Scroll Left Scroll Right
August 15, 2011 12:55 AM

Tax havens: Do companies pay their fair share?

By
Overtime Staff
Topics
Correspondent Candids

Business owners across America are staring down a 35 percent tax rate - but not every company actually pays 35 percent. "60 Minutes" correspondent Lesley Stahl reveals the new games companies play to lower their tax rates, sometimes down to single digits.

Watch Lesley Stahl's report.

For her story on the "60 Minutes" broadcast, Lesley and her producer Shachar Bar-On traveled all the way to Zug, a quaint, medieval town in Switzerland where the corporate tax rate is about 16 percent. As Stahl reports, corporate pressure to transform internal tax planning departments into profit centers has driven multinational corporations like Weatherford International to "move" to the tiny Swiss town. But when Lesley landed in Zug and went looking for these companies' headquarters, all she found was a few empty mailboxes.

In this video, Lesley discusses her reporting on the new tax havens with Overtime editor Ann Silvio. What would you do if you were in the shoes of these CEOs? Can you blame them?


Add a Comment See all 75 Comments
by chris_thomas77 September 23, 2011 6:33 PM EDT
FORGET this this Warren Buffet nonsense about raising PERSONAL INCOME TAX on the richest Americans. IT'S A GOOD PRINCIPLE, but only offers to increase federal revenue by $32 Billion/year...were not talking even a fraction of a TRILLION dollars (with a "T") which is needed to accomplish anything regarding defect/debt reduction.

This PERSONAL TAXATION issue only ensures a fight between democrats and republicans....it's a stupid fight over ideological issues that (although correct, the richest should pay a bit more percent as Warren says) will bring ZERO JOBS to America. Are you concerned about ******** like this or JOBS?

THE ISSUE IS CORPORATE TAXATION. At 39.5%, we have the 2nd highest corporate tax rate in the world (after Japan), yet there are so many EXEMPTIONS in our tax code that some companies/industries pay almost nothing....look at the oil industry or Verizon Wireless. There are over 1000 (yes, 1 thousand) changes to the exemptions in our US tax code every year, that's more than 3 per day! This allows some companies/industries to get off paying almost nothing in taxes, while others pay full price. This makes the United States tax code look like a big joke....it's only about which congressman pockets you are in on the committees that set the tax code. How can ANY business make projections concerning whether or not to domicile in USA, or to enter any particular business market in USA over the next 5-10 years when there is NEVER any PERMANENCE to our tax code....the only thing for sure about USA tax code is that it will always be unstable like a kite-in-the-wind.

The ONLY way to bring JOBS and prosperity to USA is to employ ONE single uniform FLAT tax rate to ALL companies and industries. A FLAT business tax rate of about 21% (maybe 23% maximum) is what's needed.

Everyone on both sides of the aisle will bellyache about this.

The Republicans will be uneasy to go against certain industries that pay much less than 21%, as they are too deep in these industries pockets, although it will benefit many other small businesses. Industries that are accustomed to getting off for less than 21% will all complain that they deserve a better rate, and those paying 39.5% will cheer at now paying only 21%. Republicans will look like RETARDS that only support specific industries, not all businesses.

The Democrats will complain that this will cost about $2 TRILLION per year of revenue, but the added business volume will make up most of it, create JOBS, and therefore increase personal income taxes paid by more jobs. Democrats will look like RETARDS also because they will fit the typical stereotype of tax-and-spend.

How did BOTH PARTIES become such a bunch of RETARDS unworthy of public service?

A RELATIVELY LOW (~21%) UNIFORM FLAT-RATE CORPORATE INCOME TAX (WITH NO EXEMPTIONS FOR SPECIAL INDUSTRIES) IS THE ONLY SOLUTION TO CREATE PROSPERITY AND JOBS IN USA. Anyone who says otherwise is a fool....it's already been tried.
Reply to this comment
by mike60min August 22, 2011 2:06 PM EDT
What is not disclosed in the Program are the tax incentives that allow multinationals to lay off people in the USA, shut down plants and move to India and other countries like Canada, that made the Secret Service bus.

Republicans in September 2010 voted as a block to stop a law that would have removed the tax support to Outsource jobs out of the USA. Since, the Multinationals have created 2.9 million jobs overseas and laid off 2.4 million in the USA.

Manufacturing jobs lost in the USA over 7 million.
20% of our kids live in Poverty.
12 million kids are homeless
20% of the GDP goes to the 1%.
We have the lowest Marginal tax rates in history and Congress is not using taxing policies to "Incentivize" Corporations to create jobs in the USA.

People will do anything, including trashing our economy to gain control of Congress and the Whitehouse.

Don't be so sure that will happen, we are starting to figure out who the enemy is, and it is not the President or his party.
Reply to this comment
by jschmidt27 August 21, 2011 9:26 PM EDT
The answer to the budget deficit is to fix the tax code. Cut all of the tax loopholes, subsidies including ethanol, and green energy and then lower the corporate tax rate to a competitive rate instead of the 2nd highest in the world. That corporate tax rate has killed jobs and investment. The Dems want to increase the tax on over 500k in income to 39.6%. Add up to 12% tax and you have that group paying over 50% in tax. That hits the small businessman's ability to invest in the business and hire. The Dems also want to increase the tax on cap gains which again hits investments in business as well as most retirees who have stocks or mutual funds. The Dems ideas have failed.
Reply to this comment
by rn27 August 15, 2011 10:37 PM EDT
The CEO of Cisco made the point several times in his interview that all the other industrialized countries have lowered their tax rates on corporations. You know what else these industrialized countries have done that we don't do? Provide healthcare for all their citizens. If the argument is that we need to be more like other industrialized countries with the way we structure taxes for corporations I say, let's not stop there. Let's provide healthcare for all! The overwhelming cause of families declaring bankruptcy is catastrophic illness. That doesn't happen in other industrialized countries. Think of all the money that corporations loose when people declare bankruptcy and default on their financial obligations. I call on Washington to make a deal. We'll call it the "We want to act like other industrialized countries" bill. There would be something for everyone to like and to dislike (the hallmark of a compromise). The wealthy won't have to worry that so much of their money is going towards taxes and the rest of won't have to worry about loosing everything if we have the misfortune to get sick, or have to choose between taking our sick child to the doctor or buying food for the week! This could be a winner. I totally agree with Cisco's CEO when he says that America need to wake up and be more like other industrialized countries!
Reply to this comment
by smartin1971 August 15, 2011 8:29 PM EDT
Dear America,



Today 45,000 Verizon employees received their last paycheck until this strike is over. We understand that in this economy everyone should be willing to give up something for the betterment of our country's financial welfare. We are more than willing to bargain with Verizon to come up with a fair contract for everyone involved. We are not asking for anything more than what we already have and have had for years!



Verizon has placed ads in papers & on television telling you that they just want us to pay for a portion of our health care insurance premium cost and listing various salaries that we should be thankful for. Verizon has failed to publicly mention the 99 other items they would like for us to give up or that these salaries and benefits that they are posting are inaccurate. It takes a unionized Verizon worker 25 years to gradually earn the amount of vacation time that is in these ads!



Verizon has told you that their land line business is failing, yet they fail to mention that that very business is the backbone network of their FIOS, DSL & Wireless operations. They want you to think that there is no need for a land line because they want their FIOS & DSL to be classified as "internet or data" instead of exactly what they are: land lines. When a land line customer switches to FIOS, Verizon's fiber optic network, Verizon tells you it's lost but in fact it is transferred onto the FIOS network. We the unionized technicians are the one's who built and continue to maintain the FIOS network. There are millions of FIOS customers now and new ones everyday that had a land line previously. Every cell tower connects to a land line network. Without Verizon's land line business they would have no wireless business!



Verizon fails to publicly mention that they want to begin increasing the outsourcing of American jobs to other countries by removing all aspects of job security from the contract, to freeze all pensions for current workers and completely eliminate them for future employees, slash sick time, eliminate disability payments for injured workers, eliminate holidays (including Veteran's Day) and completely gut health care plans for current & retired workers.



Despite making $19.5 billion in profits and paying out $258 million to it's top 5 executives in the last four years, Verizon wants to take back more than 50 years of collective bargaining and destroy middle class jobs, just like many of the other large corporations!



The President of Verizon makes $55,000 a day, how much does the average American worker make per day?



Verizon has paid $0 in federal corporate income taxes over the last three years, how much has the average American worker paid in federal income tax?



Verizon received nearly $1 billion in tax benefits from the federal government (your money) over the last three years, and slaps the federal government in the face by outsourcing jobs to other countries like India and the Philippines. How much has the average American worker received in tax benefits?



You ask why the workers would be going on strike when we've been spoiled and should be thankful we have a job in this economy? I believe what you should be asking is why aren't there more American jobs being created by American companies? Why are companies being allowed to outsource their jobs when American production is at an all time low and we all know that we cannot grow as a consumer only country! We must produce products here in the United States of America!



We are on strike for all of you, not just ourselves. The middle class stands to lose everything while corporations and a few individuals gain it all. We walk the line for you!



We understand that we may have to give up some things that we have had in the past, but we should not have to give up everything including our job security! All we are asking is for Verizon to sit down and bargain with the people that helped build it. It's time to bring jobs back to America and end corporate greed!
Reply to this comment
by smartin1971 August 15, 2011 8:02 PM EDT
You Paid Federal Income Taxes. Why Didn't Verizon?
Verizon U.S. Tax Return
INCOME: $24,200,000,000
TAXES PAID: $0
REFUND: $1,300,000,000

Sources:


Institute for Policy Studies, 3/23/2011;
Washington Times, 4/10/2011
Verizon reported $24.2 Billion in pre-tax income for 2009 and 2010, yet paid $0 in federal income tax.
In addition, Verizon actually claimed a refund of $1.3 Billion, earning it a place on what the Washington Times calls the "Tax Evaders' Wall of Shame."
What's really incredible is that Verizon's actions are perfectly legal. The economy is exploiting tax loopholes to get the maximum reward.
Verizon Should Invest in Jobs and Communities
Despite huge profits and a free ride on taxes, Verizon has slashed good jobs our communities need more than ever. It's pulled back on building out high-speed broadband to connect some rural and inner city areas to the future. And it's neglected the copper telephone lines that millions rely on.
Verizon should pay its fair share of the taxes that fund schools, roads, public safety, job training, and so much more. And it should invest in good jobs, quality service, and broadband buildout.
Verizon's five top executives were paid $258 million over the last 4 years. That is over a quarter Billion dollars!
If middle class working families continue to decline, we will never get out of this recession.
Tell Congress that Verizon and all corporations need to pay their fair share!
Call your Senators and Representatives at 202-224-3121
45,000 members of the Communication Workers of America and International Brotherhood of Electrical Workers are on STRIKE against Verizon.

Verizon made 11.6 BILLION dollars in profit in 2009*
Verizon made 10.2 BILLION dollars in profit in 2010*
Verizon's Wireless Service is only wireless from your cell phone to the cell tower. The service is connected to Verizon's wireline network at the cell tower. There is only ONE network.

Here is why we are on STRIKE:

Verizon has demanded 1 Billion Dollars in Concessions. Almost $23,000 dollars per employee per year.
They have demanded this not because they are a company in financial distress but because they want more. Verizon's revenue in 2010 was 106.6 BILLION dollars*
The contracts that expired on August 6th had strong restrictions on moving work. Not just out of state but also out of the country. If an American worker loses their job because the job is sent overseas, who picks up the slack to cover their federal, state and local taxes? YOU DO!
We are in the worst economy in 75 years and verizon wants its employees to contribute over $10,000 a year to its medical plan before any benefits are paid out. This isn't just about its union members having to pay more, but having to pay more for less
Verizon's demands also want to eliminate things like:
differential for late tours
holidays
freezing pensions
cut disability benefits in half
These union workers are not asking for anything other than to not go backward. Let us keep what we fought for over dacades of bargaining.
Verizon's Chairman Ivan Seidenberg is paid 300 times what an average worker earns, and was the 13th highest paid CEO in America in 2010. He is also ranked 10th in executive pay for 2011 according to Forbes Magazine as he is set to receive $36.75 million dollars this year in total compensation that doesn't include the rise in his stock, which has an estimated value of $76.5 million. Everyday Mr. Seidenberg rolls out of bed in 2011, he will make more than $100,000, while he continues to do everything he can to strip the hard-working union members of their health care, pension, and sick days, etc.+

The Unions just want Verizon to bargain fairly and to negotiate to a fair agreement.
WE ARE READY AND WILLING TO RETURN TO WORK WHEN VERIZON IS WILLING TO NEGOTIATE IN GOOD FAITH

* Los Angeles Times article dated 1/25/2011
+ Examiner.com dated 8/8/2011
Reply to this comment
by smartin1971 August 15, 2011 8:07 PM EDT
How do we stop this?
This Strike is going to define the future. If the unions lose this fight the American people are doomed. If the unions retain a fair contract it could lead a charge to save us.
by CHINO49P August 15, 2011 6:48 PM EDT
Everyone should wake up and realize that the real problem is corporate greed. How much profit is enough? These companies that move out of the country don't care about anything but how much "more" money they can make. Thier executives only care about making millions and billions in salaries & bonuses for themselvs for bringing in excessively high profits. None of the businesses that moved off-shore would have gone under if they had stayed here, paid thier taxes, paid thier workers salaries and paid out everything else it takes to run a business here. All of that expenditure would have been into this country and contributing to our economy. All the while they would still have been able to make very good profits. Thier top exects probably wouldn't be getting thier millions in bonuses, but give us a break, that kind of "GREED" is the problem.

And please don't say they have to think about the stockholders & investers. The benefit of increased profits to the stockholder/investers is nothing compared to the damage to the American economy in which the stockholder/investers have to live. They spit in our faces, then send the product back here for us to make them money. The few people who would be affected by lower return on thier investment money is nothing compared to the masses who are hurt by lost jobs and a failing economy. Most Americans are just getting by. Some are able to be putting a little away. The problem comes from people who are not satisfied with having way more than is needed to live very well, but are always greedily wanting MORE-MORE-MORE. ITS UNSUSTAINABLE--the problem is "GREED".

And please don't anybody say anything about the high taxes the poor corporations have to pay. For about the last ten years, the taxes that the wealthy (individuals & corp.) have "actually been paying", have been at historic "LOWS", and they have been making and sitting on record profits. All the while not creating jobs here but sending them out of the country so thier profits can skyrocket even more. All the while the poor have actually gotten poorer, and the wealthy have actually gotten wealthier. Greed will kill our country!
Reply to this comment
by rn27 August 15, 2011 10:46 PM EDT
The amazing levels of greed that we are seeing in our country today frighten me also. The middle class is the back bone of our soceity and they are struggling like never before. That is one of the reasons we are not recovering from this recession. You cannot run with a broken back. The gap between the haves and the have nots is growing too wide. All the rules are bent to the advantage of the rich, and still it is not enough! We are held hostage by them. If you listen to the Republican candidates their entire message is to pander more to business. If people don't wake up and rise up soon, I fear our country is lost.
by vshar August 15, 2011 4:21 PM EDT
No company which profits from taxpayers' money should be allowed to avoid paying their fair share. A company which "moves its profits elsewhere" does not deserve to profit at the taxpayer's expense. Also, it is important to clarify that not all corporations pay 35% of their profits in taxes. The rate varies from 15% to 35%, depending on the amount of corporate encome subject to tax.
Reply to this comment
by LBROKER August 15, 2011 4:05 PM EDT
I AM AMAZED AT THE DIFFERING OF OPINION REGARDING THE STATEMENTS FROM THE CEO WHO TOLD US HE WAS MORE WORRIED ABOUT HIS STOCKHOLDERS THEN HE IS ABOUT AMERICA. THE TAX CODE IS A MESS BUT THE ANSWER IS TO FIX IT, NOT APPLAUD GREEDY CORPORATE PIGS WHO THROW OUR COUNTRY UNDER THE BUS SO THEY CAN CONTINUE TO SUCK UP A LARGER PIECE OF THE PIE. TO SAY THAT THESE COUNTRIES "GET IT", BECAUSE THEY UNDERSTAND THAT THEY CAN MAKE MONEY BY SUCKING UP TO THESE CORPORATE PIGS WITH NO LOYALTY TO THE USA, SHOWS HOW OUT OF TOUCH THE WEALTHY ARE. THE NEXT TIME THIS CEO NEEDS AMERICA TO GO TO WAR TO PROTECT HIS FREEDOM, HAVE HIM SEND THE SWISS ARMY. FOR NOW WHY DON'T WE JUST REVOKE HIS US CITIZENSHIP.
Reply to this comment
by LBROKER August 15, 2011 3:47 PM EDT
THE TAX CODE IS A MESS, BUT IT IS A MESS CREATED BY CORPORATE AMERICA. IT IS NOTHING BUT A GLORIFIED ENTITLEMENT PROGRAM, SHIFTING THE BURDEN OF PAYING THE THE PRICE OF FREEDOM FROM THE WEALTHY, TO THE POOR SCHMUCK WHO CANT AFFORD TO BRIBE A SENATOR OR CONGRESSMAN. WE SHOULD SIMPLIFY THE SYSTEM AND ELIMINATE USING THE TAX CODE FOR POLICY INITIATIVES. IF A CONGRESSMAN OR SENATOR DECIDES TO SELL HIS SOUL FOR A BRIBE (I"M SORRY, I MEANT A CAMPAIGN CONTRIBUTION.)THEY SHOULD HAVE TO PUT IT IN A LAW THAT IS VISIBLE TO ALL.
Reply to this comment
See all 75 Comments
.

Follow 60 Minutes Overtime

America's #1 News Program, Now on your iPad Download Now »
Recently on 60 Minutes
  • Trapped in Unemployment Trapped in Unemployment

    The chances of finding a job are grim for the four million long-term unemployed in the U.S., but Joe Carbone is looking to change that in his Connecticut town. Scott Pelley reports.

  • Treating Depression: Is there a placebo effect? Treating Depression: Is there a placebo effect?

    A Harvard scientist says the drugs used to treat depression are effective, but for many, it's not the active ingredient that's making people feel better. It's the placebo effect.

  • Mozart of Chess: Magnus Carlsen Mozart of Chess: Magnus Carlsen

    At age 21, chess grandmaster Magnus Carlsen is the number one player in the world and says he loves to see his opponents squirm.

  • The year of Adele The year of Adele

    Anderson Cooper profiles British singer Adele, who proves the health of her voice by singing him one of her soulful songs . . . a cappella.

60 Minutes on Facebook
  • Building You a Better Morning

  • CBS This Morning

    "CBS This Morning," anchored by Charlie Rose, Gayle King and Erica Hill, airs weekdays from 7 to 9 a.m. ET and at the same time in other time zones.
    Learn more...