Many big U.S. corporations pay very little in taxes: study
(Reuters) - Many of the most profitable U.S. corporations paid little or no federal income tax from 2008 to 2012, according to a five-year study issued on Tuesday by a left-leaning tax activist group.
Citizens for Tax Justice looked at 288 profitable Fortune 500 companies and said that 26 of them - including Boeing Co (BA.N), General Electric Co (GE.N) and Verizon Communications Inc (VZ.N) - paid no federal income tax in the five-year period.
The group also said that 111 of the 288 companies paid no federal income tax in at least one of the five years measured.
In a reflection of how the tax code's complexity leaves many issues open to question, corporations sometimes dispute the way Citizens for Tax Justice calculates its numbers.
Some of the companies singled out took exception to the findings. GE spokesman Seth Martin said: "For each year cited by Citizens for Tax Justice, GE paid income taxes in the U.S., as well as billions in other state, local and federal taxes in the
He added, "CTJ inaccurately uses the current tax provision - a book accounting number - to make definitive statements about our U.S. income taxes. This is not the same as the cash income tax that we pay for a given year."
A key player in Washington's tax debate, Citizens for Tax Justice regularly issues studies making similar findings about corporate taxes. U.S. lawmakers often cite them in criticizing the tax code as too complex and riddled with loopholes.
Despite complaints about it from across the political spectrum, the tax code seldom changes. It has not been thoroughly overhauled in 27 years. Congress is unlikely to do that in 2014, said Senate Republican Leader Mitch McConnell.
"I have no hope for that happening this year," he told reporters at the U.S. Capitol on Tuesday, blaming lawmakers' stubborn fiscal gridlock on Democrats seeking tax increases.
Republican Representative Dave Camp, who heads the top tax-writing committee in the House of Representatives, is slated to unveil tax reform draft legislation on Wednesday, though it is widely expected to sit on the shelf with previous such drafts.
One of the main obstacles to reform is the abundance of tax breaks in the code that benefit corporations and individuals, lowering the effective tax rates of both and giving them ample reason to resist tax changes that would harm their interests.
"Corporate lobbyists incessantly claim that our corporate tax rate is too high, and that it's not 'competitive' with the rest of the world," said Robert McIntyre, director of Citizens for Tax Justice and the study's lead author.
"Our new report shows that both of these claims are false," he said, contending that most large corporations pay nowhere near the statutory 35-percent U.S. corporate income tax rate due to tax breaks that lower their effective tax rates.
"And far too many aren't paying U.S. taxes at all. Most multinationals are paying lower tax rates here in the United States than they pay on their foreign operations," he said.
Boeing spokesman Chaz Bickers said the aerospace manufacturer's tax bills are largely deferred until it starts generating revenue from airplane sales. "We play by the rules. We pay our taxes," he said, adding Boeing's total effective tax rate for 2013 was 26.4 percent.
Verizon spokesman Bob Varettoni said the telecommunications group complies with all tax laws and pays its fair share of taxes. He said Verizon paid more than $2.9 billion in income taxes from 2008 to 2012.