I am sure the tax code has its logic, but

… how is it that Facebook had $1.1 billion in pre-tax profits from US operations in 2012, resulting in a federal tax liability of $559 million, but will instead receive a tax refund of $429 million? Because of the deductibility of executive and employee stock options. This is all explained quite clearly in footnote 68 of Facebook's 10-K, according to Business Insider, for those who know how to read such footnotes. That's right -- while the rest of us are working on our 1040s, and while Congress dithers as the automatic budget cuts loom, Facebook is paying a negative corporate tax rate. As it did for 2011. And for 2010. And as it will probably pay for years in the future, because after all that, it still has $5.8 billion of tax loss carry forwards to use in future years. So you tax grumblers, stop complaining about government inefficiency, fraud, and waste. Just remember how happy you are making some people with your tax payments. Facebook shareholders are smiling; a slice of your check is going to their company, with Uncle Sam just acting as a conduit. I am sure someone can explain this tax policy to me. I am sure it stimulates innovation and the growth of new businesses. But aren't those businesses supposed to start paying taxes at some point? I suppose the good news in the coming budget crisis will be that if health care and medical research are cut, that will begin to get at the root of the problem, which is that people are living longer than they used to. It's a pretty indirect strategy, but in the long run it might work: cut government spending on health and the nation's population will start to move back toward the age distribution which the existing tax structure was adequate to support.