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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Posted by Taxmaster - November 5, 2013 at 12:33 am

Categories: Federal Tax, Income Tax, Tax Evasion   Tags:

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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Posted by Taxmaster - November 1, 2013 at 12:31 am

Categories: Federal Tax, Income Tax, State Tax   Tags:

Tax Scams For 2013

Every year the Internal Revenue System puts out a list that they call the “Dirty Dozen.” The “Dirty Dozen” is a list of the top tax scams that affect taxpayers.

Here is a look at this year’s “Dirty Dozen:

1. Identity Theft

2. Phishing. A phishing scam is when a person attempts to steal your information through either emails or fake websites.

3. Return Preparer Fraud. Though most tax professionals are honest, professional people others are not. Some tax specialists will attempt to encourage filers to claim improper credits, deductions or exemptions to increase their tax return.

4. Hiding Income Offshore. Having money in an offshore account is not illegal. What is illegal is to hide it offshore accounts for the purpose of not paying United States taxes on the funds.

5. “Free Money” from the IRS & Tax Scams Involving Social Security. Even though there is no such thing as Free Money scammers try to convince potential victims otherwise.

6. Impersonation of Charitable Organizations. Every time disasters happen, scammers strike.

7. False/Inflated Income and Expenses. This is when taxpayers are encouraged to bump up their income in order to maximize their refundable credits.

8. False Form 1099 Refund Claims. This is basically a redemption scheme. This is where a person files a series of false tax forms to gain a fraudulent tax return.

9. Frivolous Arguments. This is where scammers encourage taxpayers to make unreasonable and outlandish claims to avoid paying the taxes that they owe.

10. Falsely Claiming Zero Wages. Taxpayers are too often convinced that they can reduce their taxable income to zero.

 

11. Disguised Corporate Ownership. Here scammers attempt to hide where there income is really going or they manufacture false deductions.

 

12. Misuse of Trusts. Trusts have many legitimate purposes, but many people use trusts illegally to get out of paying the amount of taxes that they owe.

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Posted by Taxmaster - October 25, 2013 at 12:29 am

Categories: Federal Tax, Tax Evasion   Tags:

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