More Corporations Finding Ways to Pay No Taxes

taxes we've talked about corporations big corporations finding ways to pay absolutely no taxes and USA today has an article that says yes there's been a lot of talk about Apple finding ways to drastically cut its federal tax bill but if you actually look at the S&P 500 which is which is made up a five hundred the biggest companies in the United States there are actually many companies that pay 0 effective tax rate in fact 57 above the S&P 500 pay 0 affective tax rates according to S&P capital IQ the effective tax rate for a corporation to be clear that we're talking about the same thing is the average rate at which pre-tax profits are taxed and for corporations the effective tax rate is is computed by dividing total tax expenses by earnings before taxes okay now this news is coming out just a couple of months after the Government Accountability Office released a report which said that in back in 2010 companies paid an effective tax rate of 12 points 6 percent so when you look at the rate the federal corporate tax rate is 35 percent the effective tax rate is 12 points 6 percent and this of course Louis is the result of I don't know if I wanna call it creative accounting or if we want to call it the result the the typeof accounting you only have access to if you have a lot of money call it what you will the result of taking advantage a very specific tax laws that are available for big corporations listen to some other names of the companies worst better-paying 0 effective tax rate Verizon drugmaker bristol-myers Squibb power management firm eaten the the list is incredibly long actually spans onto a second page altogether MetLife Avalon Bay communities Lam research I'll poultry group Plum Creek timber perkin-elmer these are really big companies and they're paying 0 effective tax rate on millions hundreds of millions or even billions of dollars in profit how are they doing this there's a couple ways offshore transfer payments harvesting losses accounting rules that allow for moving around when your losses are actually taken is tax deductible so for example you can lose money years ago and then take part of those losses and use them to offset future profits even in very profitable years and you can manage this with with I don't have creative accounting is the right way but with with expert accountant you can manage this in a way within the law this is not a legal to offset you Chur earnings with previous losses in a way that is net advantageous Louis we talk all the time about this be some people will say well these are the corporations that are creating jobs this is the engine of America we just talked yesterday about how McDonald's a hugely profitable corporation pays wages that are so low that they recommend to their employees that they get food stamps and Medicaid so it is not true that these are totally self sufficient companies and employees can simply go elsewhere the employees go to the government while working for these companies in the case have low-wage a a employers so the idea that they deserve all of these benefits is just not true yeah and it's incredible there even some laws that allow for companies do you basically just give out lots of stock to you I don't know various executive right and in that way I R take bad of a what their taxes would be as well just awarding those who are already making so much money it's it's truly incredible with all these corporations have force politicians to do over the years