As the U.S. faces a presidential election in the middle of tough economic times, taxes have been firmly in the spotlight. A study (pdf) released today is bound to add more fuel to the fire.
Citizens for Tax Justice, a left-leaning research organization in Washington, D.C., sifted through the financial reports of 280 Fortune 500 companies and found that 78 of them paid no federal income tax in at least one of the past three years. Thirty companies, the study found, paid a negative tax rate over the three-year period.
The Los Angeles Times reports that corporations have criticized the report:
GE accused the report of being "inaccurate and distorted" and said that it expects to pay a 30% overall tax rate this year. Verizon said the study was "union-orchestrated" as well as being "deceptive and politically motivated," adding that the company paid out $1.8 billion in taxes over the three-year period.
But according to the study, only a quarter of companies paid close to 35% of their U.S. profits, while another quarter paid less than 10%.
The New York Times reports another criticism of the study is that it did not factor in deferred taxes, or taxes companies might have to pay at a later time.
With that in mind here are some of the report's highlights that we've taken from the press release:
-- "The average effective tax rate for all 280 companies in the study over the three year period was 18.5 percent; for the period 2009-2010 it was 17.3 percent, less than half the statutory rate of 35 percent."
-- "Total tax subsidies given to all 280 profitable corporations amounted to $222.7 billion from 2008-2010."
-- "Wells Fargo tops the list of 280 U.S. corporations receiving the most in tax subsidies,getting nearly $18 billion in tax breaks from the U.S. treasury in the last three years."
-- "The top ten defense contractors saw their combined tax rate decline from 19.3 percent in 2008 to a mere 10.6 percent rate in 2010."
-- "U.S. corporations with significant (ten percent or more of their total worldwide profits) foreign profits paid tax rates to foreign countries that were almost a third higher than they paid to the IRS on their domestic profits."