Huge Companies Aren’t Really Paying Huge Taxes
It turns out big corporations are not paying as much as they ought to pay on taxes. Corporations are expected to pay as much as 35% on federal income tax, but congress investigation reveals that large companies pay less than half of that amount on the average.
The Government Accountability Office recounted that these companies paid 12.6% in 2010. Ironically, these companies are also seeking cuts on corporate tax. This report came out during the time when the government was keeping budgets tight and their increased awareness regarding clever tax cutting tactics of corporations.
According to Senator Carl Levin, American companies are frequently complaining about the 35% top tax rate, but they barely pay as much. In fact, they barely pay close to that amount. The Michigan Democrat knows the top tax rate is one of the highest in the world. In May, he issued a report that specifies the tax avoidance of Apple Inc. Note that he also looked into the low taxes of Microsoft.
The GAO report did not reveal companies that pay only a third of the top rate. However, there seems a trend of paying lower taxes. Earlier reports indicated companies paying between 20 and 30 percent in taxes. New IRS data and public financial statements exposed that profitable corporations are not really meeting top tax rates.
President Obama, together with some legislators, has advocated lower taxes for corporations.
A report published by GAO in April indicates a rise in annual cost of breaks on corporate taxes. It has risen more than twice since 1987, reaching 180 billion dollars.
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Tobacco Taxes Could Save Lives
The latest anti-smoking campaign measures include higher taxes on tobacco products. They have also placed bans on lighting up in public. Experts predict that these measures could possibly prevent millions of premature deaths around the globe.
Between 2007 to 2010, Turkey, Romania and thirty nine other countries established taxes and bans on smoking in public places that have already saved lives, a study published by the World Health Organization says.
Professor David Levy the lead author of the study from Georgetown University Medical Center located in Washington says that, “”If the progress attained by these … countries were extended globally, tens of millions of smoking-related deaths could be averted.”
Experts predict that a wider use of tobacco taxes and bans could potentially decrease health care costs and higher birth rates in babies resulting in healthier children.
Pakistan, Argentina and Italy have plans that they hope will reach an estimated 15 million people and convince them not to smoke. The study estimates that this plan could nearly 7.4 million smoking related deaths by 2050.
All recent studies seem to prove that the most effective steps in saving lives and reducing the numbers of smokers is higher taxes and bans. By banning smoking in businesses, restaurants and other public places could prevent 2.5 million smoking related deaths. Taxes could prevent 3.5 million deaths the study states.
Each year six million people die smoking related deaths. If the trend continues the experts say those numbers could reach eight million before 2030. The WHO is waging war on “Big Tobacco,” but to win this war it needs individual states to tax cigarettes heavily and ban smoking in public places.
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Tax Breaks Were Instrumental in Reaching State Budget Deal
As part of a new budget deal, Republican and Democratic lawmakers approved 16 tax breaks that are worth an estimated $13 million. These breaks in taxes would aid restaurants, mint farms, nonprofit gun clubs, beekeepers, and international investment firms.
These exemptions in taxes were necessary for Senate Republicans to agree to end current tax breaks for residential phone service that they expect will net around $85 million by 2015.
Rep. Reuven Carlyle of Seattle says, “In addition to ending the tax break for phone service, Democrats also got an agreement to set expiration dates on tax breaks, and to disclose the value of future exemptions. The only way we were able to get the bill through was because of that.”
The new breaks in taxes will open opportunities to create jobs and stimulate the economy.
The House and Senate approved the operating budget on Friday. The breaks in taxes are contained in a separate measure, Senate Bill 5882; both cleared both chambers with large majorities.
Senate Democratic Leader Ed Murray, D-Seattle, said “Tax breaks can serve a useful purpose. Tax loopholes we absolutely need to close, but there are tax incentives that I think are valid. (In the past) we closed the tax loopholes for banks, but we gave one to newspapers and the dairy industry … Not every tax break is necessarily bad.”
Some of the tax breaks that were approved just extended exemptions that were due to expire. The beekeepers one alone is worth $120,000 over two years.
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