A tax system - using that word loosely, to the point of a total disconnect - out of whack.

Seriously.

A tax advocacy group says Facebook, which made $1 billion in U.S. profit before taxes last year, will pay no U.S. income tax for 2012.

Tax experts say that could possibly be true - and if so, it's perfectly legal - but it's only part of the story. At issue is a sizable tax deduction from stock options that Facebook issued to its employees.

Stock options, like regular cash salaries, are tax-deductible for companies. Companies can use those deductions to offset their profits, and apply those losses to previous years, too. That's how a company could even be eligible for a refund in a year when it made money.

Citizens for Tax Justice, the advocacy group, says Facebook (FB) will receive a tax refund of nearly $430 million as a result of those options.

Facebook said in an e-mail that the company believes "in paying our fair share, and we do pay our fair share."

An existential question:

Can a fair share be . . . nothing?

Apparently so.

Meanwhile, from across the pond:

Apple shelters almost $1bn a week from US tax man

And yes, no doubt it will all be "legal".

But will it be "right"?

No . . .

And there's the rub.

Permalink