\”Bank of America paid no federal tax and we gave it $45bn in the bailout,\” said Alisa Harris, one of US Uncut\’s New York organisers. \”People are tired of sitting at their computers and seething, they want to get out there and do something, It\’s not enough just to talk about it on Facebook.\”
Bank of America said it had made a loss of $4.5bn in 2010 and had therefore has not owed federal taxes….
And, of course, the federal tax on corporations is the corporate profit tax. Don\’t make a profit and don\’t pay tax.
Pretty simple really, but seems beyond the understanding of some.
However, Harris said the focus on Bank of America was just the start for US Uncut activists. \”This movement appeals to people because it\’s focused on something a diverse group of people can agree on – corporations should pay taxes. It\’s a very commonsense, basic, non-partisan cause.\”
Well, apart from the fact that corporations cannot pay taxes and therefore do not, that\’s just fine.
But taxes on what? On profits? Sorta necessary for a company to make a profit first, isn\’t it?
According to US Uncut, nearly two-thirds of US corporations and 68% of foreign firms operating in the US pay no income tax.
And I do hope that USUncut hasn\’t made the most glaring of errors there.
There are two types of corporation in the US: S corporations and C corporations. These correspond, roughly, to our LLP and LTD/PLC. Thus an S corporation:
An S corporation, for United States federal income tax purposes, is a corporation that makes a valid election to be taxed under Subchapter S of Chapter 1 of the Internal Revenue Code.
In general, S corporations do not pay any federal income taxes. Instead, the corporation\’s income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.
Just like an LLP: no corporation tax, no corporate profits tax, is payable because those profits are taxed as income to the shareholders.
I really do hope, for their sakes, that they\’ve not made this mistake. Wouldn\’t surprise me if they had though…..