Murdoch’s corporation had a tax rate of NEGATIVE 46% between 2007 and 2010http://www.zerohedge.com/article/over-past-4-years-news-corp-generated-104-billion-profits-and-received-48-billion-taxes-irsCall it the gift that keeps on giving (if one is a corporation that is): the US Tax system, so effective at extracting income tax from America's working class, is just as "effective" at redistributing said income tax at the corporate level. Case in point: News Corp, which after generating $10.4 billion in profits over the past 4 years, and which
would have been expected to pay the IRS $3.6 billion at the statutory corporate tax rate, instead received $4.6 billion back from Uncle Sam. Bottom line: Murdoch's corporation had a cash paid tax rate of -46% between 2007 and 2010. The culrpit: two little somethings called Deferred Tax Assets and Net Operating Loss Carry-forwards.
Is it all just such IRS tax loopholes as deferred tax assets and NOL carryforward? Not entirely. Reuters explains:
http://www.reuters.com/article/2011/07/12/column-dcjohnston-murdoch-idUSN1E76A1NH20110712How does Murdoch make money off the tax system? There are three basic elements, disclosure statements show.
One is the aggressive use of intra-company transactions that globally allocate costs to locations that impose taxes -- and profits to areas where profits can be earned tax-free. For that Murdoch can thank laws and treaties that treat multinational corporations much more generously than working stiffs, such as those who make up the audience for his New York Post and for his British tabloids with bare-breasted women. Working stiffs have their taxes taken out of their pay before they get it, while Murdoch gets to profit now and pay taxes by-and-by.
News Corp. has 152 subsidiaries in tax havens, including 62 in the British Virgin Islands and 33 in the Caymans. Among the hundred largest U.S. companies, only Citigroup and Morgan Stanley have more tax haven subsidiaries than News Corp., a 2009 U.S. Government Accountability Office study found. News Corp. had nearly $7 billion permanently invested offshore in 2009, money on which it does not have to pay taxes unless it brings the money back to the United States. Meanwhile, it can use that money as collateral for loans in the United States, where interest paid is a tax-deductible expense.
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