A dozen multinational corporations paid an effective tax rate of negative 1.5 percent on billions of dollars in profits while reaping billions in taxpayer subsidies.
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A new study by the advocacy group Citizens for Tax Justice identified the 12 companies as American Electric Power, Boeing, Dupont, Exxon Mobil, FedEx, General Electric, Honeywell International, IBM, United Technologies, Verizon Communications, Wells Fargo and Yahoo. Together they reported $171 billion in profits over the 2008 to 2010 period, while getting $62.4 billion in tax subsidies. The release is part of a larger report that the group plans to release later this summer.
CTJ noted that President Obama has indicated that he wants to reduce or eliminate corporate tax subsidies, but use the increased revenue to lower the statutory corporate tax rate. Lobbyists for big business, however, have rejected the so-called “revenue neutral approach” and called for changes that would reduce corporate tax payments by trillions of dollars over the upcoming decade.
Among the companies on the list, over the 2008 to 2010 period, GE received $4.7 billion in tax benefits on top of its $7.7 billion in pretax U.S. profits. Exxon Mobil paid an effective three-year tax rate of only 14.2 percent, or 60 percent below the 35 percent rate that companies are supposed to pay. Over the past two years, however, Exxon Mobil’s net tax on its $9.9 billion in U.S. pretax profits was only $39 million, an effective tax rate of only 0.4 percent.
The study can be found at http://www.ctj.org/pdf/12corps060111.pdf.