John Harwood reports:
Democratic presidential candidate Elizabeth Warren proposes raising $1 trillion in government revenue from a new tax on profits of the largest corporations. The proposed surtax would prevent Amazon and other companies with profits exceeding $100 million from wiping out their tax liabilities altogether. Instead of taxable corporate income as defined by the IRS, the 7% surtax would apply to profits companies report to their investors.
A lot to like. Look – I hated that 2017 tax scam, which we were told would clean up how corporations are allowed to shield income by all sorts of tricks including transfer pricing manipulation. Alas, its complexity was a boondoggle for shifty tax attorneys rather than simplification and closing loopholes. So proposals to “repeal and replace” this awful tax deform are highly welcomed. But this part of Harwood’s reporting was dreadful:
Warren cited two high-profile examples: Amazon has reported $10 billion in 2018 profits but zero in U.S. corporate taxes; Occidental Petroleum has reported $4.1 billion in profits and also paid zero.
Tax analysis is way beyond the depth of basically any reporter.
There are a lot of areas where the training and experience of reporters and editors, even at business publications, just don’t prepare them to accurately report things.
I feel for these women and men who are asked to comprehend and explain things to a broad audience that experienced lawyers and accountants still have to spend a substantial portion of their career keeping up with.
Doesn’t make the reporting any better.
I made a few types here:
“Its pretax income was $5603 million in 2018 and I was surprised to learn that $3431 billion was generated in the U.S. with the remaining $2177 billion generated in other nations where oil profits often are taxes at very high rates. In fact, this company paid $1014 billion in foreign income taxes.”
In each instance of billion – please make that million.
pgl:
I think I caught it all.
“Tax analysis is way beyond the depth of basically any reporter.”
Actually it should not be that hard to read the income tax section of the 10K filing for a U.S. publicly traded company. http://www.sec.gov provides these documents for free. It took me just a few minutes to cull this information.
John Harwood pretends he knows this stuff. After all he is a business reporter for the Wall Street Journal and CNBC. One would think he would take the time to check the facts but he didn’t.
pgl:
The scam is if the 2017 tax break does not produce revenue as opposed to deficit, it will sunset. To prevent the later from occurring, the tax break will expire for middle income people and balance the deficit out. The 1% will keep their tax break then.