Top 26 Companies Paid No Tax from 2008-2012

[oldfart]

I'm pretty suspicious of the source here. One of the companies they list is GE. However, GE's 2012 Annual Report indicates they paid income taxes to the tune of $3.2 Billion in 2012. Their income tax rates on consolidated earnings were 14.4% (2012), 28.3% (2011), and 7.3% (2010).

I'm not sure where your article is getting it's sources from, but they don't appear to be connected with what the companies are reporting.

Source: http://api40.10kwizard.com/cgi/conv...est=1&rid=23&section=1&sequence=-1&pdf=1&dn=1

Let me try to help you. GE is an international company. Someone is trying to be dishonest here. GE paid no taxes in the UNITED STATES. Instead they used methods to push profits to operations in other countries with lower or no taxes and paid income taxes there. Which is why you see taxes paid by GE. In the US, they often got back refunds.
So, if you care that they paid taxes in other countries, great. But their operations in this country were tax free.

For 2010, for example (bold added):

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
http://www.nytimes.com/2011/03/25/business/economy/25tax.html?pagewanted=all&_r=0

So you can make up your beliefs from whole cloth, or actually spend a bit of time out reading about it. From impartial sources. Up to you. But calling the citizens for tax justice a questionable source is stupid.

Now, perhaps I'm missing something, but if you look on page 97 of the 10-K, it says that GE Corp paid $3,237 million in cash taxes in 2012.

OK, the original article cited claimed that 26 of the Fortune 500 companies paid no net federal income tax over a several year period. They appear to have applied this criteria consistently. The notes for GEs tax accrual work papers shows that the 2010 NOL exceeded the net income for US federal income tax purposes in 2011 & 2012 combined. The refunds claimed ("tax benefit") based on those NOLs (I'm assuming they carried them back) exceeded the 2012 tax liability. So there is no inconsistency.

And I have no way of tracking the issue of income allocation to various countries (transfer pricing issues, especially) or computing their foreign tax credit, which also has a bearing.

Does this clear it up?

 

[Toro]

Now, perhaps I'm missing something, but if you look on page 97 of the 10-K, it says that GE Corp paid $3,237 million in cash taxes in 2012.

OK, the original article cited claimed that 26 of the Fortune 500 companies paid no net federal income tax over a several year period. They appear to have applied this criteria consistently. The notes for GEs tax accrual work papers shows that the 2010 NOL exceeded the net income for US federal income tax purposes in 2011 & 2012 combined. The refunds claimed ("tax benefit") based on those NOLs (I'm assuming they carried them back) exceeded the 2012 tax liability. So there is no inconsistency.

And I have no way of tracking the issue of income allocation to various countries (transfer pricing issues, especially) or computing their foreign tax credit, which also has a bearing.

Does this clear it up?

You assumed that's what they did? So we don't know?

I didn't see the tax notes for GE specifically. I skimmed the methodology of the Center and didn't see anything about it.

It also appears that they made many inferences in their conclusions. Frankly, I don't know if they are correct or not. For example, it says that many companies paid more to foreign governments than they did to the US government. That's not entirely clear. In the notes, GE said they filed tax forms in 5,600 jurisdictions. How do the taxes they paid to foreign provinces, departments, states, cities, counties, municipalities, etc. relative to the respective national governments compared to taxes paid by GE to the state, cities, countries compared to Washington?

As I understand it, cash income taxes paid are taxes actually paid, not expensed on the income statement. After I posted cash taxes paid, I realized that it didn't specify where they were paid, so perhaps it was all paid outside the US. Also, it was over five years, so they may have paid no net taxes over five years even if they had paid US income taxes in 2012.

I don't have a horse in this race. Frankly, I was a little surprised to see the effective income tax rate was 19.4%. I thought it was lower.

 

[oldfart]

Now, perhaps I'm missing something, but if you look on page 97 of the 10-K, it says that GE Corp paid $3,237 million in cash taxes in 2012.

OK, the original article cited claimed that 26 of the Fortune 500 companies paid no net federal income tax over a several year period. They appear to have applied this criteria consistently. The notes for GEs tax accrual work papers shows that the 2010 NOL exceeded the net income for US federal income tax purposes in 2011 & 2012 combined. The refunds claimed ("tax benefit") based on those NOLs (I'm assuming they carried them back) exceeded the 2012 tax liability. So there is no inconsistency.

And I have no way of tracking the issue of income allocation to various countries (transfer pricing issues, especially) or computing their foreign tax credit, which also has a bearing.

Does this clear it up?

You assumed that's what they did? So we don't know?

I didn't see the tax notes for GE specifically. I skimmed the methodology of the Center and didn't see anything about it.

It also appears that they made many inferences in their conclusions. Frankly, I don't know if they are correct or not. For example, it says that many companies paid more to foreign governments than they did to the US government. That's not entirely clear. In the notes, GE said they filed tax forms in 5,600 jurisdictions. How do the taxes they paid to foreign provinces, departments, states, cities, counties, municipalities, etc. relative to the respective national governments compared to taxes paid by GE to the state, cities, countries compared to Washington?

As I understand it, cash income taxes paid are taxes actually paid, not expensed on the income statement. After I posted cash taxes paid, I realized that it didn't specify where they were paid, so perhaps it was all paid outside the US. Also, it was over five years, so they may have paid no net taxes over five years even if they had paid US income taxes in 2012.

I don't have a horse in this race. Frankly, I was a little surprised to see the effective income tax rate was 19.4%. I thought it was lower.

OK, the two of us should be able to figure this out. I trust you to be able to read a securities filing and I can decipher the tax notes. All I can go on is what was in the article, including their methodological notes and what was pasted from the GE securities filing. They are not inconsistent. The article looked at 2008--2012 as a whole while the GE filing covered the years 2010 through 2012. I'd need the 2008 and 2009 GE filings to make a direct comparison, and I really see no need to double check.

The GE filing in the notes uses negative numbers in parentheses to indicate annual losses, and that amount times it's tax rate is called a "tax benefit". In tax parlance, these losses (by tax accounting rules, not FASB) are called "net operating losses" (NOLs) and are carried either back to obtain a refund of taxes paid in a previous year or forward to offset positive taxable income in a future year. Look at the third paragraph of the notes and add the figures for 2010 through 2012 together and you get a net loss (i.e. the 2010 NOL exceeds the taxable income for 2011 and 2012 combined) and the tax benefit of that 2010 NOL exceeds the taxes paid for 2011 and 2012. So on net, GE got more money back from the IRS for 2010 than it paid in 2011 and 2012 combined, according to GEs own statements.

Again, if I had 2008 & 2009 GE statements we could make a direct comparison to the article. But if GE lost money in 2010, given recent economic history, I don't see it as unreasonable that they could have lost money or just broken even in 2008 and 2009. The article claimed that 26 of the Fortune 500 companies (5.2% of them) paid no net tax for the five year period as a whole; which does not seem to me to be an unreasonable claim on the face as those were five horrendously bad years taken as a whole. Frankly I'm surprised that only 26 of the 500 companies met this criterion.

Hope this makes sense.

 

[Toro]

OK, the two of us should be able to figure this out. I trust you to be able to read a securities filing and I can decipher the tax notes. All I can go on is what was in the article, including their methodological notes and what was pasted from the GE securities filing. They are not inconsistent. The article looked at 2008--2012 as a whole while the GE filing covered the years 2010 through 2012. I'd need the 2008 and 2009 GE filings to make a direct comparison, and I really see no need to double check.

The GE filing in the notes uses negative numbers in parentheses to indicate annual losses, and that amount times it's tax rate is called a "tax benefit". In tax parlance, these losses (by tax accounting rules, not FASB) are called "net operating losses" (NOLs) and are carried either back to obtain a refund of taxes paid in a previous year or forward to offset positive taxable income in a future year. Look at the third paragraph of the notes and add the figures for 2010 through 2012 together and you get a net loss (i.e. the 2010 NOL exceeds the taxable income for 2011 and 2012 combined) and the tax benefit of that 2010 NOL exceeds the taxes paid for 2011 and 2012. So on net, GE got more money back from the IRS for 2010 than it paid in 2011 and 2012 combined, according to GEs own statements.

Again, if I had 2008 & 2009 GE statements we could make a direct comparison to the article. But if GE lost money in 2010, given recent economic history, I don't see it as unreasonable that they could have lost money or just broken even in 2008 and 2009. The article claimed that 26 of the Fortune 500 companies (5.2% of them) paid no net tax for the five year period as a whole; which does not seem to me to be an unreasonable claim on the face as those were five horrendously bad years taken as a whole. Frankly I'm surprised that only 26 of the 500 companies met this criterion.

Hope this makes sense.

I'm sorry. I can't find the paragraph that discusses NOLs. What page is it on?

http://api40.10kwizard.com/cgi/conv...est=1&rid=23&section=1&sequence=-1&pdf=1&dn=1

The GECC effective tax rate was 6.2% in 2012, compared with 11.8 % in 2011 and (45.8)% in 2010. Comparing a tax benefit to pre-tax income resulted in a
negative tax rate in 2010. Our tax expense of $0.5 billion in 2012 decreased by $0.4 billion from $0.9 billion in 2011. The lower 2012 tax expense resulted
principally from the benefit attributable to the high tax basis in the entity sold in the Business Property disposition ($0.3 billion), increased benefits from low
taxed global operations ($0.3 billion) and the absence of the 2011 high-taxed disposition of Garanti Bank ($0.1 billion). Partially offsetting the decrease in tax
expense was the absence in 2012 of the 2011 benefit from resolution of the 2006-2007 Internal Revenue Service (IRS) audit ($0.2 billion) which is reported in
the caption “All other-net” in the effective tax rate reconciliation in Note 14 to the consolidated financial statements in Part II, Item 8. “Financial Statements and
Supplementary Data” of this Form 10-K Report, and from higher pre-tax income in 2012 than in 2011, which increased pre-tax income $0.3 billion and
increased the expense ($0.1 billion).

The GECC effective tax rate was 11.8% in 2011, compared with (45.8)% in 2010. Comparing a tax benefit to pre-tax income resulted in a negative tax rate in
2010. The GECC tax expense of $0.9 billion in 2011 increased by $1.9 billion from a $1.0 billion benefit in 2010. The higher 2011 tax expense resulted
principally from higher pre-tax income in 2011 than in 2010 of $5.5 billion, which increased the tax expense ($1.9 billion). Also increasing the expense was a
benefit from resolution of the 2006-2007 Internal Revenue Service (IRS) audit ($0.2 billion) that was less than the benefit from resolution of the 2003-2005 IRS
audit ($0.3 billion) both of which are reported in the caption “All other-net” in the effective tax rate reconciliation in Note 14 to the consolidated financial
statements in Part II, Item 8.

That's from the 2012 10k. It says that in total, tax expense from GE Capital was $0.3B over those three years. GE Capital is where the losses occurred IIRC.

Page 150 reconciles the statutory tax expense with the actual tax expense. 2012 was 14.4%, 2011 was 28.3%, 2010 was 7.3%. How does this reconcile with NOLs that

Here is the 2010 10k. GE did not lose money in 2008 or 2009. It made $11B in 09 and $17.4B in 08. Cash taxes paid (p96) was $3.1B in 09 and $2.6B in 08. Again, I don't know where the tax was paid.

http://api40.10kwizard.com/cgi/conv...est=1&rid=23&section=1&sequence=-1&pdf=1&dn=1

The OP said that 26 companies didn't pay tax. GE is reporting that it has paid taxes of $2-$3 billion per year. It doesn't say where the taxes were paid, but the company reported that it paid taxes.

 

[oldfart]

I'm sorry. I can't find the paragraph that discusses NOLs. What page is it on?

Post #54 in this thread, the third paragraph of the notes.

The GECC effective tax rate was 6.2% in 2012, compared with 11.8 % in 2011 and (45.8)% in 2010. Comparing a tax benefit to pre-tax income resulted in a
negative tax rate in 2010. Our tax expense of $0.5 billion in 2012 decreased by $0.4 billion from $0.9 billion in 2011. The lower 2012 tax expense resulted
principally from the benefit attributable to the high tax basis in the entity sold in the Business Property disposition ($0.3 billion), increased benefits from low
taxed global operations ($0.3 billion) and the absence of the 2011 high-taxed disposition of Garanti Bank ($0.1 billion). Partially offsetting the decrease in tax
expense was the absence in 2012 of the 2011 benefit from resolution of the 2006-2007 Internal Revenue Service (IRS) audit ($0.2 billion) which is reported in
the caption “All other-net” in the effective tax rate reconciliation in Note 14 to the consolidated financial statements in Part II, Item 8. “Financial Statements and
Supplementary Data” of this Form 10-K Report, and from higher pre-tax income in 2012 than in 2011, which increased pre-tax income $0.3 billion and
increased the expense ($0.1 billion).

The GECC effective tax rate was 11.8% in 2011, compared with (45.8)% in 2010. Comparing a tax benefit to pre-tax income resulted in a negative tax rate in
2010. The GECC tax expense of $0.9 billion in 2011 increased by $1.9 billion from a $1.0 billion benefit in 2010. The higher 2011 tax expense resulted
principally from higher pre-tax income in 2011 than in 2010 of $5.5 billion, which increased the tax expense ($1.9 billion). Also increasing the expense was a
benefit from resolution of the 2006-2007 Internal Revenue Service (IRS) audit ($0.2 billion) that was less than the benefit from resolution of the 2003-2005 IRS
audit ($0.3 billion) both of which are reported in the caption “All other-net” in the effective tax rate reconciliation in Note 14 to the consolidated financial
statements in Part II, Item 8.

That's from the 2012 10k. It says that in total, tax expense from GE Capital was $0.3B over those three years. GE Capital is where the losses occurred IIRC.

Page 150 reconciles the statutory tax expense with the actual tax expense. 2012 was 14.4%, 2011 was 28.3%, 2010 was 7.3%. How does this reconcile with NOLs that

Here is the 2010 10k. GE did not lose money in 2008 or 2009. It made $11B in 09 and $17.4B in 08. Cash taxes paid (p96) was $3.1B in 09 and $2.6B in 08. Again, I don't know where the tax was paid.

http://api40.10kwizard.com/cgi/conv...est=1&rid=23&section=1&sequence=-1&pdf=1&dn=1

The OP said that 26 companies didn't pay tax. GE is reporting that it has paid taxes of $2-$3 billion per year. It doesn't say where the taxes were paid, but the company reported that it paid taxes.[/QUOTE]

Lots of luck. This summary includes the results of two multi-year audit resolutions. They also claim that their 2010 effective tax rate was a negative 45.8% which I have no idea how was computed. Also remember that GE and GECC file a consolidated return, so it's easy to lose track of where they refer to the consolidated return and where they are referring to the two corporations. And as I mentioned, we have no way of computing their foreign tax credit, which was probably the major issue in the audits.

 

[JimH52]

The top corporations in America paid no tax from 2008-2012, and scores of others paid less than they were supposed to, according to report from Citizens for Tax Justice. The Sorry State of Corporate Taxes | Citizens for Tax Justice

They argue that it is for the good of the economy. If so, wouldn't our own escape from taxes fuel growth were we to have more in our pocket to spend?

Your thoughts?

So why isn't the GOP screaming about the tax revenue we are losing here? Every dollar that is lost to tax loopholes and dodgers is another dollar added to the deficit.

 

[Iceweasel]

So why isn't the GOP screaming about the tax revenue we are losing here? Every dollar that is lost to tax loopholes and dodgers is another dollar added to the deficit.

So why aren't you listening when conservatives discuss cronyism in government? If you don't want to listen that's fine but when you pretend that you do and say that don't that makes you a liar.