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Octafish

(55,745 posts)
Fri May 8, 2015, 05:25 PM May 2015

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.

He is a member of the Business Roundtable, a group that wants to raise the eligibility age for Medicare and Social Security to 70, cut Social Security and veterans’ benefits, increase taxes on working families, and cut corporate taxes even further.

On December 6, 2002, Jeffrey Immelt said at an investors’ meeting, “When I am talking to GE managers, I talk China, China, China, China, China. You need to be there. You need to change the way people talk about it and how they get there. I am a nut on China. Outsourcing from China is going to grow to $5 billion. We are building a tech center in China. Every discussion today has to center on China. The cost basis is extremely attractive. You can take an 18 cubic foot refrigerator, make it in China, land it in the United States, and land it for less than we can make an 18 cubic foot refrigerator today, ourselves.”


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.


5. Citigroup

Citigroup made more than $4 billion in profits in 2010, but paid no federal income taxes. Citigroup received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury during the financial crisis.

Citigroup has established 427 subsidiaries incorporated in offshore tax havens.

In 2012, it stashed $42.6 billion in offshore tax havens to avoid paying U.S. income taxes. Citigroup would owe an estimated $11.5 billion in federal income taxes if its use of offshore tax avoidance strategies were eliminated.

Michael Corbat, the CEO of Citigroup, made more than $17.6 million in total compensation last year.


6. Pfizer

Pfizer, one of the largest prescription drug companies in America, not only paid no federal income taxes from 2010 to 2012, it received $2.2 billion in tax refunds from the IRS at the same time it made $43 billion in profits worldwide.

In 2012, Pfizer stashed $73 billion in profits offshore and has used aggressive offshore tax strategies to avoid paying U.S. income taxes.

Ian Read, the CEO of Pfizer, made $17.7 million in total compensation last year.

Hank McKinnell, Jr., who was Pfizer’s CEO from 2001 to 2006, received a golden parachute from Pfizer worth an estimated $188 million.


7. FedEx

In 2011, Federal Express received a $135 million tax refund from the IRS even though it made more than $2.7 billion in U.S. profits that year.

FedEx receives more than $1 billion a year from the U.S. Postal Service to provide air service for all express mail and priority mail shipments.

Frederick Smith, the CEO of FedEx, made more than $12.6 million in total compensation last year.


8. Honeywell

From 2009 to 2010, not only did Honeywell pay no federal income taxes, it received a $510 million tax refund from the IRS even though it made a combined profit in the U.S. of almost $3 billion.

In 2012, Honeywell stashed $11.6 billion in offshore tax havens to avoid paying U.S. income taxes. Honeywell would owe an estimated $4.06 billion in federal income taxes if its use of offshore tax avoidance were eliminated.

David Cote, the CEO of Honeywell, made more than $25.4 million in total compensation last year.

Mr. Cote 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.


9. Merck

In 2009, not only did Merck pay no federal income taxes, it received a $55 million tax refund from the IRS, even though it earned more than $5.7 billion in U.S. profits.

In 2012, Merck stashed $53.4 billion in offshore tax haven countries to avoid paying income taxes. If this practice was outlawed, it would have paid $18.69 billion in federal income taxes.

Fred Hassan, the CEO of Merck from 2003 to 2009, received a golden parachute worth an estimated $189 million.

Merck’s current CEO, Kenneth Frazier, has a retirement account worth an estimated $14.4 million. 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.


10. Corning

From 2008 to 2012, not only did Corning pay no federal income taxes, it received a $10 million tax refund from the IRS, even though it earned more than $3.4 billion in U.S. profits during those years.

Corning has stashed $11.9 billion in offshore tax havens to avoid paying U.S. income taxes. Corning would owe an estimated $4.165 billion in federal income taxes if its use of offshore tax avoidance were eliminated.

Wendell Weeks, the CEO of Corning, has a retirement account worth an estimated $22.8 million. Mr. Weeks 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.

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

What other candidate publicly names the corporate welfare cheats who rob America's future?

Anyone?
9 replies = new reply since forum marked as read
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pa28

(6,145 posts)
2. I wonder if Bernie Sanders would speak at Nike and fail to mention they owe 2.2 Billion in taxes?
Fri May 8, 2015, 05:50 PM
May 2015

I'm guessing he wouldn't

Obama spoke at a beautiful outdoor pep rally at Nike headquarters today promoting the TPP. Good optics

He lambasted his liberal critics on trade but I think he forgot to call out Nike for evading tax using offshore havens and skipping out on a 2.2 Billion dollar tab. He should have picked up our check while he was there but it looks he didn't.

http://www.ctj.org/taxjusticedigest/archive/2013/07/nikes_tax_haven_subsidiaries_a.php#.VU0tqPlVhBc

Octafish

(55,745 posts)
4. What a rat! Maybe Bernie will mention Apple having a trillion in cash parked offshore?
Fri May 8, 2015, 06:27 PM
May 2015
U.S. Companies Are Stashing $2.1 Trillion Overseas to Avoid Taxes

Bloomberg Business
By Richard Rubin

Eight of the biggest U.S. technology companies added a combined $69 billion to their stockpiled offshore profits over the past year, even as some corporations in other industries felt pressure to bring cash back home.

Microsoft Corp., Apple Inc., Google Inc. and five other tech firms now account for more than a fifth of the $2.10 trillion in profits that U.S. companies are holding overseas, according to a Bloomberg News review of the securities filings of 304 corporations. The total amount held outside the U.S. by the companies was up 8 percent from the previous year, though 58 companies reported smaller stockpiles.

The money pileup, reflecting companies’ incentives to park profits in low-tax countries, has drawn the attention of President Barack Obama and U.S. lawmakers, who see a chance to tap the funds for spending programs and to revamp the tax code. That effort is stalled in Washington, and there are few signs that tech companies will bring the profits back to the U.S. until Congress gives them an incentive or a mandate.

“It just makes no sense to repatriate, pay a substantial tax on it,” said Joseph Kennedy, a senior fellow at the Information Technology and Innovation Foundation, a policy-research group whose board of directors includes executives from Microsoft and Oracle Corp. “Computing and IT companies especially have a lot of flexibility in where they declare their profits.”

Apple, Google

Microsoft, Apple and Google each boosted their accumulated foreign profits by more than 20 percent over the year, the largest increases by any of the 34 companies with at least $16 billion outside the U.S. International Business Machines Corp., Cisco Systems Inc., Oracle, Qualcomm Inc. and Hewlett-Packard Co. each added at least $4 billion.

The profits added by the eight technology companies accounted for 45 percent of the net gain in overseas funds among the corporations surveyed. At the same time, firms in some other industries felt enough pressure to meet domestic needs that they chose to take the tax hit by bringing money home.

Duke Energy Corp., based in Charlotte, North Carolina, took a $373 million tax charge against earnings in February as part of a plan to get access to $2.7 billion in accumulated foreign profits. Stryker Corp., a Kalamazoo, Michigan-based maker of medical devices, is planning to repatriate $2 billion this year.

Apache Corp., a Houston-based oil and gas company, had $17 billion indefinitely reinvested overseas at the end of 2013. Now, it has none.

“The company made the decision to utilize international cash to pay down U.S. debt and grow its North American operations,” Castlen Kennedy, a spokeswoman, said in an e-mail.

GE Leads

General Electric Co. topped the list for the fifth straight year. The company now has $119 billion outside the U.S., an increase of 8 percent from the end of 2013 and a 27 percent gain since 2010.

By contrast, Microsoft has more than tripled its offshore holdings since 2010. Apple, which counts only part of its non-U.S. holdings as indefinitely held offshore, increased that portion to $69.7 billion from $12.3 billion in 2010. Cisco now has $52.7 billion outside the U.S., up 10 percent since 2013.

Microsoft referred back to 2012 Senate testimony by Bill Sample, its vice president for worldwide tax. Sample said then that the Redmond, Washington-based company is “fundamentally a global business” and that U.S. law creates a disincentive for U.S. investment.

Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, declined an interview request.

Google Needs

Google referred to a December 2013 letter that the Mountain View, California, company sent to the Securities and Exchange Commission. It said Google needs $20 billion to $30 billion for future acquisitions outside the U.S., $12 billion to $14 billion for foreign subsidiaries’ share of developing intellectual property and $2 billion to $4 billion for capital expenditures.

John Chambers, Cisco’s chief executive officer, said on Bloomberg TV on Feb. 20 that his company is investing in India, Israel and France in the absence of U.S. tax law changes.

“I’d prefer to have the vast majority of my employees here,” Chambers said. “And our tax policy is causing me to make decisions that I don’t think is in the interest of our country, or even in our shareholders, long term.”

The Bloomberg analysis covers 304 large U.S.-based companies that are required to report annually how much they hold outside the country in profits, which isn’t the same thing as cash.

Won’t Repatriate

It’s a measure of accumulated profits, including those reinvested in active businesses and factories. The companies say they won’t repatriate these profits, and they haven’t assumed that they will pay future U.S. taxes that would be owed if they did.

“One of the reasons that they’re holding the hoards of cash abroad is they don’t want to pay the repatriation tax when they bring it back,” said Rosanne Altshuler, a Rutgers University economist who studies international taxation.

The analysis starts with corporations in the Standard & Poor’s 500 Index and excludes purely domestic firms, real estate investment trusts and companies with headquarters outside the U.S. It includes each company’s most recent annual report, many of which were filed over the past month.

The companies owe taxes at the full U.S. corporate tax rate of 35 percent on profits they earn around the world. They get tax credits for payments to foreign governments and don’t have to pay the residual U.S. tax until they bring the money home.

Offshore Incentive

Keeping money overseas is particularly easy for technology and pharmaceutical companies whose profits stem from intellectual property that can swiftly be moved.

“It’s very easy to place a patent in another country and accrue the income there,” Altshuler said. “They’re very sensitive to differentials in corporate tax rates.”

Gilead Sciences Inc., for example, reported that it held $15.6 billion outside the U.S. as of Dec. 31, up from $8.6 billion a year earlier. That’s because the intellectual property for the company’s blockbuster drug — Sovaldi — was in Ireland before the Food and Drug Administration approved it in 2013.

Corporations that rely on intellectual property — trademarks, logos or patents — have an advantage over heavy industrial companies and the financial industry, which relies on providing services to customers, said Jennifer Blouin, an associate professor of accounting at the University of Pennsylvania’s Wharton School.

“You can’t move an oil rig out of certain jurisdictions,” she said. “You can’t shift the service income without moving the people.”

Shareholder Obligation

Companies have a duty to their shareholders and they’re responding logically to the incentives in the system, Kennedy said. “Companies are strongly driven by the need to increase shareholder value, and especially any public company has to meet market expectations,” he said.

Whatever the reasons, the potential tax revenue from offshore profits is tempting to U.S. lawmakers, who have been struggling to fund road projects and revamp the tax system.

Obama and top Republicans on the tax-writing committees say they won’t repeat a 2004 law that gave companies a voluntary repatriation holiday with a 5.25 percent tax rate.

Instead, Obama earlier this year proposed applying a 14 percent mandatory tax on the stockpiled profits and a 19 percent minimum tax on foreign earnings going forward.

The one-time tax would generate $268 billion over six years, which Obama wants to use for infrastructure.

Because the one-time transition tax is levied on past earnings, it doesn’t distort companies’ decisions, Altshuler said. The real questions are the rate and the details of the tax system for future earnings.

Obama’s plan hasn’t advanced in Congress, amid Republican objections to some of the details and the idea of using one-time money for needs such as highway construction.

The president met March 2 with the chief executive officers of Xerox Corp., Micron Technology Inc., Qualcomm, IBM and EMC Corp., which have a combined $114 billion in accumulated offshore profits.

“The president and the executives also discussed a shared desire to work with Congress to enact pro-growth, business tax reform,” the White House said in a statement.

That doesn’t mean it’s going to happen anytime soon.

SOURCE: https://berniesanders.com/must-read/must-read-u-s-companies-are-stashing-2-1-trillion-overseas-to-avoid-taxes/

Totally seriously: Thanks for the heads-up, pa28!

pa28

(6,145 posts)
5. Excellent read. As you've noted the 2.2 Billion Nike owes is just the tip of the iceberg.
Fri May 8, 2015, 06:51 PM
May 2015

I was having a little fun imagining what the event at Nike today would have looked like with a president Sanders.

If you had put Bernie out there he would have called on Phil Knight to write a check covering taxes owed before saying hello.

NashuaDW

(90 posts)
6. Avoidance or Evasion?
Fri May 8, 2015, 07:26 PM
May 2015

Avoidance -- fair business (and personal) practice. Obeying the law as written is not a crime.
It's the same as taking eve legal deduction I can on my taxes. Failure to do so could be considered a breach of fiduciary duty and resort in a class-action investor lawsuit.

Evasion -- Illegal and people go to jail and companies get fined for it.

The problem here lies, not with the companies, but with the tax code as written by congress.

I 1000% percent agree that we need to rewrite the tax laws to make some of these practices illegal.

Being angry at the companies listed is like hating your neighbor for using the mortgage interest deduction to reduce his federal income tax burden.

Let's support and elect people dedicated to changing the rules of the game.

calimary

(80,700 posts)
8. Perhaps we should start ROUTINELY referring to them as Corporate Welfare Queens.
Fri May 8, 2015, 08:17 PM
May 2015

"Corporate Welfare Queen Citigroup." That's their new, official, formal name.

"Corporate Welfare Queen Honeywell."

"Corporate Welfare Queen Bank of America."

"Corporate Welfare Queen Boeing."

"Corporate Welfare Queen Merck."

Just make it part of their name from here on.

You don't have Verizon. You have "Corporate Welfare Queen Verizon."

You don't have Corningware. You have "Corporate Welfare Queen Corningware."

You don't get a prescription for a a Pfizer-made drug. You get a prescription for a "Corporate Welfare Queen Pfizer-made drug."

It should be made common practice. Pretty soon, if people around you hear these references all the time, that will start inducing them to make a connection - these corporations are also WELFARE QUEENS. Every bit as much as that imaginary black woman ronald fucking reagan used as an example of welfare queenery as she took her imaginary welfare to the imaginary grocery store to buy imaginary steak and imaginary ice cream and put an imaginary deposit down on an imaginary diamond bracelet, too, I suppose. With her imaginary food stamps, dontchaknow, which also were lavish enough to cover her imaginary limousine rides, btw.

RufusTFirefly

(8,812 posts)
9. Mind-boggling that the CEO of the No. 1 Avoider was appointed "jobs czar"
Fri May 8, 2015, 08:23 PM
May 2015

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

... and yet in 2011 our Democratic President appointed GE CEO Jeffrey Immelt to head his President's Council on Jobs and Competitiveness.

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