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Google’s Income Tax Rate Was Only 8 Percent

2:26 pm in Uncategorized by Consumer Watchdog

Evil GoogleGoogle, the company that makes its money by assembling digital dossiers about its users and selling them to advertisers for the highest bid, reported earnings Thursday. Revenue increased 31 percent to $13.97 billion and net income in the first quarter rose 16 percent to $3.35 billion, or $9.94 a share.

Admittedly as I listened to the earnings call my eyes began to glaze over. CEO Larry Page droned on about how “over the last two years, we’ve worked hard to increase our velocity, improve our execution and focus on the big bets that will make a difference in the world.”

Yada yada..

But when Page turned the call over to Patrick Pichette, Senior Vice President and Chief Financial Officer, for a nitty gritty report on the accounting details something really caught my attention.

John M. Simpson Pichette said that in the first quarter of 2013 Google only paid an effective income tax rate of eight percent. I was shocked. I knew that by exotic tax strategies called the “Double Irish” and the “Dutch Sandwich” Google had managed to trim its overall effective tax rate to 22.2 percent in 2009. Now they’ve got it down to 8 percent. If this keeps up, people like you and me will be paying Google when they file their return.
Supposedly the corporate income tax rate in the United States is 35 percent. In the UK, Google’s second largest market it’s 28 percent. No corporation seems to pay that.

Here’s a proposal: Various court decisions have concluded that when it comes to things like the First Amendment, as Mitt Romney famously put it, “Corporations are people, my friend.” Well, OK, let’s tax them just like people.
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Posted by John M. Simpson, Director of Consumer Watchdog’s Privacy Project. Following Consumer Watchdog on Facebook and Twitter.

‘Flush Tax-Evader Toilet Paper,’ Group Says to California Governor, Mayors

2:37 pm in Uncategorized by Consumer Watchdog

Toilet Paper Money

SACRAMENTO, CA – Consumer Watchdog today called on state and local governments to quit spending taxpayer millions on Scott toilet paper, Kleenex tissues and other products from Kimberly-Clark Corporation. The global company is part of a corporate coalition battling to keep a tax loophole that benefits only out-of-state corporations—to the detriment of California schools, local governments and state services.

In letters to Gov. Jerry Brown and the mayors and executives of 21 cities and some large counties, Consumer Watchdog also urged governments to avoid Chrysler and GM auto and truck purchases. The automakers are also in the coalition of out-of-state corporations eager to evade corporate taxes in California.

The letter to Gov. Brown said in part:

Every dollar of taxes evaded by large corporations is another dollar taken from our schools, fire and police protection and support for the impoverished and disabled. We ask you to set an example by avoiding taxpayer-funded purchases from out-of-state companies lobbying to protect a state loophole that lets them pay less than in-state companies.

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State Contract awarded to Ford for Police Vehicles, Shutting Out Tax-Evading Automakers

2:55 pm in Uncategorized by Consumer Watchdog

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State, Cities Urged to Bar All Taxpayer Purchases From Chrysler, GM, Other Tax Dodgers While They Refuse to Pay Fair Share

The state’s award of a contract for up to 1,900 Ford vehicles for the California Highway Patrol and other state agencies is a snub to GM and Chrysler, which eagerly sought the prestigious contract.

Consumer Watchdog applauded the tentative award, noting that of the Big 3 U.S. automakers, only Ford is not in a coalition battling to keep a California tax loophole that benefits large out-of-state corporations to the tune of at least $1 billion a year.

The nonprofit, nonpartisan Consumer Watchdog calls on the state and major cities, which it will be contacting, to bar all non-safety-related purchases of Chrysler and GM products until they cease their campaign and pledge willingness to pay the same tax rate that in-state corporations pay.

“Taxpayers shouldn’t be paying millions to automakers that are happy to starve California schools, police departments and disabled people of funding,” said Judy Dugan, research director for Consumer Watchdog. “What’s good for the CHP should be fine for other police departments and government agencies.”

Even with substantial state discounts, the contract for up to 1,800 Taurus-based police patrol cars and 100 Explorer-based police utility vehicles would likely be worth more than $50 million over time. Dealer prices listed online for the civilian models of the patrol car range from about $30,000 to $32,500, without costly additions like bulletproof doors.

The state is sharply cutting back its civilian auto fleet and the CHP has scaled back as well, but wear and tear force the CHP and other public safety agencies to replace vehicles at about 100,000 miles.

The state’s current tax loophole allows many out-of state companies with major sales in California to pay a lower tax rate than in-state companies, depriving the state of $1 billion or more a year, according to the state legislative analyst. Closing the loophole would help restore essential services axed in the current budget crisis, said Consumer Watchdog.

Two other major corporations, Kimberly-Clark (Scott, Kleenex, Huggies products) and International Paper have joined GM and Chrysler in the deceptively titled “California Employers Against Higher Taxes.”

Chrysler more than doubled its state lobbying expenses in the first quarter of this year, to $32,500, as it added two corporate tax reform bills, AB1500 and AB1501, to its lobbying list reported to the Secretary of State. The larger General Motors spent more than $86,000 on state lobbying in the first quarter, and added the same legislation to its lobbying list. If a separately proposed ballot initiative to close the tax loophole qualifies for the ballot, the four companies are expected to up the ante on spending.

“The state and cities of California owe taxpayers the respect of shunning companies that are driving the state further into a hole of debt,” said Dugan. “The CHP contract is a great start. Other agencies should quickly and publicly pledge to stay away from the tax dodgers at Chrysler and GM.”

Resources:

State announcement of tentative award (no other bidders protested the award during the protest period)

Bid pricing list from the state’s request for proposals

Consumer Watchdog’s previous press release on the tax evasion history of the corporate coalition (from which founding member Proctor and Gamble has since departed)