia.org/wikipedia/commons/a/ae/Effective_Corporate_Tax_Rate_OECD_Countries,_2000-2005_Average.jpg

[BlueStreak]

4. It would be meaningful if any of them actually paid that

This is the problem with our system now. Laws are only for the commoners. Those at the top have a different set of rules.

This didn't just happen. They have been working on this for 200 years.

[Major Nikon]

5. The only thing that's really meaningful is the effective tax rate

And the US has one of the lowest corporate effective tax rates in the developed world.

[BlueStreak]

6. Like everything else, it is a country of "Haves" and "Have nots"

For the largest corporations, the effective tax rate is damn near zero -- actually negative tax rate for some.

But for small businesses, they pay a much higher effective rate.

And that is exactly backwards. It is small businesses that create most of the jobs and carry forward the innovations that make the country strong. The big businesses just suck the blood out of everything.