U.S. corporations - like many Americans - exploit every available rule in the tax code to minimize the taxes they pay. The United States has one of the highest corporate tax rates in the world, at 35 percent (not including any state levies), yet the actual amount in corporate taxes that the government collects ("the effective tax rate") is lower than those of Germany, Canada, Japan, and China, among others. Ten ways big firms reduce their income tax liabilities are as follows-
- Graduated Corporate Tax Rates
- Inventory Property Sales
- Research and Experimentation Tax Credits
- Deferred Taxes for Financial Firms on Certain Income Earned Overseas
- Alcohol Fuel Credits
- Credit for Low-Income Housing Investments
- Accelerated Depreciation of Machinery and Equipment
- Deduction for Domestic Manufacturing
- Exclusion of Interest on State and Local Bonds
- Deferral of Income from Controlled Foreign Corporations
30 large corporations paid not a dime over the entire three years even though they made $160 billion in profits over that time period.
Small business owners see corporate tax loopholes and accounting gimmicks used to shift U.S. profits offshore to avoid taxes as serious problems, according to a poll released on February 6. Small business owners say big corporations and the wealthy don't pay their fair share of taxes.
Last Updated May 2, 2015
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