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News Corp Paid No Federal Taxes 2 Of 4 Years When Domestic Profits = $9.4 B

nytimes.com — This is Bulls-it.

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  • UnFriendlyFire, on 10/11/2007, -12/+35I'll admit, I did not read this entire very long article, and I didn't see the part about the taxes, but News Corp pays its dues by shilling for the bush/cheney admin. Also, I'll bet Billo really goes after the NYT on his show tonight.
    • eckre, on 10/11/2007, -26/+1Blah Blah Blah you whiner, most large US corporations don't pay taxes. Idiot.
    • dentonez, on 10/11/2007, -3/+1At least they aren't evil conservative devils. They are just money whores protecting their own interests. I expect as we get closer to the elections they will start seeming less right wing conservative and get on their knees for the dems as the butt kissing begins for the next round of politicos.
  • srodolff, on 10/11/2007, -10/+29>>By taking advantage of a provision in the law that allows expanding companies like Mr. Murdoch’s to defer taxes to future years,

    This one statement indicates that the taxes will be paid, just not now.
    • Terr01, on 10/11/2007, -5/+12Deferring taxes means you can make interest on what you otherwise would have paid. It's still a benefit to the company's coffers and a detriment to the government's. So let's see, assume 9.4 billion dollars in pretax profits. Assume some low but easily calculable figure, like 10%. Spread it out with the (mildly unrealistic) assumption that it's even over the four no-tax years. So 235 million each of those years. Assume a conservative interest/investment rate of 3% per year...

      That's about 72.6 million dollars in napkin-math. Not bad for a deliberately low estimate.
      • migbike, on 10/11/2007, -1/+3Not only can they earn interest on the unpaid taxes, but by delaying the payments to future years, they are hedging against inflation. $100 in todays dollars is much more valuable than $100, five years into the future.
      • NJank, on 10/11/2007, -0/+3right... hence the loophole is in place to give a benefit to 'expanding companies'. There should be a benefit of some kind in this whole thing, as that was the point of the provision of the law. Encourage growth by giving a benefit to those that are expanding.
      • ccrook, on 10/11/2007, -2/+1Terr01,

        It's been around forever and it's not a tax code loop hole. It's simply not exploitation and it's extended to companies that are expanding.
        • Terr01, on 10/11/2007, -0/+4I know, I'm just trying to point out that despite the fact that (despite that they did not skip taxes entirely), they still obtain a significant benefit, which I don't think srodolff made clear.
    • jetcopter, on 10/11/2007, -3/+3While your point is correct, you forget that you also have to pay interest on what you owe to the IRS. That interest rate is often much higher than any interest you may earn.
      • iceperson, on 10/11/2007, -1/+7You only pay interest on delinquent taxes, not deferred. This is part of the system to encourage companies to expand because it's good for the economy.
    • shockwave1111, on 10/11/2007, -1/+1Well, for the interest made on deferred tax, you also will have to pay tax on the interest made. It is a provision to encourage business to expand at a faster rate.
    • DearDearDarla, on 10/11/2007, -1/+5And in turn the real taxpayers - i.e. the American public who dutifully write their annual checks in April - pay interest on the growing, burgeoning national debt. Please enlighten Miss Darla on how this is fair?

      Either provide such loopholes for Citizen Doe or close them for companies.
  • srodolff, on 10/11/2007, -16/+8>>By taking advantage of a provision in the law that allows expanding companies like Mr. Murdoch’s to defer taxes to future years,
    This statement indicates that the taxes will be paid, just not now.
    • GabrielS, on 10/11/2007, -2/+1Why does this comment have -4 rating? This comment is accurate.
      • CorpT, on 10/11/2007, -3/+1Because it negates everything the OP was trying to say. It's a fact getting in the way of a liberal, therefore most of digg will give this a negative comment so that other liberals won't be forced to see it.
  • elizabethmuelle, on 10/11/2007, -11/+40Surprise surprise a company takes advantage of our tax laws. Instead of complaining about loopholes they use legally, why not make flat tax with no possible deductions.
    • nixonrichard, on 10/11/2007, -1/+6Except this isn't a loophole. It was specifically designed to operate exactly how it was used by NewsCorp.
      • GabrielS, on 10/11/2007, -1/+3Is this somehow wrong? Did News Corp violate the law?

        What exactly has News Corporation done here other than comply with the law?
    • myranttoyou, on 10/11/2007, -5/+4@mule Your as big a ***** as the current administration if you think repubelicans won't create loopholes in a flat tax for big business. Not to mention, a flat tax is an taxing oversimplification that won't work.
    • Urusai, on 10/11/2007, -2/+5flat tax != no loopholes

      What we need is a progressive tax with no loopholes, and a generous tax on capital gains. If you piece together the right wing tax agenda, you get a picture where nobody is taxed except the working class, while wealth rapidly accumulates in the untaxed coffers of the rich.
  • littlebylittle, on 10/11/2007, -19/+25"This one statement indicates that the taxes will be paid, just not now."

    LMAO!!! .... Yeah ....... Riiiiiiiiight!
  • shifty2, on 10/11/2007, -12/+6***** RUPERT MURDOCK!!!

    *men in black suits show up and puts plastic bag over my head....*
  • random4, on 10/11/2007, -15/+0The world is made for the rich; instead of bitching about it, get off of digg, and make some money.

    America (good) = greed, capitalism
  • deadowl, on 10/11/2007, -5/+2Okay, wait... Everyone invest in DJ with voting rights if you get the chance, then vote against the acquisition. Of course I bet someone has a controlling share anyway :(.
    • GabrielS, on 10/11/2007, -0/+2Does anyone even read the news anymore?

      The Dow Jones Corporation is controlled by the Bancroft Family. They have controlled it for nearly a century.

      The New York Times Company is controlled by the Sulzberger Family. They have controlled it for nearly a century.

      The LA Times is controlled by the Chandler Family. They have controlled it for about a quarter century.
  • robbh66, on 10/11/2007, -10/+18It's a wonderful article...to bad I had to mark this inaccurate because of the submitters' misleading title. They deferred the taxes and it is legal.
    • morningdew76, on 10/11/2007, -4/+2Dugg down for not understanding the English language. Nowhere in the title was it claimed that News Corp broke the law.. just that they have NOT paid their taxes.
      • robbh66, on 10/11/2007, -0/+1Oh really? So i claimed it was wrong? No, i said misleading, you imbecile.

        Learn to grasp the English language before you dare challenge me about it.
    • chicagobiker, on 10/11/2007, -0/+1How do I defer my taxes? Because right now, I've got about $3 to my name and have to pay the IRS $500 a month until August on top of what's already withheld from my paycheck. How about a deferment until "I" make $9.4 billion dollars? Or better yet, how about people who make less than $500,000 a year get deferred until they make that and everyone who makes more than that has to pay with no deductions.
  • crazybugger, on 10/11/2007, -5/+2Nothing new!
    • Amnesia10, on 10/11/2007, -0/+1They were infamous for years in the eighties for paying almost no tax here in the UK. They use tax havens to shunt all their money off shore so they pay little or no tax anywhere.
  • jetcopter, on 10/11/2007, -7/+6So they deferred their taxes... where is the news? Don't you realize that the net amount to the IRS is going to be greater now (tax bill + interest)?
    • LMControl, on 10/11/2007, -2/+4Please refrain from introducing relevant and factual information into a Digg thread. It throws the users off.
    • IslandDog, on 10/11/2007, -2/+2Because it's Fox News. Another mindless obsession among liberals who just need something to complain about.
  • LMControl, on 10/11/2007, -6/+7Pot=NYTimes, Kettle = Fox News. Now enjoy the veal.....
  • taintedzodiac, on 10/11/2007, -5/+9Shock! Awe! Innacurate Title!
  • Fashion_Nugget, on 10/11/2007, -4/+2All of this business and government corruption makes me proud to be an American.
  • arjung, on 10/11/2007, -0/+4it's not like they're not going to end up paying the taxes with interest eventually...

    FTA:
    "One firm focuses almost exclusively on parts of the tax code that affect the News Corporation. By taking advantage of a provision in the law that allows expanding companies like Mr. Murdoch’s to defer taxes to future years, the News Corporation paid no federal taxes in two of the last four years, and in the other two it paid only a fraction of what it otherwise would have owed. During that time, Securities and Exchange Commission records show, the News Corporation’s domestic pretax profits topped $9.4 billion."
    • GabrielS, on 10/11/2007, -0/+2My reading suggests that tax deferrment during periods of rapid growth is a COMMON practice today. Especially when you're hiring Price Waterhouse, Ernst & Young, or Deloitte & Touche to advise you on the best way to keep the most money the company makes with the company during it's period of rapid growth.
  • TSCheredar, on 10/11/2007, -1/+5"Since Democrats won control of Congress in the 2006 elections, the company and its employees have given more than twice as much to Democrats as to Republicans, the records show." ---Interesting.
  • neuropsychguy, on 10/11/2007, -1/+5Now this is a little different but how many of you "overpay" your taxes and get a refund every year? If so, why? Why should the government get to earn interest on that money when you could be? What News Corp is doing is taking advantage of the tax law. They've done nothing unethical or illegal. Anyone who takes deductions or buys solar panels for their home (in part to get the tax break) or tries to minimize the taxes they pay shouldn't be complaining. If you don't like the tax laws, then clamor for change.
    • GabrielS, on 10/11/2007, -0/+2PS: Consumers of News Corp products are paying their corporate taxes for them.

      Fact: The enterprise treats a tax as a cost that is factored into the shelf price of the products they produce.
  • dontspamjay, on 10/11/2007, -2/+1I agree that they should pay some taxes. It is extremely upsetting that regular folks are paying plenty of taxes while corporations walk.

    However, it is important to except that no corporations pay taxes. Any corporate taxes are rolled into the price of the good or service they provide and consumers pay it when they purchase said good or service. If you raised taxes on oil companies (for example) they would raise the price of their product at a proportional level to offset the tax hike. For this reason it is never a good idea to vote for higher corporate taxes.

    Not to get too far off subject, but a similar truth exists for the very wealthy. Enough tax shelters exist that they can protect the majority of their money from the government.

    www.fairtax.org -would be the largest transfer of power from the government to the people in history.
    The book is a great read.
  • jaycliche, on 10/11/2007, -3/+7"Free Market" for the rich.
  • Anarchyx2, on 10/11/2007, -0/+3Wow, wonder why they are so concerned about Ed Brown then?? Hmmm...
  • EllsworthT, on 10/11/2007, -3/+1You mean none of the employees of News Corp paid social security, medicare, federal income, or state income taxes?!? Oh wait, I see--this is a "corporate tax", the tax not paid directly by the individuals who make up the company but by the artificial entity, the "corporation" itself. But I suppose if the government didn't take the money (which it uses for the "good of society" of course), it would only go to the greedy owners of the company (the shareholders), who might use that money to buy things, or back to the company itself, where the money could be used to hire new employees or raise the (taxable) salaries of its greedy employees.

    Thank God the government taxes corporations on top of the money they already seize from its employees! Can you imagine how much we citizens would have to pay for their goods and services if the companies were allowed to keep all that extra money and be allowed to invest it themselves!
    • littlebylittle, on 10/11/2007, -0/+1"Can you imagine how much we citizens would have to pay for their goods and services if the companies were allowed to keep all that extra money and be allowed to invest it themselves!"

      This statement would apply well to individuals. Actually it's the corps that are supposed to pay federal taxes. Individuals are not according to the law.

      See The Glory, of The Royal Scam ...
  • Metalmoon, on 10/11/2007, -0/+5Great article... it points out specifics of how intertwined the US and other governments are with major media conglomerates. Here's just one example from the article for those that didn't read the whole thing:

    "The F.C.C. chairman at that time, Michael K. Powell, proposed a broad loosening of media ownership rules, including raising the cap (on household penetration) to 45 percent. (Two of Mr. Powell’s top advisers, Susan Eid and Paul Jackson, now work for Mr. Murdoch.)"
  • lagrange, on 10/11/2007, -2/+4Leona Helmsley was right, in Amerika only the little people pay taxes.
  • kastro77, on 10/11/2007, -1/+9News Corp isn't using a tax shelter and is still paying taxes on it's profits. The taxes are deferred not avoided. The difference occurs because FASB accounting standards differ from the tax code on the treatment of depreciation. News Corp is simply using accelerated depreciation in their tax filing to take a larger expense in the current year, meaning they will end up paying less taxes now, but more taxes in the future. This isn't some scheme to rip off the little man and enrich the coffers of the country's elite. It works the same as someone putting money into their 401(k) or IRA pre taxes, it just defers the tax payment, not avoiding it.

    Hypothetically speaking, if the managers of News Corp didn't take advantage of the tax code they could be considered to be breaking the law, as they must work in the best interests of the shareholders. The fact that they often don't is of course the main problem with public corporations, and why private equity firms aren't all that bad considering they get rid of inefficient or incompetent managements.
  • littlebylittle, on 10/11/2007, -2/+5Yeah they're deferring their taxes alright, until they find better loopholes in future circumstances. This is common in Big Corps like News, especially if they're sleazy, like News. They don't pay a dime in taxes.
    • GabrielS, on 10/11/2007, -1/+1Corporations do not pay taxes. You pay them for them.

      Do I need to use coloring books and blocks with letters on them to get this message through to people?
  • HMTKSteve, on 10/11/2007, -4/+2All I can say is: "Consider the source"
  • liberalplacebo, on 10/11/2007, -3/+2........exactly why we need flat tax rates.........NO DEDUCTIONS........NO EXCEPTIONS.

    Politicians LOVE the current tax systems because it brings them TONS of $$$$ by corporate lobbyists trying to get tax laws to favor their clients. All of that $$$$ from lobbyist would disappear if we switched to a flat tax rate....
    • jmadren, on 10/11/2007, -0/+0Except that a flat tax law will never be passed. The only viable reform is to abolish the income/corporate tax and go to a national sales tax. See fairtax.org for details.
  • reed311, on 10/11/2007, -1/+2Yeah, but there are some women that are abusing welfare to feed their starving children!!!
  • perendengue, on 10/11/2007, -3/+3companies don't pay taxes, only people pay taxes...

    any tax a company pays is effectively pulling money from one of two places, the shareholders in the form of reduced profit or the customers in the form of increased prices
    • Cyphase, on 10/11/2007, -0/+1A better way of saying this is, any taxes on a company will be passed on to its customers.
  • HubbertWins, on 10/11/2007, -1/+6Rich people get away with things the rest of us can't. What a shock. Someone wake me up when it is time for the revolution.
    • FlaG8r, on 10/11/2007, -0/+2Why don't you start it and wake everyone else up?
    • radix76v2, on 10/11/2007, -0/+0WAKEEE! WAKEEE!
      :)
    • tepidpond, on 10/11/2007, -0/+2Time to wake up, Hubbert. Here's your pitch-fork and torch, we're marching on the white house.
  • ccrook, on 10/11/2007, -6/+4Buried as inaccurate.

    Digg stinks of anti-corporate propaganda.

    GAAP allows companies to defer taxes to future years. It's called a deferred tax liability. They still have to pay them though.
  • caw18, on 10/11/2007, -2/+1This is not news. Anyone who has experience running a coporation will tell you that at the end of the financial year, you pay out the profits to the share holders. They pay the taxes, not the coporation.
  • Aaronontheweb, on 10/11/2007, -2/+2This was, renowned by NY Times own staff members, a hurried articles that didn't even have a clear grasp on the facts. In addition, please keep your own political views out of the article's description.
  • Pile, on 10/11/2007, -1/+3What's scary about this article is how much special treatment and rights corporations are granted. With the recent Supreme Court ruling ( http://www.bsalert.com/news/1894/Supreme_Court_Paves_Way_For_Corporations_To_Vote.html ) they have more rights than even people. Corporations now have complete freedom of speech, without any of the messy accountability responsibilities normal people have.
    • Cyphase, on 10/11/2007, -0/+1We need to get rid of corporations. Not businesses.. businesses are fine, even big businesses.. they just shouldn't be "corporations" with special protections from liability.
  • blorc, on 10/11/2007, -2/+1Nice title for an article that only mentions this in one paragraph out of the whole article. On top of that, your title fails to mention they're deferred taxes, AKA they will pay them back later.

    Quit being so hypocritical. If you had the opportunity to do something like that legally according to tax laws, I'm sure you would too. Don't act like it's wrong just because as corporation does it. If you're going to get upset about something in this article, it should be how tied close the media/government is, not because they deferred taxes to later years.
  • RealHyperX, on 10/11/2007, -3/+2Typical liberal biased title. Liberals do not understand how to defer taxes, so they make up conclusions based on lack of education. Usual liberal motto.
  • tekrat, on 10/11/2007, -0/+1Most companies don't have to pay taxes for 2 years after they are founded. That how companies like TA Recreation/AMFAC Recreations/Xanterra Parks & Resorts skirt paying most of their taxes. Every 16-18 months the aforementioned company merges with a smaller company and then they change their name. A new company (on paper) means a new two year tax shelter.

    I've missed at least half of Xanterra's iterations but they have the same bank accounts from when they were part of TransAmerican Airlines (TA Air) even thought they are new, separate, companies. Also most of the original banks no longer exist, except on paper.

    If you don't believe me look up Xanterra's tax returns in their Ohio operations and do a search for accounts dealing with Toledo Trust (which became Society Bank which became Key Bank)
  • UberC, on 10/11/2007, -0/+1The headline is a minor part of this article but it is a good read none the less.
  • gcube9x, on 10/11/2007, -3/+1Buried for nytimes. LINK TO A STORY WE DON'T HAVE TO LOG IN TO SEE.
  • mjparme, on 10/11/2007, -1/+0People threw a fit a couple of years back when Microsoft didn't pay any taxes. Who cares. At its core a corporation is nothing more than a paper entity that distributes money. The people it distributes money to (e.g. its employees) pay taxes on the money. So New Corp. might not have paid taxes on its revenues but the people that money was distributed to did. Sure a company has some physical assets that they probably pay property taxes on but it is probably a really small percentage.
    • ZephramStark, on 01/06/2008, -0/+0International Corporations are required to pay taxes to do business in the United States. People are not. I do not pay federal income tax. Knowing what the money is used for, the act of paying personal federal income tax is morally reprehensible.
  • morningmatters, on 10/11/2007, -1/+2If every little business can do what NewsCorp is doing now, then perhaps it would be fair. However, the current batch of tax laws pushed by conservatives and some democrats clearly favor mega corporations over smaller startups, ultra wealthy over your average joes.

    What's amazing however, is to see your average joes naive enough to support tax plans which would ultimately place more burden on themselves than the ultra wealthy and mega corporations, thinking somehow that it will enrich everyone on the long run.
    • merowe, on 10/11/2007, -0/+2Example Please?
      From my understanding, I can start my own corporation and do pretty much anything I want (tax-wise) that a mega corporation can. The only factors that I see are time plus the fact that you have to make a profit a certain amount of times. I don't know of any tax code where it depends on how powerful you are or whether you make $10 in profit or $1,000,000... So, please inform us...
    • reddog093, on 10/11/2007, -0/+0I agree with merowe. I'm a Tax Accountant for a company that deals with small to mid-cap businesses...The tax code is the same for all businesses within the same category...we deal mainly with s-corps, partnerships, sole proprietorships and so-on. Even what we charge is basically relative to the scale of a company...small companies require less work/research so they don't get charged as much.. So....where are you going with this? As long as the "average joe" has a competent accountant they're playing the same game. So...like merowe says...Please oh PLEASE enlighten us with some examples.
  • copmoore, on 10/11/2007, -0/+2The bigger issue in the story is Murdoch's links to both political parties and his connections to China.
  • stmiller, on 10/11/2007, -2/+3Tax cuts for the wealthy. Thanks Bush.
    • mjparme, on 10/11/2007, -3/+0Why should the wealthy pay all the taxes? Wealthy people tend to be business owners who create jobs for other people. Why shouldn't they get a break? Wealthy people still pay more taxes than anyone else. Plus, what defines "wealthy"?
    • mjparme, on 10/11/2007, -2/+1Why should the wealthy pay all the taxes? Wealthy people tend to be business owners who create jobs for other people. Why shouldn't they get a break? Wealthy people still pay more taxes than anyone else. Plus, what defines "wealthy"?
      • stmiller, on 10/11/2007, -0/+1Bush's tax laws define the wealthy as the top 1% income earners. Even people who make over $200,000/year get huge tax cuts, according to his tax plans. Here in America, the less you make, the MORE you are taxed.

        So the question you should be asking is 'why should the POOR pay all the taxes?' because that is what is currently happening.
  • Suzilla, on 10/11/2007, -1/+2Now that the purchase of Dow/Jones by Murdoch is all but a done deal, the NYTimes is starting to sense that it, too, may be in his sights. Too little, too late. Too bad the NY Times didn't do the right thing sooner, when it would have mattered.
  • m2paper, on 10/11/2007, -0/+2Nothing new!
  • jgaba24, on 10/11/2007, -0/+3Makes you have a little sympathy for Ed and Elaine Brown
  • cfish, on 10/11/2007, -1/+5Just stop paying income taxes all together......There is no law that requires us to nor in the 16th amendment!

    http://video.google.com/videoplay?docid=-1656880303867390173
  • Xevec, on 10/11/2007, -1/+1why can't all people do this? according to people though, news corp(fox) has done nothing of the sort. They are simply delayed in paying taxes. I want ALL people to avoid paying taxes to your federal government. The feds do NOT deserve your money. Avoiding paying the taxes to the feds is like preventing theft. State taxes aren't as much of a burden than federal taxes. Hell, most taxes you pay ARE TO THE FEDS. Medicare, Social security, income tax...are the big ones. And the employer pays DOUBLE...since they are paying your portion(from your paycheck) and THEIR portion. The only thing that employees pay that employers don't is withholding tax. But alas, only employers pay the federal and state unemployment tax...not employees.

    If we stop this federal onslaught of taxes, we shall have more money to spend in the economy. But of course, that means less services from the feds....or does it? I mean, we NEVER seem to have a problem running wars. Funding our troops, buidling an embassy in Iraq which I hear is ***** HUGE! Why not use that money domestically? Like for example, helping our veterans?
    • reddog093, on 10/11/2007, -0/+0Are you serious? "http://en.wikipedia.org/wiki/United_States_federal_budget%2C_2007" a basic outline of our 2007 budget. If American citizens don't pay taxes our entire nation would fall into a state of chaos. Have you seen the level of taxation in some countries? We get off very well. For the most part, the poorer members of the population don't pay that much in taxes due to our current tax code. You make under a certain amount of money and you're in a lower % tax bracket. Plus there are loads of credits to take advantage of if you go through the effort (They're are even free tax services for the less fortunate such as VITA...volunteer income tax assistance...which helps many people without financial experience. In the end, you're only giving the government a lot if you make a lot.. And how about "$72.6 billion (+5.8%) - Veterans' benefits" listed on the page...Is that not money used domestically for helping our veterans? Or do you think it would be wiser for you to spend your money "in the economy"..Yeah you're extra HD TV and XBOX 360 would be far more beneficial to our nation than social security and medicare.
      And who the ***** are these "feds" you're talking about...is this a group of people called "feds"? I'm assuming they're somehow related to "the man"? I suggest you get an accountant and STFU
  • taxwriteoff, on 10/11/2007, -0/+1Good for Rupert Murdoch!
  • Cyphase, on 10/11/2007, -0/+1"This is Bulls-it." - Story comment

    Taxes are *****. All of them. For everyone.
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