While Republicans in congress continue to talk about cutting spending to get the national debt down, many highly profitable corporations have used a questionable tax code and loopholes to avoid paying any revenue to the federal government.
According to a new report by the Citizens for Tax Justice, one of the corporations that has avoided paying taxes is the social media giant, Facebook. The new study shows that not only did Facebook not pay any taxes in 2012, despite earning more than $1 billion dollars, they actually received a tax rebate of almost a half a billion dollars.
"Earlier this month, the Facebook Inc. released its first “10-K” annual financial report since going public last year. Hidden in the report’s footnotes is an amazing admission: despite $1.1 billion in U.S. profits in 2012, Facebook did not pay even a dime in federal and state income taxes. Instead, Facebook says it will receive net tax refunds totaling $429 million.
Facebook’s income tax refunds stem from the company’s use of a single tax break, the tax deductibility of executive stock options. That tax break reduced Facebook’s federal and state income taxes by $1,033 million in 2012, including refunds of earlier years’ taxes of $451 million."
The report continues to show that when all is said and done, after Facebook uses reductions from its stock options, their rebate will total nearly $3 billion.
"In total Facebook’s current and future tax reductions from the stock options exercised in connection with its IPO will total $3.2 billion. That’s almost exactly what CTJ predicted last year, when Facebook first announced its IPO."
Facebook joins a laundry list of other corporations, such as Verizon and GE, who profit billions of dollars each year, but because of the current tax code, end up depriving the federal government of fair revenue with each passing year.
If politicians in Washington are serious about getting the national debt under control, they have to put a hold on cutting services for the poor and go after where the meat really is.