Parks Dept Banning Public buttembly! 1858

Wm James

What tax dollars?

Study Finds Resurgence in Corporate Tax Avoidance

The income tax is immoral and economically destructive. It should be abolished. Meanwhile, however, the "little guy" pays it while mbuttive profitable corporations escape it. Here is a news announcement with some important findings.

Many of the country's biggest corporations are once again paying little or nothing in federal income taxes, according to a study released today by the Insbreastute on Taxation and Economic Policy, which collaborated on a number of widely-publicized analyses of corporate taxes in the 1980s.

ITEP's new report examines the U.S. profits and federal income taxes of 250 of the nation's largest and most profitable corporations over the 1996-98 period. Although big corporations ostensibly are supposed to pay 35 percent of their profits in taxes, the 250 companies in ITEP's survey paid only 20.1 percent in 1998. That was down from 22.9 percent in 1996, and far below the 26.5 percent that a similar group of large companies paid back in 1988, soon after pbuttage of the loophole-closing 1986 Tax Reform Act.

"With significant help from Congress, corporations appear to be finding ways around the tax reforms adopted in 1986," said Robert S. McIntyre, a principal author of both the new study and previous corporate tax studies in the 1980s. "We hope our findings will encourage lawmakers to reexamine this important area of taxation."

The study's central findings include:

Forty-one companies actually paid less than zero in federal income taxes in companies reported a total of $25.8 billion in pretax U.S. profits. But rather than paying $9 billion in federal income taxes at the 35 percent rate, these companies enjoyed so many excess tax breaks that they received $3.2 billion in rebate checks from the U.S. Treasury. Just one company, Texaco, reported $3.4 billion in U.S. profits and $304 million in tax rebates over the three years.

In 1998, twenty-four corporations got tax rebates. These 24 companies--almost one out of ten of the companies in the study--reported U.S. profits before taxes in 1998 of $12.0 billion, yet received tax rebates totaling $1.3 billion. The list of big-name companies getting tax rebates in 1998 included, among others, Texaco, Chevron, CSX, Pepsico, Pfizer, J.P. Morgan, Goodyear, Enron, General Motors, Phillips Petroleum and Northrop Grumman.

A hundred and thirty-three of the 250 companies paid effective tax rates of less than half the 35 percent rate in at least one of the three years (and many did it more than once). In the years that these 133 corporations paid such low tax rates, they paid a mere 8.5 percent of their $209 billion in U.S. profits in federal income taxes.

Over the 1996-98 period, petroleum was the lowest-taxed industry in America, with an effective tax rate of only 12.3 percent. In 1998, the tax rate on the 12 big oil companies in the study fell to only 5.7 percent. Only one industry, publishing, paid an effective tax rate of more than 30 percent.

The Size of the Tax Breaks

Had all 250 companies paid the full 35 percent corporate tax rate on their $735 billion in pretax U.S. profits from 1996 to 1998, their federal income taxes would have totaled $257 billion. But instead, tax breaks for the 250 companies lowered their taxes by $26.9 billion in 1996, $31.8 billion in 1997 and $39.3 billion in 1998, for a total of $98 billion in tax savings over the three years.

getting more than a billion dollars in tax breaks. General Electric topped the list, with $6.9 billion in tax breaks over three years.

--

"This notion that the United States is getting ready to attack Iran is simply ridiculous. Having said that, all options are on the table," George Bush, Feb 22 2005