How Much do America’s Big Corporations Pay in Taxes?
Popular Articles
Mint is the best way to manage your money. Go there now »
Popular Articles
©2007–2010 Mint Software, Inc. | All Rights Reserved
27 Comments so far
leave a commentA more interesting chart would be the amount of tax paid vs revenue.
Tax on Revenue??? That means nothing. Taxes are on net profits and as long as they are not distributed to shareholders why should they pay income taxes anyway ?
Its much better if they reinvest this money in the economy creating real jobs based on product that people purchase on a voluntary basis then having Government continue there never ending spending addiction, malinvestments, subsidies, bailouts and waste so that some very privilege large non competitive entities benefit at the expense productive tax payers.
Remember the income tax act was to pay for the world-war one.
Some did figured out how to get very very rich from It and to day they still do.
Before 1913 the US attracted millions of people and was the fastest growing economy in the world . It does not matter how much taxes there will be the Government by its very nature will eventually spend it and manage to have larger accumulated deficit.
Its counterintuitive to think that more income will not fix deficit but when a democracy is no longer conductive to liberty as its main objective the physiology is inverted and Power becomes the objective.
Why would taxes vs. revenue be interesting, or even relevant? Taxes are paid on profits, not on revenue. Profit is revenue minus the expense of doing business and may be 1% of revenue or 30% of revenue. The implication that a company which takes in a lot of money should also pay a lot of taxes regardless of its costs is just foolish.
I don’t get to deduct my operating costs: food, housing, health care, transportation to/from work. If I were to deduct those things, take what was left over and use that to calculate the percentage that I pay to taxes, I would be well over the 45% tax rate that Exxon pays, and in that case Exxon is NOT paying its fair share.
Agree with Lee Hinde’s comment above. This graphic only shows part of the picture (just pre-tax income, that comes after all the deductions). Knowing how much these companies get as deductions would probably make it more “complete”!
It should also be noted which tax year this data is from. The company paying a 35% tax on income in 2010, may have paid a 5% tax on income in 2009. Better yet, give their average tax rate across a 5-year period to accoutn for one-time write-offs and unusual circumstances.
It would also be nice to separate U.S. vs foreign pre-tax income and taxes. Example: Exxon paid $1.6 billion US taxes and $20 billion foreign taxes.
Let us see total revenue vs tax paid
flat tax would be better. Companies keep profits in their exUS subsidiaries to avoid Uncle Sam…you would do the same.
It’s misleading because most of the big profits are “earned overseas” where tax rates are lower. “Over the last two years, GE Capital has displayed an uncanny ability to lose lots of money in the U.S. (posting a $6.5 billion loss in 2009), and make lots of money overseas (a $4.3 billion gain). Not only do the U.S. losses balance out the overseas gains, but GE can defer taxes on that overseas income indefinitely.” [Forbes]
http://www.forbes.com/2010/04/01/ge-exxon-walmart-business-washington-corporate-taxes.html
Why is it that New York Times reported earlier that GE paid no income taxes?
Probably because GE is very good at hiring people that worked for the IRS to better understand how to avoide taxes completely.
Please update your figures to highlight that GE (and probably many other incorrectly listed in your report) PAID ZERO TAXES!
http://www.nytimes.com/2011/03/25/business/economy/25tax.html?pagewanted=all
If you want to know the deductions, go to the SEC’s website: http://www.sec.gov
Deductions are not a trick the companies are use to pay less taxes, they are normal expenses of running a business like rent, salaries (only up to $1 million is deductible for highly paid executives and stock options are not a deduction), utilities, raw materials, inventory, property taxes, taxes (SS, medicare, unemployment, property taxes, sales taxes, etc.).
Also, the IRS has multiple auditors at each of these large corporations that work at the company’s offices year-round. Its doubtful these companies are cheating the IRS as the negative press, fines and penalties would hurt them.
This has been and remains a battle of rumor and suspicion. The issue is no one seems to understand (or wants to understand) that a business only pays taxes on earnings. Not gross income. If you think this doesn’t apply to you as an individual tax payer you are…in a word..WRONG!
You see you get all sorts of deductions to arrive at AGI which is what you pay tax on, there are lots of adjustments and there are exemptions and there are deductions and then you pay taxes on what’s left after all the government giveaways that are reserved for individual taxpayers.
But somehow it’s OK when it’s you and not OK when it’s a corporation…Why is that? Because the tax code is so complex that the average taxpayer can’t understand corporate taxation so it seems like smoke and mirrors. It’s not, they get audited too, and alot more often than you would tolerate being audited. If you don’t believe me, go back to school, get your degree in accounting (as I have), and maybe then you’ll understand what the grown ups are talking about.
What is the figure in the middle of the circle? Gross income or taxable income?
Two-thirds of corporations pay zero income taxes.
Of course, because 2/3 of all US corporations are S Corps, a type where the owners have chosen to have corporate profits distributed and taxed as personal income.
The alternative for C Corps and their owners is to pay taxes twice; corporate income taxes on corporate earnings then personal income taxes again on the leftover $ distributed to them as dividends. If you owned a small company (up to 75 emplyees), which structure would you choose?
What about subsidies? This seems like an incomplete graphic
What everyone forgets is that we all purchase products from these corporations. So who do you think will ultimately pay these taxes.
Google’s taxes are inaccurate on this infographic. Google only pays a 2.4% tax rate due to exploiting corporate tax loopholes: http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html
I suggest you read the Bloomberg article a little more closely.The 2.4% is what Google paid to foreign governments. They paid 22% to the US. Mint number is correct.
Why do corporations get to deduct things like rent and utilities and sales tax? Corporations are people, they should pay taxes like people. People don’t pay tax on profits, we pay tax on revenue. This whole argument misses the facts of what is taxed on people versus corporations.
Sorry Joe, I think you got your facts wrong. People do get to deduct expenses (see Schedule A) and are taxed on profits (see Schedule D).
Everyone knows corporations don’t pay taxes, duh? And by everyone, I mean socialists, democrats, the mainstream media, and bloggers.
LoL Chris. Under your logic I suppose socialists, the mainstream media, and bloggers are the only ones capable of doing research and reading. Politicize this if you want, the fact is that companies do not pay their fair share and never have. Now, thanks to the supreme court, they can spend even more money getting in the pockets of legislators to ensure they can continue to pay as little as possible if nothing at all. Problem is the tax laws are geared toward big business because Washington believes the economy is a volume game…but small businesses keep the wheels turning and they simply deserve a different tax structure.
Can you PLEASE Source this information? Because what I can find for tax year 2010 is that Exxon indeed paid around 46% tax rate, but the entirety of that tax burden was paid to FOREIGN Countries!!! Here is the breakdown according to CNN Money:
U.S. federal income tax: -$156 million
U.S. state and local income tax: $110 million
International: $15.2 billion
Exxon paid the most taxes last year of any U.S. company, by far — but not a cent went to the IRS for income taxes. That’s because the oil giant does business in some of the mostly highly taxed countries in the world. Want to extract petroleum in Nigeria? Be prepared to fork over up to 85% of your profit in tax payments.
Exxon doled out more than $15 billion in income tax payments to foreign countries last year. U.S. tax codes allow companies to take massive deductions in light of those international charges, which knocked Exxon’s federal income-tax bill down into negative territory.
Given this clarification, the implication is your piece is a positional piece and not an informational piece and implies a tax situation directly linked to it’s U.S. taxes.
You all don’t understand tax like you THINK you do. Start a business, hire an accountant and then you’ll understand. Start hiring employees and trying to manage your relationship with revenue, expenses and tax and you’ll realize how silly your comments are.
S-corps do make up ~70% of small corporations and you are correct, they pay ZERO taxes, I’ll repeat a previous poster, they pass their taxes onto the members and the members pay it. The problem is no one ever goes and research the topics, they just repeat what they hear.
Btw, you can deduct certain expenses as an individual but you up have to keep records and file a schedule A. You are in fact taxed on your profit as an individual…instead of just making blanket statements, research the tax code and understand it, then come back and make educated comments..hopefully you will still have hair and understand the push for flat tax or simplified tax for both individuals and your supposed evil corporations.
I’ll also add that another previous poster was correct, higher taxes mean higher prices, who do you think the corporations like coca-cola and apple pass these costs onto? If your costs go up, your prices go up, this is simple economics in business.
I just like to add that the above comment is spot on. As Daniel Moynihan uses to say, “Everyone is entitled to his own opinion, but not to his own facts.” If you want to be a partisan devote and parrot talking points, please direct your comments to the church of your choice. I sure you will enjoy preaching to the choir. However, if you want to discuss business and financial issues, you have a responsibility to get your facts correct.