Even though Facebook had a year of record profits, it paid no income tax.
For most Americans, taxes had risen at the start of 2013, but some big companies skirted paying taxes at all. Facebook paid no net corporate income taxes for 2012.
Instead, Facebook will rake in nearly four and a half million USD in net tax refunds for the year, according to Facebook’s recent annual report. The company earned over a billion dollars in US corporate profits last year.
Facebook cut its tax burden on the most part by taking tax deductions on executive stock options. Thanks to this one tax break, Facebook will save a total of $3.2 billion in taxes, according to the report.
Facebook is one of several major companies that’s being accused of tax evasion. Many of America’s most profitable companies, such as General Electric and Wells Fargo, paid no net income taxes between 2008 and 2010 due to the tax loopholes, says Citizens for Tax Justice.
Robert McIntyre, of watchdog group Citizens for Tax Justice, mentioned in an interview with Fox News:
“The employees cash in stock options, and at that point there is tax deduction for the company. Because even though it doesn’t cost Facebook a nickel, the government treats it as wages and they get a deduction for it. And usually it doesn’t wipe out companies whole tax bill, although many companies get big breaks from it.”
According to the Huffington Post, President Obama mentioned in his State of the Union address that he planned to be:
“getting rid of tax loopholes and deductions for the well-off and well-connected.”
Curtis Dubay, a senior tax policy analyst with the Heritage Foundation, mentioned that Facebook didn’t get called out for tax evasion in President Obama’s political agenda. Instead, President Obama pointed to oil and gas companies as examples.
Do you think Facebook is taking advantage of President Obama’s oversights by not paying taxes in spite of a record boost in profits?
Facebook paid no corporate income tax last year, after making more than $1 billion in profits thkpr.gs/YunuJF
— ThinkProgress (@thinkprogress) February 15, 2013