Liberals are analytically challenged, and the more liberal, the more challenged.
And by the way, $4.8 billion in taxes on $10.4 billion in profit is a tax rate of 46 percent -- 11 points higher than the corporate tax rate of 35 percent. Which I'm sure is all the basis you need for yet another harangue against the wealthy as tax scofflaws.
LOL...I guess we should consider the author of that piece conservative, but not very analytical either...after all it took more at least 30 secs to google the topic...
Al
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News Corp pays 20% tax in US
By Alan Rappeport in New York and Vanessa Houlder in London
News Corp’s political influence, which has ruptured dramatically in the UK in the past week, has not come as a result of its contributions to government coffers.
Its latest 10-K statement showed that although the corporate tax rate in the US is 35 per cent, News Corp’s effective tax rate last year was 20 per cent. The company earned $2.5bn in profits and still managed to receive a tax benefit.
Tax analysts say News Corp has historically been able to keep its tax rates low because of its ability to capitalise on low-tax havens and a strategy of deferring taxes and accelerating the depreciation of its assets.
Tax policy has been a hot issue in the US as the Obama administration looks to raise revenue by closing tax loopholes amid contentious negotiations to raise the country’s debt limit. This year, General Electric came under fire for paying no taxes in 2010, in spite of earning $14.2bn in profits.
A 2009 report by the US Government Accountability Office found that News Corp had 152 subsidiaries in tax havens or “financial privacy jurisdictions”. Only Citigroup and Morgan Stanley had more.
“The only thing that could be considered abusive is the transfer pricing,” said Robert Willens, an independent tax consultant. “It’s always questionable, because the issue of where income has been earned is not a well-defined concept.”
News Corp declined to comment.
In 1999, The Economist concluded that News Corp had paid no net UK corporation tax since June 1987, although the group had made £1.4bn in profits. In some years the company did pay some tax, but in other years it claimed rebates.
A UK tax adviser said the company’s tax planning was likely to be based round its financing, rather than its intellectual property. Borrowing money in high tax jurisdictions is a commonly used technique to shift profits to low tax jurisdictions.
Jack Ciesielski, publisher, of the Analyst’s Accounting Observer, called the strategy “brutally simple”.
“Companies go where the rates are lowest to do business and keep costs in jurisdictions where they’re most deductible,” he said.
However, an insight into the complexity of News Corp’s tax structures came in 2009 when Australian Courts were ruled on a global restructuring in 2004 and 2005 as the group’s holding company relocated from Australia to the US. The Australian tax office blocked it from getting a tax benefit from a $1.5bn capital loss created by the restructuring, arguing that it used contrived and circular steps to create the benefit.
But News Corp won the case on the grounds that it was indeed a commercial deal, along with an appeal mounted by the Australia tax authority in June last year.
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