Tuesday, April 19, 2011

Does Bank of America Pay Corporate Taxes?

Paying No Taxes and Loving It:
Nyaah, nyaah, niyaah!  Feel
the burn, libbies!  Har har har!
Zombie has an interesting presentation of the Tax Day protests in San Francisco.  Another phony left wing "populist uprising" is a group called US Uncut, who invaded a branch of Bank of America to put on a highly scripted song-and-dance demonstration.  Their message to B of A:  pay your taxes, because B of A doesn't pay any corporate taxes, they are tax dodgers, etc, etc.

The ignorant left often uses arguments that so-and-so corporation made 75 gazillion dollars in profits and yet paid no income taxes!!  Omigod, think of the free goodies those taxes would have bought for losers like us!  (Well the last sentence is implied if not expressly stated.)

Now I am a tax professional, but I don't know everything.  However, it seems to me that these claims against corporations are born of ignorance and hyperbole.  Corporations are heavily and regularly scrutinized by the SEC, the IRS and their outside auditors.  If these corporations were breaking the law regarding payment of taxes, they would soon be found out.

But let's say Bank of America and other corporations are not paying any taxes this year.  What would be some of the reasons?  Here are a few possibilities:

1.  Their "billions in profits" are actually their gross sales, not their net income.  Gross sales is not "profits."  Profit is what is left over after paying expenses, including salaries and taxes.  In all probability, ignorant leftists don't know the difference, couldn't count to five if they owned a Cray computer and as we all know, can't find their ass with both hands.

2.  The non-tax paying corporations actually have losses, not profits.  That means their expenses exceeded their income.  Corporations pay taxes on net profit (Sales minus cost of goods sold minus operating expenses = net profit).  In this lousy, Democrat produced economy, it is almost certain that many corporations are experiencing losses (which probably explains their massive layoffs of employees).  Again, refer to my comment above about liberals finding their asses with both hands.

3.  Corporations made a profit this year, but have accumulated losses from prior years.  Tax laws allow corporations to carry forward their prior year losses, and they may wipe out the current year profits and not owe any taxes because of it.

4.  Corporations have tax credits to offset their taxes.  Corporations get a credit for foreign taxes that they pay, so they are not taxed twice on the same income.

5.  Corporations file consolidated tax returns, that is, one tax return for the parent corporation and all of its subsidiaries.  Just because one of the corporations in a controlled group is profitable does not mean that all corporations in the same group are.  The losses of some of the corporations in the consolidation may be enough to offset the profits in others.  Moronic liberals may be focusing on only the profitable corporation while ignoring the unprofitable ones.

There is only one way to know the true story of whether Bank of America or any other corporation is not paying taxes, and that is to examine their tax return.  They generally file their taxes on Form 1120.  If anyone has a copy of Bank of America's tax return, I will be happy to take a look at it and see if I can explain it.  Warning:  it is likely to be quite thick.

Meanwhile, don't believe any hyperbole from ignorant liberals.  Even if they owned a Cray computer, they probably wouldn't even know how to plug it in.

26 comments:

Anonymous said...

So the gist of your argument is 'trust your ruling classes, they know what's best for you.' Your support is 'the tax code is very complicated' and 'since the rulers are playing by the rules (that they wrote, of course) all is fair'. Also, you make blanket ad hominem attacks, like a monkey throwing turds. Gee, why on earth is there any dissent in the public about corporate taxes, with such genteel knights as you carrying poor ol' delicate Princess BOA's favor?

Stogie said...

Anonymous, you lefties are profoundly ignorant. You haven't got a clue as to how the world works or why. If you say that Bank of America pays no taxes, then you must support your argument with facts and specifics. You do not provide these facts and specifics, because they do not exist. So you are left with false claims and bullshit, which is what your whole movement is made of.

Anonymous said...

Let me see if I can help you understand, even whilst having to dodge all this flying poo. First, the principle of a free market holds that losers should make way for new attempts. If BOA is losing money so badly that it can't pay taxes, why's it still in business? Second, by your own argument, the 'facts and specifics' are too complex for mere laymen to understand. While an obviously silly position, I'll grant it to you-- which means that, on principle rather than on detail, people who profit (& yes, dearest, I do know the difference between profits & revenues) should pay their share of the national operating costs. They don't, which makes them thieves. & doesn't thievery just make you all hot in your Confederate uniform? =)

Stogie said...

Anonymous, your arguments are so pathetic. One reason B of A has recently experienced losses is because of so many of their mortgage loans going bad, thanks to your lefties sub-prime mortgage fiasco. AND, according to B of A's financial reports, they pay BILLIONS in taxes. So where do you get off saying that they do not? C'mon, provide some facts rather than the monkey poo you are throwing?

Anonymous said...

There's a good teaching point: 'monkey poo' refers to ad hominem attacks, which show weakness of argument by attacking the speaker instead of the speech. As an exercise, see if you can get through your next post while maintaining some decorum. The sub-prime mortgage fiasco was a leftist plot? C'mon, dude, let's come back to Earth and think reasonably about that. The sub-prime collapse happened because people with money tried to make more money, using risky means. When they failed, the social enterprise of government bailed them out-- not very free market, I'd agree. The question remains: if BOA are losing money, why should we as the public kiss their asses to keep them open? Why not let them burn, making way for new private enterprise?

Stogie said...

Anonymous, the sub-prime mortgage fiasco was a Democrat program to force banks to make bad loans to Democrat constituents, i.e. minorities without the credit or the income to pay back those loans. The facts are well documented, so please correct your ignorance on your own time.

Since government interfered in the free market and caused the subprime mortgage meltdown, they can damn well help to repair the damage that they caused.

Anonymous said...

Ah-- "minorities" now? Have a little white-person fear of the other, do you? That's so adorable. All the white families who purchased homes for hundreds of thousands of dollars belie your assertion, though; I warn you now, racism will keep your understanding forever in chains. In any event, when the subprime fiasco was still unbusted, and the money was rolling in, the loan-makers kept their profits. They should man up and keep their losses the same way. How is it that you can be simultaneously proud of your privilege, and yet bawl that the big mean gov't is trying to hurt you? When BOA makes money, it's them; when they lose it, it's the gov't? It's a poor musician who blames his instrument, buddy.

Stogie said...

Anonymous, please, the racism argument? Can't you at least try to be original?

Yes, the subprime mortgage fiasco was to help minorities buy homes that they couldn't afford. However, once the banks were forced (by threats of lawsuits by Clinton's attorney general), they then had to lower the standards for everyone, including white people.

This created a housing bubble that eventually burst, leaving banks with billions of bad loans that were collateralized by homes now worth less than the loans. This caused a chain reaction throughout the economy, causing thousands of banks, mortgage companies and insurance companies to fail.

And your folks caused it. The road to hell is paved with good intentions.

All of your arguments are merely a lame attempt to divert the focus, but it ain't working, sport.

Anonymous said...

Nope-- but I am glad to see the focus is beginning to take shape! Now ask yourself why (if we grant the truth of your facts, for the sake of argument) the 'minorities' could not afford to buy homes in the first place. Could it be that the homes were overpriced, with the distortion of the free market caused by unfettered capital stagnation? Answer: yes. Well, what agency maintains the 'right' of these capital holders to claim ownership to the land, anyway? Oh yeah-- the government! There isn't a dollar that a rich person has that a poor person didn't earn for them, and in a free market the supply of homes for the demand of workers would be met by flexible, independent companies. Instead, we have mega-monopolies, companies able to set policies like little governments themselves. The road to heaven is also paved with good intentions, my friend, it just requires a willingness to walk uphill. =)

Stogie said...

Anonymous, perhaps the minorities couldn't afford homes because they have no education or skills -- their fault, not mine. There are lots of free schools, low-cost colleges, etc.

In any case, by "helping" the minorities, the left destroyed the economy, hurting everyone, including the minorities. Now that there are fewer jobs and less opportunity, their situation is worse than ever...thanks to you.

Anonymous said...

Those free schools and low-cost colleges are the product of social programs-- socialism, if you like-- you know that, right? Furthermore, the opportunity to raise one's station is itself a luxury. If you're living hand-to-mouth, you are not on an equal playing field with those of us who enjoy the luxury to (for example) debate politics on the Internet all day. =)
In any event, my point is that the problem wasn't in trying to help, it was in trying to help the haves in the same motion as helping the have-nots. Direct government effort in establishing affordable housing would work better than doing it through mortgage rules that force an allowance for profit to the mortgage-holders into the mix. BOA played the game willingly, not as victims, and they should pay their bills whether they're happy how the chips fell or not.

Stogie said...

Anon, you live in a dream world. The government can produce no wealth, including housing -- it can only steal wealth from those who have earned it and give it to those who do not, thus reducing the motivation to continue producing for both rich and poor alike.

You have not proved or supported your argument that B of A somehow got a free ride, so please cease with the false premises.

Stogie said...

By the way, the best thing for the poor is to have a vigorous economy, one that can be achieved by low cost energy (opposed by you on the left) and a sound financial systems (which is being destroyed by you on the left.)

As for free or low cost schools, they are a factor of state laws and well within the rights of the states. It is a false argument to say that, if the government provides any services at all, it must become communist. Collectivism kills prosperity and lowers the standard of living for everyone in the long run.

Anonymous said...

As in, "I have a dream"? Why thank you, very kind of you to say. =) Actually, I think the motivation to produce is pretty safe. Poor people have need, rich people have greed-- either way, they'll keep on striving, whether the government is responsive democracy or the old feudalism. The government makes wealth production possible, dude, despite Rand's post-traumatic fear of the masses, it is through Hobbes's social contract that productivity can exist. At the end of the day, BOA is either solvent or not. If they are in the black, they owe the people a share-- we made it possible. If they're in the red, they should go. No getting around that proof-- it's bedrock.

Stogie said...

Anonymous, your arguments aren't getting any stronger. No, it isn't "greed" that motivates rich people, it is legitimate self interest. It is poor people greed that motivates them to steal others' wealth rather than producing their own.

The government makes wealth production possible? To a certain extent, by providing laws and courts for settling disputes, and by providing infrastructure, all of which are legitimate uses of government. Stealing wealth and redistributing it to buy votes from the underclass is not a legitimate use of government, and in fact, is harmful to all.

B of A showed one year of losses from 2006 through 2010, and that was 2010. They are profitable and pay billions in taxes, but now you are making me repeat the same points, which means that this discussion is at an end.

I will delete any further comments from you. Since it is my blog, I get the last word.

Stogie said...

Note to readers: Anonymous is a troll who seeks to overwhelm a discussion with incessant repeating of the same failed arguments, over and over and over. He cannot win on the merits, so he seeks to harrass. I think I have kicked his ass, but you are welcome to your own opinion.

Teresa said...

You definitely kicked anon's ass Stogie. Anon couldn't produce one shred of evidence to back up his claims.

Stogie said...

Thanks Teresa. Like most liberals he is long on opinion and short on facts.

Conservative Pup said...

Found you through Adrienne's Corner--enjoyed your post and the troll-whuppin' comments.

I think lots of these trolls have only one agenda: to waste and suck up time. Your comments to him/her/it? were clear, logical, in line with natural law, and correct. As you said, he just repeated the same thing, over and over, throwing in the same old tiresome themes. They are losing, they know it, but they just can't stop themselves. Good job.

Stogie said...

CP, thanks for your comments. Another goal of the troll is to elicit angry comments that they can use against you. I often feel that I am a laboratory case for liberals to practice their Saul Alinksy tactics on.

Bob Belvedere said...

Great job, Dr. Stogie. You dissected that zombie with great skill.

thatmrgguy said...

Anon was an ass and got his ass royally kicked by a master...we're not worthy. Found you from Addriene's Corner.

Mike

Stogie said...

Thanks Bob and ThatMrGuy. Since I enabled "registered users only" the troll has not been back. Obviously, he's not terribly proud of who he is.

Pat said...

If those are the rules, they should apply equally well to the other "people," actual taxpayers who should be entitled to equally long lists of deductibles so they pay no taxes.

If profit after expenses is the game upon which taxes are paid, i.e., expendable income, taxpayers should be able to play it too, for they have none.

Who would then pay taxes except corporations, the only one with actual profits?

Stogie said...

Pat, individuals do indeed have many deductions and credits available to them; so-called poor people can get the child credit, the child care credit, the earned income credit. Since I actually do taxes, I know what I am talking about. The earned income credit actually gives a big chunk of change to those who qualify, not a refund of their own withholding, but a free gift of money from the government (that is, from the rest of us who pay actual taxes).

I don't where you get off saying that corporations pay no taxes. The IRS says corporations paid over 225 billion in taxes in 2009.

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