Eight Corporate Subsidies in the Fiscal Cliff Bill, From Goldman Sachs to Disney to NASCAR. Matt Stoller is a fellow at the Roosevelt Institute. You can follow him at Throughout the months of November and December, a steady stream of corporate CEOs flowed in and out of the White House to discuss the impending fiscal cliff. Many of them, such as Lloyd Blankfein of Goldman Sachs, would then publicly come out and talk about how modest increases of tax rates on the wealthy were reasonable in order to deal with the deficit problem.
What wasn’t mentioned is what these leaders wanted, which is what’s known as “tax extenders”, or roughly $205B of tax breaks for corporations. With such a banal name, and boring and difficult to read line items in the bill, few political operatives have bothered to pay attention to this part of the bill. The negotiations over the fiscal cliff involve more than the Democrats, Republicans, the middle class and the wealthy. 8) Bonus Depreciation, R&D Tax Credit – These are well-known corporate boondoggles. Enjoy! Corporations are the people of the year, my friend. Who’s the most important newsmaker of the year? Time magazine says Barack Obama. We disagree. It’s the American corporation. Ever since Republican presidential candidate Mitt Romney reminded us of the legal fiction of corporate personhood during the past summer’s presidential campaign—“corporations are people, my friend!”
And it turns out corporations have had quite the resurgence in the past year: What you’re seeing is after-tax corporate profits as a percentage of the US economy, and the the last decade has just been swell for them; record-setting, in fact, despite the crisis. Our case further solidifies with a look at how poorly unincorporated persons have fared in recent years: A measure of labor’s share of US national income. That chart comes from this research at the St. And it’s not just that corporations are competing with real people in the economic environment. Then there’s the criminal activity. Why are Cash-Rich Companies Being Subsidized by Tax-Poor Governments? The latest Q3 US national accounts data shows profits as a share of GDP are at historical highs. Meanwhile household’s share is at all time lows (see chart).
Will pressure from the electorate force to address this imbalance? In the UK, we witnessed just what SocGen described as “the public lynching of Starbucks, Amazon and Google” as public ire has shifted “very swiftly from banker bashing to corporate bashing.” Forget the official tax rate, and look at the actual tax dollars US and European companies have been paying. Societe Generale warns that there is risk to these rates going forward — and that could have implications for profitability.
Source: Quant Quickie Societe Generale Category: Politics, Taxes and Policy. Corporate Taxpayers & Corporate Tax Dodgers, 2008-2010. NEW REPORT: 280 Most Profitable U.S. Corporations Shelter Half Their Profits from Taxes. “These 280 corporations received a total of nearly $224 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author.
“This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.” 30 Companies average less than zero tax bill in the last three Years, 78 had at least one no-tax year.Financial services received the largest share of all federal tax subsidies over the last three years. More than half the tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications, and oil, gas & pipelines.U.S. corporations with significant foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits.
Full Report Here Read Our Press Release With Key Findings. Wolf Richter: A Revolt Against Corporate Welfare Programs For Multinationals In France. By Wolf Richter, San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Cross posted from Testosterone Pit. “Foreign Investment Paradox” is what the New York Times called France’s ability to attract €42.5 billion in foreign investment through October this year. Only China and the US were ahead for the first two quarters. A paradox because it shouldn’t happen. As if to underline the harsh reality in France, the article ran the same day that Texas Instruments announced its intention to shutter a research and development plant at Villeneuve-Loubet, near Nice, in southern France, as part of its corporate weight-loss program.
Yet France can be a veritable gold mine: it offers tax credits of 30% of R&D expenditures of up to €100 million. And it’s not a paradox. Then, November 1, tax authorities raided Google offices at four locations in Paris and seized files. They hadn’t been the first ones.