On $1 billion profit, Facebook paid MUCH less than nothing in taxes
From Citizens for Tax Justice:
“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.
But that’s not all of the stock-option tax breaks that Facebook generated from its initial public offering of stock (IPO). Facebook is also carrying forward another $2.17 billion in additional tax-option tax breaks for use in future years.
So in total Facebook’s current and future tax reductions from the stock options exercised in connection with its IPO will total $3.2 billion.”
To review:
Facebook makes a billion-dollar profit.
Facebook executives cash out billions of dollars in stock options (money taxed at the 15% capital gains rate).
Taxpayers then cough up an additional $429 million paid to Facebook, which because of its generosity to its own executives won’t be paying state or federal corporate income taxes for years to come.
– Jay Bookman
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352 comments Add your comment
Madmax
February 15th, 2013
5:00 pm
Like I said Keep, are you over 16? How do you think FB sets their advertising rates? You don’t believe that they build that tax into them? And you don’t think that those advertisers pass on the cost of that to their consumers? Eventually, someone buys a coke or whatever product was advertised and all that “free” stuff including those advertising fees that were paid to facebook which includes the recovery of those taxes they incur are passed on to the consumer as part of the price of that coke. That my friend is a flat tax.
JamVet
February 15th, 2013
5:01 pm
Wall Street banks and big corporations love America when they want corporate welfare. But when it comes to paying taxes, they want nothing to do with this country. ~ Bernie Sanders
Liberal Pariah
February 15th, 2013
5:02 pm
Just say NO, the country will be better off
Kamchak ~ Thug from the Steppes
February 15th, 2013
5:02 pm
Teleprompter must have been working today…
Mitt Romney says, “What?”
Keep Up the Good Fight!
February 15th, 2013
5:04 pm
And madmax, being a brilliant support of the idiot flat tax, you ignore competition and everything else that goes into establishing the price of a product. But I am sure since you have indicated that Facebook includes recovery of taxes in their advertising pricing and they are not paying any taxes, advertisers will be getting a big rebate to pass on the consumers, right?
josef
February 15th, 2013
5:04 pm
The SONS OF THE CONFEDERATE VETERANS are for Hagel…
Madmax
February 15th, 2013
5:06 pm
Jamvet – so sorry you are so confused. Where exactly will a company get this money you want to tax? They can’t print it so where does it come form.
Brosephus™
February 15th, 2013
5:07 pm
Fred ™ @ 1:56
TBG: I have to split, butKam is in town. If you can, see if we can put together a whirlwind Trap shooting outing for tomorrow. Me, you, Kam, Bro, and TBG.
———————
Keep @ 2:00
And if this were a Star Trek episode, who is going to be shot in the 1st 5 minutes?
———————-
TBG @ 2:40
Fred, sorry, this weekend and next are no good for me.
———————-
Fred @ 2:57
Sweet, we can invite Keep up the Good Fight and HE becomes the target. Kam is cheering…….
Actually, with TBG backing out, I’m the next on the hiearchy chart. When there’s only one Brotha, then the Brotha is the one who doesn’t make it.
Tealiban Party
February 15th, 2013
5:07 pm
Where are all the CONS today? Are they huddled up their bunkers and safe rooms clutching their ARs and guns since that asteroid is getting close?
Or did asteroid not make Wayne LaPierre’s list of gun-toting disasters?
Keep Up the Good Fight!
February 15th, 2013
5:08 pm
Bro, maybe you want to go fishing?
Brosephus™
February 15th, 2013
5:08 pm
Guess I’ll post on topic, even though I should have done that first….
F**K FACEBOOK!!! I refuse to give them a smidget of information on me so they can sell my info to someone else and profit. They don’t produce anything tangible, and they f**k people’s lives up who get tangled in that sh*t. If I had to use Facebook to post here, there’d be one less brother on the board.
josef
February 15th, 2013
5:09 pm
Whoop, there it is!
Madmax
February 15th, 2013
5:09 pm
Keep – I am not a supporter of the flat tax – I am asking how you can rail against the flat tax and then turn around and ask for the tax code to impose a hidden flax tax? It seems contradictory to me. All you’ve done is throw juvenile snipes and jabs and haven’t answered the question.
Soothsayer
February 15th, 2013
5:11 pm
Jay, like I always say: “a billion here, a billion there, pretty soon you’re talking some real money,”
Maybe there’s a saving grace here. Could it be that the exercisers of those stock options will be taxed at the personal level?
0311/8541/5811/1811/1801
February 15th, 2013
5:12 pm
Corbin Sharpe.
I think, therefore I am..
I think. @ 11:23 am :
“0311/8541/5811/1811/1801
You have to go back to 1964 to prove your point? Scout, you are sad.”
Yep …………. just like Supreme Court decisions go back way over a 100 years.
It’s called “PRECEDENT” !
Look it up !
Keep Up the Good Fight!
February 15th, 2013
5:12 pm
Answered what question?
Ohhh, and I see you duck the question about that big refund offered by Facebook in your logic. Why are you taking juvenile snipes and not responding to that?
JamVet
February 15th, 2013
5:12 pm
Max, read and learn.
There is nothing in the U.S. Constitution that only persons should be taxed. There are also no moral reasons to avoid taxing corporations. On the contrary, as a matter of fairness it would be appropriate to tax any entity which gains a benefit from the United States government. Corporations benefit greatly from the governmental system in the United States.
The very concept of a corporation only exists because of the protection afforded by a system of laws in the United States. Corporations effectively shield the owners of a business from liability, which certainly provides a benefit both to the corporation and the owner. A person can sue Exxon Mobil for injuries done by the corporation, but they cannot sue the owners of Exxon Mobil. This is the beauty of a corporation, and also why most large businesses form into corporations. This protections is afforded by the United States system of laws.
Corporations also benefit greatly from various governmental agencies. The SEC and FTC help to ensure a fair marketplace where every business can compete on an even playing field. If corporations have a legal dispute over a breach of contract they go to the court system for relief. Corporations are able to do business in America because of a relatively high level of security provided by government.
Corporations also often use the law against the people. If someone fails to pay their mortgage, or make payments on a student loan the corporation will appeal to the government in order to seize the house or garnish the wages of the worker. If a corporation finds itself unable to make payments on its loans it will take advantage of the United States bankruptcy laws to relieve itself of the debt burden.
Corporations also benefit from the infrastructure that can only be paid for with taxes. UPS and Federal Express certainly benefit from the interstate road system, and all of the airports built with taxpayer dollars. General Electric benefits from the electrical grid and broadband system which was build up with taxpayer funds.
While corporations often move their revenue to overseas accounts in order to avoid tax liability, the fact is they make much of their money from the business friendly environment in America which was created with taxpayer funds. If corporations make a profit, they likely owe a great deal of it to the government system they use.
There are also some false assumptions in the argument that higher corporate taxes will lead to higher prices for consumers. If a corporations cost of business increases it could increase prices, but the corporation also could simply reduce its tremendous profit margin, or reduce its dividend, or eliminate waste within the corporation. The profits of GE and Exxon Mobil suggests that many of these corporations have room for some sacrifice when it comes to profits. By raising prices a corporation risks losing customers to their competitor, a scenario they would likely avoid. If no competitor exist this is a separate issue under anti-trust law.
If the federal budget is to be balanced some group of people or some “thing” in America is going to have to feel the pain of spending cuts or tax raises. The spending cuts being passed right now affect mostly the poor and middle-class. Progressives ask whether it is really just to exempt some of the most profitable corporations on earth while simultaneously asking the most vulnerable in America to take on the burden.</i?
Cheesy Grits is gone but not forgotten
February 15th, 2013
5:13 pm
They can’t print it so where does it come form.
The American people.
“Why shouldn’t the American people take half my money from me? I took all of it from them.”
- Edward Albert Filene (1869-1937)
Madmax
February 15th, 2013
5:14 pm
Keep – try to focus – here comes the question ” I am asking how you can rail against the flat tax and then turn around and ask for the tax code to impose a hidden flax tax?”
0311/8541/5811/1811/1801
February 15th, 2013
5:15 pm
Brosephus:
What do you think about that new medal for the “drone pilots” ?
Brosephus™
February 15th, 2013
5:15 pm
Bro, maybe you want to go fishing?
If it’s with Carnival….. Nahhh….
pogo
February 15th, 2013
5:16 pm
10-20 years from now the name “Barack Obama” will be held as one of the most maligned political figures this country has ever known. The consequences of his and his democrats (during his first two years) and his and democrats actions today will haunt the children of this for their entire lives. They will know nothing but unending debt and endless government oversight and regulation. Yes, Bush and the so-called “conservatives” contributed to this as well but now Obama is taking spending and entitlements to a whole new realm. For all of you old Obama liberals, I hope you are proud. He is simply undoing the very fabric of the middle class of this country. He speaks of wanting to help the middle class but his real intention is to destroy the middle class entirely and make everyone but the rich and liberal elite (including himself and his food shoveling leviathan of a wife) government dependent morons. He has gone quite far in doing just this in just four short years.
Keep Up the Good Fight!
February 15th, 2013
5:16 pm
A flax tax — more fiber?
Again, Madmax, your “hidden flat tax” is where? Tell me about that advertising rebate.
Brosephus™
February 15th, 2013
5:17 pm
What do you think about that new medal for the “drone pilots” ?
I saw your rant, amongst others, and I don’t have any thoughts or feelings on it. I haven’t read up on it to see how it’s awarded and what one has to do to get it. Seems as though I read that you have to be a pilot to fly them, so I honestly don’t have any feelings positive or negative about that.
Cheesy Grits is gone but not forgotten
February 15th, 2013
5:20 pm
For all of you old Obama liberals, I hope you are proud
We are. Everything else you wrote pure nonsense.
Michelle Obama is a lot hotter than most first ladies.
Ill bet she would kick your a** too.
Kamchak ~ Thug from the Steppes
February 15th, 2013
5:20 pm
…and his food shoveling leviathan of a wife…
And there’s your sign.
Common Sense isn't very Common
February 15th, 2013
5:20 pm
Bro
He just wants you to bring the dynamite
Madmax
February 15th, 2013
5:21 pm
Jam – I understand the argument but eventually they get their money from their consumers and that will be in the form of either a flat tax or a regressive tax (higher volume consumers can generally broker better deals so the small guy takes the full brunt); double taxation does nothing but raise the cost of everything. We may not like it, but that is the madness of this system, but until someone can come up with a better system, it’s still the best alternative in the world.
0311/8541/5811/1811/1801
February 15th, 2013
5:25 pm
Get ready libs. ………. your women are going in the next big one (or to Canada …………
)
“Rep. Charles Rangel (D-N.Y.) on Friday said he plans to introduce legislation that would bring back the military draft and extend it to women for the first time.
Rangel, who has pushed for years to bring back the draft, said the Pentagon’s decision to allow women to serve in combat means that they too should register for the Selective Service.”
Read more: http://thehill.com/video/house/283387-rangel-to-introduce-legislation-to-reinstating-the-draft-#ixzz2L0dY0MkR
Keep Up the Good Fight!
February 15th, 2013
5:30 pm
Perhaps if women register, clownish Ftroopers will be less eager to demand wars?
Dave
February 15th, 2013
5:32 pm
Fred, you took a shot at me this afternoon just before 2:00 p.m. about Ireland and low taxes and I asked for you to enlighten me. I had to earn a living in the meantime. Since you came back into the thread about a half hour later talking about a shooting expedition, I assume you aren’t going to respond. If low corporate taxes over there really did lead to it having financial problems, rather than the obvious cause, the world wide recession, I’d really like to hear the facts. And Fred says…..
Brosephus™
February 15th, 2013
5:33 pm
Kamchak
Pogp’s into the bones draped in skin look.
——————
NoCom
I was trying to find the comedian that joked about Blacks not riding in boats because of our “history” with cruises, but I can’t remember who made the joke.
0311/8541/5811/1811/1801
February 15th, 2013
5:34 pm
Brosephus:
Thanks for your “rant” reply.
0311/8541/5811/1811/1801
February 15th, 2013
5:37 pm
“………….. clownish Ftroopers will be less eager to demand wars?”
And perhaps cowardly liberal men will be less likely to have to fight for their country.
This could be a good thing for your guys !!!
Keep Up the Good Fight!
February 15th, 2013
5:37 pm
Bro…. is that the one with the punch line: “they aren’t falling for that take a cruise line again?”
0311/8541/5811/1811/1801
February 15th, 2013
5:38 pm
Excuse me: “you guys”
Kamchak ~ Thug from the Steppes
February 15th, 2013
5:39 pm
For pogo
http://www.alternet.org/9-interesting-things-you-may-not-know-about-clitoris
Educate yourself about what you’re doing wrong, and maybe you wont hate the wimmens
On $1 billion profit, Facebook paid MUCH less than nothing in taxes … | Income Tax Guide
February 15th, 2013
5:40 pm
[...] this article: On $1 billion profit, Facebook paid MUCH less than nothing in taxes … ← Brownback Spells Out Ambitious Agenda for 2013 | Wichita [...]
Dave
February 15th, 2013
5:41 pm
JamVet at 5:12 p.m.,
“Corporations benefit greatly from the governmental system in the United States.”
I didn’t go back and read the exchange this was a part of; but, I would make the point that corporations are fiction, no matter what the current Supreme Court says. I’d agree that their owners and employees benefit from our government; but, the entity? It’s a piece of paper in a government office or a series of bits in a government computer.
0311/8541/5811/1811/1801
February 15th, 2013
5:49 pm
Yes ……….. I did ……….. that’s the “0311/8541″ part.
Got to run.
Have a nice evening !
Brosephus™
February 15th, 2013
5:54 pm
Thanks for your “rant” reply.
If that was a “rant”, then I have major improvement to make to reach the gold medal level of yours.
—————–
Keep
Yep!!! Or it’s something along that line of thought.
Brosephus™
February 15th, 2013
5:57 pm
Kamchak
independent thinker
February 15th, 2013
6:02 pm
Tne business worl d of the Repubs and Mitt Romney in full display- thanks Jay!
Keep Up the Good Fight!
February 15th, 2013
6:08 pm
And yep… there are many brave women who are fighting and dying for you right now. Volunteers. And you are “kept” by those women, right? So let’s not insult them by claiming that somehow your internet chest thumpin makes you superior.
Latrina
February 15th, 2013
6:45 pm
“…Facebook, which because of its generosity to its own executives won’t be paying state or federal corporate income taxes for years to come.”
Well Jay Congress and no one else writes the federal tax laws and the Dems are the majority (at least in the Senate) at the moment so let’s see if the Facebook loophole gets closed. I’d be willing to bet a substantial sum that it won’t happen.
guy
February 15th, 2013
7:27 pm
I agree with you on this,Jay. I have a small business and if we are even a little profitable,here comes the tax man. I know also that when obamacare blooms we can expect more taxes that are totally uncalled for. Then you have those who get back in taxes much,much more than they ever pay in. The system is completely broken. When average people like us are forced to throw in the towel,look out. It’s over!
JKL2
February 15th, 2013
7:49 pm
I am guessing Zuckerberg didn’t vote for Romney. Free pass from his (D) buddies.
Only Republicans are “evil rich”…
btull27
February 15th, 2013
9:14 pm
So, This article is about CAPITAL TAX instead of the absurdity of our tax code as a whole? Lets again go at profits from investments, which have already been taxed, to further promote this assault on the “rich”. Our tax code is the dangling carrot above the head of politicians. If you believe in it or defend it, you are an idiot. Politicians make it out as some “complex” anomaly that is incapable of being modified without the devine intervention of God. We just changed healthcare with the stroke of a pen, but TAXES are too much to tackle. Democrats and Republicans are FOOLS and any of you who spend your time defending them can consider yourselves the same. Whether you have an O or a W on your back window, your both f’ing idiots. Brother from a different mother.
Joel Edge
February 16th, 2013
7:27 am
Geez, Jay, Zuckerberg hosted a fundraiser for Chris Christie, get over it.
Cloudodust
February 16th, 2013
8:57 am
If Facebook owned one single Exxon fuel pump, would they still get this break or the hush-hush from the not-so-MSM..? Pick and choose how you want to attack free enterprise. That’s the new American way…What a crock of Liberal lutefisk.
Vast Right Wing Conspiracy (aka "Knuckle-Dragger")
February 17th, 2013
9:49 pm
This is a favored group of the democrats. No need for a true believer such as yourself to act surprised, Jay.
rose carloni
February 18th, 2013
10:47 am
Disgusting. There is something inherently wrong with our current capitalist system and tax laws