Major corporation with $18B in sales and $619MM in profits will pay zero tax in 2010

[lothar]

Capex isn't input costs. Capex is big stuff like machinery, buildings, etc. Buying a different set of motors for their new washers would go into COGS.

Their COGS isn't up by "much" either if you're comparing from 2006-today. Should add that the figures below are in Millions so no one would misread them.
When was this tax break passed? Has it always been there or was it added in Obama stimulus?

I'm not against this in any way BTW...The same reason why I'm not against what John Kerry did to his yacht by parking it in RI to avoid a MA excise tax. Do a search on Kerry's boat discussion we had here last year. I defended him then for using it and I will defend Whirlpool now for using them.

Loopholes are legal and are there to be used. I defend people and corporations that use them, what I don't defend are the politicians that created them.

 

[BoberFett]

We have all kinds of inappropriate 'loopholes' and subsidies - not to mention atrociously bad and selective enforcement (which the Republicans want to slash more).

We should keep progressive rates, make them more corrosive instead of the current rates that have allowed the rich to hoard an increasingly large share of wealth.

We should get rid of corrupt loopholes, and keep some good ones (e.g., blind).

So Idiot234, is a tax credit for making more efficient products a good loophole or a bad loophole? Is a per child deduction a good loophole or a bad loophole?

Unless you eliminate all deductions and credits and make the tax code simple, people will figure out how to game the system.

 

[Atreus21]

It's the government's responsibility to collect taxes, not whirlpools to hand over it's own legitimate earnings because of the government's inability to close loopholes.

Any tax reform that takes place right now, even if it's horrific, will be an improvement on the gigantic clusterfuck that is our tax code. I accept the premise necessary to pass Obamacare (namely the "DO SOMETHING, ANYTHING" premise) when it comes to the tax code.

 

[the DRIZZLE]

There are things that society benefits from that it's a good return to give incentives to get people to do them. There are other tax credits that are corrupt.

Right-wingers don't get the difference and have a simplistic notion - anything the government does is harmful.

That's not accurate, rational, balanced, it's idiotic and childish, but leads them to sneer at 'social engineering'.

Social engineering is essential if you don't want a Dickensonian wasteland for humanity; there is good and bad, you need to do it well.

Not allowing monopolies, for example, is "social engineering". Allowing them is "free market" and terrible for society.

But I don't see many righties - and I'm not talking about you - who can have any rational discussion instead of mouthing ideology slogans.

On your questions, I'm for closing the corrupt loopholes and credits; for keeping and expanding the good credits (good for a legitimate government interest for the public).

I'm actually open to REDUCING the corporate tax rates IF they could be reduced in conjunction with other steps to tax the rich more fairly (especially wealth).

Liberals DO NOT 'like the system the way it is because they can't resist social engineering'. You are mixing things up.

Liberals like a certain amount of social engineering, which they can do REGARDLESS of the income or flat tax etc.; there are things liberals want to change in the system.

The bottom line is, do you want a class with widely spread prosperity, more productivity and opportunity and a thriving middle class?

Or do you want a third-world economy where we have a plutocracy and a huge poor class, with less productivity and opportunity but some really rich few people?

That's pretty much the choice between the left and right.

Again, you are bringing the redistribution aspects of the personal tax code into this which is irrelevant. These corporate tax incentives don't spread prosperity, they merely pick winners and losers among companies. I don't understand why you tie reforming the corporate tax system to the personal system. If corporate loopholes are closed and rates are reduced in a revenue neutral way that again has no effect on the wealth distribution by class.

You are not describing conservatives but rather anarchistics. Government can regulate the economy without using the tax code favor one industry over another and give handouts. The conservative argument is that the line between "good for the public interest" and "corrupt loophole" is very blurry. There is almost always some public interest argument made for all the bad policies. We simply don't trust the government to make these decisions.

You still haven't answered if you favor the tax incentive in question.

 

[lothar]

It's the government's responsibility to collect taxes, not Whirlpools to hand over it's own legitimate earnings because of the government's inability to close loopholes.

Any tax reform that takes place right now, even if it's horrific, will be an improvement on the gigantic clusterfuck that is our tax code. I accept the premise necessary to pass Obamacare (namely the "DO SOMETHING, ANYTHING" premise) when it comes to the tax code.

That's exactly my position. :thumbsup::thumbsup::thumbsup:

 

[silverpig]

sell for less than they like? have you seen the prices of front load laundry stuff?

All things being equal, an energy efficient and energy star certified washer costs more to produce than the exact same washer with a cheaper and less energy efficient motor and no certification. If they do the same thing and look exactly the same, then in the eyes of the consumer, they should cost the same. This means the company has to charge the same. This means that their margin is lower on the energy efficient one.

This is a gross oversimplification and they can probably charge a little more for the energy efficient one, but I'd guess that their margins are lower. The incentive in business is to buy the cheapest inputs you can.

 

[silverpig]

Their COGS isn't up by "much" either if you're comparing from 2006-today. Should add that the figures below are in Millions so no one would misread them.
When was this tax break passed? Has it always been there or was it added in Obama stimulus?

I'm not against this in any way BTW...The same reason why I'm not against what John Kerry did to his yacht by parking it in RI to avoid a MA excise tax. Do a search on Kerry's boat discussion we had here last year. I defended him then for using it and I will defend Whirlpool now for using them.

Loopholes are legal and are there to be used. I defend people and corporations that use them, what I don't defend are the politicians that created them.

Looks like their COGS took a huge jump up from '05 to '06 though.

It's still hard to get that information from company statements because it is all aggregated. There's no distinction between any of their product lines, nothing is broken down. This COGS increase could be from energy efficient stuff, could be from depressed retail prices from increased competition, it could be from some other factor increasing costs, it could be from a shift in sales volume from one product line to another with different COGS ratios...

 

[werepossum]

Easier way for the government to influence producers to make better products is to give tax breaks to the consumers who purchase those products instead. Then the consumers have a reason to go buy more, the companies sell more, there is more competition because now every company competes with equal footing, there is no lobbying or chance for corruption on this issue, and the government actually makes more money through taxes as well.

Instead we got this retarded subsidy that doesn't need to be in place.

Problem with giving tax breaks to the consumer is that then domestic and foreign manufacturers are on even footing, which with the dismantling of our tariffs means that goods manufactured in low labor, low tax nations have a competitive advantage. We have a compelling national interest in keeping manufacturing (and other wealth producing) jobs in our country, so we want our manufacturers to benefit from our tax structure.

My first preference would be to restructure the tax benefits so that only goods manufactured inside this country would qualify. As it stands, companies like Whirlpool benefit doubly, both from off-shoring production and from tax breaks for meeting the same energy standards they already have to meet in Europe. This is exactly why, when we needed a new washer, we selected Samsung (Korean company, Korean factory) rather than Whirlpool or GE (American company, German or Mexican factory.) If they are going to move production out of the country, screw 'em.

My second preference would be to simply mandate stringent energy standards and give no tax breaks. That's simple, easy and cheap to enforce, and results in the same level playing field (with respect to taxes) as incentivizing the consumer. Remember, if we are going to provide tax breaks to the consumer and not the manufacturer, the manufacturer must pass along those costs to the consumer, so we have the same net effect except we've empowered government and spent a lot more in overhead, dealing with each individual consumer rather than a small number of manufacturers. That harms only the people who prefer or are forced by budget to purchase very low end, inefficient machines, which would necessarily disappear. But at least they would have a better pool of used machines from which to select, and as a country we'd use less power.

 

[Fern]

How could a big business get away with this? It's an outrage that they should be making so much money and not contribute back to the country. We need to close all these loopholes that allow greedy companies to exploit the tax code, like the one in the article below:

http://taxprof.typepad.com/taxprof_blog/2011/03/wsj-.html

http://online.wsj.com/article/SB10001424052748704506004576174321393436988.html

The articles you linked answer your question in the thread title.

They aren't "getting away" with anything.

Congress has decided to give subsidies to companies making greener products. It's not a 'loophole', it's a statutory benefit for doing what Congress wants.

Fern

 

[ElFenix]

The articles you linked answer your question in the thread title.

They aren't "getting away" with anything.

Congress has decided to give subsidies to companies that lobby them hard. It's not a 'loophole', it's a statutory benefit that companies get for giving Congresscritters money for their re-election campaign.

Fern

ftfy. term limits nao!

(or, just abolish the corporate income tax as all it does is play hide the salami with the burden of taxation. you can't game what doesn't exist!)

 

[werepossum]

ftfy. term limits nao!

(or, just abolish the corporate income tax as all it does is play hide the salami with the burden of taxation. you can't game what doesn't exist!)

I also like the idea of abolishing the corporate tax, but it raises a question of fairness in taxation. Is it really fair, in the interests of driving the economy, that profits given as dividends are taxed at 15% whilst wages are taxed at up to 39%? I could make the argument that cutting tax rates on wages also generates economic activity. in fact, I could make almost the identical argument; if a low capital gains rate makes investments more practical (and without question it does), wouldn't decreased wage tax rates do the same thing by expanding money available to purchase the goods or services created and thus making the venture potentially more profitable?

 

[ElFenix]

I also like the idea of abolishing the corporate tax, but it raises a question of fairness in taxation. Is it really fair, in the interests of driving the economy, that profits given as dividends are taxed at 15% whilst wages are taxed at up to 39%? I could make the argument that cutting tax rates on wages also generates economic activity. in fact, I could make almost the identical argument; if a low capital gains rate makes investments more practical (and without question it does), wouldn't decreased wage tax rates do the same thing by expanding money available to purchase the goods or services created and thus making the venture potentially more profitable?

there's two reasons CG should have lower rates, and if you eliminate one of them (double taxation of gains) you should increase the CG rate accordingly. seems like simple logic to me.

 

[Fern]

I also like the idea of abolishing the corporate tax, but it raises a question of fairness in taxation. Is it really fair, in the interests of driving the economy, that profits given as dividends are taxed at 15% whilst wages are taxed at up to 39%? I could make the argument that cutting tax rates on wages also generates economic activity. in fact, I could make almost the identical argument; if a low capital gains rate makes investments more practical (and without question it does), wouldn't decreased wage tax rates do the same thing by expanding money available to purchase the goods or services created and thus making the venture potentially more profitable?

there's two reasons CG should have lower rates, and if you eliminate one of them (double taxation of gains) you should increase the CG rate accordingly. seems like simple logic to me.

CG and dividends are two very different things.

There are a good number of benefits to abolishing income tax at the corporate level; such as:

1. Increases progessivity of income tax of corporate profits distributed to shareholders; given that we change dividends back to tax at regular rates. I coud demonstrate this with cals if needed, but the current double taxation situation effectively raises rates on lower income people receiving dividends, and decreases effective rates on higher income people.

2. Discourage extravagant expenses. As it stands now the gov subsidizes extravagant biz expenses vis-a-vis deductions from income tax. Effectively the US gov is paying 35% of them. Eliminating that may well stop such stuff; the shareholders will realize they are now bearing 100% of it.


LTCG have, and need, a lower rate because of the effects of inflation.
Fern

 

[Ronstang]

What an evil company. I'm not sure how they had to game the system to get a 3.4% profit margin. I wonder how many whiners in this forum would work for that kind of return.

 

[bfdd]

The US has the highest statutory rate in the developed world, but the effective rate is similar to other countries. This means that tax breaks make up the difference. It also means that we have the largest difference between the statutory and effective tax rates. Economists consider this difference a measure of the economic efficiency of the tax code. The larger is it is, the more market distortions you are causing.

if i read this right, you're making the case for a straight up flat tax with no possible ways of avoiding it right?

 

[lothar]

Looks like their COGS took a huge jump up from '05 to '06 though.

It's still hard to get that information from company statements because it is all aggregated. There's no distinction between any of their product lines, nothing is broken down. This COGS increase could be from energy efficient stuff, could be from depressed retail prices from increased competition, it could be from some other factor increasing costs, it could be from a shift in sales volume from one product line to another with different COGS ratios...

So did their revenues, by an almost equal amount. ~$4 billion.

That's true. It also could be because they acquired a business...Could be anything including all what you said.

 

[OrByte]

If House republicans went after this ONE company instead of NPR

they could get alot of tax money.

So, I'll be waiting for House republicans to pass a bill....swiftly, while ignoring their own transparency rules.

right?

 

[BoberFett]

If House republicans went after this ONE company instead of NPR

they could get alot of tax money.

So, I'll be waiting for House republicans to pass a bill....swiftly, while ignoring their own transparency rules.

right?

Go after them for what, mongoloid-boy?

 

[Zebo]

We should not even have corporate taxes. Sweden, with a generous social welfare state has the lowest in the world to attract business. Corporate taxes does nothing in the way of redistribution and cripples young companies.

 

[Ronstang]

Go after them for what, mongoloid-boy?

Windfall profits. They did have a 3.4% profit margin and we know that is way too much when we have so many in need of a handout.

 

[lothar]

Their COGS isn't up by "much" either if you're comparing from 2006-today. Should add that the figures below are in Millions so no one would misread them.
When was this tax break passed? Has it always been there or was it added in Obama stimulus?

I'm not against this in any way BTW...The same reason why I'm not against what John Kerry did to his yacht by parking it in RI to avoid a MA excise tax. Do a search on Kerry's boat discussion we had here last year. I defended him then for using it and I will defend Whirlpool now for using them.

Loopholes are legal and are there to be used. I defend people and corporations that use them, what I don't defend are the politicians that created them.

Looks like their COGS took a huge jump up from '05 to '06 though.

It's still hard to get that information from company statements because it is all aggregated. There's no distinction between any of their product lines, nothing is broken down. This COGS increase could be from energy efficient stuff, could be from depressed retail prices from increased competition, it could be from some other factor increasing costs, it could be from a shift in sales volume from one product line to another with different COGS ratios...

Their COGS/Revenues in '06 are only up by that much because Whirlpool acquired Maytag on May 31, 2006.
Whatever COGS/Revenues Maytag received/spent after that date is now part of Whirlpool and therefore consolidated onto the financial statements of Whirlpool.
http://webcache.googleusercontent.c...&gl=us&client=firefox-a&source=www.google.com

Maytag was an unprofitable company going broke if I remember correctly that they were even almost bought out by the Chinese which is why you see an increase in ~$4 billion on both COGS and revenue.

With the inefficiency of Maytag added, it's only expected that COGS/revenue percentage of the new consolidated Whirlpool financial statement would increase.

I doubt the Whirlpool execs woke up one night in 2006 and all of a sudden decided to change their product lines and/or start making energy efficient stuff and selling them at cost(since both cost and revenue shot up by ~$4 billion) for no reason at all...Even if those things happened anyway, they would all be minute compared to whatever Maytag was contributing to Whirlpool in their financial statement.

 

[silverpig]

Their COGS/Revenues in '06 are only up by that much because Whirlpool acquired Maytag on May 31, 2006.
Whatever COGS/Revenues Maytag received/spent after that date is now part of Whirlpool and therefore consolidated onto the financial statements of Whirlpool.
http://webcache.googleusercontent.c...&gl=us&client=firefox-a&source=www.google.com

Maytag was an unprofitable company going broke if I remember correctly that they were even almost bought out by the Chinese which is why you see an increase in ~$4 billion on both COGS and revenue.

With the inefficiency of Maytag added, it's only expected that COGS/revenue percentage of the new consolidated Whirlpool financial statement would increase.

I doubt the Whirlpool execs woke up one night in 2006 and all of a sudden decided to change their product lines and/or start making energy efficient stuff and selling them at cost(since both cost and revenue shot up by ~$4 billion) for no reason at all...Even if those things happened anyway, they would all be minute compared to whatever Maytag was contributing to Whirlpool in their financial statement.

You still can't make any inferences based on those numbers. There's just not enough detail.

 

[the DRIZZLE]

if i read this right, you're making the case for a straight up flat tax with no possible ways of avoiding it right?

The corporate tax rate is already flat (for large corporations), the lower effective rate is mostly the result of special tax breaks. I simply don't like the government playing central planner and favoring certain industries over others. I think it invites corruption and bad policy.

 

[werepossum]

there's two reasons CG should have lower rates, and if you eliminate one of them (double taxation of gains) you should increase the CG rate accordingly. seems like simple logic to me.

Works for me.

CG and dividends are two very different things.

There are a good number of benefits to abolishing income tax at the corporate level; such as:

1. Increases progessivity of income tax of corporate profits distributed to shareholders; given that we change dividends back to tax at regular rates. I coud demonstrate this with cals if needed, but the current double taxation situation effectively raises rates on lower income people receiving dividends, and decreases effective rates on higher income people.

2. Discourage extravagant expenses. As it stands now the gov subsidizes extravagant biz expenses vis-a-vis deductions from income tax. Effectively the US gov is paying 35% of them. Eliminating that may well stop such stuff; the shareholders will realize they are now bearing 100% of it.


LTCG have, and need, a lower rate because of the effects of inflation.
Fern

All that sounds good. I really have no problem with a lower rate for capital gains, but I think far too much of what is taxed as capital gains is short term manipulation or other cases where either no money was risked (i.e. exercising stock options), or where no real value was created (i.e. futures trading where there is a winner and a loser.) Lower capital gains for money invested long term, with rates keyed to the length of investment, would suit me fine, the only down side being the increased paperwork.

 

[chowderhead]

GE laughs at Whirlpool and its earnings.
http://www.nytimes.com/2011/03/25/b....html?pagewanted=1&_r=1&src=ISMR_HP_LO_MST_FB

14.2 billion in profits with 5.1 billion in the US - total American tax = 0. In the last five years, G.E. has accumulated $26 billion in American profits, and received a net tax benefit from the I.R.S. of $4.1 billion.
All companies need to do is hire former Treasury officials, IRS agents and people who wrote the tax laws to do their taxes.

All this has pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.

Don't worry, they don't need to pay more or any taxes at all, American tax payers need to.