Can anyone provide an example of a tax loophole that greedy corporations use?
'cause you guys are so well informed.
- sanityLv 79 years agoFavorite Answer
Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.
Google’s income shifting -- involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” -- helped reduce its overseas tax rate to 2.4 percent.
Companies hiding taxable income in subsidiaries:
Half the states allow chain retailers — but not independent businesses — to shield much of their profits from state corporate income taxes. That's right: While local grocers, hardware stores, and toy shops pay state income taxes on all of their earnings, some of their biggest competitors pay only a minimum tax of a few hundred dollars a year.
Chains manage this feat by making payments to out-of-state subsidiaries and deducting these payments as expenses on their state tax returns. Wal-Mart, for example, set up a real estate subsidiary for this purpose. This subsidiary collects "rent" from Wal-Mart stores, enabling the chain to disguise profits as expenses. According to an analysis by the Wall Street Journal, Wal-Mart shifted some $7.3 billion in profits to this subsidiary over a four-year period, evading $350 million in state income taxes. Home Depot, Staples, Toys R Us, and The Gap are among the many other chains that employ this type of tax dodge.
Another method (see link):
- Zachary GLv 79 years ago
Well while I don't think corporations are "evil" or "greedy". They do use various loopholes to exploit the tax code. The most common one is tax shelters where they store their money in foreign banks to avoid paying taxes here in the U.S.Source(s): 19 year old Conservative who advocates a Flat Income Tax
- itsamini1Lv 79 years ago
Instead of being paid an outrageous salary (which there is a legal limit on) they receive stock options, capital gains on which they only pay 15% tax on.
- ChuckLv 59 years ago
They set up company headquarters in a location overseas where the taxes are lower. GE has done it and lots of other coropoations too!
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- 9 years ago
They don't need loopholes. They handed to them like food stamps.