Wednesday, April 7, 2010

Being Tax Exempt

Leona Hemsley was right: "Only the little people pay taxes." According to Forbes magazine the largest U.S. corporations paid no taxes last year. The "most egregious" of these were General Electric and Exxon Mobil. GE "generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion." (Didn't GE benefit from billions in the bailout via AIG?) Exxon reported making $45.2 billion in profit and paid no, zilch, nada taxes to the IRS.

How do these companies not pay taxes? Forbes noted that "Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas. Likewise, GE has $84 billion in overseas income parked indefinitely outside the U.S."

In 2008 the Government Accountability Office found that "two out of every three United States corporations paid no federal income taxes from 1998 through 2005." So, can we agree that what Leona Hemsley said was true and that she undoubtedly went to jail not because she did anything different than many others in her tax-exempt bracket but because she was stupid enough to say so?

10 comments:

Pamela said...

Wow! We are so backwards!

DB said...

Yes, Hemsley's lack of common sense was quite noticeable from the beginning.

It's comforting to know that my dime helps to support a nation that allows Exxon and GE to survive under their obvious financial burdens.

Why have I been an honest taxpayer I'd like to know?

Judith Ellis said...

In this regards your statement is so very true, Pam. We need tax reform! It looks as if all of the big hot button issues have fallen on this president to take up, eh?

Judith Ellis said...

DB - The sad thing is these companies have done nothing illegal, as the Wall Street banks, eh?

zorro said...

Why is this important?
I'm still in shock that a famous billionaire
golfer who travels around the country on tour cheated on his wife. This kind of stuff has never happened before with rich famous men. What are we coming to? I hope the Nike commercial straightens this guy out. :-)

septembermom said...

Tax reform has to be a priority. When preparing our return, my 7 year old son asked, "Why do we have to pay taxes?" My oldest said, "The government works for us, Mom?" Loaded questions...

Judith Ellis said...

Zorro - Funny!

Judith Ellis said...

Kelly - In the mouth of babes, eh? I also think that we all should pay taxes in a way that will benefit our great country. But as we see here, the system is sincerely screwed.

Anonymous said...

I like what you're doing, Judith. Good writing.

Judith Ellis said...

Thank you, Anon. Do pass through again.