Money

How Some Multi-Billion Dollar Corporations Pay No Taxes

| by Michael Allen

President Obama is constantly being accused by Republicans of burdening businesses with "job killing taxes" and "punishing" successful companies.

However, the GOP never mentions the numerous corporations, worth billions, that have found legal ways not to pay any taxes.

According to USA Today, the U.S. federal corporate tax rate is 35 percent, but Verizon, Bristol-Myers Squibb, MetLife, News Corp, Public Storage and several other corporations had an effective tax rate of zero percent over the past twelve months.

One of the favorite corporate tricks is to set up a foreign subsidiary to make raw materials in countries with low tax rates. Then the U.S. headquarters buys these materials from its foreign subsidiary at way above cost. This way the foreign subsidiary pockets that money, which is not taxed in the U.S.

Companies such as Bristol, Forest Labs, Agilent Technologies, Eaton and Lam Research have offshore accounts and are waiting for a "tax-free holiday," much like the type Republican presidential candidate Mitt Romney promised in 2012, to bring that money back to the U.S.

Popular Video

A police officer saw a young black couple drive by and pulled them over. What he did next left them stunned:

Popular Video

A police officer saw a young black couple drive by and pulled them over. What he did next left them stunned:

Hewlett-Packard, J.C. Penney and E-Trade actually have negative effective tax rates due to the way they calculate their business losses.

Verizon reportedly has a tax rate of negative 4.8 percent because of the way the multi-billion telecom does its accounting with severance, depreciation and pension costs.

Another Republican claim is that cutting taxes creates jobs, however, Verizon has cut jobs over the years while raking in massive profits.

In 2012, Verizon cut 1,700 jobs in its technician and call-center workforce, reported the Chicago Tribune.

The company cut 600 jobs in New England and New Jersey in 2012, reported Crooksand Liars.com.

Verizon cut more jobs this year in Ohio, noted The Columbus Dispatch.

Sources: The Columbus Dispatch, Chicago Tribune, USA Today