Murdoch the welfare queen

This really is a stunner.  Over the last four years US-based News Corp has made $10.4 billion in profits and has “paid” minus $4.8 billion in taxes.   Or, in plain English, got a $4.8 billion tax refund.

A fine piece of reporting by David Cay Johnston of Reuters exposes News Corp as a (corporate) welfare queen on an epic scale.  As he points out,

Fox News, the editorial pages of his Wall Street Journal and other Murdoch outlets often rail against taxes. Their attacks on government benefits for the elderly, the sick, the jobless and children focus attention on the uses of tax dollars and away from his aggressive efforts to enjoy the benefits of civilization without paying for them.

Bottom line, part of the tax paid by ordinary people (that they presumably imagine is going towards socially useful goals like education and social security) is actually being diverted to enrich plutocrats.

To see Reuter’s graphic of this, click here.

News Corp employs several  strategies to get the refunds including the aggressive use of transfer pricing – moving costs to countries where profits are taxed and profits to tax havens where they aren’t.  There are 152 subsidiaries in various tax havens around the world.  By 2009 News Corp has accumulated nearly $7 billion outside the USA on which no tax is payable unless the company brings it back into the USA.

While the headline figures dug up by Reuters relate to the US domiciled group, it’s a racing certainty that much the same applies for the UK operations, that costs here are high and profits small while selling print and broadcast media to the people of the Cayman islands (area: 1oo square miles, population: 56,000) is unbelievably (literally) profitable.

Remind me again; just why are government finances in such a hole?  Cameron has some explaining to do about his priorities.

 

UPDATE:  Err, it seems that Johnston got his figures wrong as per link to his retraction in the first comment.

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2 responses to this post.

  1. Posted by Pseu on 14 July 2011 at 5:47 pm

    Retracted. The premise of the column was entirely, completely 100% wrong. Oopsie.

    http://www.reuters.com/article/2011/07/13/column-dcjohnston-murdoch-idUSN1E76C25320110713

    Reply

  2. Posted by liberaleye on 18 July 2011 at 12:33 pm

    Oops indeed! Thanks for spotting the retraction.

    Reply

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