Kudos to Martin Sullivan, Chief Economist and Contributing Editor at Tax Analysts who had a nice piece in the Washington Post published about him over the weekend. I’ve always admired Marty’s ability to cut through the political BS and revenue scoring to see the true cost and impact of our tax laws and proposed tax legislation. In this article Marty tells it like it is and where the real money is in large corporate tax avoidance.
USA Today last week also published the results of their recent review of the Annual Statements of the Standard & Poor’s 500, and found that 57 companies had a effective tax rate of zero. Nada. 0% That’s zero point zero. (Some were even negative, but that often occurs temporarily with losses or significant NOL carryforwards.)
They said that “The effective tax rate is a popular measure used by investors to compare how much companies pay in tax relative to profit” and it’s no surprise to us that there are so many companies paying no taxes. We see companies paying no Federal Income taxes every year when we compile the Ferraro 500 list of companies based on the size of their uncertain tax position reserves.
And finally, on a related note, just this morning Jesse Drucker at Bloomberg profiled an advisor in Ireland who is instrumental in helping multinationals with Irish tax avoidance strategies. Jesse wrote: “In 2010, U.S. companies attributed $95 billion in profits to Irish subsidiaries, up more than sevenfold from $13 billion in 2000… Many of the Irish subsidiaries have no offices or employees and pay no income taxes. They are merely ways to move profits out of countries where sales take place to mailbox subsidiaries in zero-tax island havens.”
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