Wednesday, April 11, 2012

Down this road, no taxes for business

While getting refunds of every cent they pay, representatives of big business enthusiastically support you and I paying HST to fund safe streets and private schools. However, they aim to relieve themselves of income taxes too. While working people, even those on the brink of poverty, pay income taxes, large corporations arrange business affairs to avoid or evade paying. If mega-business eliminates consumption taxes and royalties, they'll be largely tax free.

Often this is done by ensuring that profits are earned in very low or no tax jurisdictions, even if creation and sale of goods and services happens elsewhere and legal fictions are employed to claim domicile in tax havens. Those include places like Luxembourg, Switzerland, Cayman Islands, Bermuda or my favourite, Andorra. Nestled in the Pyrenees Mountains between France and Spain, in addition to no taxes, unregulated banking and stable government, this nation offers dazzling mountain scenery and matchless recreation.

Amazon: £7bn sales, no UK corporation tax, Ian Griffiths, The Guardian
Amazon.co.uk, Britain's biggest online retailer, generated sales of more than £3.3bn in the country last year but paid no corporation tax on any of the profits from that income – and is under investigation by the UK tax authorities.

...The latest 2010 accounts for Amazon EU Sarl show the Luxembourg office employed just 134 people, but generated turnover of €7.5bn (£6.5bn). In the same year, the UK operation employed 2,265 people and reported a turnover of just £147m. According to the SEC filings, UK sales that year were between £2.3bn and £3.2bn.

...Amazon would not comment on why it switched ownership of the UK business to Luxembourg in a complex manoeuvre that saw the UK company's shares change hands four times. However, the US parent company has suggested it may have been done to reduce the group's tax bill...
Thirty companies paid no U.S. income tax 2008-2010: report, Kevin Drawbaugh, Reuters
"Thirty large and profitable U.S. corporations paid no income taxes in 2008 through 2010, said a study on Thursday that arrives as Congress faces rising demands for tax reform but seems unable or unwilling to act...

"The average effective tax rate for the companies over the period was 18.5 percent, said Citizens for Tax Justice and the Institute on Taxation and Economic Policy, both think tanks.

"Their report also listed General Electric Co, Paccar Inc, PG&E Corp, Computer Sciences Corp, Boeing Co and NiSource Inc as among the 30 that paid no taxes...

"Big Business is getting away with taxation murder," said Frank Knapp, vice chairman of the American Sustainable Business Council, a progressive business coalition.

"They pay little or no taxes on massive U.S. profits and then have the gall to lobby for ... a tax holiday to 'repatriate' profits they have stashed offshore..."
GE, Exxon, 10 Other Major Corporations Paid Negative Tax Rate, Andy Kroll, Mother Jones
"...Between 2008 and 2010, a dozen major US corporations—including General Electric, ExxonMobil, and Verizon—paid a negative tax rate, despite collectively recording $171 billion in pretax US profits, according to an analysis by Citizens for Tax Justice. Taken together, these companies' tax burden was -$2.5 billion, and ten of the companies recorded at least one no-tax year between 2008 and 2010..."
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3 comments:

  1. And let's be clear that business that pays no tax is simply a way for people who already have corralled more than their fair share of wealth to hog-tie even more. Behind every corporation is a group of people who run it to accrue wealth and power and their corporation is a fiction that allows them to skate on rule that apply to the general population. Who said feudalism is dead?

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  2. “While getting refunds of every cent they pay, business people enthusiastically support you and I paying HST.”

    Hi Norm, this is not entirely accurate. As a business person I do not support the HST. I know of other small business people who voted yes to rid ourselves of this regressive taxation system.

    Perhaps what you were referring to is the view from corporate world.

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