Facebook Takes Advantage Multi-million Dollar Tax Breaks
MENLO PARK, Calif. - Facebook has released its tax information and despite the fact that it made over a billion dollars in profits last year, the company won’t be paying any taxes, but will instead be collecting a $429 million refund. The refund is a result of special tax breaks gained when Facebook gave its employees stock options as part of its initial public offering last year.
As if we needed more evidence that the system is broken.
Right now negotiations over the automatic federal spending cuts set to kick in at the beginning of the month, the so-called sequester, are stalled. Amongst the biggest differences between the Republican controlled House and the Democratic controlled Senate is that one side wants to close loopholes in the tax code and the other side doesn’t. Guess which is which.
If you aren’t sure, you could be somewhat forgiven, since Mitt Romney kept going on during the presidential campaign about closing loopholes. Oh, and when they were “offering revenue” during the fiscal cliff stand-off, Congressional Republicans repeatedly said they were hunky dory with simplifying the tax code and eliminating deductions.
Now though, that sort of commonsense approach to long term deficit reduction is off the table for Republicans. This is a no-brainer folks: before we start taking money away from people who can’t afford to lose it, we need to stop those who can afford to shoulder more of the burden from avoiding paying their fair share.
Note that deficit spending has come down every year since 2009, when the combination of the final Bush budget and emergency bailout monies requested by both the outgoing and incoming Presidents put $1.4 trillion on the credit card. These spending reductions have gone on despite the fact that basic macroeconomics tells us that we shouldn’t be cutting anything until the nation’s unemployment situation is resolved.
This hasn’t been good enough for Republicans though. They forced the sequester deal two years ago by yelling and stamping their feet about the horror of deficits and refusing to raise the debt limit without an agreement for future cuts. At the time, Speaker of the House John Boehner was quoted as saying that Republicans got 98% of what they wanted in that deal.
Now if no agreement is reached, meat cleaver cuts chosen specifically because they were so terrible neither side would want to allow them to happen are about to be a reality. The GOP, who supposedly cares so much about debt and deficits, is busy pretending that its leadership didn’t spend the last year talking about tax code reform, and that the sequester is really all Democrats’ fault.
Republicans would have us pay no attention to the man behind the curtain. They would have us forget Facebook, forget that Warren Buffet pays a lower effective tax rate than his secretary does, and forget that 10,000 US corporations are supposedly headquartered in a single building in the Cayman Islands.
I mean isn’t it obvious that the only way out of this is cutting grandma’s social security and making her pay more out of pocket for her health care?