NOT BREAKING: Corporations “Pay Little or No Federal Income Taxes”

In General Interest by Jonathan Tasini2 Comments

It’s new data but not a new revelation because this bit of news is nothing we haven’t already become accustomed to. Corporations are robbing the country, robbing because corporations pocket profits made possible from all the investments in human and physical capital made thanks to taxes regular people pay but the same corporations do squat when it comes to paying a fair share.

The newest angle comes from the terrific folks at Citizens for Tax Justice (to my mind, CTJ is the absolute best on the topic of taxes). In their report “The Sorry State of Corporate Taxes,” CTJ concludes:

*111 of the companies enjoyed at least one year in which their federal income tax was zero or less.*26 companies, including Boeing, General Electric, and Verizon, enjoyed negative income tax rates over the entire five-year period, despite combined pre-tax profits of $170 billion.

*Of the 125 multinational companies in this sample, two-thirds paid a lower U.S. tax rate than the rate they paid to foreign governments on their foreign profits. On average, their foreign effective tax rate was 12 percent larger than their U.S. effective rate.

*The total amount of federal income tax subsidies enjoyed by the 288 profitable corporations over the five years was $362 billion. [emphasis added]

Who loses from this?:

The general public. As a share of the economy, corporate tax payments have fallen dramatically over the last quarter century. So one obvious group of losers from growing corporate tax avoidance is the general public, which has to pay more for — and/or get less in — public services, or else face mounting national debt burdens that must be paid for in the future.

And that one key point above is worth remembering whenever you hear some political hack, of either party, argue that corporate tax rates have to be lowered for the sake of “global competitiveness”. Fact is, it’s nonsense:

Instead, companies have shifted jobs overseas for a variety of non-tax reasons, such as low wages and weaker labor and environmental regulations in some countries, a desire to serve growing foreign markets, and the development of vastly cheaper costs for shipping goods from one country to another than used to be the case.