While the average American taxpayer tends to dread April 15, not every person needs to get upset about Tax Day. These people (or, well, “people”), better known as corporations, have found that the existing tax rules actually work in their favor. Why bother stressing when you know that, in addition to making millions in profits, the U.S. government is going to be giving you a rebate?
To be clear, we don’t yet know what specific corporations are paying this year until that information becomes public. However, if filing reports from recent years are any indication, these five companies know some clever accounting tricks that will help them wriggle out of having to pay federal taxes.
1. General Electric
The multibillion corporation has received rebates over the past 5%, and spent the better part of the early 2000s paying a tax rate of just 1%. In 2013, it was publicized that the company is making the most of lenient tax laws by stashing away over $100 billion in profits in Ireland where the tax rate is much lower.
2. Time Warner
The reviled telecommunication company not only has an effective monopoly over the internet for many Americans, it also has found tricks to rip off the IRS. Last year, the company took in $4.3 billion and still managed to secure a $26 million rebate from the government. I’m sure that’ll make you feel great the next time your router fails to connect.
The company has a storied history of trying to dodge taxes – back in 2001, attempts to move money offshore actually backfired – but now it seems they’ve found the magic formula by, well, copying other corporations’ success. Last year, Xerox managed to pay nothing in taxes, and actually receive a $16 million rebate.
The toy company offers both an unattainable portrayal of the female body with its Barbie dolls and an unattainable tax rebate with its 2014 filing. No average tax payer can realistically expect to match Mattel’s $46 million rebate, which means the company paid a tax rate of negative 17.3%.
Perhaps it makes sense that a financial company would understand how to exploit the existing tax system and actually turn an additional profit off of it. In 2014, the company made $3.5 billion, and – rather than paying taxes on that – still got the U.S government to rebate it $106 million. This is hardly new behavior. In the past five years, Prudential has managed to make $468 million from the government in tax rebates. It must be nice!
While these corporations are some of the more egregious examples from recent years, they’re far from alone. As a report by the Citizens for Tax Justice declares, the average corporation pays under 20% in taxes, far short of the 35% corporate tax rate the United States purports to have.