5 Facts About Taxes That Might Make You Angry
Taxes are unavoidable. Well, at least, they’re supposed to be. We’ve all heard that old saying, “The only things that are certain in life are death and taxes.” But if taxes are such a sure thing, how is it that so many taxpayers — both businesses and individuals — are able to use loopholes to avoid paying some taxes?
Many people criticize our current tax system. They feel it is overly complex, that it favors certain groups, or that it is unfair. We often hear about statistics that support these sentiments, a few of which we’ve chosen to highlight. Here are some tax statistics that might make you angry.
- 35%: The Federal tax rate profitable corporations are supposed to pay.
- 12.6%: The average Federal tax rate corporations actually paid in 2010. Many large corporations pay zero dollars in federal income taxes.
- Incentive or loophole? Inversion occurs when a corporation changes its country of residence. Basically, it becomes a subsidiary of a foreign company so that it can take advantage of lower tax rates there and avoid paying U.S. taxes on its foreign income sources. Would you call this a tax incentive or a tax loophole?
- 26.2%: The percentage of corporate tax incentives that result from instances in which corporations defer income from foreign subsidiaries. During fiscal year 2011, corporations deferred around $47.6 billion.
- $181 billion: Total dollar amount of corporate tax incentives during the fiscal year 2011.