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tax subsidies
Corporate tax subsidies "earned."
The Center for Tax Justice has an update to the big report they issued last November, detailing how much the Fortune 500 corporations paid, or avoided, in taxes. They found then that "30 of the companies paid no net federal income tax from 2008 through 2010." None. Nada. Zip.

In their follow-up, they find that 24 of these companies avoided paying taxes again in 2011.

In fact, all but four of the 30 companies remained in the no-federal-income-tax category over the 2008-11 period.

Over the four years:

  • 26 of the 30 companies continued to enjoy negative federal income tax rates. That means they still made more money after tax than before tax over the four years!
  • Of the remaining four companies, three paid four-year effective tax rates of less than 4 percent (specifically, 0.2%, 2.0% and 3.8%). One company paid a 2008-11 tax rate of 10.9 percent.
  • In total, 2008-11 federal income taxes for the 30 companies remained negative, despite $205 billion in pretax U.S. profits. Overall, they enjoyed an average effective federal income tax rate of –3.1 percent over the four years.
You read that right. These 30 companies had an effective negative tax rate of –3.1 since 2008.

So how much federal revenue was missed out on in those four years? Or, more to the point, how much did all the rest of us schlubs who actually pay our taxes end up subsidizing those companies over the last four years?

That would be $78.3 billion, that's how much they received in tax subsidies by avoiding the 35 percent tax rate they're supposed to be paying. "Wells Fargo alone garnered $21.6 billion in tax subsidies over the four years, followed by General Electric ($10.6 billion), Verizon ($7.7 billion), and Boeing ($6.0 billion)."

Meanwhile, the Republican budget (the Romney-Ryan budget) would cut the corporate tax rate from 35 percent to 25 percent. Maybe they're shooting for a –10 percent tax rate for corporations. Rep. Paul Ryan says that of course that massive tax break, as well as the one for millionaires, will be revenue neutral, and they'll somehow magically find enough tax loopholes to close to make up the difference. He just can't tell us which loopholes. That's super secret information. Of course, even if he does have real loopholes in mind, a revenue neutral plan would still mean that American taxpayers would be cheated out of about $20 billion a year that these companies should have paid.

Originally posted to Joan McCarter on Mon Apr 09, 2012 at 12:37 PM PDT.

Also republished by Income Inequality Kos and Daily Kos.

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Comment Preferences

  •  But of course! (3+ / 0-)
    Recommended by:
    blueoregon, ColoTim, martyc35
    Maybe they're shooting for a –10 percent tax rate for corporations
    According to Republicans, WE should be paying big bidness to set up shop and create jubs
  •  This diary is the kind of pseudo analysis (3+ / 0-)
    Recommended by:
    Susan G in MN, VClib, johnny wurster

    that just doesn't work.

    Without a far greater degree of analysis of how each company wound up with the low tax rates it is not possible to say whether they were inappropriate.

    Moreover, the fact that some corporations in some years wind up with absurdly low tax rates has nothing to do with whether corporate tax rates should be lowered or raised, though it might be an argument for a flatter tax (albeit without more data, not a very good one).

    Finally, though I have not looked at the analysis by Citizens for Tax Justice,  starting any analysis in 2008, which was the most highly anomalous year in decades should be viewed with some degree of skepticism.

    •  I work for one of those companies above (1+ / 0-)
      Recommended by:
      Sherri in TX

      And we didn't pay taxes because we lost a metric shit-ton of money for quite a while. We're just now back up to investment grade.

      I won't divulge which one, but yeah, it's not all cut and dried.

      We get what we want - or what we fail to refuse. - Muhammad Yunus

      by nightsweat on Tue Apr 10, 2012 at 01:50:20 PM PDT

      [ Parent ]

      •  OK but what I would like to know (2+ / 0-)
        Recommended by:
        Amber6541, starfu

        I agree with you that if the company is losing money or not making profit, I wouldn't expect them to pay corporate income tax.

        But I would like to know how the executives were compensated, particularly if they were getting bonuses and whether the expenses of the company (that decreased the profits) included paying lobbyists, making ads for political purposes or contributing to PACs.

        It is a pretty obvious strategy to decrease taxes by decreasing profits by creating these sorts of expenses. Shareholders might not like it but the company executives are laughing all the way to the bank.

        •  Oh they made out like bandits (1+ / 0-)
          Recommended by:
          Thursday Next

          HUGE sacks of money, but not Wall Street money.  Our CEO made something like $10m last year with $1.5m being salary.

          Of course one year they pulled in something like 8% of our profits.

          Exec pay is out of control and always will be absent regulation.

          We get what we want - or what we fail to refuse. - Muhammad Yunus

          by nightsweat on Wed Apr 11, 2012 at 11:30:48 AM PDT

          [ Parent ]

  •  Great - my taxes support shareholders instead (8+ / 0-)

    of education, healthcare for all, clean air, clean water...

    How come catholic institutions can opt out of paying for contraceptives but I can't opt out of paying dividends to the shareholders of these companies?

    “Parties do not lead revolutions. They follow them. And then only when forced to.” Joe Bageant

    by tgypsy on Mon Apr 09, 2012 at 12:53:11 PM PDT

  •  It actually makes sense to flatten (6+ / 0-)

    the rates IF -- that's a big "if" -- you eliminate many deductions and exemptions.  

    Look at what's happening with the corporate tax rate.  Of course, what matters most is NOT the stated rate but the effective rate -- what you actually pay, after deductions, exemptions, etc.  As we are repeatedly told, the corporate tax rate of 35% is "the highest in the world" and makes us not competitive.  That's true -- those companies that DO pay an effective rate of anywhere near 35% have a strong, strong incentive to move as much of their income as possible overseas.   But if the average effective federal corporate income tax rate is around 25% (which is where I think it is), that means that some companies (like those here) are paying nothing, some are paying 20%,  some are paying 25%, and some are paying the full 35%.   Who pays what depends on which special tax breaks you qualify for.  That's a horrible system -- it means that businesses make a lot of business decisions based on what tax breaks they will get, rather than on what is best for business.  

    If the effective tax rate is now around 25%, it would be far, far, far, better to lower the stated rate to something like 28%, eliminate a bunch of the exemptions and deductions, and maybe bring the effective rate up a bit  -- meaning that most companies would pay roughly the same thing (no more some paying 35% and some paying 0) and you'd raise more money.  You'd also lessen the role of the tax code in making business decisions.   And that would be a good side effect.

  •  Does this include all taxes paid, anywhere, by (1+ / 0-)
    Recommended by:
    johnny wurster

    multinationals? One suspects not.

    •  Accounting for income taxes is weird (2+ / 0-)
      Recommended by:
      Justanothernyer, nextstep

      Mattel, for example, paid $173 million in 2011 (149 and 133 million for 2010 and 2009, respectively).

      That's straight off the cash flow statement, so it's really what they paid.  The diary is likely using the GAAP statement of expense, which is a different calculation and relates solely to income tax expense attributable to that year.  

  •  So many energy companies, tsk tsk, tsk (2+ / 0-)
    Recommended by:
    leu2500, US Blues

    maybe it's time to nationalize energy?

    "Such is the irresistible nature of truth that all it asks, and all it wants, is the liberty of appearing." - Thomas Paine

    by blueoregon on Mon Apr 09, 2012 at 12:59:34 PM PDT

  •  Wells Fargo? Is this counting breaks for loans (2+ / 0-)
    Recommended by:
    leu2500, US Blues

    or something?

    Today, strive to be the person you want to be.

    by GoGoGoEverton on Mon Apr 09, 2012 at 01:08:21 PM PDT

  •  Exhibit A - Why the left is so maligned on finance (0+ / 0-)

    Gee....do you think these companies paying no taxes might have something to do with the fact that they had no earnings during the largest recession since Jesus threw the money changers out of the temple???

    How are you "subsidizing" someone if they did not earn anything to pay taxes on?  

    That would be $78.3 billion, that's how much they received in tax subsidies by avoiding the 35 percent tax rate they're supposed to be paying.
    They are supposed to be paying?  Who made you god or goddess of the tax code?
  •  Adventures in Capitalism (0+ / 0-)

    Information like this keeps entering the collective midstream, soon we'll have a flood.

    "Political ends as sad remains will die." - YES 'And You and I' ; -8.88, -9.54

    by US Blues on Tue Apr 10, 2012 at 01:35:56 PM PDT

  •  No corporate tax (0+ / 0-)

    Please Democrats ,the  first time etch-a-sketch talks about the 35% corporate tax rate        JUMP ON HIM FOR THIS!

  •  This is GOOD why do ou Hate it (1+ / 0-)
    Recommended by:
    happymisanthropy

    these WONDERFIL COMANIES now have MORE $$ to spend on GIVING YOU A JOPGP but are u appling for 1 NOOOOOOOOOOOOOOOOOOOOOOOOOO ur just SITIIIGN around giving out FIKLTHY BITTH ONTROL AND BOOKS ON FILTHY EVOLUTIONN instead of WORKING HARD FOR THE $$$ LIKE These Wonderrfl XOMNPANIES so WAKE UP AMERICA BEFORE IT IS TOO LATE.

  •  Sounds like a redistribution of wealth to me. My (2+ / 0-)
    Recommended by:
    happymisanthropy, tgypsy

    wealth redistributed to 30 of the Fortune 500 companies.  Not to mention to the millionaire and billionaire individuals.

  •  Who thinks the first tax subsidy that Ryan (2+ / 0-)
    Recommended by:
    maryabein, happymisanthropy

    would eliminate would be the Earned Income Credit since Republicans think that poor people are not paying their fair share of taxes?

    “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

    by ahumbleopinion on Tue Apr 10, 2012 at 01:48:05 PM PDT

  •  excellent read for all about our corporations... (1+ / 0-)
    Recommended by:
    Bugsby
    Friday, April 6, 2012
    Three Corporate Myths that Threaten the Wealth of the Nation
    ...When the executives who control big-business investment decisions place a high priority on innovation and job creation, then we all have a chance for a prosperous tomorrow. Unfortunately, over the past few decades, the top executives of our major corporations have turned the productive power of the people into massive and concentrated financial wealth for themselves. Indeed the very emergence of “the 1%” is largely the result of this usurpation of corporate power. And executives’ use of this power to benefit themselves often undermines investment in innovation and job creation.

    These corporations do not belong to them. They belong to us. We need to confront some powerful myths of corporate governance as part of a movement to make corporations work for the 99%. To start, we have to recognize these corporations for what they are not.

    • They are not “private enterprise.”
    • They should not be run to “maximize shareholder value.”
    • The mega-millions in remuneration paid to top corporate executives are not determined by the “market forces” of supply and demand.
    http://www.nakedcapitalism.com/...

    American taxpayers need to make corporations work for the 99%......wtf
  •  Holy crap! Looks bad, but . . . (0+ / 0-)

    Now I'm reading the comments and finding some high-minded devil's advocates justifying these tax-dodging bastids.

    So which is it?  You guys are confusing this bear of little brain.

    I was a peripheral visionary. I could see the future, but only way off to the side. ~ Steven Wright

    by Bugsby on Tue Apr 10, 2012 at 01:58:03 PM PDT

  •  Hey look at that...13 of them are power companies (0+ / 0-)
  •  This really is disgusting... (0+ / 0-)

    ... and yet, as always, we are just powerless to do anything about it.

  •  Wells Fargo is an amazing example (0+ / 0-)

    12 million undocumented residents--and a very big hunk of them send money home via Wells Fargo, because they can't legally build a retirement here. A comprehensive immigration law would not only save social security (demographic mix) but would hit Wells Fargo where it hurts.

  •  GOP's agenda is to give to the rich and take from (0+ / 0-)

    the poor.  

    And yet the middle class still votes for them.

    The GOP's philosophy is that the rich don't have enough money and the poor have too much.  

    How do they get away with that message?  Because they do.  

  •  To be fair, Wells Fargo is really bankrupt. (1+ / 0-)
    Recommended by:
    ozsea1

    Yes, they still pay tens (hundreds?) of millions in bonuses to their idiot CEO and executives, but Wells Fargo is likely bankrupt by any honest reckoning. They were deeply exposed to the sub-prime mortgage melt-down, and made things much worse by gobbling up Wachovia with its colossal holdings of sewage-grade mortgages.

    Of course, what this really reflects is the ongoing back-door bailout of insolvent banks, even as those same banks turn around and foreclose on homeowners nailed to the floor on underwater mortgages.

    Yep. The banksters still run Washington.

  •  These are the real welfare (1+ / 0-)
    Recommended by:
    Amber6541

    queens!

    "Growing up is for those who don't have the guts not to. Grow wise, grow loving, grow compassionate, but why grow up?" - Fiddlegirl

    by gulfgal98 on Tue Apr 10, 2012 at 02:37:53 PM PDT

  •  Are they hiring? (0+ / 0-)

    seriously.

  •  Sure, there's a lot of outrage for Ryan's plan... (1+ / 0-)
    Recommended by:
    wsexson

    ... but where's the outrage over Obama's corporate tax reform "framework"?

    From the diary:

    Meanwhile, the Republican budget (the Romney-Ryan budget) would cut the corporate tax rate from 35 percent to 25 percent. Maybe they're shooting for a –10 percent tax rate for corporations. Rep. Paul Ryan says that of course that massive tax break, as well as the one for millionaires, will be revenue neutral, and they'll somehow magically find enough tax loopholes to close to make up the difference. He just can't tell us which loopholes.
    I agree with those criticisms.

    Here's Obama's framework:

    The President’s framework is very short on details about which corporate loopholes he wants to close to offset the costs of the tax breaks it includes. In other words, it’s not even clear how a corporate tax reform based on the President’s framework would avoid becoming revenue-negative.

    The President has proposed to reduce the statutory corporate tax rate from 35 percent to 28 percent, make certain temporary tax breaks, including the research and experimentation credit, permanent, and add some new business tax breaks.  In total, these tax cuts would cost us about $1.2 trillion over the next 10 years.

    Ryan's plan? Cut taxes from 35% to 25%. No clear info on what "loopholes" cuts would counterbalance the decrease in revenue.

    Obama's plan? Cut taxes from 35% to 28%. No clear info on what "loopholes" cuts would counterbalance the decrease in revenue.

    Let's not kid ourselves saying this is only a Republican problem.

  •  View the "Dennis Moore" sketch (0+ / 0-)

    on YooToob. Monty Python. Classic.

    "What have you done for me, lately?" ~ Lady Liberty

    by ozsea1 on Tue Apr 10, 2012 at 04:41:21 PM PDT

  •  Corporate Socialism (0+ / 0-)

    There's a term called "Lemon Socialism" where non-viable companies are propped up by government funding. Here in the USA we have done it one better with Corporate Socialism - the government props up viable, profitable companies.

    "Those who can, do. Those who can't, teach." - Originally said by someone who can do neither.

    by bondibox on Wed Apr 11, 2012 at 08:58:22 AM PDT

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