This number is actually a shame in the sense that it shows how little taxes are paid by other big companies.
You'd never want other companies paying as much tax if they didn't have the profit to back it up. It would bankrupt them.
https://taxpolicycenter.org/taxvox/tpc-number-those-who-dont...
They do have the profit in that the money they make doing things exceeds the money they spend to do the thing, but though a series of tricks of varying legality and ethics they make it so on paper they do not have "profit" and therefore successfully avoid taxes.
Amazon reported losses for the first 10 years while growing to billions in yearly revenue.
>It would bankrupt them.
It really wouldn't have. While Amazon was growing to dominate retail and putting very many competitors out of business, they were paying 0 corporate taxes. Many companies play these tricks and many people want them to pay fair taxes. If you need to be tax free to break even, you should go bankrupt. Especially in the Fortune 500 region.
IMO corporate tax should be zero, and we tax individual people instead.
Money is taxed (generally) whenever it moves between parties. You paid tax on your income; you give (some of) it to someone else for goods or services - they pay taxes on it again. That's not double taxation, that's how tax works.
Money flows to the corporation. They pay some to employees, who pay tax on their income. They (might) pay some to shareholders, who (might) pay tax on dividends or capital gains. What is left (very simply speaking), the corporation pays tax on as its income.
Taxing corporate profits is layering an additional (hefty) tax on its beneficiaries - people.
Search 'double taxation' and you will see this term is generally accepted by financial professionals in many jurisdictions to describe the above scenario where a corporation makes a profit, is taxed at the corporate level and then additional taxes must also be paid by the receiver of the already taxed funds (ex. shareholder, bondholder).
You do some work, you earn income, which presumably (or hopefully) exceeds your perception of the cost of doing the work to you. You pay taxes on that. You then give the money to some third party, as a gift, for goods & services, to repay a debt, or whatever reason. Subject to the stipulations of the tax code, the recipient pays taxes on whatever they receive (e.g. for gifts there is a threshold, for debts they will pay tax only on the interest received etc. etc.). Nobody calls this double taxation.
A corporation does what it does, earns income, which hopefully exceeds the cost of doing whatever it is that it does. They pay taxes on that. They then give the money to some third party, as a dividend or bond repayment or whatever other reason. Subject to the stipulations of the tax code, the recipient pays taxes on whatever they receive. Some people try to call this double taxation.
Trying to dress this up with concepts like "the shareholders receive the profit, but taxes have already been paid on that" is just missing the point entirely: our tax system taxes money when it moves, not based on how it is labelled (at least when it works as intended).
You.
Plumbler.
Landlord.
Each person is a different person and pays income tax on "their income"
If the corporation shields the shareholds from many forms of liability, why should the shareholders be able to claim the same personhood when it comes to income and taxation?
If corporations are said to be able to have moral and religious beliefs (thanks, SCOTUS), and yet their shareholders are free to have other, different beliefs, how can they considered the same person?
a corporation is a distinct "legal person" because it goes through "incorporation" which breathes a legal life into a concept.
a person does, a corporation has legally perpetual existence because the shareholders can endlessly transfer their shares to other persons and on death the shares are given as inheritance.
But the point is that the owners accept double taxation in exchange for the protections of the corporate form, like a legal liability shield, treatment of ownership interests as capital assets subject to lower tax rates on sale, deferral of taxation of shareholders' allocable shares of the business' income (as represented by dividends), etc.
A corporate tax rate is good policy. The answer to how high that tax rate should be has split families and friends for decades. Higher corporate tax rates drive substantially increased R&D spending and capital investments (and it's not even close; its easily 4x-5x the amount invested when corporate tax rates are low). This apparent paradox is quite easy to explain: when corporate tax rates are high, corporations will increase their spending on deductible categories to reduce their taxable income, and thus the tax they pay. When tax rates are low, there's little to no incentive to due that.
"Hording cash" sounds like NOT spending on expenses and offsetting profits, and therefore likely involves that corporation being taxed. In addition it sounds a lot more sustainable than wall streets typical obsession with short term gains Uber alles.
“Company ABC made a billion last quarter and still had layoffs. Why are they so stupid? Can’t they save for a rainy day?”
“Company XYZ made a billion for the last 12 quarters. Why aren’t they giving it to their employees, or paying a wealth tax?”
Eventually that money is going to come back though - no shareholder wants a company to sit on a massive cash pile for decades.
If a company can’t find a use for the money, then investors will want that cash returned so that they can find a use for it elsewhere.
Apple itself set a goal in 2018 to be net cash neutral:
https://www.morningstar.com/markets/what-apples-cash-problem...
And when the money comes back to investors, that’s when taxes can be paid and everyone benefits.
Stock buybacks also result in capital gains taxes eventually - it just takes a long time because investors get to choose when to take the gain. If we wanted to fix that, we could just make stock buybacks illegal again like they were before 1982.
Then investors would get dividends again, which results in immediate revenue for the federal government.
Then, your corporation would quickly be scrutinized on both its income (corporations don’t get W-2’s, you probably can’t just move your existing income to a corp) and its expenses (“reasonable and necessary” is very broadly interpreted, but is unlikely to support what you’re doing).
If the goal of the USA is to force companies to re-shore, wouldn't this be a better way [0] to proceed than inflating the costs of many goods for the consumer? Large corporations appear to have record cash on hand in recent decades, where as consumers hold record debt.
[0] By better, I mean more much likely to achieve the stated goal.