Well Toritto filed his Federal tax return with the I.R.S yesterday. Electronically. No more filling out those forms, as in years past and posting them in the mail.
Thank you President Trump. You made it rain. Just not here.
This old, retired going on 77 year old, partially blind diabetic with a heart condition, living on a modest fixed income, who drives a 2006 Hyundai paid more in taxes this year.
My total taxes went up by $382, an increase of almost 24% year to year.
Now being an old retired guy my income tax filing has been virtually the same each year for a decade. I have approximately the same amount of income; the same itemized deductions (medical and dental expense, cost of health insurance, drugs, state sales and real estate taxes, donations etc.).
So how did my total tax go up?
I am not discussing the amounts withheld during the year being reduced and affecting a refund someone may be expecting. I am discussing the bottom line – the toal income tax I pay for 2018.
Tax rates were reduced (especially at the top individual as well as corporate level) and the standard deduction was doubled from $6,000 to $12,000.
So what happened?
What the President, his cronies and the media didn’t tell you was that the law also took away the personal exemption. That personal exemption was worth $4,050 in income exempt from tax for each dependent person in your household. So while the standard deduction was increased by $6,000, I lost, as did everyone else, the personal exemption for $4,050.
Since my itemized deductions exceeded the new $12,000 standard deduction each year in the last decade, losing the personal exemption increased my taxable income this year. In the second lowest 12% bracket that increase in taxable income cost me $486.
Lots of folks are screaming as they calculate their 2018 taxes. Most of them enjoyed the increase they saw in their paychecks early in the year and heaped praise on our illustrious President, What they didn’t realize at the time is that while their total tax might be lower, the refund they would be receiving would be considerably smaller or they might even owe the government at the end of the year. The increase in their paychecks, so widely praised, was merely an “advance.”
That is not the case for the likes of me. My tax for the year actually increased because of the loss of the personal exemption and many families with children will feel the negative impact.
Meanwhile however, the 1% will do just fine.
And it is comforting to know that I will have paid more in taxes these last two years than Amazon, which earned $11.2 billion (yes, billion) in profits last year and paid zero (that’s zero) in Federal income tax. It paid zero the prior year as well on over $5 billion in profits. To top it off, Amazon actually reported a $129 million 2018 federal income tax rebate—making its tax rate -1%.
Now this is nothing new. Major corporations have been paying little or nothing for years in Federal income tax.
In years past I paid more in tax than General Electric. Yup.
From 2008 to 2013, while GE made over $33.9 billion in United States profits, it received a total tax refund of more than $2.9 billion from the Internal Revenue Service.
G.E.’s effective U.S. corporate income tax rate over this six year period was -9 percent.
In 2012, GE stashed $108 billion in offshore tax havens to avoid paying income taxes. If this practice were outlawed, GE would have paid $37.8 billion in federal income taxes that year.
I also paid more tax than Boeing.
From 2008 to 2013, while Boeing made over $26.4 billion in U.S. profits, it received a total tax refund of $401 million from the IRS. Boeing’s effective U.S. corporate income tax rate over this six-year period was -2 percent.
Boeing even has its own taxpayer-funded bank; the Export-Import Bank of the United States. Boeing has received so much corporate welfare from this bank that it has been dubbed “the Bank of Boeing.”
From 2008 to 2013, while Verizon made over $42.4 billion in U.S. profits, it received a total tax refund of $732 million from the IRS. In 2012, Verizon stashed $1.8 billion in offshore tax havens to avoid paying U.S. income taxes. Verizon would owe an estimated $630 million in federal income taxes if its use of offshore tax avoidance was eliminated.
Bank of America received a $1.9 billion tax refund from the IRS in 2010, even though it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of more than $1.3 trillion.
In 2012, Bank of America operated more than 300 subsidiaries incorporated in offshore tax havens like the Cayman Islands, which has no corporate taxes.
In 2012, Bank of America stashed $17.2 billion in offshore tax havens to avoid paying U.S. income taxes. Bank of America would owe an estimated $4.3 billion in federal income taxes if its use of offshore tax avoidance strategies were eliminated.
Are you still smiling?
Citigroup made more than $4 billion in profits in 2010, but paid no federal income taxes. Citigroup received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury during the financial crisis. Citigroup has established 427 subsidiaries incorporated in offshore tax havens.
In 2012, it stashed $42.6 billion in offshore tax havens to avoid paying U.S. income taxes. Citigroup would owe an estimated $11.5 billion in federal income taxes if its use of offshore tax avoidance strategies were eliminated.
Michael Corbat, the CEO of Citigroup, made more than $17.6 million in total compensation that year.
The list goes on. Fedex. Honeywell. Merck. Corning.
From 2008 to 2012, not only did Corning pay no federal income taxes, it received a $10 million tax refund from the IRS, even though it earned more than $3.4 billion in U.S. profits during those years.
Corning has stashed $11.9 billion in offshore tax havens to avoid paying U.S. income taxes. Corning would owe an estimated $4.165 billion in federal income taxes if its use of offshore tax avoidance were eliminated.
Wendell Weeks, the CEO of Corning, had a retirement account worth an estimated $22.8 million 4 years ago. Who knows how much he as stashed today. Mr. Weeks wants to raise the eligibility age for Medicare and Social Security to 70 and make significant cuts to Social Security as a member of the Business Roundtable.
Yes, I know. They are following the law. Law which allows them to do what they do with perfect legality. And besides, they make jobs – except for the ones they make in China.
Feel like a fool? A tool?
Yea. Me too.
Remember these are not money losing corporations. They make billions. They just play by different rules. “Corporations are people” – except they’re not.
Statistics thanks to the office of Senator Bernie Sanders – Socialist.