With the April 17 deadline looming, many Americans are hurrying to file their income taxes. For some of the most profitable corporations in America, however, tax day never comes.
In fact, a new report issued by Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy reveals that 26 of the most profitable Fortune 500 companies, paid no federal corporate income taxes for the past four years, despite making billions in profits. Among the most egregious of corporate tax dodgers are a host of companies with Massachusetts operations — General Electric, Verizon and Wells Fargo, to name a few.
Not only are these corporate heavy-hitters avoiding taxation, but they’re actually enjoying negative federal income tax rates — which means that despite $206 billion in profits, these corporations managed to draw in billions in taxpayer subsidies.
That’s why hundreds of Bay State taxpayers will take to the streets of Boston’s Financial District tomorrow to demand major corporations and the wealthiest 1% pay their fair share. The protests are part of a growing, nationwide wave of voter discontent against big corporations, the rich and politicians who have created an economic emergency for the 99% through rampant tax dodging.
Join us in the streets TOMORROW to make your voice heard. We’re meeting at 5:30 PM in Dewey Square across from South Station. For more information, visit www.TaxDayBoston.org and follow along on twitter with #99TaxDay.
…voter discontent against big corporations….
Which are simply following the tax laws as they are written. If effective rates after deductions, credits, carry-forwards, etc, are too low, blame the politicians not the corporations. Even if you believe corporations control the legislators by way of contributions and lobbying, elect new candidates until we are represented by statesmen who listen to their constituents and not special interests. or we can keep electing the same and expecting the same, but this is the fault of tax law, NOT evil corporations.
Corporations control (or at least heavily influence) the politicians directly (through contributions, PACs and SuperPacs, lobbying and everything else) and indirectly through their ownership of the media — the media in turn controls what we want and that is among the most powerful of the “knobs” available to corporate America. Tax law is, in fact, dominated (if not controlled) by corporate America (notice I’ve avoided the characterization you offered).
Until we do something about the extent to which corporate America dominates the economic policies of our government, then tax law will stay the same and those policies will stay the same. Attempting to discard old representatives and replace with them new-improved models will not change a thing so long as we leave the web of connections in place.
The old aphorism comes to mind: “Same circus, different clowns”.
I have having issues connecting to it.
This is the same group that complained a few months ago about payment of state income taxes, but forgot to account for NOL carryovers.
Which suggests that they don’t really have much of an understanding of accounting or tax accounting, and the differences between the two.
Is available on pages 66-67 of their November 2011 report at:
http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersReport.pdf
It’s a fairly complex methodology but I’d be interested in your informed criticism.
I did see a similar report late last year relating to state taxes. This was widely reported in the media as “corporations pay no state taxes.” That report was simply wrong because they did not account for all of the state taxes other than the income tax. This was a media issue rather that a CTJ issue, though CTJ did not exactly strive to correct the bad reporting.
With respect to the income tax, it was pretty clear that they did not bother to account for losses from the recession, which are “carried forward” to subsequent years and offset income subject to taxation. So when Business X loses $100 in 2007, 2008, and 2009, and then makes a profit of $300 in 2010 as the economy recovers, the business’ taxable income is $0.00. Corporate income tax receipts therefore lag the recovery, especially when the recession was so severe and the recovery so slow.
Stock investors don’t care so much about a business’ taxable income; they want to know if the business is operating at a profit right now. So the financial information that public companies submits to the SEC is different than the financial information necessary to calculate taxes.
In the state report last year CTJ looked at SEC filings, and noted: “Look! Companies made a profit, and paid no taxes!” without considering or even explaining the “profit” they are pointing to bears only a loose connection to “income subject to taxation.” In other words, misleading.
The headline here makes me suspect that this report on federal taxes is similarly misleading, designed for political advocacy rather than factual reporting.