Why is about half of Congress so intent on preserving tax loopholes for corporations? Much has been made recently about how General Electric paid no taxes on $14 billion of profits, but Rupert Murdoch’s News Corp can do better than that. From a Slate story and a Reuters chart:
After digging through News Corp.’s financial disclosures, Johnston reports that based on the company’s $10.4 billion profits during that time period, the company would have been expected to pay $3.6 billion at the 35 percent corporate tax rate. But instead the company managed to collect $4.8 billion in income tax refunds, “all or nearly all from the U.S. government.”
Nearly $5 billion paid by us because the company is so good at using tax havens, such as the Cayman Island. News Corp ranks #3 in diverting profits off-shore. Of course it’s all legal, but why do we have laws allowing it? The solution from the GOP? Cut the corporate tax rate even further.
You can see my thoughts on tax loopholes/deductions in previous posts. I don’t like News Corp paying less than other Corp’s if that is the case.
There are smarter folks than I that read this blog so I’m asking for some help. Why do corporations pay any tax? The way I understand it and I may be dead wrong, corporations are to pay taxes on their net profit. Then when the owners of the corporation, (the share holders) receive dividends (their share of company profits) they pay tax on it again.
Suppose you had a sole proprietorship, say Green Enterprises for instance. Green Enterprises makes a little money, takes advantage of tax depreciation on equipment, writes off his property taxes and interest costs and then Green Enterprises is taxed as personal income once. No double-tax on the same income. Is that correct or fair?