How Corporations Avoid Taxes:

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Real Estate Broker/Owner with Buyers' Choice Realty

How Corporations Avoid Taxes


In the 1950’s, corporate taxes accounted for 30% of all federal revenue.  Nowadays, they account for just 6.6%.  This is because corporations have become masters of tax minimization.  Earlier this year, GE became the poster child for these shady practices.  Here is how GE – and other corporations like them – manage to do it:

How Corporations Get Out of Paying Taxes
Via: OnlineMBA.com
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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Peggy Hughes/pha logistix, inc. 05/20/2011 08:00 AM
  2. Steve Mattison 05/20/2011 10:22 AM
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Ambassador
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Mirela Monte
Buyers' Choice Realty - North Myrtle Beach, SC
Myrtle Beach Real Estate

 

You can enlarge the diagram by clicking on it.

May 20, 2011 07:12 AM #1
Ambassador
2,801,517
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate
Mirela - With corporations now allowed to make huge political contributions, good luck ever seeing this turned around.
May 20, 2011 08:19 AM #2
Rainmaker
135,175
Steve Mattison
Canyon de Chelly National Mo, AZ
Vietnam Veteran

That is sure symbolic the way the flag is draped - of the state of our Union!  Really liked the diagram too, very good post and I appreciated it!!!

May 20, 2011 10:16 AM #3
Rainer
249,359
Bill Pohl
Tetra Homes, Inc. - Loveland, OH

As a guy who owned a multi-state public accounting firm, I can tell you that the whole tax system needs to be overhauled to get rid of the special interest groups and go to a flat tax model (or VAT tax) because our system is broke and we just need something new.

May 20, 2011 02:54 PM #4
Rainmaker
1,244,411
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

I'm sorry * I pay the TAXES on my DIVIDENDS from the corporations including GE/NBC * DIS/ESPN * XOM.  It is a falsehood that these corporations do not pay taxes....their shareholder/OWNERS pay taxes......and yes, I have been fortunate to have INVESTED IN REAL ESTATE so I can shelter a good bit of that income and those taxes.....

May 29, 2011 12:04 PM #5
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Mirela Monte
Buyers' Choice Realty - North Myrtle Beach, SC
Myrtle Beach Real Estate

Wallace:  So, you are just fine with corporations paying less taxes than you do, in spite of making billions from American consumers, all the while transfering more and more of their plants and factories overseas?


Ostensibly, the U.S. federal tax code requires corporations to pay 35 percent of their profits in income taxes.

But of the 275 Fortune 500 companies that made a profit each year from 2001 to 2003 and for which adequate information to draw conclusions is publicly available, only a small proportion paid federal income taxes anywhere near that statutory 35 percent tax rate. The vast majority paid considerably less.

In fact, in 2002 and 2003, the average effective tax rate for all of these 275 companies was less than half the statutory 35 percent rate. Over the 2001-2003 period, effective tax rates ranged from a low of -59.6 percent for Pepco Holdings to a high of 34.5 percent for CVS.

Over the three-year period, the average effective rate for all 275 companies dropped by a fifth, from 21.4 percent in 2001 to 17.2 percent in 2002-2003.

The Gap Between Statutory and Real Corporate Tax Rates
Actual taxes paid by consistently profitable Fortune 500 companies now is less than half the statutory rate

May 29, 2011 12:24 PM #6
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Mirela Monte

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