An interesting article by Peter Goodman
, explains how corporations that claim to be serving the larger common good pay zero taxes. I suggest you read the whole article, which focuses on Marc Benioff, the CEO of Salesforce, and will pass on one passage that particularly struck me:
His philanthropic efforts have been directed at easing homelessness in San Francisco, while expanding health care for children. He and Salesforce collectively contributed $7 million toward a successful 2018 campaign for a local ballot measure that levied fresh taxes on San Francisco companies to finance expanded programs. The new taxes were likely to cost Salesforce $10 million a year.
That sounded like a lot of money, ostensible evidence of a socially conscious C.E.O. sacrificing the bottom line in the interest of catering to societal needs. But it was less than a trifle alongside the money that Salesforce withheld from the government through legal tax subterfuge.
The same year that Mr. Benioff backed the ballot measure, his company recorded revenues exceeding $13 billion while paying the modest sum of zero in federal taxes. Salesforce deployed 14 tax subsidiaries scattered from Singapore to Switzerland, moving its money and assets around in a masterful display of accounting hocus-pocus that made its taxable income vanish..Salesforce repeated the trick in 2020, paying no federal taxes despite reporting $2.6 billion in profit.
During President Bill Clinton’s administration, the Treasury Department opened up a loophole that enabled executives at multinational corporations to set up subsidiaries in foreign countries that beckoned with low taxes — Ireland was a popular choice — and then legally transfer their intellectual property there. Their new international outposts charged the rest of the corporation exorbitant licensing fees to use the intellectual property.
The net effect: On their American earnings statements, the wealthiest corporations looked like money losers, paying taxes accordingly.
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