Defense Contractors Pay Little To No Corporate Income Tax While Earning Billionsy Pat Garofalo on Nov 7, 2011 at 11:50 am Last week, Citizens for Tax Justice released a report showing that 30 major corporations have paid no income taxes for the last three years, as they made $160 billion. CTJ looked at 280 companies in the Fortune 500, and found that “while the federal corporate tax code ostensibly requires big corporations to pay a 35 percent corporate income tax rate, on average, the 280 corporations in our study paid only about half that amount.” In fact, over the last three years, only two industries — retail and health care — paid an effective tax rate of 30 percent or more. And as the Hill noted today, one industry is doing very well when it comes to tax avoidance — defense contractors: American defense manufacturers pay an average annual tax rate of 17.5 percent, placing them in a class with some of the nation’s least-taxed sectors like information technology, telecommunications, financial services and energy, Citizens for Tax Justice and the Institute on Taxation and Economic Policy concluded. [...] Boeing, which also makes commercial aircraft, came in with the lowest tax rate among defense firms at -1.8 percent; SAIC had the highest at 28.7 percent, according to the report. Boeing has been outspoken about its desire to see the corporate tax rate cut, even as it pays nothing in taxes. Prominent Republicans like House Budget Committee Chairman Paul Ryan (R-WI) have joined Boeing’s griping about corporate taxes, ignoring that the company doesn’t actually pay them. Defense contractors have made billions in profits this year, and “so far earnings by defense contractors have yet to see the effects of the end of fighting in Iraq, plans to draw down Afghanistan and expected cuts in defense spending.” Tags: Boeing Corporate Tax Taxes Previous in TP Economy Next in TP Economy By clicking and submitting a comment I acknowledge the ThinkProgress Privacy Policy and agree to the ThinkProgress Terms of Use. I understand that my comments are also being governed by Facebook's Terms of Use and Privacy Policy.

 Pat Garofalo on Nov 7, 2011 at 11:50 am


Last week, Citizens for Tax Justice released a report showing that 30 major corporations have paid no income taxes for the last three years, as they made $160 billion. CTJ looked at 280 companies in the Fortune 500, and found that “while the federal corporate tax code ostensibly requires big corporations to pay a 35 percent corporate income tax rate, on average, the 280 corporations in our study paid only about half that amount.”
In fact, over the last three years, only two industries — retail and health care — paid an effective tax rate of 30 percent or more. And as the Hill noted today, one industry is doing very well when it comes to tax avoidance — defense contractors:

American defense manufacturers pay an average annual tax rate of 17.5 percent, placing them in a class with some of the nation’s least-taxed sectors like information technology, telecommunications, financial services and energy, Citizens for Tax Justice and the Institute on Taxation and Economic Policy concluded. [...]
Boeing, which also makes commercial aircraft, came in with the lowest tax rate among defense firms at -1.8 percent; SAIC had the highest at 28.7 percent, according to the report.

Boeing has been outspoken about its desire to see the corporate tax rate cut, even as it pays nothing in taxes. Prominent Republicans like House Budget Committee Chairman Paul Ryan (R-WI) have joined Boeing’s griping about corporate taxes, ignoring that the company doesn’t actually pay them.
Defense contractors have made billions in profits this year, and “so far earnings by defense contractors have yet to see the effects of the end of fighting in Iraq, plans to draw down Afghanistan and expected cuts in defense spending.”

U.S. Corporations Paid Far Less Than Legally-Imposed Tax Rate: Study

Source: Huffington Post
By Kevin Drawbaugh

June 2, 2011

Twelve big U.S. companies paid far less than the statutory corporate tax rate from 2008 to 2010, despite making substantial profits in that period, said a report released on Wednesday.

With the Obama administration drafting a corporate tax reform plan, the report found General Electric Co, American Electric Power Co Inc, DuPont Co and nine other companies had a negative 1.5 percent tax rate on $171 billion in profits over the three years studied.

"Not a single one of these companies paid anything close to the 35 percent statutory tax rate," said the report from Citizens for Tax Justice, a left-leaning group based in Washington that promised more details later this year.

The White House and Congress are considering an overhaul of the corporate tax system as a partial solution to the federal deficit, projected to hit $1.4 trillion this year.

Critics say tax loopholes promoted by corporate lobbyists and enacted by Congress are to blame for a system that lets companies avoid taxes, usually in perfectly legal ways.

Some business leaders have said they could live with closing some of these loopholes, but in return, they have said they want the statutory tax rate lowered. It is among the highest rates in the industrialized world.

Both President Barack Obama and Republicans want to trim the rate. Obama has said he wants to end enough corporate tax breaks to compensate for the revenue that would be lost from a lower rate. Republicans have blasted that as "tax hikes."

The Business Roundtable, a lobbying group for corporate CEOs, issued a report in April that said U.S.-based companies faced an average effective tax rate of 27.7 percent in the 2006-2009 period, more than their non-U.S. competitors.

The debate promises to go on for months and possibly years. U.S. Treasury Secretary Timothy Geithner last week predicted movement on tax reform later in 2011.

Citizens for Tax Justice produced a report in the 1980s that helped lead to President Ronald Reagan's landmark 1986 tax reforms. Since then, the tax code has become riddled with exemptions, deferrals and other special breaks.

Companies singled out in Citizens for Tax Justice's newest report also included Verizon Communications, Boeing Co, Wells Fargo & Co, FedEx Corp and Exxon Mobil Corp.

'TIP OF ICEBERG'

"These 12 companies are just the tip of the iceberg of widespread corporate tax avoidance," said Bob McIntyre, director of Citizens for Tax Justice, which is working on a broader report covering the Fortune 500 companies.

Elected officials should make "reducing or eliminating the vast array of corporate tax subsidies the centerpiece of any deficit-reduction strategy," he said.

GE spokesman Andrew Williams said the company is "fully compliant with all tax laws. There are no exceptions."

He said GE's 2010 tax rate was low because the company lost billions of dollars in GE Capital, its financial arm, as a result of the global financial crisis. "GE's tax rate will be much higher in 2011 as GE Capital recovers," he said.

Citizens for Tax Justice said that in the 2008-2010 period, 10 of the dozen companies studied enjoyed at least one year in which they were profitable, but paid no taxes.

Exxon Mobil had a 14.2 percent effective tax rate over the 3-year period, the highest of the 12 companies cited in the report, according to the group.

Exxon Mobil spokesman Alan Jeffers said, "Our effective tax rate in this country over the past six years has averaged about 32 percent. Last year our total taxes and duties to the U.S. government were $9.8 billion, which includes an income tax expense of $1.8 billion."

American Electric Power and DuPont did not respond to requests for comment. DuPont effectively paid $258 million in taxes in the first quarter of 2011, a 15.2 percent tax rate.

(Additional reporting by Matthew Daily and Ernest Scheyder in New York, Anna Driver in Houston, Scott Malone in Boston; Editing by Richard Chang)

Copyright 2011 Thomson Reuters.

Boeing’s Reward for Paying No Federal Taxes Over LastThree Years? A $35 Billion Federal Contract

http://scr.bi/heKdRK

Please go to the Scribed link. Pretty shocking.

REPORT: You Have More Money In Your Wallet Than Bank Of America Pays In Federal Taxes

http://thinkprogress.org/2011/02/26/main-street-tax-cheats/

Today, hundreds of thousands of people comprising a Main Street Movement — a coalition of students, the retired, union workers, public employees, and other middle class Americans — are in the streets, demonstrating against brutal cuts to public services and crackdowns on organized labor being pushed by conservative politicians. These lawmakers that are attacking collective bargaining and cutting necessary services like college tuition aid and health benefits for public workers claim that they have no choice but than to take these actions because both state and federal governments are in debt.

But it wasn’t teachers, fire fighters, policemen, and college students that caused the economic recession that has devastated government budgets — it was Wall Street. And as middle class workers are being asked to sacrifice, the rich continue to rig the system, dodging taxes and avoiding paying their fair share.

In an interview with In These Times, Carl Gibson, the founder of US Uncut, which is organizing some of today’s UK-inspired massive demonstrations against tax dodgers, explains that while ordinary Americans are being asked to sacrifice, major corporations continue to use the rigged tax code to avoid paying any federal taxes at all. As he says, if you have “one dollar” in your wallet, you’re paying more than the “combined income tax liability of GE, ExxonMobil, Citibank, and the Bank of America“:

[Gibson] explains, “I have one dollar in my wallet. That’s more than the combined income tax liability of GE, ExxonMobil, Citibank, and the Bank of America. That means somebody is gaming the system.”

Indeed, as politicians are asking ordinary Americans to sacrifice their education, their health, their labor rights, and their wellbeing to tackle budget deficits, some of the world’s richest multinational corporations are getting away with shirking their responsibility and paying nothing. ThinkProgress has assembled a short but far from comprehensive list of these tax dodgers — corporations which have rigged the tax system to their advantage so they can reap huge profits and avoid paying taxes:

- BANK OF AMERICA: In 2009, Bank of America didn’t pay a single penny in federal income taxes, exploiting the tax code so as to avoid paying its fair share. “Oh, yeah, this happens all the time,” said Robert Willens, a tax accounting expert interviewed by McClatchy. “If you go out and try to make money and you don’t do it, why should the government pay you for your losses?” asked Bob McIntyre of Citizens for Tax Justice. The same year, the mega-bank’s top executives received pay “ranging from $6 million to nearly $30 million.”
- BOEING: Despite receiving billions of dollars from the federal government every single year in taxpayer subsidies from the U.S. government, Boeing didn’t “pay a dime of U.S. federal corporate income taxes” between 2008 and 2010.
- CITIGROUP: Citigroup’s deferred income taxes for the third quarter of 2010 amounted to a grand total of $0.00. At the same time, Citigroup has continued to pay its staff lavishly. “John Havens, the head of Citigroup’s investment bank, is expected to be the bank’s highest paid executive for the second year in a row, with a compensation package worth $9.5 million.”
- EXXON-MOBIL: The oil giant uses offshore subsidiaries in the Caribbean to avoid paying taxes in the United States. Although Exxon-Mobil paid $15 billion in taxes in 2009, not a penny of those taxes went to the American Treasury. This was the same year that the companyovertook Wal-Mart in the Fortune 500. Meanwhile the total compensation of Exxon-Mobil’s CEO the same year was over $29,000,000.
- GENERAL ELECTRIC: In 2009, General Electric — the world’s largest corporation — filed more than 7,000 tax returns and still paid nothing to U.S. government. They managed to do this by a tax code that essentially subsidizes companies for losing profits and allows them to set up tax havens overseas. That same year GE CEO Jeffery Immelt — who recentlyscored a spot on a White House economic advisory board — “earned total compensation of $9.89 million.” In 2002, Immelt displayed his lack of economic patriotism, saying, “When I am talking to GE managers, I talkChina, China, China, China, China….I am a nut on China. Outsourcing from China is going to grow to 5 billion.”
- WELLS FARGO: Despite being the fourth largest bank in the country, Wells Fargo was able to escape paying federal taxes by writing all of its losses off after its acquisition of Wachovia. Yet in 2009 the chief executive of Wells Fargo also saw his compensation “more than double” as he earned “a salary of $5.6 million paid in cash and stock and stock awards of more than $13 million.”

In the coming months, politicians across the country are going to tell Americans that the only way to stave off huge deficit and balance the budgets is by gutting programs for the poor, eviscerating support for the middle class, eliminating labor rights, and decimating the government’s ability to serve the public interest. This is a lie. The United States is the richest country in the history of the world, and income inequality is higher now than it has been at any time since the 1920′s, with the top “top 1 percentile of households [taking] home 23.5 percent of income in 2007.”

It is simply unfair for Main Street Americans who’ve already been battered by one of the worst economic crises in our history to have to continue to sacrifice while the rich and well-connected continue to rip off taxpayers and avoid paying their fair share. That’s why a Main Street Movement consisting of Americans who are fed up with the status quo is rocking the nation, and one of its first targets should be tax dodgers like Bank of America and Boeing.

UPDATEAll across the country, Main Street Americans are protesting tax dodgers like Bank of America. A picture from one such demonstration (HT: @loril):

UPDATEOn its Twitter account, US Uncut notes that protesters outraged at Bank of America's tax avoidance shut down a major branch in Washington, D.C. today.

UPDATEHundreds of demonstrators descended on a Bank of America branch in San Francisco, some carrying signs mocking the bank's logo as "Bankrupting America" (HT: @jashsf):

UPDATEOne Uncut US demonstrator carried a sign that read: "I pay almost 1/3 of my measly income, Bank of America pays NOTHING?!!!" (HT: @allisonkilkenny):

UPDATEThis art school dropout in Maine was outraged at having to pay more taxes than Bank of America (HT: RawStory):