TPT May 2017

67 / 92

G LOBA L MARKE T P L AC E
MAY 2017 65
framag Industrieanlagenbau GmbH
Neukirchner Straße 9
A-4873 Frankenburg
Tel.: +43 (0) 7683/5040-0
E-Mail:
framag BILLET SAWING
• perfect cutting quality and accuracy
• optimized saw blade life time
• lowest cutting costs
• unique vibration damping due to HYDROPOL® a
specially patented compound material
• unique blade dampening and cooling features
• minimized maintenance expenditures
Tube&Pipe_125x180_4c.indd 1 06.03.2017 11:30:25
the companies – nearly 40 per cent – paid no taxes in at least
one of the years between 2008 and 2015. Eighteen of these
incurred a total federal income tax bill of less than zero over
the entire eight-year period – meaning that they received
rebates.
The institute, a liberal-leaning research group in Washington,
used the companies’ own regulatory filings to compute their
tax rates. Here, edited for concision, are the main points from
Ms Cohen’s review of methods by which companies legally
avoided paying taxes. (“Profitable Companies, No Taxes:
Here’s How They Did It,” 9 March).
• Multinational corporations have ways of booking profits
overseas, out of the reach of the Internal Revenue Service.
“The truth is that we have a rigged tax code that has
essentially legalised tax dodging for large corporations,” said
Senator Bernie Sanders, the Vermont independent, citing
evidence in the Institute on Taxation and Economic Policy
report. “Offshore tax haven abuse has become so absurd that
one five-storey office building in the Cayman Islands is now
‘home’ to more than 18,000 corporations.”
• Other companies qualified for accelerated depreciation,
enabling them to write off most of the cost of equipment
and machinery before it wore out. Some saved billions in
taxes by giving options to top executives to buy stock in the
future at a discount. The companies then get to deduct their
huge payouts as a loss.
• Individual industries have successfully lobbied for specific
tax breaks that effectively function as subsidies. Matthew
Gardner, a senior fellow at the institute and a co-author of
the study, told the Times, “One of the things that jumps out
pretty starkly is there’s a real gap between the tax rates
paid by different industries.”
Over the 2008-2015 period covered by the report, utilities
logged an effective tax rate of just 3.1 per cent. Industrial
machinery; telecommunications; and oil, gas and pipeline
companies paid roughly 11.5 per cent. Internet services paid
15.6 per cent. In just two sectors – health care and retail
– companies paid more than 30 per cent of their profits in
federal income tax.
› Ms Cohen concluded her article where it began, with the
avowal by the new US president and his party to change
the corporate tax code. “Republicans say their tax overhaul will
eliminate some of the biggest loopholes,” she wrote.“[While]
critics counter that the substitute will end up further reducing
companies’ tax bills.”
› On the broader topic of tax code revision in general, some
tax incentives – including those enacted by the US during
the 2007-2009 recession – were meant to boost economic
growth and hiring. But, according to the 7 March report from
the Institute on Taxation and Economic Policy, often they did
not work that way.
Dorothy Fabian, Features Editor (USA)