[dboreham]

Probably not a good idea to start a thread on this, but...it irks me every time I see one of these "BigCo only pays $5.34 in taxes despite making $35,923,233 in operating profit" comments.

Corporations, like the rest of us, pay taxes on the money they make (profit). Profit may be reduced, perhaps to zero, intentionally, by paying money made to people (employees, shareholders, managers). Those people like the rest of us pay tax on that income. I assert that provided tax is paid on the money by someone, somewhere, that's just fine and I'm ok with the corporation itself not paying any (income) tax. Obviously they should pay property taxes, employer payroll taxes and so on.

Since the marginal tax rate on corporate income is much higher than most individual's marginal tax rate (in the USA specifically), company managers are strongly motivated to aim for low to zero profit and hence zero tax by either spending money or paying it to employees or shareholders (who are liable for the tax on that income).

Of course, real life is a bit more complex -- corporations and individuals can reduce or evade tax through jurisdiction arbitrage, various other tricks. I don't support those things. I do support the goal to have individual people pay tax, not corporations. That also seems to be the motivating principal behind the US tax code at present.

[amelius]

There are a lot of smaller companies paying tax on profit right now. If you cancel that form of tax, the money needs to come from somewhere. Hence, income tax (and salaries) will increase and things will be fair. So that scenario would be perfectly fine with me.

This is, of course, no excuse for Google not paying taxes at this moment.

[dboreham]

Are there? (genuine question) I own two small companies. Our accountant would have a fit if we left significant taxable profit in the companies. We pay any profit to employees and shareholders. Isn't Google just doing the same thing (modulo increased complexity due to their size and international reach)?