Tag Archives: Corporations

Gay Marriage Good for Business Says Corporate America and Beyond

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Panorama of the west facade of United States Supreme Court Building at dusk in Washington, D.C., USA. Photo by Joe Ravi CC-BY-SA 3.0
Panorama of the west facade of United States Supreme Court Building at dusk in Washington, D.C., USA. Photo by Joe Ravi CC-BY-SA 3.0

Almost 400 of the world’s largest businesses, corporations, and even sports teams, banned together to present an amicus brief to the Supreme Court stating that gay marriage is ‘good for business.’

As the Supreme Court gears up to hear its major case on the constitutionality of state laws banning gay marriage, 379 companies, including such giants as Apple, Dow Chemical, Verizon and Disney presented the following statement:

“Employees with partners of the same sex should be permitted to marry if they so choose, and then should be treated identically to their married heterosexual counterparts. State laws that require otherwise impose a significant burden on us and harm our ability to attract and retain the best employees. Such laws force businesses to uphold discriminatory laws that run counter to important corporate values. In the end, economic growth suffers.”

On April 28 the SCOTUS justices will be hearing arguments for and against the ban on legalization of gay marriages in certain states. Federal courts have nullified state bans, and the court will have to decide whether the Feds have a constitutional right to uphold that nullification, or if the states alone can determine the legality of gay marriage. Today gay marriage is legal in 37 states and in the District of Columbia. One more state, Nebraska, was about to legalize when a federal appeals court got involved and stopped the process in its tracks.

Corporations Often Pay No Federal Taxes, WSJ Finds

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There is a special structure built into the way companies pay taxes that allows the companies to avoid paying even one dollar in federal taxes, which a growing number of companies are taking advantage of, according to a report in Tuesday’s Wall Street Journal.

Passing the Profits Through

The companies are called “pass-throughs,” because the companies pass their profits along to their investors, who then pay the taxes. These companies have discovered that it is more cost effective to pass their profits onto their investors and avoid paying taxes rather than hiring an army of accountants to help them take advantage of tax loopholes.

Legal and Encouraged

According to the article in the WSJ pass-throughs have existed for decades, are perfectly legal, and are even encouraged by Congress and state governments. The goal of the pass-through option is to stimulate entrepreneurship.

The Journal reported that 69% of US corporations were organized as non-taxable businesses in 2008. In 1986 only 24% of corporations were organized this way. Because partnerships and sole proprietors were not included in the figures, the percentage of these corporations is actually higher.

More than Anywhere Else

It is common for large companies to be structured this way. An estimated 60% of all US businesses with at least $1 million in profits are pass-throughs, the largest percentage in the developed world.

This fact is a major reason that federal corporate tax collections comprised only 1.3% of the US GDP in 2010 despite the fact that the corporate tax rate in the US is 35%; that figure is down from 2.7% in 2006, and indication that a growing number of companies are taking advantage of this peculiarity of corporate taxation.