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Twitter won't pay tax on the first $107 million of income it reports

Mark Sullivan | Nov. 11, 2013
Tech companies are leveraging the U.S. federal deduction related to stock option compensation that relieves them of paying millions in income taxes

The cloud-computing company NetApp holds $484 million in unused deductions for stock options. At its current profit levels, the company could pay no income taxes for more than two years.

The travel website Priceline discloses having $900 million of unused stock option deductions, meaning that the next $900 million the company earns could be tax-free. Since Priceline's U.S. income averages $119 million a year, the company might end up paying no income taxes for the next nine years.

Other companies profiled in the CTJ report include 3D Systems, Cirrus Logic, Rackspace Hosting,, Verisign, WebMD, and Zynga.

It matters
Economists fear that if the U.S. does not begin to manage deficits and pay down the debt, its credit rating could tumble, or—God forbid-—t could default on its loans. This would be calamitous, on the scale of the Great Depression, or worse.

To control the deficit, the government needs to both control spending and maximize tax revenues. It needs to ensure that everyone, from individuals to large corporations, pays their fair share.

Let the (public and transparent) debate continue over what those "fair shares" really are, but in the financial straits the country is in, there's just no more time to tolerate loopholes that give relief to those who don't need it.


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