I find videos like this somewhat disturbing, because they hide rather than illuminate the truth. Among other facts that are glossed over is that multinational corporations end up paying a blended rate based on the rates of all the countries they do business with. So, for example, a quick look at Dell's last quarter financials indicates that Dell paid a blended rate of 16.7% - hardly the 35% that is suggested to a financially naive viewer of a video like this.
In fact, by quickly checking the financials of some well known companies in our industry, you quickly see that only Amazon seems to be paying outsized taxes. Perhaps that is due to the US-centricity of their business, but maybe they just don't have as many tax lawyers.
(I just worked up a quick spreadsheet by looking up pre- and post-tax financials from Google Finance for the last quarter, with the exception of Nokia, where I had to go back several quarters to find a quarter with actual profit to be taxed. All revenue and tax numbers are in millions.)
Company Pre-tax Post-tax Tax Tax Rate
Dell 1072 893 179 16.70%
Google 3498 2705 793 22.67%
Apple 17477 13064 4413 25.25%
Microsoft 8239 6624 1615 19.60%
Amazon 273 187 86 31.50%
IBM 7274 5490 1784 24.53%
HP 2399 1926 473 19.72%
Ebay 2435 1879 555 22.81%
Compare European companies SAP and Nokia:
SAP 1619 1199 420 25.94%
Nokia 403 231 172 42.68%
It may be that US corporate tax rates are too high. But this video doesn't make an effective case for that assertion.
I agree with +Steve Faktor
that personal income tax policy is more of a problem than corporate taxes, and I'd be glad to trade lower corporate taxes for fewer deductions and higher effective tax rates for high income individuals.
Michael - I'd love to have a real debate about tax policy. I'm sure there's a lot that I'm missing, and would love to chat some time about what in Dell's experience makes you think that our tax rates are damaging to your business. At O'Reilly, I've never found myself at a competitive disadvantage due to our taxes relative to those of international competitors.
FWIW, O'Reilly's effective tax rate for 2011 was 31.94%. Would I like it to be lower? Absolutely. Do I think we can solve our country's problems by cutting taxes? Absolutely not. We're in a crunch where we want services as a country, but we don't want to pay for them. Unless we're really willing to end entitlements like Medicare and slash our military spending, high taxes are the price we pay.
What I have a real problem with is the notion that we can get something for nothing. Let's not talk about cutting taxes unless we are also willing to do the math on how to balance the budget without having to raise them!