Monday, December 03, 2007

The Taxman Barely Cometh

The biggest tax-avoidance strategy targeted by Rangel is what might be called cross-border tax arbitrage—taking advantage of the difference between higher U.S. rates and lower rates abroad. Companies can do this because they do not have to pay taxes on earnings from their overseas operations until the income from those operations is brought back into this country. One of the big beneficiaries of this rule is semiconductor manufacturer Broadcom, which calls Irvine, Calif., home but makes most of its goods in low-tax countries such as Singapore. It then ships them directly to overseas customers.

Corporate Taxes: Who Pays the Least

Congress is currently considering lowering the 35% federal tax rate. But a lot of companies don't need help from Washington, they've been finding legal ways to shrink their tax bill for years. We asked the analysts at Capital IQ (a division of Standard & Poor's) to cull the cash taxes (ie. actual checks) that the companies of the S&P 500 paid to the tax collector over the past five years and then look at how that compares to their earnings before income taxes. Here's a list of the 100 companies that sent in the smallest checks

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