By Emily Stephenson
Citizens for Tax Justice, a lobby group that has floated a similar idea, said individuals pay an “exit” tax on unrealized capital gains if they renounce their U.S. citizenship. The inversion plan is similar and would remove a “significant incentive” for companies to move abroad, the group argued in a paper earlier this month.
By Steve Wamhoff, CTJ Legislative Director
If the all-American fast food chain Burger King, with its thousands of restaurants in the United States, can claim to be a foreign company for tax purposes, our corporate tax system is in real trouble.
The crisis of corporate inversions is now apparent even to those who aren’t connected to the boring details of tax policy. The specifics of inversions are clear to everyone: A U.S. corporation merges with a smaller foreign company and claims the foreign country as its address, even though the vast majority of the business continues to be carried out and managed in the U.S. The public outrage is so apparent that Walgreen Co. backed off its plans to invert.
Every now and then something happens — a Senate investigation into Apple’s tax dodging, Burger King’s plan to become Canadian — that demonstrates that our corporate income tax is very ill. Every time, pundits debate how to cure this disease, offering various tax reform proposals.
And every time, a few suggest we shoot the patient, that is, repeal the corporate income tax, which is expected to raise $4.6 trillion over the coming decade.
I finished reading Steve Robinson’s Aug. 30 column, “Learn Burger King’s lesson – drop the corporate income tax,” dried my eyes and vowed to write my congressional representatives, demanding they do something to rid our “uncompetitive tax code” of the “rotten fruit” that prevents America’s corporations from making an honest buck without having to move their headquarters to foreign countries to survive.
Imagine having to pay a corporate tax rate of almost 40 percent, the highest rate in the industrialized world. It turns out that imagining is exactly what has to be done.
A recent study published by Citizens for Tax Justice showed that 300 of the Fortune 500 companies paid an average federal tax of 18.3 percent. Thirty of the companies, including Wells Fargo, Verizon, Boeing and General Electric, paid no federal income taxes in 2008, 2009 and 2010.
Oregon's tax system takes a lot of hits, from business figures who think high income taxes discourage investment to seniors who say it's a struggle to pay property taxes on a fixed income.
But a study from Wallet Hub, a personal finance website, says that Oregon's tax system is the second-best in the country when it comes to following principles of fairness -- as determined in a survey of adults around the country describing how much an ideal state and local tax system should take from various income groups.
This approach certainly fits with the approach of such groups as Citizens for Tax Justice, which has long argued that most state tax systems are too regressive. Citizens for Tax Justice is affiliated with the Institute on Taxation and Economic Policy, which provided the data on state and local taxes used by the Wallet Hub study.
Pity those poor corporations; how do they ever make a profit? I almost shed a tear while reading Edwin Douglass’ Sept. 4 letter, “Tax breaks keep down price of goods.” With this logic, why not grant all corporations tax-free status?
Let’s not charge them for water, electricity or heating fuel, either. This way, they can lower their prices even further. Yeah, right.
Many of the largest corporations in America pay no corporate tax; among them, according to the Citizens for Tax Justice, are General Electric, Boeing, American Electric Power, Con-way, First Energy and Verizon — all the while benefiting from the taxes paid by citizens, who also buy their products.
By Lynnley Browning
Each month, millions of Americans send a check to Ocwen Financial Corp., a little-known giant in the lucrative if unglamorous business of processing and servicing home mortgages.
Handling loan payments, modifying soured mortgages and foreclosing on borrowers is a profitable line of work. But Ocwen’s success has been turbocharged by its subsidiaries in an unlikely offshore tax haven: the United States Virgin Islands. It is a slice of paradise that some experts consider the nation’s one and only, officially sanctioned, full-blown offshore tax shelter.
The territory doesn’t even crack the top dozen offshore tax havens most frequented by corporate America, according to data from Citizens for Tax Justice, a liberal think tank.
The United States generally taxes the income of large corporations at 35 percent, one of the highest rates in the world. It has spurred companies such as Lake Forest-based Hospira to enter talks to buy a French company in a deal that would enable the drugmaker to move its headquarters to that country and lower its taxes.
North Chicago-based drugmaker AbbVie also plans such a move, a tactic so controversial that U.S. Sen. Dick Durbin and President Barack Obama have railed against the practice, known as an inversion.
Boeing's deferral strategy has made it a target of such groups as Citizens for Tax Justice. The group and the Institute on Taxation and Economic Policy this year released a report in which Boeing was listed among companies that consistently were profitable but hadn't paid taxes for years.
"That’s the extraordinary deal Congress gives many big American companies now sitting on hundreds of billions of dollars of what are, essentially, interest-free loans. Apple and GE owe at least $36 billion in taxes on profits being held tax-free offshore, Microsoft nearly $27 billion and Pfizer $24 billion, according to Citizens for Tax Justice, a nonprofit organization respected for the integrity of its numbers even by groups that dislike its progressive perspective."
Read the full article
By Tom Zirpoli
Is it fair that many large corporations don't pay their fair share of taxes but still enjoy the resources that our nation offers to help them prosper?
According to Tim Dickinson of Rolling Stone, "Two-thirds of Americans believe large corporations should be paying higher taxes, and 80 percent believe corporate loopholes should be closed.
Of course, many American companies don't need to move their headquarters to lower their tax bill. Some stay and still pay nothing or very little at all. Citizens for Tax Justice studied the 2008 to 2012 tax records of 288 profitable Fortune 500 companies and found that they paid a "federal tax rate of just 19.4 percent over the five-year period; far less than the statutory 35 percent tax rate."