The federal government has been effectively subsidizing News Corp. for years:
After digging through News Corp.’s financial disclosures, Johnston reports that based on the company’s $10.4 billion profits during that time period, the company would have been expected to pay $3.6 billion at the 35 percent corporate tax rate. But instead the company managed to collect $4.8 billion in income tax refunds, “all or nearly all from the U.S. government.”
For the visual learners among us, Reuters compiled this handy chart.
And exactly how did News Corp. go about turning an income tax profit over the past four years? According to the report, by using these three tricks of the trade: “aggressive use” of intra-company transactions that moves profits to global tax-free locations and losses to heavily taxed areas; buying companies with tax losses; and by maximizing the benefits of tax deferrals.
That might sound remarkably boring to those of us who never splurged for Turbo Tax Premier, so we’ll repeat the takeaway: Instead of paying $3.6 billion in corporate income taxes over the past four years, the company actually received refunds worth $4.8 billion, a total worth nearly half of News Corp.’s pre-tax profits over the same period.
The British let this crazy Australian fuck rule their country for 30 years. He doesn’t full control of this country yet — it’s time to make sure he doesn’t get it.
Update. Reuters has withdrawn the story, saying it was wrong.
WereBear
But making sure Grandma gives the cat food to the cat: soshalizm!
MarkJ
Gee, I wonder why the Republicans are fighting tooth and nail against closing those offshore tax havens? Couldn’t be because their propaganda outfit exploits the hell out of those loopholes.
beltane
There are people who will say that Murdoch is just a sympton, not the disease. I have to respectfully disagree with this assessment. The Murdoch organization is the disease, not the only one, but the most dangerous one by far.
Han's Solo
That’s free market economics for you right there!
But don’t you see? They HAVE to take the government welfare so they can use it to complain about people who are on government welfare! It is all so simple.
Han's Solo
Also too, what Fox “news” financial “experts” don’t tell you is that the “invisible hand of the market” is a highly skilled pick pocket that survives by robbing the American people.
Elizabelle
agree with beltane at 3
liberal
I don’t get why we need to allow businesses, particularly corporations, to own other businesses.
Chris
I’d say Murdoch had more control of the British government system than he does ours, but has more control in terms of popular support and loyalty here than he does there.
Which is why, sorry to keep concern-trolling, but I’m a skeptic of anything serious being accomplished on this side of the ocean.
jheartney
This is just one of the schemes Murdoch has for forcing people to pay him without their knowing it. If you get cable TV, part of your monthly fee goes to News Corp. for the Fox News feed, whether you watch Fox or not. Even if you are a liberal, you are paying O’Reilly’s salary if you have cable.
bondirotta
oh yes he does
Comrade Javamanphil
A whole bunch of people so poor they can use the EIC to pay $0 in federal income tax (please don’t mention social security or medicare) vote for Democrats. So, as you can see, both sides do it! Also, too, stop attacking Jake Tapper’s sister organization. It’s uncivil. (And by “It’s”, I mean the truth.)
Judas Escargot
At 80 years old, the world will be rid of Murdoch soon enough, and he must know this. So IMO all this scrambling is to protect his son.
So here’s hoping the son falls, too. I want to see that foul, toxic dynasty utterly destroyed and ground into the dust for all time.
jrg
Yep. Because it will be oh-so-partisan for the government to do something about a “fair and balanced” TV network that lies to it’s viewers and steals from the taxpayers.
Mudge
But..but..but Orrin Hatch is angry that people who make $20,000 a year don’t pay income taxes! I eagerly await his press release about Newscorp.
DougJ in Damascus
In the absence of something explosive — phone hacking into 9/11 victims voicemail or some such — I think you are probably right.
birthmarker
I’m with you, Chris, sound and fury signifying nothing. I can only hope I am wrong.
I was in Europe last year and I didn’t understand why what seemed to be the straight-up American version of Fox News was on every hotel TV. (Didn’t watch enough to see if they mixed it up for the European audience.)
May my soul never be so dead that I watch Fox News.
Zifnab
With negative tax rates, News Corp must be a freak’n jobs machine. We can’t raise their taxes to non-negative levels or we’ll totally destroy the economy.
Quincy
Fox’ war on Media Matters’ tax-exempt status just got even funnier.
Brandon
@Judas: the real question is what happens after Murdoch. Will the rats scatter, will there be a destabilizing fight for control among his kids, or has his influence on the culture and operations of News Corp been so strong that the organization will live on continuing to operate as a vast criminal enterprise?
Judas Escargot
No arguments on any of these points from me… Murdoch seems to have been taking the King Lear/Ran route in trying to divvy up his holdings among his multitude of offspring ahead of time.
Culturally, I think Murdoch::NewsCorp as Steve Jobs::Apple. The company will certainly survive the eventual passing or retirement of its founder, but will lose a lot of its ‘flavor’ in the transition.
Only time can tell such things.
gene108
I don’t get why people get upset, when a corporation or individual works within the existing rules to minimize their tax liability or gets a refund?
The problem isn’t the company acting unethically, because they aren’t. They are following the laws as written.
The problem would then be with the laws.
gypsy howell
And who writes the laws? The people who get legally paid off by companies like NewsCorp. And why is it legal to essentially bribe our politicians here in the US to write laws like this? Because it was made legal by laws written by the people who get paid off by companies like NewsCorp.
jim filyaw
how does newscorp’s tax refund compare with the federal allocation for p.b.s.?
gene108
Congressmen and women.
As angry as you are at companies, they still can’t vote an elected official into or out of office. We aren’t totally power less, when dealing with Congresscritters.
The real problem is most people know very little about the tax code and all the deductions that can be available, so they don’t know what exactly to complain about.
Or middle class homeowners, who would vote any elected official out of office in a heartbeat, if Congress rescinded the Home Mortgage Interest deduction.
I mean is it really fair that a person, who pays interest on a mortgage should be given preferential tax treatment versus someone who rents or owns their home outright?
There’s a lot in the tax code that benefits people that isn’t exactly fair to everyone.
The bigger issue with how News Corp. handled its tax situation, in my opinion, is having dummy offices in the Cayman islands or wherever and using them as tax havens to avoid paying taxes.
That’s trying to circumvent U.S. law, by parking your cash in a foreign bank account, rather than a U.S. bank account.
I can understand not wanting to tax foreign operations, because a company would be paying taxes twice. For example, Ford’s European division pays taxes for income in Europe. There’s no reason to pay income on those sales in the U.S., even though it would report those sales as income in its consolidated financial statements. That’d be double taxing someone, just because they have an office in the U.S.
On the other hand, if you really don’t do any business in the Cayman islands and are just using it as a tax haven, I think there should be some way to capture taxes on that income.
Quiddity
@gene108: The “problem” is that Fox News has been attacking GE for not paying taxes (along with snide remarks about Immelt).
Fox is guilty of political hypocrisy. That’s the “unethical” charge that sticks.
different church-lady
What I find interesting about all this is how similar it is to the way strong-arm dictators fall. They can rule a country for 30 or 40 years on strong arm tactics and fear alone. But once there’s a chink in the armor or health starts to fail or any sign of weakness, suddenly opposition starts to gain traction from a lot of different directions and everything falls apart very quickly.
News Corp’s been ripping us off for years. Why no news or outrage about it until now? Because suddenly Murdoch is seen as weak instead of invincible.
different church-lady
@ gene108: some of the anger is misdirected — it ought to be at the laws and lawmakers, but we humans tend to take nearly any mental shortcut we can.
Plus there are people who will deliberately encourage one to take that shortcut: if you hate News Corp, you’re going to state it in a way that makes one want to hate News Corp too.
But a fair amount of it ought to be directed at News Corp, and I think I can lay a pretty safe bet that they had a hand in lobbying for the laws that allow them to do this. The lack of ethics comes not once the law is written; it comes well before.
P.S. Throw in the fact that News Corp is a major media player and the ethical considerations get more interesting — they can influence lawmakers not only with money, but with the shaping of public opinion, in a way that say, the makers of ball bearings can’t.
bargal20
Rupert Murdoch is American, not Australian. He’s been American since the 1980s.
Why does DougJ hate immigrants?
El Cid
The federal government did not subsidize this company or have it pay no taxes.
Because. And also SHUT UP.