Below are the names and details of some of the largest tax loopholes in American history. These tax loopholes are used by American corporations to legally avoid taxes. The information is more than interesting, its almost unbelievable, yet we have every reason to believe that the Huffington Post got it right.
Excess Stock Options
About 280 Fortune 500 companies have taken home a total of
$27.3 billion over the past three years thanks to a tax break that allows corporations to treat executive stock awards like cash compensation -- meaning the money can be written off like a business expense -- according to a recent report from the Citizens for Tax Justice. Critics argue that this defies "common sense," given stock options aren't a cost to the company like cash compensation is.
Facebook
used this single loophole to wipe out its entire tax liability last year.
Accelerated Depreciation
Accelerated depreciation
accounted for $76 billion in revenue loss in 2011, the most of any corporate tax break, according to the Government Accountability Office.
The tax break allows businesses to write off the costs of ostensibly deteriorating machinery before the equipment even wears out. A Citizens for Tax Justice study
found that Duke Energy managed to reduce its tax liability largely by using this tax break. Duke called the study misleading.
Deferral On Overseas Profits
Fortune 500 companies, including Apple, have
more than $1.6 trillion in profits parked offshore, according to multiple recent studies. By keeping that money overseas, companies are able to avoid paying U.S. taxes on the profits.
Exclusion Of Interest On State And Municipal Bonds
When companies invest in state and municipal bonds, they are
exempt from taxes on the interest they earn from those bonds. This is one corporate tax break that individuals can take advantage of as well, though it largely benefits the wealthy. As a result of the loophole, the
government has lost $58 billion over the past five years, according to the Fiscal Times. Companies including Goldman Sachs have benefitted from the exemption by using the tax exempt bonds to build new offices,
according to The New York Times
Domestic Manufacturing Activities
Starbucks is
among the companies that have successfully lobbied to qualify for a tax break that rewards U.S. manufacturing. As a result, activities like roasting coffee beans count as domestic manufacturing and are eligible for tax breaks
Fossil Fuel Subsidies
Oil and gas companies currently benefit from tax breaks that they say encourage innovation by subsidizing hunts for oil and gas that may not turn out to be fruitful. The result: Continental Resources
paid an effective tax rate of 2.2 percent over the past 5 years. Chevron and Exxon Mobil paid tax rates at 4 percent and 2 percent, respectively.
Corporate Jet Owners Tax Break
