Many big U.S. corporations pay very little in taxes: study

Tue Feb 25, 2014 10:05pm EST

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013. REUTERS/Jim Young

The Boeing logo is seen at their headquarters in Chicago, April 24, 2013.

Credit: Reuters/Jim Young

(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

U.S."

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.

(Additional reporting by Richard Cowan in Washington; Editing by Ken Wills)

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Comments (9)
tatman wrote:
so much for “corporations are people too”. except these “people” have massive cash hoards, pay little-to-no taxes, enslave the workforce, push forward “right to work” legislation to keep the populace underpaid and with limited benefits, and have exceptional control over our elected officials, dictating policies that the rest of the REAL people in america have to follow and pay for the rest of our lives. welcome to western capitalism at its finest.

Feb 26, 2014 8:57am EST  --  Report as abuse
njglea wrote:
“Boeing spokesman Chaz Bickers said the aerospace manufacturer’s tax bills are largely deferred until it starts generating revenue from airplane sales.” Did Mr. Bickers happen to mention the $8.5 BILLION Boeing tax break Corporate Welfare King Governor Jay Inslee rammed through the Washgington State legislature in a special session last December? Did he happen to mention that now Boeing wants another $12 BILLION transportation package, primarily to get Boeing employees to work? Did he happen to mention that Mr. Inslee tried to pin Boeing staying in Washington State on the bad Machinist’s contract that the local union turned down and that the president of the International Machinists’s Union rammed through a second vote on essentially the same contract while machinists were on Christmas vacation. No – I’m sure he did not. I get to pay for thier corporate welfare along with every other average tax-paying citizen including union members whose paychecks are automatically plundered every week or month. Average Americans need a tax break – not corporations or the wealthiest.

Feb 26, 2014 11:15am EST  --  Report as abuse
boon2247 wrote:
The common man can only be expected to take so much of this before he’s fed up. At that point action will be taken out of frustration and anger. Change will come, but will it be changes that help society or damage it?
Corporations and the banking industry have no morals about what is right and wrong. How long before people say “If they don’t play by the rules, why should I?” This scenario has played out many times in the past, and all have turned out badly for everyone concerned. I see no indication that anything was learned from past mistakes, only finger pointing on both sides. Occupy Wall Street, was a first attempt to show the imbalance in America, the authorities shut that down and no changes were made. What will it take to prompt change? For the CIA to understand that terrorism was a real threat here in the US, it took a group of mostly Saudi terrorists hi-jacking planes and using them as guided missiles on 9/11 to make the threat real.
If the government can’t or won’t own up to their responsibility to the citizens and stop its own corruption along with corporate corruption, people will turn on them as well.

Feb 26, 2014 12:45pm EST  --  Report as abuse
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