The burgeoning scandal about criminal activities of Rupert Murdoch's newspaper employees has scuttled his News Corp.'s bid to take over a British broadcasting company.
The Fox News baron also now faces trouble in the U.S. Sen. Jay Rockefeller wants an investigation into reports that Murdoch's renegades hacked into phones of 9/11 victims.
Riper still for U.S. investigation is this David Cay Johnston report on how Murdoch makes money off U.S. taxes. Almost unbelievable.
Over the past four years Murdoch's U.S.-based News Corp. has made money on income taxes. Having earned $10.4 billion in profits, News Corp. would have been expected to pay $3.6 billion at the 35 percent corporate tax rate. Instead, it actually collected $4.8 billion in income tax refunds, all or nearly all from the U.S. government.
The relevant figure is the cash paid tax rate. This is the net amount of corporate income taxes actually paid after refunds. For those four years, it was minus 46 percent, disclosure statements show.
Even on an accounting basis, which measures taxes incurred but often not actually paid for years, News Corp. had a tax rate of under 20 percent, little more than half the 35 percent statutory rate, company disclosures examined by Reuters show. News Corp. had no comment.
CORRECTION: It IS unbelievable. Reuters has withdrawn this David Cay Johnston column because it is wong. It says News Corp. changed tax reporting in 2007 and this apparently materially affects what Johnston wrote. An update is coming, but not yet available, only this correction.