As we head into the heart of the tax season and try to figure out just how to avoid having to pay in when we file our income tax, we should all be grateful we don’t have a bill the size of a company like, say Facebook, right? Not so, reports the Huffington Post. In fact, despite making pre-tax profits of $1.1 billion, Facebook paid no income tax at all in 2012. And on top of that, it received $429 million in net tax refunds for the year.
This is as a result of those loopholes that the president talked about getting rid of in his State of the Union speech on Tuesday. Facebook is just one of the corporate giants that is able to reduce its tax burden by accessing these legal loopholes in the U.S. Tax Law. Other companies that do this, the Huffington Post reports reports, include General Electric, Wells Fargo and Boeing.
Facebook is reported to have received this tax benefit by taking advantage of the tax deductibility of executive stock options linked to the social media giant's initial public offering last year. It netted Facebook a total saving of $3.2 billion in taxes, a windfall that it can carry forward to future years.
So is it time for the whole tax code to be overhauled to ensure that everyone does indeed get to pay their fair share?