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20 U.S. companies that paid 0% in taxes

Lord of Planar said:
I don't want business to pay any taxes. It is harmful to our global competitiveness. I guess you like all the made in China products we have today. Not I.
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China makes are products because they have cheap labor. Not taxes.
 
99percenter said:
China makes are products because they have cheap labor. Not taxes.
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It's both.

Do you think the transportation costs are nonexistent, or could possible offset the labor cost differences?

Consider these four transactions when thinking only in terms of how taxation affects them.

US company sells to US customer.

US company sells to foreign customer.

Foreign company sells to foreign customer.

Foreign company sells to US customer.

OK, some refinement, from a federal taxation viewpoint:

US company sells to US customer:

Product sells with the added cost of taxation from production taxation to the customer. One tax added.


US company sells to foreign customer:

Product sells with the added cost of taxation from production taxation, and the receiving countries consumption tax. Two taxes added.


Foreign company sells to foreign customer:

Product sells with the consumption tax added to the consumer cost. One tax added.


Foreign company sells to US customer:

No taxes...


Now which has the competitive advantage?

No tax over two creates a huge trade imbalance.
 
Do you think corporate welfare has any relation to this?
 
JasperL said:
Well, we can't compete with tax rates of ZERO like many of these tax havens offer. It's absurd - we allow for a "HQ" to be a mail drop in a tiny building with 1,000 other "corporate headquarters." I don't mind competing with countries that offer lower rates for actual businesses, but you can't defend the BS system we have now, where the HQ can be anywhere on the planet that one can send some mail. IMO, if someone wants to put a HQ in Bermuda, move the CEO and all the staff, support, etc. to Bermuda. Otherwise, your HQ is where the OPERATIONS for the HQ are located not where you've moved the piece of paper.

And they ARE only playing by the "rules" but the rules are corrupt, and if corporations pay $1 billion in lobbying etc. to get those rules, then we need to address the problem there, and not pretend that legislators getting paid (bribed) to pass favorable rules won't pass favorable rules. It's why I've also come to believe step one in any kind of reform is to reform campaign financing.
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Actually, the US along with other nations are cracking down on it. Google FATCA

According to the IRS regs, business transactions that only provide a tax advantage and no other benefits are illegal. When the IRS starts dunning some of these corps with phony HQ's for the tax plus penalties, that's when we'll see them stop this practice. That is, *if* they actually enforce the law.
 
Anthony60 said:
The thread is about corporations that didn't pay any taxes.
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:doh:

And how do corps with profits get away with paying no taxes when the rate is so high?

Answer: because the official tax rate and the effective tax rate are not the same!!
 
Born Free said:
Yeah and your anointed one is bitching about companies leaving because of high taxes, maybe you should try and educate your beloved Obama. Tell him companies leave for a variety of reasons and then tell him to stop bitching.
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Do you have anything actually of relevance to what I wrote?

The vomit you speak of is Obama's, he's the one going around bitching about companies leaving and not paying their fair share of taxes. For me they should leave until we change the tax law to "0" for corporations. Of course liberals don't understand that the shareholders of corporations are double taxed.
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You do realize I'm one of the few licensed public accountants on the forum right?
 
Born Free said:
Now you show your ignorance.
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This will be good. I suspect you're going to show yours.

A sole proprietor is stupid, that's way. They has a choice to be a sole proprietor or form an LLC or a "S" corp, which puts them on the same level as a corporation.
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No it doesn't. An LLC or S-corp come with various limitations as how they can raise money compared to a C-Corp not to mention how certain asset classes are treated and how certain items are taxed. They are not "on the same level as a corporation." Furthermore, neither of them offer the identical level of limited liability a C-Corp has. It is FAR easier to pierce the veil of a S/LLC than it is a C-Corp. Furthermore, you utterly failed to address my point. Why should a sole proprietor have the same level of taxation as a C-Corp but the C-Corp gets limited liability? I suspect you won't answer this. You've already run away from it.

Please refrain from talking about topics you do not understand.

But I see you don't know the difference. In fact an LLC or a "S" corp is not double taxed as a corporation. Now tell me why LLC's and S corps are not double taxed and the shareholders of corporations are.
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Tell me, have you passed the 4 part CPA test and done the necessary hours to get certified by your state board? I suspect not.

S-Corps and LLCs are not "double taxed' as C-Corps, but they do not share the same level of capital raising benefits as well as the C-Corp's level of limited liability.

Why are you so afraid to answer my question?
 
Mycroft said:
shrug...

Who says they have to be charged a 4% tax?
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Missing the point again are we?

Grocery stores have profit margins that are often less than 1/4th of 1 percent. Tell me, what rate are we going to charge them on your gross tax?

Hell...who says ANYONE has to be charged a 4% tax?
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It's pretty clear you don't even have the most pedestrian grasp of the topic.

No deductions = Gross tax = Tax on Revenue. Meaning, I sell a product for $50. It cost me $45 total. In the realistic world, we'd tax that $5 profit. In your crazy land, we'd tax that $50. To generate parity income under a no deductions tax, that would be a 3.5% gross tax.

Now, if we applied a 3.5% gross tax against a company that has a net profit of 0.25%, are they making any money? How do you think low margin industries are going to survive when you're hitting them with a tax that's well past their net profits? A gross tax turns a number of industries instantly negative. How is that good for the economy?

You got any more strawmen?
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No, you just don't understand why a gross tax is idiotic.
 
sangha said:
The idea of a flat tax with no deductions just proves that some people don't have a clue how business and the tax system work.
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Generally, the partisan right favors a gross tax, yet cannot even grasp the basics as to why it's bad.

They actually really believe that if I sell something for $2.00 and it cost me $1.99 to produce, I should pay taxes on the whole $2.00 :screwy
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Indeed, and because it's the same rate for everyone, we'd have to apply a relatively high level of gross tax against low margin industries.

LV would probably be fine under a gross tax, but anything with a margin under 10% is just screwed. And these people claim to be pro-business.
 
Lord of Planar said:
It's both.
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Not really.

China and Vietnam had a 3% difference in tax rates.

Vietnam is taking mountains of Chinese manufacturing because the Chinese labor markets have spiked in costs. The cost of moving entire manufacturing facilities, key staff and starting up in a new country is not worth 3$ tax difference. It is when your labor cost in Vietnam is 25% of China's.

That suggests that taxes are basically not even a consideration, but labor is the absolute key decision.
 
sangha said:
No, you showed that you didn't understand their statement which showed that they got a tax benefit. You thought it showed that they paid taxes
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Correct me if I'm wrong, but isn't this thread titled "20 U.S. companies that paid 0% in taxes?"
 
obvious Child said:
Not really.

China and Vietnam had a 3% difference in tax rates.

Vietnam is taking mountains of Chinese manufacturing because the Chinese labor markets have spiked in costs. The cost of moving entire manufacturing facilities, key staff and starting up in a new country is not worth 3$ tax difference. It is when your labor cost in Vietnam is 25% of China's.

That suggests that taxes are basically not even a consideration, but labor is the absolute key decision.
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What is the difference in freight charges between the two nations?

What is the international shipping cost of US good to US customers compared to China or Vietnam?

Of course that small percentage makes a difference to the bottom line. However, both have nearly equal freight charges to ship over the Pacific whereas US goods do not ship over the Pacific to US customers.


My contention is that the shipping cost offsets wage differences for many items purchased overseas, and the tax code differences is what makes it advantageous to offshore labor. Otherwise the costs are close to identical.
 
Lord of Planar said:
What is the difference in freight charges between the two nations?
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Immaterial. The transit times between southern China and Vietnam are effectively immaterial.

What is the international shipping cost of US good to US customers compared to China or Vietnam?
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Again, basically nil given their geography.

My contention is that the shipping cost offsets wage differences for many items purchased overseas, and the tax code differences is what makes it advantageous to offshore labor. Otherwise the costs are close to identical.
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How does shipping costs offset wage differences when the cost of shipping per item is immaterial but the cost of labor per item is massive? When it costs you 2 cents to ship something per item to the same places, but $5 difference per item in labor, what does shipping have to do with anything at that point?

How does the tax code relate to their low price of labor? You do realize that European nations with lower taxes then the US have comparable labor costs right? How does Vietnam's 3% lower tax rate from China's result in a massively lower wage difference?

I don't think you really grasp anything about this topic at all.
 
obvious Child said:
Immaterial. The transit times between southern China and Vietnam are effectively immaterial.
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Shipping costs are immaterial.

OK...

LOL...

LOL...

LOL...

I'm done with this argument with you.

It's pointless.

You are blind to facts. You already are determined to think one way, and facts will not change your mind.

Shipping costs immaterial...

LOL...

LOL...

LOL...
 
Lord of Planar said:
Shipping costs are immaterial.

OK...

LOL...

LOL...

LOL...

I'm done with this argument with you.

It's pointless.

You are blind to facts. You already are determined to think one way, and facts will not change your mind.

Shipping costs immaterial...

LOL...

LOL...

LOL...
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Says the guy who thinks that a 3% tax differential somehow equates to a 75% labor pricing difference.

I'm the blind one?

Well, that proves you don't get this topic at all. Also notice I was talking about the shipping cost differentials between Vietnam and China as well as the cost of shipping verse labor. Not that shipping costs are immaterial as a whole.
 
obvious Child said:
Says the guy who thinks that a 3% tax differential somehow equates to a 75% labor pricing difference.
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I consider it rather rude to misrepresent my point.

Are you being intellectually dishonest, ignorant, or stupid I must wonder.
 
Lord of Planar said:
I consider it rather rude to misrepresent my point.

Are you being intellectually dishonest, ignorant, or stupid I must wonder.
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See your own post where you flat out lied about what I wrote. I contend that taxes and labor costs have frankly very little to do with each other.

As for your BCG, the reason manufacturing will partially return to the US is not because of shipping costs. It is because of delays and rising labor costs elsewhere. When you have to fly to Shenzen from Cleveland to fix a problem rather than flying to say, Chicago, that adds a huge amount of costs and time into your equation. Several smaller firms have already relocated back to the US because the time to fix something in China is obscene. The changes often range from a few weeks to a few months where a US manufacturer could have the new designs in a day or two. This has literally nothing to do with taxes. And when you add in the rising labor costs world wide, the total cost differential between foreign and US becomes manageable. Furthermore, outsourcing always runs the risk of creating a competitor. At least in the US, we respect the IP laws. There is a reason why the fake luxury bags have become at times identical to the real ones. The plant you build them in knows where to get your materials and how to build them. They simply start their own with the same machines, same suppliers at a fraction of the cost. Teach them to make your product well and they'll make it themselves.
 
obvious Child said:
See your own post where you flat out lied about what I wrote. I contend that taxes and labor costs have frankly very little to do with each other.
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I disagree with you. Taxes are a huge factor. Our marginal rate is 35% for US corporations, and that doesn't include their taxes to the states they operate in.

Labor costs are generally under 20% of an items cost. Not always, it depends on the item.

I contend that for many or most items, shipping costs outweigh the difference in labor costs when only shipping state to state, vs shipping to a US port and then state to state as well.

obvious Child said:
As for your BCG, the reason manufacturing will partially return to the US is not because of shipping costs. It is because of delays and rising labor costs elsewhere.
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The article mentions both.

Your example of a few cents probably applies to small toys, where you have hundreds in a cubic foot. Overseas shipping in large volume is primary paid for by volume. As the size of the items increase, so does the cost.

obvious Child said:
When you have to fly to Shenzen from Cleveland to fix a problem rather than flying to say, Chicago, that adds a huge amount of costs and time into your equation. Several smaller firms have already relocated back to the US because the time to fix something in China is obscene.
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Sure. One of several factors. For one thing, unless they are shipping large volumes, they don't get as good of a shipping price to offset these other costs and time they incur.

obvious Child said:
The changes often range from a few weeks to a few months where a US manufacturer could have the new designs in a day or two. This has literally nothing to do with taxes.
That's because the taxes are relatively static between the two systems.

And when you add in the rising labor costs world wide, the total cost differential between foreign and US becomes manageable. Furthermore, outsourcing always runs the risk of creating a competitor. At least in the US, we respect the IP laws. There is a reason why the fake luxury bags have become at times identical to the real ones. The plant you build them in knows where to get your materials and how to build them. They simply start their own with the same machines, same suppliers at a fraction of the cost. Teach them to make your product well and they'll make it themselves.
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I don't believe you simply cannot acknowledge that the differing tax structures are a factor in the cost analysis.
 
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