Free Lunch: Make $10 Billion, and Get a $4 Billion Tax Refund

[SquarePeg]

Well, well, well...as if General Electric and Viacomm not paying any taxes whatsoever ain't bad enough, the news (to me, anyway) is that Newscorp is getting $4 billion dollars from Uncle Sam for its $10 billion in revenue!!

That's $14 billion total income for this past tax year -- almost a third of it free!!!

Remember that when you complain about unions, civil servants, or welfare recipients taking away your hard-earned entrepreneurial dollars!!

[SnerpGoodWord]

These stories usually leave out lots of relevant details. Frequently the money being paid back is a refund for taxes that shouldn't have been collected in a previous year or something like that. Worse, frequently there's serious "creative accounting" involved on the part of the person making the claim. Suffice to say there's nothing in the tax code that just hands out billions willy nilly.

According to Newscorp's 10K for last year, they paid an effective tax rate in the US of about 20%. That's far from getting money back.

[SquarePeg]

Originally Posted by SnerpGoodWord

These stories usually leave out lots of relevant details. Frequently the money being paid back is a refund for taxes that shouldn't have been collected in a previous year or something like that. Worse, frequently there's serious "creative accounting" involved on the part of the person making the claim. Suffice to say there's nothing in the tax code that just hands out billions willy nilly.

According to Newscorp's 10K for last year, they paid an effective tax rate in the US of about 20%. That's far from getting money back.

OMG, just do a Google search...I'd no idea this company -- and no doubt other multinationals -- are dodging taxes all over the world! News Corp is also being badgered for something similar in Australia...and his holding company in Britain hasn't paid one pence in eleven years....

Yes it is "willy nilly," call it "creative accounting" or call it "theft" -- it's willy, nilly, and silly!

[SquarePeg]

It's too bad you've decided to classify this thread as "world affairs"...it's first and foremost a business matter, an oxymoron called business ethics!

[Brutha]

It's too bad you've decided to classify this thread as "world affairs"...it's first and foremost a business matter, an oxymoron called business ethics!

No, this thread belongs in world affairs.

[Le Roi]

I'm totally up for businesses not paying taxes. The less tax they pay, the better. I wish the rest of us could also avoid paying taxes. I'm obviously not in favor of the government given business a net amount of money, but I highly doubt that is happening in this case.

The less money the government can get its hands on, the better I think it is for almost everyone.

I agree with Brutha, this is a World Affair type of thread. You're not talking about how to improve your business, you're talking about political stuff (which taxes on other businesses are).

[Curtis2011]

This post reeks of uneducated sensationalism.

Almost 100% of the time I have heard the cry of "Company X didn't pay taxes" from a (usually) liberal-minded person, the story ends up being that the company took a big loss in the preceding years, and thus gets to carry that loss forward to the current year. When this is done, the past loss reduces the current taxable income to zero, thus resulting in zero taxes paid.

In case nobody knew, this is a common business practice and 100% legal. The US government allows a business to carry losses from the past forward to current years to reduce the amount of taxes they pay in the current year. The government does this to help reduce the amount of business failure in bad economic years and in general.

ANY business can do this. It is NOT tax evasion. The only people complaining about it are those that know very little about corporate finance, business, or the tax system.

Also with the complaints about the bailouts for corporations:

First of all, I don't think companies should receive these bailouts at all. However, the bailouts are rarely (more like never) an actual gift of money from the US government. They are actually a low-interest loan that the company pays back to the government over time. The US government actually makes a profit off of these loans because they charge interest. However, they do interfere with the free market and give these businesses unfair advantages over other businesses, so I am generally against them.

[SquarePeg]

Originally Posted by Brutha

No, this thread belongs in world affairs.

Yeah, too bad you don't consider business ethics a part of business!

[SquarePeg]

Originally Posted by Le Roi

I'm totally up for businesses not paying taxes. The less tax they pay, the better. I wish the rest of us could also avoid paying taxes.

How would you fund the government, then?

Originally Posted by Le Roi

I'm obviously not in favor of the government given business a net amount of money, but I highly doubt that is happening in this case.

Yes it is...and Murdoch's British holding company hasn't paid British taxes in eleven years.

Originally Posted by Le Roi

The less money the government can get its hands on, the better I think it is for almost everyone.

How so?? Waste is one thing, but you don't "throw out the baby with the bathwater"....

Originally Posted by Le Roi

I agree with Brutha, this is a World Affair type of thread. You're not talking about how to improve your business, you're talking about political stuff (which taxes on other businesses are).

Yes, I'm talking about the wider social implications of business. Why does that not belong in the business section?? It's like, hey, this is a physics forum, let's not talk about what the implications are of building an atomic bomb, let's just put our blinders on and focus on building weapons of mass destruction...we'll let the "world affairs" folks worry about life on earth....

[SquarePeg]

Originally Posted by Curtis2011

This post reeks of uneducated sensationalism.

So there are perfectly valid circumstances under which an immensely profitable multi-billion-dollar company should not only not pay taxes but receive public money, too??

Never mind the uneducated...I'm more worried about the miseducated!!

Originally Posted by Curtis2011

Almost 100% of the time I have heard the cry of "Company X didn't pay taxes" from a (usually) liberal-minded person, the story ends up being that the company took a big loss in the preceding years, and thus gets to carry that loss forward to the current year. When this is done, the past loss reduces the current taxable income to zero, thus resulting in zero taxes paid.

Yes, and it is this provision, among others, which allows for the art of creative accounting -- deliberately engineering apparent losses in order to claim poverty!

Originally Posted by Curtis2011

In case nobody knew, this is a common business practice and 100% legal.

In case you don't know, legal is not the same as ethical!

Originally Posted by Curtis2011

The US government allows a business to carry losses from the past forward to current years to reduce the amount of taxes they pay in the current year. The government does this to help reduce the amount of business failure in bad economic years and in general.

Yes, all well in theory -- except these loopholes are big enough for an international conglomerate to not only leap through, but take $4 billion out the door in these bad economic years...and in general!

Originally Posted by Curtis2011

ANY business can do this.

Yes, and anyone can run for POTUS. Oh, sure, you need money, but that's just a technicality....

Originally Posted by Curtis2011

It is NOT tax evasion.

Not, it's just a legal loophole, emphasis on "legal!"

Originally Posted by Curtis2011

The only people complaining about it are those that know very little about corporate finance, business, or the tax system.

Actually, the only people not complaining are those who do not care about social responsibility, the meaning of wealth, and common decency.

Originally Posted by Curtis2011

Also with the complaints about the bailouts for corporations:

First of all, I don't think companies should receive these bailouts at all.

But it's legal! But it's "corporate finance!" It's "business!"

Originally Posted by Curtis2011

However, the bailouts are rarely (more like never) an actual gift of money from the US government. They are actually a low-interest loan that the company pays back to the government over time.

The point is that free market theorists are communists in practice!

Originally Posted by Curtis2011

The US government actually makes a profit off of these loans because they charge interest. However, they do interfere with the free market and give these businesses unfair advantages over other businesses, so I am generally against them.

But millions will be out of work! There will be ripples throughout the economy, domestic and global! Those businesses are just too big to fail!!

[JSB]

I'm no fan of Murdoch or Newscorp, and I think the News of the World phone hacking scandal shows Murdoch's true colors when it comes to ethics (anything for money), but this story about a $4 billion tax refund is false, the result of an error on the part of the journalist who wrote about it.

His retraction of the story is here: COLUMN-How I misread News Corp's taxes: David Cay Johnston | Reuters

[SquarePeg]

Originally Posted by JSB

I'm no fan of Murdoch or Newscorp, and I think the News of the World phone hacking scandal shows Murdoch's true colors when it comes to ethics (anything for money), but this story about a $4 billion tax refund is false, the result of an error on the part of the journalist who wrote about it.

His retraction of the story is here: COLUMN-How I misread News Corp's taxes: David Cay Johnston | Reuters

Good to know: thanks very much for the update!

I'm not really all that concerned about the hacking, actually; for me, it's the systemic practice of big corporations being taxed at much lower rates, relatively speaking, than individual taxpayers that has me upset.

Good to know in this case, however, that $4 billion wasn't given out!

Unfortunately, that still leaves many other similar stories with Murdoch's corporate empire (such as his British holding company not paying taxes for eleven years straight, according to, IIRC, a Member of Parliament)...not to mention General Electric and Viacom paying no taxes whatsoever, which stand verified and uncontested.

[Brutha]

Yeah, too bad you don't consider business ethics a part of business!

No, I do you however seem to think too much in labels. If you would move past the labels and see what the kind of threads in the business forum are about it would be easy to see how your thread doesn't fit it.

[Curtis2011]

Originally Posted by SquarePeg

So there are perfectly valid circumstances under which an immensely profitable multi-billion-dollar company should not only not pay taxes but receive public money, too??

Never mind the uneducated...I'm more worried about the miseducated!!



Yes, and it is this provision, among others, which allows for the art of creative accounting -- deliberately engineering apparent losses in order to claim poverty!



In case you don't know, legal is not the same as ethical!



Yes, all well in theory -- except these loopholes are big enough for an international conglomerate to not only leap through, but take $4 billion out the door in these bad economic years...and in general!



Yes, and anyone can run for POTUS. Oh, sure, you need money, but that's just a technicality....



Not, it's just a legal loophole, emphasis on "legal!"



Actually, the only people not complaining are those who do not care about social responsibility, the meaning of wealth, and common decency.



But it's legal! But it's "corporate finance!" It's "business!"



The point is that free market theorists are communists in practice!



But millions will be out of work! There will be ripples throughout the economy, domestic and global! Those businesses are just too big to fail!!

I wrote a long response to each of your replies, but then figured that this short video clip would get my point across much more efficiently.

[jellybeanpimp]

Originally Posted by Curtis2011

I wrote a long response to each of your replies, but then figured that this short video clip would get my point across much more efficiently.

whahahahaha

[Vibration]

Before 1913 there was no federal income tax. If America survived from 1776 to 1913 with no federal income tax, then why can't it survive today without it?

[JSB]

America also had a standing army smaller than that of Romania and no Social Security or other "safety net" programs.

The problem in the US is that nobody wants to pay taxes, but everybody screams bloody murder if someone tries to cut government services. We are a nation of spoiled children, and we refuse to accept that there's no free lunch. Even the Tea Party supporters, who ostensibly want to reduce government spending, might not REALLY want to reduce it after all; they just don't like paying taxes. There was a famous quote from, a Tea Party supporter at a town hall meeting during the 2008 campaign: "Keep your godd**n government hands off my Medicare!"

If Americans want lower taxes, no problem; drastically cut the defense budget, the Veterans Administration, Social Security and Medicare and that should take care of it.

If Americans want to keep those services and expenditures, then they need to pay the taxes necessary to support them.

Originally Posted by Vibration

Before 1913 there was no federal income tax. If America survived from 1776 to 1913 with no federal income tax, then why can't it survive today without it?

[SquarePeg]

Originally Posted by Brutha

No, I do you however seem to think too much in labels. If you would move past the labels and see what the kind of threads in the business forum are about it would be easy to see how your thread doesn't fit it.

We all traffic in labels. It's called language.

The trick is to go beyond the labels.

Indeed, it was going through the "My Thoughts on Employees" thread that I was struck by how so many entrepreneurs -- and business-types in general -- are so against working people, "little people," and the government that tries to represent them with policies catering to them, when it's the big companies these entrepreneurs try so hard to emulate that's been causing all the problems.

[SquarePeg]

Originally Posted by Curtis2011

I wrote a long response to each of your replies, but then figured that this short video clip would get my point across much more efficiently.

I'd just like to know what you think we're arguing about here. You really think it's all right to have an economic system where billion-dollar companies pay no taxes and yet can be bailed out at public expense?

[SquarePeg]

Originally Posted by Vibration

Before 1913 there was no federal income tax. If America survived from 1776 to 1913 with no federal income tax, then why can't it survive today without it?

General Electric, Viacom, and others do not pay income tax. Taxes on the wealthiest individuals have been cut yet again.

America's surviving on the backs of its workers -- it's the most productive in the world, after all! Before 1913, the country had slaves, white ethnics, some Chinese out west, and of course native land.

[SquarePeg]

Originally Posted by JSB

America also had a standing army smaller than that of Romania and no Social Security or other "safety net" programs.

The problem in the US is that nobody wants to pay taxes, but everybody screams bloody murder if someone tries to cut government services. We are a nation of spoiled children, and we refuse to accept that there's no free lunch. Even the Tea Party supporters, who ostensibly want to reduce government spending, might not REALLY want to reduce it after all; they just don't like paying taxes. There was a famous quote from, a Tea Party supporter at a town hall meeting during the 2008 campaign: "Keep your godd**n government hands off my Medicare!"

If Americans want lower taxes, no problem; drastically cut the defense budget, the Veterans Administration, Social Security and Medicare and that should take care of it.

If Americans want to keep those services and expenditures, then they need to pay the taxes necessary to support them.

I think it's a matter of who pays how much.

Since the rich benefit most from this country, it behooves them to step up first and foremost. Seems like a very free-market attitude to me; get more, pay more.

Or they could think of it as noblesse oblige, even, in keeping with any crypto-aristocratic sentiments they may hold.

[Brutha]

Indeed, it was going through the "My Thoughts on Employees" thread that I was struck by how so many entrepreneurs -- and business-types in general -- are so against working people, "little people," and the government that tries to represent them with policies catering to them, when it's the big companies these entrepreneurs try so hard to emulate that's been causing all the problems.

Most entrepreneur and people with a start up mentality don't want to emulate big companies. They rather dispose various traits of big companies.

Or they could think of it as noblesse oblige, even, in keeping with any crypto-aristocratic sentiments they may hold.

What do you mean with the term "crypto-aristocratic" and from where did you get it?

You really think it's all right to have an economic system where billion-dollar companies pay no taxes and yet can be bailed out at public expense?

Nobody in this thread defended bail outs.

Mixing issues into one cloudy mess and getting outraged doesn't do anything good. If you want meaningful political change you have to actually engage the reasoning behind specific decisions.