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25 companies with largest tax subsidies
There are a lot of corporate bad guys to point at in the new report Corporate Taxpayers & Corporate Tax Dodgers (PDF). Out of 280 profitable Fortune 500 corporations the report examines, 30 paid a negative effective federal income tax rate between 2008 and 2010, while 67 paid less than 10 percent—nearly as many as the 71 that paid an effective rate of more than 30 percent, close to the official, if rarely observed, corporate income tax rate. Wells Fargo got nearly $18 billion in tax breaks over three years. AT&T got more than $14 billion. FedEx paid a 0.9 percent tax rate; Amazon paid 7.9 percent, a standout in a retail industry that on average pays close to 30 percent.

But it's not like these are renegade corporations somehow. They're maybe the most aggressive in a system that gives enormous preference to corporations over workers, and they're surely lobbying for more such preference. But if the nonpayment of taxes was limited to these 67 corporations, it would be both less of a problem to our economy and an easier problem to address. It's the system, though. The seven industrial machinery companies included in the study paid an effective negative tax rate: "–13.5 percent of their profits in federal income taxes." The financial industry paid a whopping-by-comparison 15.5 percent—but also took in the largest chunk of tax subsidies of any industry, accounting for 16.8 percent of subsidies. As the report asks, "does anyone think that financial companies need bailouts from the IRS, too?"

If the United States government "can't afford" to fix bridges or offer Pell Grants to college kids or food stamps to hungry people, look here (PDF) for the explanation:

Corporate taxes paid for more than a quarter of federal outlays in the 1950s and a fifth in the 1960s. They began to decline during the Nixon administration, yet even by the second half of the 1990s, corporate taxes still covered 11 percent of the cost of federal programs. But in fiscal 2010, corporate taxes paid for a mere 6 percent of the federal government’s expenses.

Just the 280 corporations in this study account for $223 billion in subsidies—money that should have been invested in our economy.

The report notes that "today corporate tax loopholes are so out of control that most Americans can rightfully complain, 'I pay more federal income taxes than General Electric, Boeing, DuPont, Wells Fargo, Verizon, etc., etc., all put together.'" If Warren Buffett shouldn't pay a lower tax rate than his secretary—and he's right, he shouldn't—it's certainly the case that Wells Fargo shouldn't pay a lower tax rate than me or you.

Originally posted to Daily Kos Labor on Thu Nov 03, 2011 at 09:25 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Phew! (10+ / 0-)

    At least now they can use that extra money to create jobs!

    Every Republican and just about all Democrats providing cover

    Thank you in advance for your support in November

    More and Better Democrats

    by SJerseyIndy on Thu Nov 03, 2011 at 09:33:47 AM PDT

  •  how about that! in the 47% and the 1% at the same (6+ / 0-)

    time! only in america!

    Kick a "job creator" in the balls today!

    by memofromturner on Thu Nov 03, 2011 at 10:12:44 AM PDT

  •  Hmmm, I'm going to hire me a new tax (4+ / 0-)

    accountant so I too can get me one of these "negative tax rates"

    The seven industrial machinery companies included in the study paid an effective negative tax rate: "–13.5 percent of their profits in federal income taxes."

    Don't know why I didn't think of that years ago.

  •  Oil Companies Are Main Reason for Superpower (4+ / 0-)

    military spending and some like Exxon are paying little to nothing for the protection.

    They should be covering a good half the military budget.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Thu Nov 03, 2011 at 10:29:32 AM PDT

  •  Congress are a bunch of whores. (1+ / 0-)
    Recommended by:
    Senor Unoball

    And I make that statement with sincere apologies to sex workers everywhere.

    The root problem is that both houses of congress (and in most cases the president) have to whore themselves out to corporations in order to attract the campaign money they need to keep their cushy part-time jobs.

    Get Money Out of Politics and you solve all the other problems we have - because congress will then HAVE to serve we the people in order to retain their jobs.

    Celtic Merlin

    Struggle with dignity against injustice. IS there anything more honorable that a person can do?

    by Celtic Merlin on Thu Nov 03, 2011 at 10:29:37 AM PDT

  •  Conservatives have been very good at (1+ / 0-)
    Recommended by:
    Senor Unoball

    pushing the meme that corporations should not be taxed.  That's one subject that pops up all the time when I speak with conservative acquaintances.

    Somehow, these folks have been convinced that they will end up paying that money anyhow; therefore it's all right to tax individuals more, and tax corporations less.

    And yeah, I'd sure love to get in on that negative 13.5% rate.

  •  JFK on Taxes (2+ / 0-)
    Recommended by:
    phonegery, Eric Nelson

    I realize this posting regards corporate taxes, but I read something yesterday that still ties in, and is pretty interesting.

    In his history of the JFK presidency, A Thousand Days, Arthur Schlesinger writes (pg. 1004):

    (Kennedy) was outraged to discover that an oil man reputed to be among the richest living Americans had in certain years paid income taxes of less than $1000; that, of the nineteen Americans with incomes of more than $5 million a year, more than 25 percent had paid no income tax at all in 1959 and that of the rest not one had paid in the 80 to 85 percent tax bracket to which their income nominally consigned them; that in a recent year one American received an income of nearly $20 million and paid no taxes at all. The President and the Attorney General, brooding over these figures, decided to make a major issue of the tax-avoidance spectaculars after the 1964 election.

    And now, about 50 years later, the 1 percenters and their enablers decry modest tax increases but which would still place them 50 percentage points less than they would have been paying in Kennedy's time.


    (Man, and only 19 known Americans with incomes of more than $5 million at the time!)

    "I mean, it -- I mean -- and I tell somebody, I said, just because you have a group of scientists that have stood up and said here is the fact, Galileo got outvoted for a spell." -- Rick Perry, 9/7/11

    by Senor Unoball on Thu Nov 03, 2011 at 11:17:35 AM PDT

    •  Hehe... (1+ / 0-)
      Recommended by:
      The President and the Attorney General, brooding over these figures, decided to make a major issue of the tax-avoidance spectaculars after the 1964 election.

      Good thing we don't have conspiracies in America, or people might start to get suspicious about what happened on that fateful day in November, 1963.

      When the power of love overcomes the love of power, there will be peace. - Jimi Hendrix

      by CharlieHipHop on Sat Nov 05, 2011 at 08:54:34 AM PDT

      [ Parent ]

  •  Voting against their own interests... (2+ / 0-)
    Recommended by:
    Senor Unoball, Eric Nelson

    at least, Chase and other banks WANT unemployed Americans and want people to need food stamps, because they profit handsomely by the exclusive contracts they have to service those payments via debit card.

    Nice racket...

  •  Bracing for an Influx of Veterans (2+ / 0-)
    Recommended by:
    Gorette, chimpy
    Demanding Increased Revenues, Sacrifice, Means 'Supporting the Troops' !!

    A Decade Plus of Not - Added to the Previous Decades
    State readies for influx of veterans as Iraq drawdown approaches

    November 3, 2011 - With hundreds of Massachusetts servicemen and women potentially returning home from Iraq before the holidays, state officials are bracing for an influx of veterans in need of support, and Gov. Deval Patrick on Monday said his administration plans to “step up our efforts” to ensure their needs are met.

    State officials say they are prepared to handle an increased demand for services, and Secretary of Veterans’ Services Coleman Nee said outreach will be essential to make sure veterans know what types of benefits and services are available to them at both the state and federal level.

    Earlier this month, President Barack Obama announced an end to military operations in Iraq and the return of combat troops by the end of the year. The withdrawal wraps up a military commitment that began in the spring of 2003.

    “We can provide the benefits and the services. We’re set up for it,” Nee told the News Service on Monday. “The lynchpin of this really is the outreach, because when veterans come home the first thing they want to do is see their families. They want to take off their uniform. They want to decompress and relax a little bit, and some of these folks might think they don’t need services right now, but three or four months down the line they might.” read more>>>

    And the corporations, along with the grossly wealthy, profit handsomely from War either directly or indirectly along with anyone who has one of the many investment scheme's, for that nest egg, handled by a broker, you too are reaping the profit of War!!

    CCR:"If you're a torturer, be careful in your travel plans. It's a slow process for accountability, but we keep going."

    by jimstaro on Sat Nov 05, 2011 at 08:40:49 AM PDT

  •  Maybe we can get companies to start up with (2+ / 0-)
    Recommended by:
    Lonely Liberal in PA, chimpy

    "We are the 94%" about paying taxes.

    I think I'd be more likely to patronize those places.

    I'm from the government and I'm here to help. Oh, yeah, and Ronald Reagan was an idiot and a lousy president.

    by journeyman on Sat Nov 05, 2011 at 08:41:46 AM PDT

  •  How About Raising It To Zero? (3+ / 0-)
    Recommended by:
    Marjmar, Gorette, chimpy

    Or, no tax breaks below zero taxes.  That should raise a few dollars.  At worst, it'll cut the CEO bonuses since they aren't spending much on job creation anyway and contribute nothing (negative, in fact) to the country.

    Don't do corporate business here if you require a payoff.  If you require a payoff you deserve to be replaced by somebody who doesn't.

    If corporations are people, I want them taxed the same way.  It's only fair, after all.

    (-6.25, -6.77) Moderate left, moderate libertarian

    by Lonely Liberal in PA on Sat Nov 05, 2011 at 08:52:27 AM PDT

  •  i am struggling so hard to pay my taxes (4+ / 0-)
    Recommended by:
    Marjmar, Gorette, chimpy, flying shams

    and the IRS is haranguing me over a relatively small sum, while these corporations pay NOTHING.

    I wish I were healthy enough to be at the occupy protests.

    "Politics is like driving. To go backward put it in R. To go forward put it in D."

    by TrueBlueMajority on Sat Nov 05, 2011 at 09:01:30 AM PDT

  •  This is sick. (3+ / 0-)
    Recommended by:
    Gorette, chimpy, Bluesteele31

    The head of that #4, GE, sits on Obama's Jobs Council.  How sick is that?  

    Then Democrats wonder why people are not buying the "campaign message".  

    I also thank the one who rearranged deck chairs on the Titanic so those on board ship could get a better view of the iceberg.

    by NyteByrd1954 on Sat Nov 05, 2011 at 09:26:44 AM PDT

  •  Thanks for the PDF but (0+ / 0-)

    is there a url for it?

    I don't know what consciousness is or how it works, but I like it.

    by SocioSam on Sat Nov 05, 2011 at 09:56:52 AM PDT

  •  This is so so so IMPORTANT! (1+ / 0-)
    Recommended by:

    News! That's what it is. I've never seen or heard any details on this, just vague generalities. Amazing to know and should be shouted by Democrats all over the airwaves!

       Corporate taxes paid for more than a quarter of federal outlays in the 1950s and a fifth in the 1960s. They began to decline during the Nixon administration, yet even by the second half of the 1990s, corporate taxes still covered 11 percent of the cost of federal programs. But in fiscal 2010, corporate taxes paid for a mere 6 percent of the federal government’s expenses.
    comment writer's bold

    Corporations used to contribute to our common welfare, meaning projects that made life in the USA better, during the time I was growing up. Back then we built new schools, libraries, highways and bridges and community colleges. College tuition at state universities was $1000/year. No loans needed! Now the Republicans want poor people to make up the slack.

    This decrease of 25+% to 6% tax contribution from corporations makes all the difference in the world. And it made them all billionaires. Trash the country so we have more billionaires and multimillionaires. Yes, that's so Republican and so BAD.

    $223 billion in subsidies to major corporations. If we had that invested in the economy it could have been working to improve the job situation.

    "extreme concentration of income is incompatible with real democracy.... the truth is that the whole nature of our society is at stake." Paul Krugman

    by Gorette on Sat Nov 05, 2011 at 10:00:53 AM PDT

  •  Of those 25 companies: (2+ / 0-)
    Recommended by:
    chimpy, marty marty

    8 are energy companies - Exxon, PG&E, and 6 electric utilities, all of which have long term investments in poisoning our atmosphere. They tell whoppers about EPA's job killing regulations while receiving whopping subsidies.

    "At this point of unimaginable threats on the horizon, this is what hope looks like." - Tim DeChristopher @RL_Miller

    by RLMiller on Sat Nov 05, 2011 at 10:04:20 AM PDT

  •  ATT, VZ numbers VERY INTERESTING (1+ / 0-)
    Recommended by:

    I think we can now see why those two are able to kill Sprint and TMobile with new network coverage.  They're effectively being subsidized while Sprint and TMo are not.

  •  Playing percentages (0+ / 0-)

    "Corporate taxes paid for more than a quarter of federal outlays in the 1950s and a fifth in the 1960s. ... But in fiscal 2010, corporate taxes paid for a mere 6 percent of the federal government’s expenses."

    The multiple degrees of meaninglessness in these pseudo-stats is breathtaking. There are a great many other things one would need to know in order for this to be actually meaningful. Ferinstance—

    How much in any given year were"federal outlays" comprised of debt, as opposed to paid for via taxation?

    Imaginary example:
    suppose that in 1950, corporations paid 25% of federal outlays but there was no federal debt. In 1951, the corporations make precisely the same profit and pay precisely the same amount of tax, but this year the government borrows and spends an amount equal (and in addition) to the previous year's outlays. Presto changeo, and the corporations' share of contribution to federal outlays just shrank by 50% to a mere 12.5%.

    Next, we could move on to increased population and thus increased aggregated personal income during whatever period is examined, comparing that to increased corporate earnings during the same period.

    No, I haven't done the math. But neither has the statistically-challenged source Clawson cites. In its present state, these stats are meaningless.

  •  Two little things (0+ / 0-)

    First, what do you mean by "negative tax rate?"  Is the government paying money to these zero-tax bill corporations?

    Second, no corporation, no corporation, pays taxes.  Customers pay a corporation's taxes.  No profits = no taxes.  A corporation knows the percentage of profit necessary to keep its share price high and rising in the market, to continue to stay in business against competition, and to be able to borrow money at a favorable rate of interest,  If a subsidy is withdrawn, the corporation's tax bill will increase.  To maintain its profit percentage, the corporation will necessarily modify its method of operating (staff reductions) and/or increase prices.  Who will pay those prices so the corporation can pay the increased taxes?  Okay, here the answer, free fer nuthin':  The Consumer

    Skipping randomly down the diary's table, Congress can eliminate all tax breaks and who will make up the increaed cost to the providers of Financial Services, Telephone Service, Light Bulbs, Gasoline, Laundry Detergent, Drugs, Electric Power and Coca-Cola?  The Consumer

    This is not to discourage efforts at tax fairness.  It's just to help clarify who will pay for the fairer treatment of corporations.  This is not some damned conservative argument that corporations should be taxed less.  It's Biznez and Experience 101.

    •  No, it's Right Wing Talking Points 101 (1+ / 0-)
      Recommended by:
      Second, no corporation, no corporation, pays taxes.  Customers pay a corporation's taxes.

      Sorry, but this is right wing BS, and isn't remotely true.

      The reality is that any corporation's ability to pass along expenses such as taxes to their customers is limited by the competitiveness of the particular marketplace that they're in.    In other words, prices will be set based on what a company can get it's customers to pay -- if that price is above the cost of providing the product or service, then they make a profit.  If that price is below their cost, they'll figure out a way to change their costs or else they'll eventually not be providing that particular product anymore.

      Note that taxes don't really seem to figure into this at all -- if they're losing money, then they're not paying corporate income taxes, anyway.  And if they're making money, the price of their products is set by what the market will let them charge, not by what their taxes are.

      For example, looking at that list, we see both AT&T and Verizon on the list.  Does anyone really believe that they're charging us lower prices for telecom services because of those tax subsidies?  

      Political Compass: -6.75, -3.08

      by TexasTom on Sat Nov 05, 2011 at 11:51:58 AM PDT

      [ Parent ]

      •  Where, but in revenue from (0+ / 0-)

        customers, does a corporation obtain the money to make a profit and, thus, be liable for income taxes?

        While you're certainly correct that (which has nothing to do with the sentence you quoted and chose to dismiss) there may be a limit to the extent that a producer can increase a price, I would expect a subsidy removal to affect all companies in an industry to the same percent.  So, the computerized efforts by both Coke and by Pepsi would find the top price that one could charge without causing defection to Kiddie-Cola, then adjust down a little to come in just under the other producer.  

        Producers in all of the categories in the diary's table offer wide varieties of products, walk-in customer, commercial, and industrial.  Their records can allow them to distribute increases at different percentages to different services.

  •  Several major errors in Study linked to. (1+ / 0-)
    Recommended by:

    The study covers corporations deducting the economic value of stock options as one of its tax subsidies.  In these transactions the company deducts the value of the stock options and the employee pays income tax on the stock options when exercised.  This is the same thing as the company paying a cash bonus (funding it by selling some stock shares to a third party) and deducting the bonus as an expense and the employee paying income tax on the bonus.  It is a fiction that this is a tax subsidy.

    The study's assertion of depreciation as done is a subsidy is just overreaching.  No matter what the timing of the depreciation, different depreciation schedules do not change the net tax payment over time just the timing.  If anything, as we very consistently have inflation, the company economically gets cheated by reducing the full expense value of the depreciated asset.  This is moreso a penalty than a subsidy.  If you want to see more manufacturing in the US, discouraging manufacturing equipment in the US is not the way to go.

    When discussing the reduced share of income tax paid by corporations, the study ignores that since the 1980s much business income now goes through "pass through entities" such as LLC.  These business entities pay no income tax but their income gets reported on the personal income tax returns of the owners.  For example, This website is owned by Kos Media, LLC.  It if had a profit of $10 million dollars, it would pay no Federal or State income taxes.  However this profit would be reported on the individual tax returns of the owners.  Much business income that was paid as taxes by corporations in the past is now paid by individuals using these pass through entities.

    The study does cover some outrageous tax policies for which GE should get special credit for.  GE clearly has better tax people than Congress.

    But the study misses the biggest subsidy of all, imported goods don't carry the tax burden of the US as paid by income, payroll and property taxes by employees, investors and vendors while much of the tax burden from the courty or origin is removed by the exporting country.  This subsidy means lost tax revenue, lost jobs and lower pay for those who work.  

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Sat Nov 05, 2011 at 11:18:23 AM PDT

  •  The (0+ / 0-)

    criminal rich need to be eaten.

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