Guess how much Halliburton paid in taxes ?

[Champion Jack]

http://www.iht.com/articles/127385.html

Annual reports filed with the SEC since the mid-90's - when Dick Cheney took over as chief executive and wrote the game plan for garnering government goodies - showed Halliburton subsidiaries incorporated in such places as the Cayman Islands, Bermuda, Trinidad and Tobago, Panama, Liechtenstein, and Vanuatu.

--------snip-----------

Halliburton, in an SEC filing in 2000, duly noted that it had a subsidiary incorporated in Vanuatu called Kinhill Kramer (Vanuatu) Ltd. The company adamantly denies that its offshore subsidiaries are used to shift income out of the United States. But it's indisputable that somebody is doing a dandy job of limiting Halliburton's tax liability. When I asked how much Halliburton paid in federal income taxes last year, a company spokeswoman, Wendy Hall, said, "After foreign tax credit utilization, we paid just over $15 million to the IRS for our 2002 tax liability." That is effectively no money at all to an empire like Halliburton. Less than pocket change. Dick Cheney must be having a good laugh over the way his old company, following his road map, is taking the United States for such a ride
------------

In the early 90's, when Cheney was defense secretary under the first President George Bush, he hired the Halliburton subsidiary Brown Root to determine what military functions could be outsourced to private, profit-making companies. Brown Root came up with myriad ideas in a classified study and was handed a lucrative contract to carry out its own plan.
.
Cheney took over as chief executive of Halliburton in 1995 and the defense contracts just kept on coming. When he returned to government as vice president in 2001, no firm was better positioned than Halliburton to cash in on the billions of dollars in contracts that resulted from the war on terror and the conflict in Iraq.
.

[blurp]

1. Why double tax?

I just don't think this is that big of a deal.

Everyone paid by Halliburton pays some kind of tax -- employee pay is taxed, shareholder dividends are taxed. What's is the point?

[RobertSeattle]

3. The "double tax" argument is a canard

Everything is double, triple, quadrupple, etc taxed - it's a silly argument.

You get paid, you get taxed, you then spend your take home money - it is taxed - the business you spent your money at is taxed - they spend it on wholesale - the wholesaler is taxed, etc. Why should Halliburton get out of the loop?

[blurp]

8. Silly argument

Everything is double, triple, quadrupple, etc taxed - it's a silly argument.

No, that is a silly argument. Just because there are examples where things are double or triple taxed doesn't mean it's the right thing to do.

You seem to be arguing that because there are examples of bad taxation one more won't hurt. Bah. That's a terrible argument.

You get paid, you get taxed, you then spend your take home money - it is taxed - the business you spent your money at is taxed - they spend it on wholesale - the wholesaler is taxed, etc. Why should Halliburton get out of the loop?

If I buy something wholesale, I don't have to pay tax.

But that's besides the point. I would only ask this: what extra services do the people of Halliburton get from the government that they don't get individually? Presumably when people get together to form a corporation, they're putting an extra burden on society and must pay for this.

Okay, so what is it?

Seems to me that it's SOCIETY that benefits when people joint together to produce goods and services, but a tax by society on the company implies the reverse.

[atre]

25. Explanation

If you don't want your business to pay taxes on its income and then you pay taxes on the dividends to you, DON'T INCORPORATE. Accept the unlimited liability trade-off. The choice about which business entity you want to use for your company is YOURS alone. In fact, you can't incorporate without filing articles with the Secretary of State. It requires a deliberate act on the part of the incorporator, who should have known the consequences, and now must accept them.

So why do so many people accept them? Because they are better off paying taxes on corporate income as the corporation and then dividend income as individuals because of the benefits of the "limited liability to the extent of capital contributions" trade-off.

FYI, the reason you don't get taxed on wholesale purchases is because you would get to deduct that money from your gross income from the business anyway as a "Cost of Goods Sold." They could tax that, but it would be a waste of time because it all washes out in the long run.

Please don't try to make corporate taxation a moral issue, because you can't win. That tax revenue must come from somewhere. The people profiting most from our economy should be the ones to shoulder most of the burden.

[truthspeaker]

4. we're talking about the taxes paid by the corporation itself

Double-taxing? Just taxing them once would be an improvement.

[blurp]

9. The people are already taxed

Double-taxing? Just taxing them once would be an improvement.

The point is that everyone that makes up Halliburton already gets taxed -- their income or dividends are already taxed.

Why should they pay collectively through the corporation they are a part of and then individually in things like income tax, etc?

There is no reason for it.

[truthspeaker]

13. the regular workers, yes

But only a small part of Halliburton's profits go to pay employee salaries. We're talking about the money that goes straight to Cayman Island business accounts, without ever being taxed.

[blurp]

20. Still wrong

But only a small part of Halliburton's profits go to pay employee salaries. We're talking about the money that goes straight to Cayman Island business accounts, without ever being taxed.

You're confused.

Profits AREN'T supposed to pay employee salaries. Profits are what you have left after you pay for employees, materials, rent, electricity, etc.

Salaries come from gross income.

And guess what: most of the money a corporation gets by selling goods and services goes to pay wages.

It's a fact.

Consider a company like Tyson Foods:

http://moneycentral.msn.com/investor/invsub/results/compare.asp?Page=ManagementEfficiency&Symbol=TSN

Look at the yearly revenue per employee: it's $210,000. Now that seems huge, but subtract out wages, materials, rent, and everything else and you're left with just $3,000 per employee per year profit.

So, of all the money Tyson takes in, just 1.4% goes to profits.

[atre]

27. The Internal Revenue Code taxes gross income, not gross receipts

Business expenses (employees' salaries, cost of the goods sold, etc.) are deductible. Capital expenditures (long-life assets such as machinery, improvements, etc.) generally can be depreciated (deductions spread out over 3, 5, or 7 years, generally). Businesses, unlike normal people, can generally deduct most of their expenses from gross income (although Section 212 allows us to do a bit of the same when investing or similar activities).

Maybe this example will clear things up:

If a company makes $200,000 in gross receipts, but spends $180,000 to make that, the gross income is only $20,000 (ignoring depreciable assets, which must be depreciated over the useful life).

That $20,000 is ALL that is taxed.

[ProfessorGAC]

17. Another Econ 101 Student Heard From

Unbelievable.
The Professor

[blurp]

21. Insults rather than arguments -- wonderful

How about adding something to the discussion besides insults?

I understand I might be wrong about all this so how about helping me learn something.

[ProfessorGAC]

31. Your Point On Double Taxation Is A Canard

You actually weren't asking a question. You were making a statement. Your statement is invalid.

There is only one possible routes to avoid double, or multiple taxation. Beyond one obvious route, it is impossible. So, there are no points to be made. An understanding of macroeconomics that does, indeed, go beyond simple Econ 101 jargon is needed, but a doctoral degree in economics, isn't. A thought process that delves beyond two dimensions, is also required.

Since every unit of currency in any economy, no matter the type, is spent more than once, at more than one level of the supply chain, it is not possible to tax each dollar just one time unless all taxes are applied at the consumer level as a massive accumulation of VAT. However, there is no more regressive tax than a VAT. (Or most other sales taxes, for that matter.) It's a one size fits all tax that impacts the people with the lowest dispensible (discretionary) income. People with the most income spend a far lower percentage, saving and investing a far higher proportion than do lower income households. So, the overall percentage of income paid as a sales tax or VAT is lower, the more you make. This is the ultimate in regressive taxation. It's a flat tax that impacts one more greatly as the income goes down!


The other reason why it's an obvious canard is that somehow it's supposed to affect macroeconomic health. However, during the period from 1938 to the present, the United States has had the highest corporate and personal taxation rates in its history. Somehow over that shadow of double taxation and high marginal rates, the U.S. has become the single most potent economic force in world history.

So, the outcomes of the last 76 years are directly contradictory to any theories about double taxation. The concerns over the impact of such multiple taxation stages have simply never materialzied. And there isn't any field of study, aside from geology, cosmology, and anthropology, wherein 75 years is not a long enough time to dismiss a theory due to the lack of empirical evidence.

Sorry if you felt insulted, but if you're going to posit economic hypotheses that fly in the face of 75 years of contrary data, i'm certainly going to question the basis of your conclusions. And if the basis is that you took Econ 101, which it often is in these circumstances, i'll point that out as well. But, don't feel insulted. There are folks with Ph.D.'s in economics whose thought processes stopped during Econ 101. I know several personally.
The Professor

[Name removed]

35. Deleted message

Message removed by moderator. Click here to review the message board rules.

[atre]

26. Corporate employees' income IS NOT TAXED to the corporation

This is deductible as a business expense. See Section 162 of the Internal Revenue Code.

[kcwayne]

5. Because the net income of a corporation is not fully distributed

through dividends and wages.

What an enormous free ride corporations would get if they didn't get taxed. Then all the infrastructure that gets built to support them is paid for by all citizens, many of whom get no benefit from the corporation's existence.

Why should citizens pay for electic grids that can produce millions of megawatts of power when they only consume a few kilowatts? Or why should they be responsible for building highways to support the movement of thousands of trucks loaded with some company's goods?

Corporations benefit disproportionately from public investment. They should pay a fair share.


If they don't like that, they should quit asking for protection from the US military, and should start planning for economies like those in sub-Sahara Africa.

[blurp]

10. Bad examples

What an enormous free ride corporations would get if they didn't get taxed. Then all the infrastructure that gets built to support them is paid for by all citizens, many of whom get no benefit from the corporation's existence.

Why should citizens pay for eclectic grids that can produce millions of megawatts of power when they only consume a few kilowatts? Or why should they be responsible for building highways to support the movement of thousands of trucks loaded with some company's goods?

Those are poor examples that don't support your point at all.

In the case of electrical power, often the grid is built using bonds. The people paying for the grid get their money back with interest. Where does that interest come from? Users of the grid who pay the electric company based on how much power they consume.

A company pays for power just like everyone else and the more they use, the more they pay. So your example is bogus unless companies like Halliburton are getting free electricity.

The same thing applies to roads. Gas taxes pay for much of that infrastructure. Customers and employees of Halliburton are already paying for the roads they use through those taxes. The more traffic a company might create, the more is paid in gas taxes. So, why make them pay twice?

Corporations benefit disproportionately from public investment. They should pay a fair share.

Actually it's the public generally that benefits from corporations. They bring together many people and produce most of the goods and services we need. Is that bad?

No other way, generally, of organizing people has been discovered that has been as productive as the corporation.

If they don't like that, they should quit asking for protection from the US military, and should start planning for economies like those in sub-Sahara Africa.

Oh, I totally agree with you here. People with a lot, whether they own it individually or collectively ought to pay for it's protection.

The fair way would be to create a kind of national property tax that was used as the basis for paying the military. Include business assets, land, homes, etc. The more it's worth, the more tanks you should buy to protect it.


And don't get me wrong. I'm not here to defend CEO's excesses. I'm talking about the structure itself. I admit it needs work, but let's not throw out the baby with the bath water. Corporations are important social institutions like governments, schools, and churches. They all have their roles to play.

[havocmom]

18. What a corporation pays its workers is DEDUCTED from its own income

They get to charge off payroll and all payroll expenses. Why should they get a double tax break?

Using arguement that workers pay on their income just won't fly to let corporations off the tax hook. If a corporation gets personhood status when it comes to rights and legal protections afforded individual citizens, they they also have responsibilities just like individual citizens/ They can't keep having their cake, eating it too while the middle class disappears and the poor face hunger.

[blurp]

23. Won't defend personhood status, but

They get to charge off payroll and all payroll expenses. Why should they get a double tax break?

But it's not a double break. They simply don't pay tax on someone elses income. i.e. employees.

[havocmom]

28. Ahhh, so then they SHOULD pay taxes on their own income?

See, that is how it works.

If you use the arguement that they shouldn't have to pay taxes because the employees pay on their income, you allow corporations to shift all the tax burden onto employees who do NOT get ALL the $$. Not quite cricket that way. John Doe, productive employee gets to pay more in taxes to the corp. can pay less even though the corp. makes considerable profit from John Doe's efforts.

Corporations gain tremendous benifits from the goverment of this nation. They should pay a resonable share of funding those benifits. The infastructure of the nation is what makes business possible. Business needs to fund that infastructure that they benefit more from than the average worker does.

[blurp]

32. They all pay anyway

See, that is how it works.

If you use the argument that they shouldn't have to pay taxes because the employees pay on their income, you allow corporations to shift all the tax burden onto employees who do NOT get ALL the $$.

No, you're wrong.

Shareholders also pay tax on the money they get.

That's the basis of the "double tax" argument: the money is taxed once as a sort of collective profit, then again as individual profit.

No one is getting a free ride.

Not quite cricket that way. John Doe, productive employee gets to pay more in taxes to the corp. can pay less even though the corp. makes considerable profit from John Doe's efforts.

"considerable profit"? That really depends.

Consider Tyson foods. They make about $3000/year per employee. Is that really raking it in?

And keep in mind that those profits are often put right back into the company. Much of that money will never reach shareholders. In fact, something like only 1/3 of publicly traded companies even pay dividends.

Corporations gain tremendous benefits from the government of this nation. They should pay a reasonable share of funding those benefits. The infrastructure of the nation is what makes business possible. Business needs to fund that infrastructure that they benefit more from than the average worker does.

Corporations are the basis for most of the production in this country. Whatever the government uses it gets mostly from corporations. If anything, it's the government that benefits from corporations rather than the reverse.

Who actually builds all that infrastructure? Corporations. Who organizes the people and resources? Corporations.

[kcwayne]

24. Admittedly I am not an expert on public utility funding

But you are wrong on the fuel tax. I looked up Ohio's data, and they are asking for 5.7 billion in new road construction money this year, and based on their fuel consumption and tax rate on fuel, they collect 1.2 billion. So the rest of the money is made up from other taxes, or they just do what Bush does repeatedly with deficits.

When I grew up in Central Illinois they build a nuke plant in Clinton that had massive (several billion) cost overruns. The tax payers ended up picking up the cost overruns. Now what do a bunch of farmers need with a nuclear plant of that size? They planned on two towers and only opened one so maybe they were thinking about selling energy outside the market area, I don't know. The main point I was trying to express here is that the people in Central Illinois would never size a plant like that to serve their needs. Somebody came in and convinced everyone that it would be a good thing for the economic development of the area. It wasn't, and the taxpayers bore the burden. If it had been good, and alot of industry had moved in to take advantage of the cheaper power, people there might have benefitted for 20 years or so with increased employment, but then these companies would have moved to China by now, abandoning everyone and leaving the area with overcapacity. Again the taxpayers get screwed.

Its all about privitizing the profits, and socializing the losses. Its why lobbying is such a lucrative business.

[bahrbearian]

6. I get ya lets have the Employee's pay the Corp. Taxes...

[Bandit]

7. Should be no big deal if illegal aliens don't pay tax then either.

Right????

[ComerPerro]

12. Because the CEOs and the prominent shareholders

Get all of the benifit.

Besides, maybe you haven't noticed, but you pay the taxes on your pay. Not Haliburton.

[blurp]

14. I don't think that's true

Get all of the benifit.

I challenge you to back this up.

Besides, maybe you haven't noticed, but you pay the taxes on your pay. Not Haliburton.

But the people that make up Haliburton, all the employees and the shareholders also pay. They aren't getting the free-ride you make them out to be getting.

[ComerPerro]

15. Yes, but if the company doesn't pay its fair share in taxes

Then the average worker, the "people who make up Haliburton" still pay the same levels in taxes.

The CEOs (who have profit sharing), however, earn more and the stock does better.

I don't know if you just live in a fantasyland where everyone is pure and honest, all executives are looking out for society's best interests, increased earnings are shared all the way down from the top executive to the lowliest employee, and hard work will pay off and reward you; but that myth was destroyed with the Reagan era.

It's not double taxation.

What is happening is taxation at the point of transfer of wealth. And Haliburton isn't paying its fair share of taxes.

Try this:
Stop paying your taxes, or start cheating on them and paying less than your fair share. After all, you have to pay sales tax and property taxes with income that has already been taxed.
So take a stand against this so called "double taxation" and stop paying your taxes. See how fast your ass gets busted.

[blurp]

22. What a company earns is really spread around

Consider a company like Tyson Foods:

http://moneycentral.msn.com/investor/invsub/results/compare.asp?Page=M...

Look at the yearly revenue per employee: it's $210,000. Now that seems huge, but subtract out wages, materials, rent, and everything else and you're left with just $3,000 per employee per year profit.

So, of all the money Tyson takes in, just 1.4% goes to profits.

[havocmom]

29. If it is "spread around" why is more and more of the $$ being held by less

and less people? The $$ is floating to the top and you are kidding yourself to think otherwise.

[blurp]

33. Difference between wealth and income

and less people? The $$ is floating to the top and you are kidding yourself to think otherwise.

People often focus on wealth rather than income. They aren't the same.

Wealth often includes (shares of stocks at X) times (stock price).

So if Microsoft is suddenly up 10 points, then Bill Gates is now worth a lot more.

But has he actually had income? Nope.

So that $$ floating around at the top is somewhat ephemeral and goes up and down with the stock market.

Now, do I wish the average Joe had more wealth? As an average Joe, you bet! I just think there are better ways of improving the lot of the average man than setting up corporations as the great Satan.

We have to be balanced in how we look at them. We have to see the good as well as the bad.

[atre]

30. And that 1.4% is roughly all that they are taxed

An earlier poster was right. If you work for a corporation, they don't ever pay taxes on the salary you make as an employee. For them, that is deductible as a business expense under Section 162 of the Internal Revenue Code. You, however, do pay taxes on that salary.

[blurp]

34. That's entirely fair

An earlier poster was right. If you work for a corporation, they don't ever pay taxes on the salary you make as an employee. For them, that is deductible as a business expense under Section 162 of the Internal Revenue Code. You, however, do pay taxes on that salary.

That's entirely fair, IMHO.

If someone earns money as an individual doing a service or indirectly doing a service as the member of a corporation, I don't think it changes the burden on government services.

[underpants]

2. Off subject but this whole "double taxation on dividends" is BS

That ties into the fact that Halliburton like many military contractors dodge taxes (ABC WNT reported on this just this week) but also the fact that many HUGE corps actually receive refunds so the money that we hear so often is being taxed twice would in fact not be taxed at all if dividends are tax free.

[blurp]

11. Not a problem if the refund is for a service

That ties into the fact that Halliburton like many military contractors dodge taxes (ABC WNT reported on this just this week) but also the fact that many HUGE corps actually receive refunds so the money that we hear so often is being taxed twice would in fact not be taxed at all if dividends are tax free.

As long as those refunds are given in exchange for the corporation doing what the government wants it to do, what's the problem?

The corporation is in effect performing a service for the government. The refund is payment for that service. Why is that bad?

[ComerPerro]

16. Perhaps because they had agreements going back to 2001

They have overcharged the government by as much as double the amount on essentials such as gasoline and meals that were never served, and they are getting a cost-plus contract.

They aren't doing a noble service. They are ripping you off. I don't see why you are so happy about it.

Sorry, conservatives, but the "free market" doesn't exist anymore.

[RedEarth]

19. Frontline on PBS last night did a story

on tax evasion by US corporations. If they happen to re-run the show I would highly recommend that you watch it. Not only do many US corporations pay little or no tax, many of them get tax refunds for various shelters(example of which is leasing the sewer lines in a city in Germany as a tax write off here in the US) they have set up. Bottom line, individual taxpayers without the benefit of shelters having been picking up a larger and larger share of the tax burden over the last several years.