back to article Think tank report names and shames 'stakeholder capitalist' Salesforce for paying no corporate income tax in the US

SaaSy CRM giant Salesforce.com is among the tech companies named in a think tank report for paying no corporate income tax in the US despite sizeable earnings. According to the Institute on Taxation and Economic Policy (ITEP), a nonprofit tax policy organisation [PDF], Salesforce is among nine tech and 55 S&P and Fortune 500 …

  1. Anonymous Coward
    Anonymous Coward

    They're not saying Salesforce is a tax evader, which means that Salesforce paid the tax they owe. So if someone should be named and shamed, it's the members of Congress who wrote the horribly confusing and winner-picking US tax code in a way that allows them to owe no tax. Which is to say, if you believe that everyone should have to pay a certain minimum tax, then you should elect representatives who will enact such legislation. No sane person donates money to a government; any half-decent charity will do far more good.

    1. Yet Another Anonymous coward Silver badge

      >No sane person donates money to a government;

      Well corporations wishing to pay no tax certainly do

      1. Boris the Cockroach Silver badge
        IT Angle

        But they're happy to bribe... sorry pay contributions to congress critters to ensure that the tax code has a loophole for them... (so long as the bribe(oops said it again) sorry contribution is less than the tax they would have paid

    2. Adelio Silver badge

      To be sure I am positive that they deliberately passed the laws to engorge themselves and other "friends".

      Politians are unlikely to pass laws that means they get "less" money!

  2. Shadow Systems Silver badge

    Politicians, catapults, & the sun.

    Put the first into the second & fling them all into the third. Don't stop there though, lawyers, lobbiests, & corporate executives should be next on the launch list. Eventually we can weed out enough of the oxygen wasters to reduce our carbon footprint, hopefully enough to save the planet for the rest of us to survive.

    I wonder how much it costs to build a catapult? Maybe I should start a GoFundMe page? Hmmmmm...

    1. HildyJ Silver badge
      Devil

      Re: Politicians, catapults, & the sun.

      Why bother with catapults when we have so many active volcanoes to drop them in?

      I'd suggest the middle of the ocean but I worry the fish wouldn't be able to digest them.

      1. Shadow Systems Silver badge

        At HildyJ, re: volcanoes...

        I worry about the potential damage... to the volcanoes. The same toxic nature that would harm the fish would surely give a volcano a serious case of indigestion &/or diarrhea. I considered grinding them up like sausage for fertilizer, but then that toxicity issue made me reject it as lethal to the poor plants.

        I will adjust my aim from the sun to merely out of the atmosphere though. Even if they fall back & reenter, the process will make for an interesting Aura Borealis effect. =-)p

        *Hands you a pint & clinks rims*

        Cheers. Here's hoping they all get abducted by aliens & used as hull plating. =-)p

    2. chrisw67

      Re: Politicians, catapults, & the sun.

      If you managed to make a catapult that could put stuff in orbit (or beyond) then you would make so much profit that you too could afford to pay no tax.

      1. KBeee Bronze badge
        Joke

        Re: Politicians, catapults, & the sun.

        A catapult to put things into orbit is easy.

        1. Make catapult

        2. Aim at ground

        3. Miss

    3. Steve Davies 3 Silver badge
      FAIL

      Re: we can weed out enough of the oxygen wasters

      Errr... Didn't the 'former guy' promise to 'drain the swamp'?

      Then he proceeded to give the top 1% big biz a huge tax cut.

      Is there any wonder people don't trust politicians (of any colour party)

      1. iron Silver badge

        Re: we can weed out enough of the oxygen wasters

        The "former guy" as you put it wasn't a politician, he's a con man / failed entrepreneur.

        Of course he cut tax for all his buddies.

      2. Anonymous Coward
        Anonymous Coward

        Re: we can weed out enough of the oxygen wasters

        I guess the downvotes are from those who got the big tax reduction...

        There I was thinking that this site was free of that particular bunch of [redacted][redacted]

        1. Michael Wojcik Silver badge

          Re: we can weed out enough of the oxygen wasters

          My taxes went down under Trump. That doesn't make me dislike him any less.

  3. Yet Another Anonymous coward Silver badge

    SimplE tax rules

    The government gets to nationalise any company for 10x it's 'profits' in cash to the shareholders

    1. Anonymous Coward
      Anonymous Coward

      Re: SimplE tax rules

      This helps how exactly? Today, corporations manipulate their business deals and accounting practices to make them look more profitable than they are so that idiots will overpay for the stock and the big bosses can cash in on their restricted shares and options. They do this by reporting a separate set of metrics that they've colluded with Wall Street "analysts" to get the market to decide are "more meaningful" than GAAP or other national/international accounting rules provide. Then they pay taxes based on their GAAP numbers, which are almost always much lower, less whatever collection of corporate welfare, subsidies, and loopholes allow.

      Under your system, they would instead manipulate all these things to guarantee that they never report any profits so that they can't be forcibly taken over at what would almost certainly be a tiny fraction of their fair market value (ignoring the insane speculative fervor that has shares that have never paid dividends and never will, representing ownership of corporations that have never turned a profit and never will, trading at valuations in the hundreds of billions).

      If you want simple tax rules, you could start by wiping away all the credits, offsets, banked NOLs, subsidies, enterprise zones, opportunity funds, etc. Every corporation pays 22% of its GAAP profits less half of dividends paid to domestic owners (not all, because those are taxed at a lower rate already), period. If you then want to make it "more fair", you can also impose a minimum rate expressed as a percentage of revenue that applies to those who hide their profits in offshore subsidiaries, or you can just base the minimum on the total P&L of all subsidiaries combined.

      Corporate tax is never going to be simple, but if you insist on taxing corporations (instead of their owners, who already have to pay taxes on the income they get from corporations), that's about as simple as you can make it. You'd find that far fewer legitimately profitable corporations end up owing no tax. Giving the state a free deep in the money call option on every corporation is a lot like prohibition of recreational drug use: it will create a thriving black market in cheats and schemes while doing less than nothing to address the original problem.

      Take away the hiding places, level the playing field, then set the rate wherever it needs to be to fund the minimum level of government the people demand. If you eliminate lobbying, taxation really is just that simple.

      1. Alumoi Silver badge

        Re: SimplE tax rules

        If you eliminate lobbying, taxation really is just that simple.

        But... but... think of the children. They'll starve if daddy won't bring home the bacon.

      2. Cliffwilliams44 Bronze badge

        Re: SimplE tax rules

        FACT: Corporation DON"T PAY TAXES!

        Taxes are an expense. If the goal of the corporation is to operate at a 10% margin the raised tax rates are going to be dealt with in 2 ways. Raise revenue or reduce other expenses. The former means raising prices the later most always means reducing labor costs in the form of layoffs. Also because taxes for a corporation are payed on profit, not revenue, it is easy for a corporation to show no profit when all revenue is expended on the cost of doing business! Everyone gets paid and everyone is happy even the shareholders as dividends are also an expense.

        Eliminate the Income tax for all individuals and corporations and implement an end-point consumption tax of 5% (sans food), then everyone pays! EVERYONE! (Including organized crime operations when they buy things with their ill gotten gains)

        And before you get your panties in a knot, this is not regressive! What is regressive is increasing the cost of energy, which the left has no problem with! If the poor can spend $150.00 a shot on lottery tickets they can pay this 5% levy. The Left just does not want to give up the Income tax because it is a fundamental part of their Manifesto!

        Last year I paid over $18K in Federal taxes. I guarantee if I summed up all my non-food purchases and applied the 10% I would have paid more in taxes. And I would be happy to do so as I was buying the things I wanted/needed.

  4. Dave314159ggggdffsdds Silver badge

    What a bizarre bit of far right propaganda. Why on earth has the Reg published it?

    Companies pay taxes on profits, not income. These companies did not make profits this year, they lost money.

    The writer is a conspiratorial loon.

    1. Anonymous Coward
      Anonymous Coward

      """"""""""""""""""""""""""""""""""""""""""""""""""""

      Salesforce Announces Strong Fourth Quarter and Full Year Fiscal 2021 Results Raises FY22 Revenue Guidance to $25.65 Billion to $25.75 Billion

      February 25, 2021

      Fourth Quarter Revenue of $5.82 Billion, up 20% Year-Over-Year, 19% in Constant Currency

      FY21 Revenue of $21.25 Billion, up 24% Year-Over-Year, 24% in Constant Currency

      Current Remaining Performance Obligation of Approximately $18.0 Billion, up 20% Year-Over-Year, 18% in Constant Currency

      FY21 GAAP Operating Margin of 2.1% and Non-GAAP Operating Margin of 17.7%

      Raises First Quarter FY22 Revenue Guidance to Approximately $5.875 Billion to $5.885 Billion, up Approximately 21% Year-Over-Year

      Initiates FY22 GAAP Operating Margin Guidance of Approximately 0.2% and FY22 Non-GAAP Operating Margin Guidance of Approximately 17.7%

      """""""""""""""""""""""""

      Don't ask me what it means. I'm not an accountant.

      1. Anonymous Coward
        Anonymous Coward

        I haven't read the Salesforce 10-K, but I can tell you without much doubt that operating margins of 2.1% and 0.2% mean the company didn't make a profit. Typically those figures represent the fraction of revenue (commitments to buy goods and services) they received that they had left after the cost of supplying those goods and services along with other operational needs (i.e., inclusive of SG&A but exclusive of financing considerations, depreciation, and so on). From what I can tell, their net operating income in FY21 was in fact a large loss, but they were also cash flow positive. You really have to go read the SEC forms if you want to understand this stuff, because too many people publish non-GAAP figures rectally sourced by the management. The overall impression I have is that Salesforce is not terribly profitable, which is probably why they didn't owe much if any tax. Another poster suggested R&D tax credits, which is a good theory too. If you're going to get angry, start by getting educated. I don't follow this company because it doesn't pay a dividend, but you can learn everything you need to know at https://www.sec.gov/edgar/browse/?CIK=1108524&owner=exclude

        1. Adelio Silver badge

          and we all know that companies pay accountants millions to make sure they have no "profits" using all the legal laws that they have bribed politians for.

      2. Dave314159ggggdffsdds Silver badge

        Revenue isn't profit. This really isn't hard.

      3. Irony Deficient

        Re: I’m not an accountant.

        I’m not an accountant either, but my understanding is:

        • revenue ≠ profit when costs ≠ 0;
        • performance obligations are promises to deliver goods and/or services, and when expressed in terms of currency, indicate an expected amount of future revenue;
        • operating margin = the ratio of operating income to revenue, e.g. 2.1% operating margin = 2.10 ¤ of operating income per 100.00 ¤ of revenue. (Operating margin includes expenses such as depreciation and amortization, but excludes expenses such as interest and taxes.)

    2. Dog Eatdog

      It's using American terminology. To translate:

      revenue = turnover

      income = profit

  5. chrisw67

    Dogma

    "Presumably, then, that does not mean handing over cash to elected representatives of the people to improve the state of the world on Salesforce's behalf."

    That there is commie-speak ;) Anyone paying attention to the United States in recent decades will know there is no society (rest-of-the-world), only 350 million individuals, each "endowed by their Creator with certain unalienable Rights" including the right to consider that if I'm rolling in it then everyone else can go whistle. That individual profit is identical to the greater good is the dogma.

    1. Robert Grant Silver badge

      Re: Dogma

      If you're rolling in it then you paid taxes on it. The article is talking about corporations, not individuals.

      1. Adelio Silver badge

        Re: Dogma

        If the company did not make a profit they how can it pay it's shareholders?

      2. Anonymous Coward
        Anonymous Coward

        Re: Dogma

        But corporations are also people! Or so I've been told.

  6. GrumpyKiwi

    R&D Credits

    You'll note that almost all of the companies in this list are tech companies that invest heavily in R&D.

    R&D Tax Credits are a bipartisan favourite in the US. The last major revision of them was done under the Obama administration which (rightly IMO) valued the long term effects of greater R&D spending. One of the reasons Amazon pays relatively little federal tax is because it spends so much on R&D.

  7. stiine Silver badge

    the main thing about corporate taxes

    The thing about corporate taxes that the Institute on Taxation and Economic Policy didn't tell you is that you, the consumer, already paid that tax when you paid for those company's services or products.

  8. Anonymous Coward
    Anonymous Coward

    No mention of the monster in the room then?

    The one that didn't pay any corporate taxes despite their profits jumping in the pandemic?

    Yes, I'm talking about Amazon.

    The same company that is running scared of a few of their workers joining a Union

    The same company that has finally admitted that yes, some of their drivers have to urinate into bottles because if the workload

    etc

    etc

    etc

    And the same company whose principal shareholder also happens to be the worlds richest man.

    That ain't short of a dollar or three that's for sure.

  9. Adelio Silver badge

    if these companies are coninously making a loss they why are they still in business, where is all the money comming from?

    1. Steve Davies 3 Silver badge

      re: where is all the money comming from?

      You are talking about the likes of Uber, aren't you?

      There are a lot more companies like them that never seem to make a profit yet continue to trade.

      If this was us, we'd be closed down in a flat but these scumbag orgs can somehow afford to pay accountants to cook the books. Tax evasion is the pandemic we all know about but can't do anything about.

  10. deadlockvictim Silver badge

    The problem is Congress

    These companies followed the law. They did nothing illegal.

    If you want companies to pay taxes, the laws need to be re-written.

    And that is our job as voters to make sure that politicians are voted in that will pass these laws.

  11. Cliffwilliams44 Bronze badge

    "The companies are, however, using perfectly legal mechanisms to minimize their tax bills."

    So, what are these "think tank" people proposing? That they pay taxes they do not owe?

    Here we have the common shell game played by the Democrat Party in the US. They run around screaming at the top of their lungs that "The Rich don't pay their fair share" then propose to raise the tax rate on rich individuals and corporations. All the while writing slick little loopholes into their tax laws so their rich donors can play the shell game and not pay these new taxes. The only people stuck paying the new rates are the individuals and small-medium corporation who don't have the assets or the army of bean counters to work the system.

    The Democrat party in America is the party of the Ultra-Rich! These are their supporters:

    Amazon

    Google

    Facebook

    Wall Street

    Delta

    Coca-Cola

    IBM

    etc. etc. etc.

    You really think they are going to screw these people over?

    Believe me, Bernie and Pocahontas will never get their wealth tax imposed on them or their boards of Directors.

    1. kat_bg

      And the republican party is what??? Party of the common people? What changes in taxation they have done? Aside the massive tax cut to the top 1% (incidentally including the ones you say that are Dems supporters)... I think people in US have a twisted sense on reality. The corporations own the Congress (regardless of the Party) and people are instigated to bicker and fight between about color of skin, sexual preferences, religion, guns a.s.o.

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