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U.S. companies are making record profits; and more and more of their money is staying offshore --- and barely being taxed. A recent Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166 billion offshore last year in 2012 --- and they shielded more than 40% of their annual profits from U.S. taxes. These 60 companies were chosen for the Wall Street Journal analysis because each of them had held at least $5 billion offshore in 2011.

Further on in this post is a list of 64 companies that, on average over the past 5 years, collectively only paid an average of 8.1% in actual U.S. corporate taxes to the U.S. Treasury --- and 40% of their profits aren't being taxed by the IRS at all. (The financial data is from the SEC at http://www.sec.gov/...)


The total profits held offshore (as "permanently reinvested") by 60 big U.S. companies grew 15% in 2012 - WSJ (Source: SEC)

It's not that 64 major U.S. corporations (listed in the chart further below) pay "the highest tax rate in the world", because they don't...at least, not to the U.S. Treasury. It's foreign taxes on foreign profits that these 64 major U.S. companies mostly pay to the treasuries of foreign countries. So essentially, because the U.S. government collects so little as a percent, these U.S. corporations are essentially paying more (and a greater percentage) for the operations of foreign governments than they are for our own.

The Top Offenders are as Follows (The Full List is Further Below)

      * General Electric: The worst tax record over five years, with $81 billion in profits and a $3 billion refund. Chairman and CEO Jeffrey Immelt received compensation for 2012 that was 80 percent more than his pay in 2011 ($20.6 million in 2012 compared with $11.4 million in 2011).

      * Boeing: In addition to receiving a refund, despite $21.5 billion in profits, the company ranked high in job cutting, under-funded pensions (and contractor misconduct, but this website is temporarily down for maintenance). Boeing awarded Chief Executive Jim McNerney almost $27.5 million in annual compensation for 2012, a 20% increase from a year earlier

      * Exxon Mobil: Made by far the largest profits in the group, but paid less than 1% in U.S. taxes, and yet received oil subsidies along with their tax breaks. Unabashedly reports a 2012 “theoretical tax” of over $27 billion, almost 90% of its total income tax expense. The company was also near the top in contractor misconduct. Last year the company's board boosted Chairman and CEO Rex W. Tillerson's compensation by 17 percent to $25.2 million.

      * Verizon: Second worst tax record, with a refund despite $48 billion in profits. Verizon Communications CEO Lowell McAdam's 2012 pulled in more than $36 million stock option gains.

      * Kraft Foods: Received a refund from the public despite $13.5 billion in profits. Also a leading  job-cutter. Chairman and Chief Executive Irene Rosenfeld received total compensation of $21.9 million in 2011, up 13.5%.

      * Citigroup: One of the five big banks who are estimated to get a bailout / refund from the American public amounting to three cents from every tax dollar. Citgroup paid its new CEO Michael Corbat $11.5 million in 2012.

      * Dow Chemical: Received a refund despite almost $10 billion in profits. CEO Andrew N. Liveris earned $10.41 million and had a 5-Year Compensation of $40.89 million

      * IBM: Paid less than 3% in taxes while ranking as one of the leading job cutters, and near the top in contractor misconduct. IBM's Chairman and CEO Virginia Rometty was paid $15.4 million for her first year.

      * Chevron: In addition to a meager 4.3% tax rate and a share of oil subsidies, the company has been the main beneficiary of tax-exempt government bonds. John Watson, the chairman and CEO received about $25 million in total compensation in 2011, up 52% from the previous year.

      * FedEx: The company paid less than 5% in federal taxes while relying on the publicly-funded Post Office to deliver thirty percent of its ground packages. The founder and top executive Fred Smith received a pay package worth $13.7 million last year, nearly double a year earlier.

      * Honeywell: Less than 6% in taxes, a leading job cutter, near the top in instances of contractor misconduct, and run by the “Fix the Debt” CEO with the largest pension fund. An 8% tax rate, a leader in job cuts and under-funded pensions, and in the top 20 of contractor misconduct instances. Notable for an 8.4% tax rate, job cuts, offshore holdings, and the top U.S. spot on the contractor misconduct dollar list. CEO David Cote made $37 million in total compensation in 2011, but thinks the corporate tax rate should be ZERO.

      * Apple: Where to begin? Avoiding  federal taxes, avoiding  state taxes, hiding overseas earnings, engaging in intellectual property schemes, using the “Double Irish” to transfer profits from Europe to Bermuda, and  underpaying its store workers despite conducting most of its product and research development in the United States. Apple's CEO Tim Cook's salary is 378 million times as much as Steve Jobs --- $900,000 of cash salary and a $377 million stock grants.

      * Pfizer: One of the leaders in stockpiling untaxed profits overseas, and right behind Merck in contractor misconduct dollars. CEO Ian Read saw his pay nearly triple after his first year on the job -  $18.12 million in 2011.

     * Google: A master at the “Double Irish” revenue shift to Bermuda tax havens, while using tax loopholes to bring a lot of the money back
to the U.S.
without paying taxes on it. Recognized as one of the world’s biggest tax avoiders .

     * Microsoft: Named as one of the biggest offshore hoarders while using tax strategies to bring much of their untaxed money back to the U.S., where it also avoids state taxes.

All these companies, after using our infrastructure, technology, research facilities, higher education and national defense to build incomparably successful businesses, are now doing everything in their power to avoid paying anything back. Instead they have been using a carefully manipulated set of “legal” business write-offs, exemptions and loopholes to cut their tax bills to almost nothing --- and all the while they rant about the unfairness of the U.S. tax code (and then complain about President Obama, like the co-founder of Home Depot).

The real madness is that real American people are suffering because of the tax games these corporations play...thanks to our Congress, who go on TV to complain about the tax loopholes --- but they write the tax loopholes!

It's not the "fault" of the corporations per si (by extension, their executive officers), it's mostly Congress. Congress won't change election laws to ban corporate contributions; they won't change the law governing corporate charters and unlimited liability laws; they won't change the tax code for capitals gains (that as stockholders and millionaires themselves, personally benefit from); they won't change the law on the revolving door policy for lobbyists (or banning promises of cushy corporate jobs after retiring from Congress); and they won't listen to the majority of their constituents who voted for them in the first place to change all these things.

The CEOs are only doing what anybody else would do if they are allowed to by
law --- the laws that Congress makes and refuses to ever change --- because they
aren't in politics to represent us, but to benefit themselves. If they didn't dodge the draft, then they're also dodging taxes. Just look at that very weak restriction they put on themselves (after public outrage) for insider trading...it's a joke. And the Supreme Court didn't help either by saying "legal entities" are real people.

So it's no wonder we have a deficit and the CEOs and executive board members are earning 380 limes more than their average employee. I wonder how many of these CEOs and executive board members (like Mitt Romney) also use off-shore tax havens to avoid paying taxes on their personal wealth. And how many of these CEOs and executive board members pay the lower capital gains tax rate (like Mitt Romney). And how many of these CEOs and executive board members have $100 million stashed in an IRA retirement account (like Mitt Romney).

Capitalism has become, not pulling oneself up by their bootstraps to become successful, but more like the ruthless and obscene pursuit of excessive wealth in "Greed Gone Wild".

The Big 64 U.S. Tax Cheaters from 2008-2012 - The Financial Data is from the SEC and is listed in order of the least % of U.S. tax paid (in millions) SOURCE: http://www.sec.gov/...

* I'll let you contact me to give me an average of what percent they paid as taxes to foreign governments...then we should make that the statutory (and mandatory and effective) tax rate they should all pay to the U.S. Treasury.

More Corporate Tax Avoidance Rankings from www.payupnow.org

* By Company Name

* By Industry

* By Revenue (2008-2010)

* By Profits (2008-2010)

* By U.S. Tax %

* By Foreign Tax %

* As of this post the website http://www.contractormisconduct.org/ was down for maintenance.

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Comment Preferences

  •  Who will be the Ace of Spades? (3+ / 0-)
    Recommended by:
    Lujane, The Nose, TX Unmuzzled

    On or about 10 years ago, Bush Manchild created a playing card deck featuring key members of Saddam Hussein's administration and high ranking Baath party officials.

    For greater public awareness, we could use such a deck for identifying these America-hating CEOs today. The only problem is that 52 cards wouldn't be enough.

    They're not a serious party anymore. -Kos

    by thenekkidtruth on Wed Mar 20, 2013 at 10:53:37 AM PDT

  •  That argues for a complete overhaul (7+ / 0-)

    of the corporate tax code, NOT anger at a business for acting in a legal way that is financially beneficial.  

    When the U.S. has one of the highest corporate tax rates in the world, a international corporation would be clearly violating its duty to its shareholders if it DIDN'T do whatever it could to lower the taxes it paid.  That's what a business is SUPPOSED to do -- arrange its business so that it pays the least amount in taxes that it legally can do.  (yes, the EFFECTIVE tax rates on business is often much lower, but varies wildly from company to company -- another argument for lowering rates, eliminating deductions/exemptions, and making the corporate tax code fairer and more conducive to doing business here.)  

    The Big 64 U.S. Tax Cheaters from 2008-2012
    You are "tax cheat" if you violate the tax laws.  The corporate tax laws are extremely complex, and if a company structures its business legally so as to pay less in taxes, it is not a "tax cheat."  No one -- not you, not me, and not any business -- has an obligation to anyone to pay one cent more than the least amount that we are legally obligated to pay.

    The problem is that the system provides financial incentives for these companies to do these things.  It is absurd to call a company a "tax cheat" for doing the very things for which the tax system provides a financial incentive.  If the tax system provides a financial incentive -- in the form of a lower tax rate -- for putting a red flag in the middle of the Mojave Desert, you should expect a lot of businesses to put red flags in the middle of the Mojave Desert.  If the officers of the company -- those CEO's -- DIDN'T make sure that they did whatever was legally possible to reduce the taxes they pay, not only would they not get those big salaries, not only would they likely lose their jobs, but they likely would be sued by the shareholders of the company.

    A business has no obligation -- nada, zero, zilch -- to "give anything back."  It has an obligation to do whatever it can LEGALLY do to maximize profits for its shareholders.  Period.  And the people who write the tax code understand that.  If they provide incentives, through the tax code, for business to do something, they must EXPECT businesses to do what is in their financial best interest.  And it is in the financial best interest of a business to pay as little in taxes as it legally can do.  

    Anger at businesses for doing the very thing that the tax system provides incentives for them to do is, well, "misplaced," to put it kindly.  Instead, you should be pushing for a system where the financial incentive is for all those businesses to bring the money back to the United States so they can pay taxes to the United States treasury instead of to other countries.  

    •  I'll step up and show the disparity (2+ / 0-)
      Recommended by:
      Lujane, Roger Fox

      Gladly.

      Everyone knows that this disparity wasn't created by corporations (at least directly) - it was created by Congress, and everyone knows that only Congress can change it. Large multi-national corporations can suck it up for doing their part - all but bribing lawmakers for giving them those sweet, sweet bonuses.

      On this list, I only spot one megalithic corporation which suggests that we do things differently, and that's Warren Buffett's Berkshire Hathaway. The rest of them can do what all hard-working Americans do - pay taxes.

      They're not a serious party anymore. -Kos

      by thenekkidtruth on Wed Mar 20, 2013 at 11:23:23 AM PDT

      [ Parent ]

    •  I agree with most of what you say, but... (2+ / 0-)
      Recommended by:
      Lujane, Dburn

      That's why I said " thanks to our Congress, who go on TV to complain about the tax loopholes --- but they write the tax loopholes!"

      And these corporations spend millions on lobbyists to influence the tax laws. "Avoiders" (not "cheaters") investing in foreign offshore banks because they can (it's legal) so that makes it right?

      Yes, they are doing their duty to the shareholders, but guess who they are? Big banks, hedge funds and other large corporations. They sit on each others' board of directors, who are themselves shareholders while being paid with stock-options. To say they have an obligation to their "shareholders" is to say they have an obligation to themselves.

      •  I objected to calling them "Tax Cheats" in the (4+ / 0-)
        Recommended by:
        Roadbed Guy, nextstep, Roger Fox, VClib

        diary when the complaint was about them doing something legal.  If they were violating laws, "tax cheats" would be appropriate.  

        And these corporations spend millions on lobbyists to influence the tax laws. "Avoiders" (not "cheaters") investing in foreign offshore banks because they can (it's legal) so that makes it right?
        That's an absurd question.  There's nothing "right" or "wrong" (in the sense of moral/ethical) about paying taxes. There is no moral or ethical obligation to pay so much in taxes -- there's only a legal obligation.  I pay only the amount that the law says I must, and I factored in things like the home mortgage deduction and deductions for charitable expenses when I made decisions to buy a house or give to charity.  Is that "wrong?"  Of course not.  There is no moral obligation for me to pay taxes.  There is a legal obligation to pay what the law requires and not one cent more.  

        In fact, if there were a moral/ethical obligation when it comes to how much taxes a business pays (and I don't believe there is any moral/ethcial consideration to paying taxes), that moral ethical obligation is to the owners of that company (the shareholders) and that moral/ethical obligation is to pay what the law requires and not one cent more.  And if the law provides incentives for a business to do certain things to significantly reduce its tax obligation, and the business DIDN'T do that, then I would say the business is violating it's moral/ethical obligations to its owners.  The law recognizes that the officers of a company have a fiduciary duty to the shareholders - a duty to act in the best interests of the shareholders.  There is no such duty to act in the best interest of the rest of us or of society as a whole.  

        •  True... (1+ / 0-)
          Recommended by:
          Dburn

          As you said, "There's nothing 'right' or 'wrong" (in the sense of moral/ethical) about paying taxes..."

          But bribes are technically legal too, so I suppose there's nothing moral or ethical about that as well.

          •  No, bribes are not "legal." (3+ / 0-)
            Recommended by:
            Roadbed Guy, VClib, Roger Fox

            And I do not condone violating the law. That's why I continually say that business can do whatever is legally available to them to lessen their tax burden.  

            But no one -- not you, not me, and not a company -- has a moral obligation to pay one cent more in taxes than the legally owe.  Not. One. Cent.  

            More importantly, the ONLY people who have any standing to complain about a business doing what the law allows it to do to lessen its taxes are people who have never taken a single deduction -- not even the standard deduction -- from their income for tax purposes.

            Anyone who has taken the standard deduction, or the mortgage interest deduction, or the charitable deduction, or has a 401(k), or doesn't pay taxes on employer-provided health insurance, or has anything that in any way lessens their tax burden at all, is doing EXACTLY the same thing as an international business who legally organizes its affairs so as to pay the least amount of taxes legally possible.    

            Tell me that you routinely pay more in federal income taxes than you have to -- that you never take ANY deductions, that you don't even take the exclusion for employer-provided health insurance (but instead pay taxes on the income that you get through employer provided health insurance) -- tell me that you do all of that so that you can pay more than you  owe,  and then you can complain about other taxpayers who don't voluntarily pay more than they legally owe.  

            It's absurd to imply that, if a business does not pay more in taxes than it is legally obligated to do, or if business takes into account the tax implications when it makes business decisions, it has some kind of moral failing.  

          •  Bud - corporations have a fiduciary duty (1+ / 0-)
            Recommended by:
            Roger Fox

            to their shareholders to minimize their world-wide tax payments. If they don't the officers and directors can be removed from office and even personally sued. If you don't like how much they pay, have the laws changed. The corporation has a duty to follow the law and the current IRS rules, nothing more. There is no moral, ethical, or equitable issue as it relates to taxes. Everyone, including corporations, must follow the rules but we all have every right to reduce out taxes to the absolute minimum the law requires.

            "let's talk about that"

            by VClib on Wed Mar 20, 2013 at 05:06:14 PM PDT

            [ Parent ]

    •  There was a point in time (0+ / 0-)

      Where corporations had a sense of responsibility to the locale and to their country.  There also a time when CEO pay was not 500-1 over their lowest paid employees.  

      You can argue all you want about fiduciary responsibility, but bribing public officials is still against the law;  which is how those tax breaks get created. While there is a difference in Tax avoidance and tax evasion, it would be tough to argue that a corporation isn't evading taxes by making and selling a product here or having it made overseas and having a subsidiary sell it to them for close to the price they sell it to to create the appearance of less money being made. Fiduciary responsibility most decidedly does not include breaking the law.

      This is more fall out from the failure of The DOJ to prosecute banks. While the IRS has it's own enforcement arm, they still have to rely on US Attorneys to bring cases for them to trial.

      That happens once in a very blue moon.

      The primary reason that corporations can break laws with near impunity is that the C-Suites get huge bonuses for showing results that exceed artificially low barriers. When they do get caught as three Major drug companies did in crimes, they use shareholders money to pay the fines and then give themselves large bonuses.

      I would also argue that holding the cash overseas is precisely the opposite of what you claim is their duty to shareholders. It keeps dividends artificially low, it increases borrowing costs when they have to issue bonds to pay the tiny dividends they do pay because they don't have the cash on hand in the US.

      The best example is Apple: The fact that Apple shows a net income that is substantially lower than the cash they added to their pile of overseas holding which nears 100 billion while investing in nothing and paying a 3.5% dividend per year with a 30% net income or high after you add in the bullshit claims of tax reserves is not only a disservice to their shareholders but it is in effect hiding the cash from the taxman and their shareholders. They can no longer claim that the shareholder reward is appreciating stock value. Earnings were flat year over year. They not only have competition to worry about but they have market saturation to deal with. Yet they make very little use of their cash.  Recent buyers of Apple are hard underwater with the stock too.

      One other huge point that you deliberately left out of your post is that Corporations are the heaviest users of Govt services and Public assets.

      At no point in the past have they paid so little out relative to what workers pay and compared to the demands they make on Public assets and Govt services.

      “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

      by Dburn on Thu Mar 21, 2013 at 09:16:13 AM PDT

      [ Parent ]

  •  CEOs might have Cap Gains (2+ / 0-)
    Recommended by:
    Lujane, coffeetalk

    on company stock they receive as compensation, but they won't have "carried interests", if that's what you're implying.  "Carried interests" are only created in partnerships, not corporations.

    how many of these CEOs and executive board members pay the lower capital gains tax rate (like Mitt Romney).

    My Karma just ran over your Dogma

    by FoundingFatherDAR on Wed Mar 20, 2013 at 11:10:17 AM PDT

    •  Their equity comp is taxed as ordinary income. (2+ / 0-)
      Recommended by:
      coffeetalk, VClib

      Bud, for the 5th time, when CEOs and board members receive stock as compensation, it's treated just like any other compensation.

    •  Not implied... (0+ / 0-)

      Stock options offered as compensation and vested after one year (for "performance") --- like when a company uses profits to make stock buy-backs from outstanding shares to increase share prices before selling.

      •  Bud - you have no idea what you are writing about (2+ / 0-)
        Recommended by:
        Roger Fox, coffeetalk

        when it comes to executive equity compensation and how it is taxed. The above comment is nonsensical to anyone who actually understands this area of tax law.

        "let's talk about that"

        by VClib on Wed Mar 20, 2013 at 05:09:05 PM PDT

        [ Parent ]

        •  VClib, Maybe , but there is this (1+ / 0-)
          Recommended by:
          VClib
          Some companies pay more to CEOs than to Uncle Sam
          Citigroup, Abbott Laboratories, and AT&T are among the 26 companies that paid more to their CEOs in 2011 than they did in federal taxes, according to a study released on Thursday.

          Tax breaks on research and development, past losses, and foreign-held earnings were among those lightening the tax load for many companies on the list, said the Institute for Policy Studies, a left-leaning think tank in Washington, D.C.

          You have a million dollar limit in cash compensation that a company can take as a deduction, yet stock and option awards are tax deductible.   There are no additional taxes levied on Stock compensation like Social Security even when they are receiving the mythical $1.00 salary. Obviously the carried Interest tax level is for Hedge Fund owners only.

          Corporations take tax deductions on the extreme level of benefits and perks they offer those in the C-Suite, while to my knowledge the execs  don't have to pay taxes on those Perks and benefits.  Perks and benefits in a single year may be worth far more than the average pay earned by a worker there in his lifetime.

          The initial award of stock based compensation may be taxed as normal income but when one considers that it's part of a pay strategy where dividends paid on stock held comes out to significantly less than the what the original stock award cost. I wouldn't rate this as a huge problems as CEOs seems to have a problem with having too much skin in the game and sell their stock on receipt, not just to pay the taxes but all of it.

          Also there is the issue of Unrealized gains. If Executive staff are issued options that rise to a level where they are way in-the-money but aren't exercised , it's still money in the bank. Example: To what degree would a corporation loan money to a CEO who had in-the-money options? Obviously it varies but that is another way to get around the taxman.

          Finally, any taxes that corporation pays overseas can be used as a tax credit. Not a tax deduction but a credit which goes against actual tax owed and many times may be a driover of tax rebates when a corporation shows most of their earnings overseas.

          As I posted before, there is the issue of Corporations being the heaviest users of Govt Services and Public assets , most of them free or with nominal charges that are significantly less than what it costs to provide them.

          Then there is the Marketing aspect and Subsidizing of foreign markets.  Most of the top Brands in the world have to make in the US. Most of the top Brands are owned by Us Companies.  I'm assuming you are a venture Capitalist. Correct me please if I'm wrong. So you would understand how valuable brand equity is to a corporation. I found  my international sales and marketing a number of years back that the US brand and even made in the USA were so important to companies they would do things like asking me to take products made in their own country, ship them to the US , add enough value that we could put assembled in the USA and ship them back. All that cost for that label which gives them much higher pricing power because it many countries consider it an elite product.

          Finally , at long last, there is the issue of subsidizing foreign sales. This is easily found in Software , Drugs, and other products that companies have to sell at lower prices overseas. Many of these products couldn't be sold at all if they didn't have Brand equity and subsidies by charging US consumers higher prices than what is charged overseas.

          The idea that US Companies will just say fuck it and go someplace else  defies logic since the "Born in the USA" is what gives them the ability to sell overseas not to mention pricing power.

          It appears what we have now is that corporations taking  advantage of all the positives of having their corporations based here and have to pay little or nothing for it.  There is the very narrow and technical argument that the laws , that many times they created themselves thanks to public corruption, allow them to do this. But that fails the greater test of a fundamental part of our culture and that is fairness.

          “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

          by Dburn on Thu Mar 21, 2013 at 10:02:48 AM PDT

          [ Parent ]

          •  Dburn - I am traveling this week (0+ / 0-)

            but will try and find time to answer your thoughtful comment.

            "let's talk about that"

            by VClib on Thu Mar 21, 2013 at 04:40:04 PM PDT

            [ Parent ]

          •  Let's see if I can answer some of your questions (1+ / 0-)
            Recommended by:
            nextstep

            Equity compensation awarded to executives, that are incentive based (all are) are expenses that hit the P&L and are fully taxable at earned income rates, so yes a corporation can deduct them to determine taxable income. Understand there is parallel taxable income to the executive. Perks such as insurance, cars, airplane access and similar benefits are all disclosed in the proxy statement and are taxable income that show up on annual W2 forms.  

            Executives who own shares receive dividends like all other shareholders and pay taxes on the same rate as everyone else.

            The reason that most stock options are sold the same day as exercise (same day sale) is that to exercise the option you have to purchase the shares for cash at the option price and pay the tax at earned income rates even if you don't sell. That can be a lot of skin in the game so most executives just wait until they want to sell and then execute a same day sale.

            Loans to corporate executives, which had been very common for executives to exercise stock options, are rarely done anymore. Shareholder groups have put a great deal of pressure on boards not to make loans, for any reason.

            The issue of taxing overseas profits is a complex one. Most of the G20 has moved to "territorial taxes" where they only tax domestic earnings and don't try to collect an income tax on profits earned in other countries. The US is one of the last of the G20 that try and collect worldwide taxes. The fact that taxes paid on overseas profits is a tax credit makes sense. What doesn't make sense, in my view, is trying to collect taxes on sales and profits outside the US.

            The issue of what policies should govern US based multi-nationals is a complex one. In many cases while having their headquarters in the US most of the sales, earnings, and many of the shareholders are outside the US. The corporations fiduciary duty is first to its shareholders, not the country in which it is founded. Regarding the benefits for sending jobs overseas and closing US plants I haven't found any specific tax laws that favor that.

            That's a start.
               

            "let's talk about that"

            by VClib on Fri Mar 22, 2013 at 11:47:58 PM PDT

            [ Parent ]

            •  Thanks for the reply (1+ / 0-)
              Recommended by:
              VClib

              Let me think about it for a bit and explore a few things within your post.

              “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

              by Dburn on Sun Mar 24, 2013 at 04:58:50 AM PDT

              [ Parent ]

            •  First some questions (0+ / 0-)
              he US is one of the last of the G20 that try and collect worldwide taxes.
              Are you referring to individual taxes that US Citizens pay who haven't renounced their citizen ship or is there some sort of tax (other than the 35% ) that the US Collects? Obviously they aren't collecting the 35% otherwise why hold it offshore?
              The reason that most stock options are sold the same day as exercise (same day sale) is that to exercise the option you have to purchase the shares for cash at the option price and pay the tax at earned income rates even if you don't sell. That can be a lot of skin in the game so most executives just wait until they want to sell and then execute a same day sale.
              On the options part I was aware of this. The one story I'll never forget is when a CISCO engineer exercised his options on 100,000 shares at $80.00 at the start of 2000. He didn't sell any to pay his taxes. By the end of the year the stock was down to $18.00 and he owed 2.5 Million.

              In my world 4.5 Million is big time money personally.
              But I do remember that was right at the end of when the Nasdaq had gone parabolic and had doubled in one year.  Still it really re-defined stupid.

              I was more referring to stock awards. A College friend was an Exec VP at Abbott Labs.  He was getting 60,000 shares a year as part of his comp package. To his credit he did own 225,000 shares that netted him about $400,000+  in dividend income but the other executives sold every share.

              Maybe I'm too far away from the class of income of why someone would need 4-5 Million net of taxes to live each year. My college friend was "retired" at age 55, 6 months before the Abbott spin-off. Apparently they chose up teams and he didn't make it. We should all be so lucky.

              We tried speaking to one and other by email after 30+ years but he couldn't hear me and I couldn't hear him. So we let it go.

              If one were to put a picture definition of scumbag up. Miles White of Abbott (or Abbvy) , one of the highest paid CEOs in the country, should definitely have his mug on there.

              I don't believe in double taxation of profits where the corporation is owned by shareholders and then they are taxed again as unearned income. If you own a corporation and it pays taxes, then that should be it. To me that would be a far greater incentive to pass that law and have a corporate minimum tax than having both. But if the corporations are doing all they can to escape taxation including squirreling away shareholder money, then this is a situation that has to be solved one way or the other. Most liberals would want as much taxes as possible. In this case they are getting very little of either.

              Here is where we differ and I'd like to hear your view: There has to be a give on the corporations part on income earned overseas. To me it's a  chicken and egg story. If the corporation is domiciled in the US Physically where is the most likely place to launch a product or service? The US. Sales that take place after a successful US Introduction overseas should either be taxed or a much higher fee for service has to be established. For example: If the corporation expects the US Taxpayer to protect their intellectual property by law enforcement  and through the judicial intervention, they must pay much higher fees that just private legal fees.
              Another Example:

              Can there be any doubt that most of the wars fought in the last 12 years have been over oil. In effect the taxpayer with his money and the soldiers with their lives are protecting Exxon Mobile's ability to lift a Barrel of oil out of the ground for a $1.50.

              Here is where we paid trillions in treasure and the uncountable in blood. Yet if Exxon Mobile extracts a 100 million BBLs of oil (about 25 days worth for them) for 150 Million and transships it to Europe or Asia , they keep the money off-shore. Under the argument that there should be territorial taxes instead of a worldwide tax, then Exxon would only pay some tax if any on shipments worth 10 Billion in revenue and 9.8 Billion in gross profit.

              How is this fair?

              “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

              by Dburn on Sun Mar 24, 2013 at 06:54:55 PM PDT

              [ Parent ]

    •  FFDAR - there is no way to structure (1+ / 0-)
      Recommended by:
      Roger Fox

      equity compensation, stock options or restricted stock, for senior Fortune 500 executives (who receive Non-Qualified Options) in a manner so that the income qualifies for long term capital gains treatment. I have chaired the compensation committees of several public companies (not Fortune 500 size) and have reached out to the best tax lawyers and accountants in the US to explore this issue in depth. It can't be done, senior executives pay earned income rates on their equity compensation.

      I have written this to Ray numerous times but he continues to spread misinformation, something that is too common regarding tax code issues here at DKOS.  

      "let's talk about that"

      by VClib on Wed Mar 20, 2013 at 05:15:17 PM PDT

      [ Parent ]

  •  Logistically, just how did these (3+ / 0-)
    Recommended by:
    Lujane, coffeetalk, VClib

    companies "park" all this cash offshore?

    I've been through this before here at DailyKos and a fairly compelling case was that they earned this money "offshore" and paid whatever taxes were due locally.

    So I don't really get their legal (or moral, for that matter) obligation for them to bring the $$s back to the USA (and then pay more taxes, or not, as the case may be).

    For example, if a Japanese company builds cars in the USA and makes money from that, do we tax them?  I suspect that we do.  And if they leave the profits here, is that so bad?

    •  ??? (0+ / 0-)

      What happened to "exporting" products to foreign markets? Or like Mitt Romney did, fire American workers, keep their pensions, and hire Chinese girls in slave factories with barbed wire to "keep people out" ---

      •  Channeling Mitt Romney, you almost (0+ / 0-)

        sound like him during the campaign dissing Jeep/Chrysler (or whatever that company is called now) for opening factories in China to supply vehicles for that market.

        Heck, if they can do that, why shouldn't they?  Similarly if Buick can sell a million vehicles to the Chinese (god only knows why they'd want to buy them, but whatever), I say good for them.

        I just don't get the outrage over that.  Sure, there's not much benefit to the US economy, but there'd be even less if German, Korean, or Japanese companies were doing this in their place.

  •  Recced and Tipped (2+ / 0-)
    Recommended by:
    Lujane, The Nose

    Thanks for doing the work on this diary.  Normally when I see diaries on this subject area they don't focus on how much these corporations utilize  US Govt services even while they screw state and local Govts out of badly needed money.

    I recall wondering why a multi-billion dollar company would screw over a state for 20 million dollars in free land or some tax abatement. It's hard to understand when you look at it as a whole. Then you start to fully understand that there are individuals whose job performance ratings are based on how "tough" they are in negotiations.  That 20 million may mean nothing to EPS on the whole for a corporation like Apple, but it makes every bit of difference to the States that go without and to the person(s) whose bonus depends on it.

    It's also helpful to note that there is widespread corruption in corporations where individuals in corporations accept cash, gifts and variety of other incentives to turn business to  a favored vendor . It's called bribery and it's as wide spread in Business as it is in Govt.  The best example of it was when Fastow got caught at Enron for creating the Special purpose entities and using his leverage as CFO to get Banks to loan money to his SPEs which netted him an extra
    10 million+

    That's why it should be no surprise that companies break laws on bribery when they go to foreign countries and solicit business or are looking for suppliers.

    If we look at the problems now compared to the 80s, it make the crap that went on then look almost trivial. You now what we are seeing now? The tip of an iceberg. Now it's legal to falsify books. It's perfectly legal to cheat. People get personal highs out of "free". You want to make a very wealthy person excited, tell them something is free. It's even better if it comes out of the pockets of a trades-person they have contracted with.

    It not only the 8.1% average. That's the smallest part of the problem and the visible part. It's what we can't see but we know whatever it is its growing. Once all deterrence is taken off the table for political and economic (unproven) expediency then it doesn't take long before people to realize the Risk light is off.

    8.1%. What gets me even more is looking at fiscal year end breakdowns of where Govt Revenue comes from and we find corporations at a small fraction of what individuals pay.

    “ Success has a great tendency to conceal and throw a veil over the evil of men. ” — Demosthenes

    by Dburn on Wed Mar 20, 2013 at 11:39:15 AM PDT

  •  Problem is a stupid tax policy other Countries (3+ / 0-)
    Recommended by:
    coffeetalk, johnny wurster, VClib

    reject.

    Over the past 20 years developed countries have  moved from Global tax to territorial tax with the US being a laggard in this direction with no countries going in the other direction.  The territorial tax system is what the most successful counties in international trade do.  Does one think that all the other countries have gotten this wrong and the US is the only one to get it right?

    Territorial Systems Are the Norm
    Most countries have a territorial system. Among G-7 countries, only the U.S. has a worldwide tax system. Among OECD nations, 26 have territorial systems including Australia, Canada, France, Germany, Japan, Spain, and the United Kingdom. Eight OECD nations have worldwide systems, including the U.S., Greece, Ireland, South Korea, and Mexico. The other OECD nations with worldwide tax systems have top tax rates far below the top U.S. corporate tax rate.
     from http://www.rpc.senate.gov/...

    I have worked in international business for over 25 years and have seen the foolishness of this tax policy up close.  

    But this foolish policy of Global tax is really more of an annoyance than a serious problem for US business, as it just means there are fewer attractive opportunites to invest and employ in the US, and they should invest,  grow and employ outside the US and when the timing is right, re-incorporate in some other country.

    It is however a very big problem for US workers through higher unemployment, lower wages and lower GDP growth.

    I have discussed this overseas tax policy with a senior executive who has personally spoken to senior Democrats in Washington.  Many of these Democrats agreed with the economics and tax factors in my comments.  However these same Democrats said they could not support the change as it would be seen as pro-business.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Wed Mar 20, 2013 at 11:47:01 AM PDT

    •  Also... (0+ / 0-)

      Part of the problem with multi-nationals is that their patriotic borders begin to fade where the profit margins begin.

      •  Patriotism is a ridiculous foundation for policy (2+ / 0-)
        Recommended by:
        coffeetalk, VClib

        US policy is that US headquarter businesses operate at a disadvantage compared to other companies headquartered elsewhere.

        When doing business in the US, US based businesses should be treated no worse than businesses headquartered outside the US on matters of tax and regulation.

        The most important way to protect the environment is not to have more than one child.

        by nextstep on Wed Mar 20, 2013 at 04:05:39 PM PDT

        [ Parent ]

      •  Bud - many of the US based multi-national (0+ / 0-)

        corporations receive a majority of their revenues and profits outside the US and have shareholders from all over the world. How could they have an duty to be patriotic when they have a legal fiduciary duty to their shareholders, many of whom aren't Americans?

        "let's talk about that"

        by VClib on Wed Mar 20, 2013 at 10:39:34 PM PDT

        [ Parent ]

  •  If you don't like the way these campaign donor (1+ / 0-)
    Recommended by:
    The Nose

    corporations structure their taxes, call your favorite bought-and-paid-for politican and complain.

    •  Yes, Yes, Yes! (0+ / 0-)

      It's not the "fault" of the corporations per si (by extension, their executive officers), it's mostly Congress. Congress won't change election laws to ban corporate contributions; they won't change the law governing corporate charters and unlimited liability laws; they won't change the tax code for capitals gains (that as stockholders and millionaires themselves, personally benefit from); they won't change the law on the revolving door policy for lobbyists (or banning promises of cushy corporate jobs after retiring from Congress); and they won't listen to the majority of their constituents who voted for them in the first place to change all these things.

      The CEOs are only doing what anybody else would do if they are allowed to by law --- the laws that Congress makes and refuses to ever change --- because they aren't in politics to represent us, but to benefit themselves. If they didn't dodge the draft, then they're also dodging taxes. Just look at that very weak restriction they put on themselves (after public outrage) for insider trading...it's a joke. And the Supreme Court didn't help either by saying "legal entities" are real people.

  •  Another excellent diary (1+ / 0-)
    Recommended by:
    The Nose

    Shared on Facebook.  This message needs to get out.

    It is an old strategy of tyrants to delude their victims into fighting their battles for them. FDR

    by Betty Pinson on Wed Mar 20, 2013 at 12:19:32 PM PDT

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