Complaining that the United States has one of the world’s highest corporate tax levels, President Trump and congressional Republicans have repeatedly vowed to shrink it. Yet if the level is so high, why have so many companies’ income tax bills added up to zero?
That’s what a new analysis of 258 profitable Fortune 500 companies that earned more than $3.8 trillion in profits showed. Although the top corporate rate is 35 percent, hardly any company actually pays that. The report, by the Institute on Taxation and Economic Policy, a left-leaning research group in Washington, found that 100 of them — nearly 40 percent — paid no taxes in at least one year between 2008 and 2015. Eighteen, including General Electric, International Paper, Priceline.com and PG&E, incurred a total federal income tax bill of less than zero over the entire eight-year period — meaning they received rebates. https://www.nytimes.com/2017/03/09/business/economy/corporate-tax-report.html
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3-9-17
The sectors with the lowest effective corporate tax rates over the eight-year period were Utilities, Gas and Electric (3.1 percent), Industrial Machinery (11.4 percent), Telecommunications (11.5 percent), Oil, Gas, and Pipelines (11.6 percent), and Internet Services and Retailing (15.6 percent). Each of these industries paid, as a group, less than half the statutory 35 percent tax rate over this eight-year period.
The tax breaks claimed by these companies are highly concentrated in the hands of a few very large corporations. Just 25 companies claimed $286 billion in tax breaks over the eight years between 2008 and 2015. That’s more than half the $527 billion in tax subsidies claimed by all of the 258 companies in our sample.
Five companies — AT&T, Wells Fargo, J.P. Morgan Chase, Verizon, and IBM — enjoyed more than $130 billion in tax breaks during the eight-year period. https://itep.org/the-35-percent-corporate-tax-myth/
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From 2008 to 2013, while GE made over $33.9 billion in United States profits, it received a total tax refund of more than $2.9 billion from the Internal Revenue Service.
G.E.’s effective U.S. corporate income tax rate over this six year period was -9 percent. In 2012, GE stashed $108 billion in offshore tax havens to avoid paying income taxes. If this practice were outlawed, GE would have paid $37.8 billion in federal income taxes that year.
From 2008 to 2013, while Boeing made over $26.4 billion in U.S. profits, it received a total tax refund of $401 million from the IRS. Boeing’s effective U.S. corporate income tax rate over this six-year period was -2 percent.
Boeing is one of the top recipients of corporate welfare in the United States and has outsourced tens of thousands of decent paying jobs to China and other low-wage countries.
From 2008 to 2013, while Verizon made over $42.4 billion in U.S. profits, it received a total tax refund of $732 million from the IRS. Verizon’s effective U.S. corporate income tax rate over this six-year period was -2 percent.
In 2012, Verizon stashed $1.8 billion in offshore tax havens to avoid paying U.S. income taxes. Verizon would owe an estimated $630 million in federal income taxes if its use of offshore tax avoidance was eliminated.
Bank of America received a $1.9 billion tax refund from the IRS in 2010, even though it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of more than $1.3 trillion.
In 2012, Bank of America operated more than 300 subsidiaries incorporated in offshore tax havens like the Cayman Islands, which has no corporate taxes.
In 2012, Bank of America stashed $17.2 billion in offshore tax havens to avoid paying U.S. income taxes. Bank of America would owe an estimated $4.3 billion in federal income taxes if its use of offshore tax avoidance strategies were eliminated.
Citigroup made more than $4 billion in profits in 2010, but paid no federal income taxes. Citigroup received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury during the financial crisis.
Citigroup has established 427 subsidiaries incorporated in offshore tax havens. In 2012, it stashed $42.6 billion in offshore tax havens to avoid paying U.S. income taxes.
Pfizer, one of the largest prescription drug companies in America, not only paid no federal income taxes from 2010 to 2012, it received $2.2 billion in tax refunds from the IRS at the same time it made $43 billion in profits worldwide.
In 2012, Pfizer stashed $73 billion in profits offshore and has used aggressive offshore tax strategies to avoid paying U.S. income taxes. https://www.sanders.senate.gov/top-10-corporate-tax-avoiders
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