The federal government gives incredible tax breaks to corporations and puts an unfair burden on individuals as well as small business/entrepreneurs like me. While I have always known of this tax disparity, I have once again been rudely reminded of it this year when looking at my taxes.
I do not think it is fair that individuals pay federal taxes each year but some hugely profitable companies pay zero dollars for government taxes. I fact, I paid hundreds of thousands in federal taxes earlier this year, which covered calendar year 2017 earnings. This amount I paid was not counting state taxes. I am OK paying my fair share, it the playing field is level and fair.
Those profitable corporations with zero tax liability do not contribute to safety net programs (food stamps, disability, etc.), they do not help pay for the military, nation’s infrastructure. They do not give a dime to any of the programs for low income families. They contribute towards nadda as they pay zero dollars! They do not participate towards the running of this government.
I recently stumbled upon even more articles, including in NY Times, about how some major companies pay exactly zero dollars in federal income taxes. The timing for me to see these articles was bad, as I recently completed and filed my 2017 tax returns, and I paid over 439K in federal taxes last year. This does not include state of SC amounts; luckily I decided to live in a low tax state…that also gives a great quality of life…beaches, culture, history, restaurants, libraries, parks, etc. And Charleston was rated the nicest and friendliest people in the country for many years running.
I paid these federal government taxes earlier in 2018 which covered my 2017 obligations, which was actually a decrease from what I paid in taxes last year. Ha! Now I know I need to pay my fair share, I am in the highest income tax bracket and in top one percent based on income, and am OK with the concept of paying into the system. I think providing a social safety net to the disabled, elderly, children who never have a chance, etc. is a good thing. Providing of course the fraud and waste is brought out of the system and those who get the financial aid (which may taxes contribute towards) work to improve their life.
What I struggle with is that huge concept of profitable companies that pay zero in taxes. This is what I think is unfair, and we get emails from other struggling families saying big business is taking advantage of this country. Not only that, for me, and others innvoators/successful people, a high tax rate can impact our ability to start a new business, invest, further entrepreneurship, etc. We do not have as much capital to invest, and quite frankly it takes away some of the incentive to risk our money on new investments.
For example, there are stories of how Amazon made $5.6 billion in US based profits in 2017 but paid zero dollars…that is right, not a cent! There are many other examples as well. Much of the tax data is delayed, so some of the data may be a year old or so, but there are even profitable companies that have not paid taxes over 8 years! Not just one, but 8 years.
There are many other examples of profitable companies that do not pay taxes over 1, 2, 3, or fewer years as well. While the reasons can vary (such as deductions, losses carried forward, etc.), I am a huge believer that everyone should pay some taxes. Find who paid taxes in 2017.
I even think even a very low income family should pay something…even if a buck or two, so they have some “skin” in the game. And a hugely profitable company should of course be paying their fair share as well.
With the recent 2018 tax cuts voted into place by Congress late last year, on a selfish level I hope my federal tax obligation goes down next year. But of course that depends on many things in the law as what happens to me, my finances, income, personal situation and more throughout the year. So while I am hopeful and will keep my fingers crossed, I am not expecting much relief. Sometimes I know why some successful people, businesses, etc. move overseas and/or give up citizenship…to save money on taxes as the US system is definitely unfair.