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Facebook Paid No Corporate Income Tax Last Year, After Making More Than $1 Billion In Profits

Facebook Paid No Corporate Income Tax Last Year, After Making More Than $1 Billion In Profits

Written by Pat Garofalo

Between 2008 and 2011, 26 major corporations were able to pay no federal corporate income tax, despite making a combined $205 billion in profits. According to a new report from Citizens for Tax Justice, Facebook joined that illustrious club last year, receiving $429 million in tax rebates despite making more than $1 billion in profits:

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

Facebook will be able to carry further tax rebates forward, according to CTJ, for a total of $3 billion in tax deductions.

“When profitable corporations can use the stock option tax deduction to pay zero corporate income taxes for years on end, average taxpayers are forced to pick up the tax burden,” said Sen. Carl Levin (D-MI) when this issue arose as Facebook was preparing its initial public offering last year. This tax preference for corporations costs the U.S. about $2 billion in revenue per year.

This post was originally published by ThinkProgress.

 

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174 comments

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11:24PM PST on Feb 28, 2013

So? How can this bother you? All major companies thrive never having to pay taxes. While the poor are totally overtaxed. It has always been this way. Facebook has a lot of company in the freedom from tax bracket. And if it really bothers you tell the politicians to erect laws demanding a just tax from the wealthy after all they sure can afford to pay.But hurry up and do something about it before the Aspartame tainted milk gets to your brain causing cancerous tumers and you can't think to do it!

9:54PM PST on Feb 27, 2013

Contd. It seems to me the end result of all governments is transference of money from one group to another and Republicans have successfully convinced that chunk of Americans that taking care of the unfortunate is bad and so they have been easily duped into furthering the goals of the wealthy. They are so opposed to transference of wealth from the rich to the poor that they have failed to see the largest transference of wealth the world has ever seen has been happening right under their noses from the poor and middle class to the wealthy.

9:53PM PST on Feb 27, 2013

Oh Bibi, if you are irked just think how we US citizens feel. I fairly certain no laws were broken here. It is beyond my ability and certainly far beyond the constraints of this site to explain why a corporation making over a $Billion pays no taxes on that profit. As I see it those who have money have the wherewithal to buy legislators who gladly whore themselves out and then write laws which benefit their donors. Though all politicians and maybe every human has a price for which they will sell their souls the Republican Party in the US these days are for the wealthy. They have successfully convinced a major slice of America that the Democrats want to take the money of the rich and give it to the poor and that slice of America finds that repugnant and so they tend to vote for Republicans. What that slice of our citizenry fails to realize is the party they support has been taking their money and giving it to the rich. The Democrats are much more concerned for the needs of the middle class & the poor. They see such abuse as the example of Facebook in this article and say wait a minute, there is a problem when the rich are the only group to have realized any real gain in wealth over the last 30 or so years, and while this wealthy man makes a $Billion, this guy is going hungry.

2:44AM PST on Feb 27, 2013

America............a great country for people with power and money! Lots of it.....

It just irks me, even though I'm not an American, that such things are allowed to happen and people responsible for it are allowed to walk free!

7:23PM PST on Feb 24, 2013

Some liberal Moran math: The top 10% (executives) paid 70.47 % of all income taxes at a rate up to 60% of their income (Fed + state and local). Why don’t we all vote to force the USA corporations to pay up front, before they distribute profits. That way even the bottom 10% that use their products and services will unknowingly pay their fair share.

12:51PM PST on Feb 24, 2013

I love that you can share this article on facebook.

10:23PM PST on Feb 23, 2013

Our Glorious Leaders in the District of Columbia are bought and paid for. The ONLY way I can see to change this is to REQUIRE ALL campaigns be limited to debates on public
TV and radio. NO private donations, NO monied interests to be beholden to, NO privately written legislation, NO loopholes, Every one and every legal fiction called a corporation pays fair share of tax burden.

9:40PM PST on Feb 21, 2013

It would be interesting to read a story that also shows those larger companies that HAVE paid their fair share of taxes and promote them. Or is that not possible?

4:26PM PST on Feb 21, 2013

The saddest part is that when the income tax was first introduced in 1914, it was levied only on people who were very wealthy. It worked well while it was fairly placed and was responsible for much of the building of the 'great society'. Now, things are so out of control, with so many monopolies controlling everything, there's no revenue to even repair and maintain the infrastructures. This is progress? Is the latest smart phone the only improvement that can be expected? I'm afraid this what happens when the wealth becomes to concentrated. There is no room for innovation. The lack of competition in the markets is leading to a paralysis of the entrepreneurial mind.

3:56AM PST on Feb 21, 2013

Thanks

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