Note: This was posted by Facebook by Fred Geisler. He graciously allowed me to copy it here.
MoveOn.org has a poster of corporations that allegedly don’t pay their income taxes up. If you’ve not seen it yet, here’s the link:
Now, it turns out that most of those claims . . . aren’t quite what they’re claimed to be. How do I know this? Because I know how to look up the finances of publicly traded corporations, and I’ve known how to understand a balance sheet, income statement, and cash flow statement longer than I could legally drive.
Let’s start with the one that’s gotten the most buzz lately, GE. You see, GE Capital had so many market losses in 2009 that they’ll be carrying them forward for several more years. The fact that Bernie rolled five year’s combined profits into one number, and contrasted it with a single year, should be a hint that he’s not doing accounting.
I wish Bernie had mentioned what that “tax rebate” for Exxon is. Looking over Exxon’s SEC filing for 2009, I see them paying $78 billion in taxes that year. Even so, that rebate sounds like a return of 0.198% of that year’s tax payments.
Bernie overstated Bank of America’s TARP bailout by about 22 times, and BofA finished paying the money back on December 10, 2009. Bank of America received a tax refund for the same reason I did: They paid in more than they owed. (Mine was deliberate, but I suspect BofA’s was because their accountants miscalculated.) How do I know they paid in too much? Because they lost money in 2010, so paying any income tax at all was paying too much.
Chevron paid $12,919 million in income taxes last year; Bernie’s whining because they paid $19 million too much, and asked for that money back.
Likewise, Boeing paid $1,196 million in taxes, and Bernie’s whining because they overpaid by $124 million and asked for the money back.
Valero Energy is even more obvious. Bernie quoted their sales figure, not their profit. Why? Because they actually lost money the year that matches the sales figure he quoted. If they had the ability to claim any refund at all from the IRS that year, they paid too much.
Bernie did get Goldman right. What happens when companies are required by law to file taxes with one set of accounting rules, and report to Wall Street with a different set of accounting rules? The accountants figure out how to report high profits to Wall Street, but low profits to the IRS. If Bernie wants to Do Something, he should introduce legislation requiring that SEC and IRS reports use the same set of accounting rules.
Like with BofA, Bernie overstated Citigroup’s TARP money, although only by a factor of 8 this time. After Citi paid back $20 billion, the Treasury took the option to convert the rest into common stock; I suspect selling some of those shares is part of Geithner’s plan for raising cash if the Republican House refuses to raise the debt ceiling, or does something else equally stupid.
Bernie does seem to be right about ConocoPhillips. Will he introduce legislation to close that loophole?
Like Goldman, Carnival Cruise Lines appears to have built a business model around loopholes in the tax code. Will Bernie introduce legislation to plug some of them?