Another study is out, on corporate tax rates and what US corporations paid. A whopping 30 large, profitable corporations paid NO taxes for tax years 2008-2010.

Pepco Holdings, a Washington, D.C.-area power company, had the lowest effective tax rate, at negative 57.6 percent, among the 280 Fortune 500 companies studied.

The statutory U.S. corporate income tax rate is 35 percent, one of the highest in the world, but over the 2008-2010 period, very few of the companies studied paid it, said the report.

The average effective tax rate for the companies over the period was 18.5 percent, said Citizens for Tax Justice and the Institute on Taxation and Economic Policy, both think tanks.

Their report also listed General Electric Co, Paccar Inc, PG&E Corp, Computer Sciences Corp and NiSource Inc as among the 30 that paid no taxes. All 280 corporations examined were profitable over the period.

But, the very interesting thing about the corporate loopholes is that Reagan, the god to the GOP, closed many corporate loopholes in 1986. So, why is the GOP not willing to genuflect to their god and do the right thing and close corporate loopholes today?

Inquiring minds want to know.

EricLykins's picture

why is the GOP not willing to

why is the GOP not willing to genuflect to their god and do the right thing and close corporate loopholes today?

They would rather demonize the 47% of people (2009) that aren't paid enough to afford income taxes,

Since there's nothing in the AP/Reuters report that didn't come from the one-page CTJ press release, here's a link to the full report and some more highlights.

  • While the federal corporate tax code ostensibly requires big corporations to pay a 35 percent corporate income tax rate, on average, the 280 corporations in our study paid only about half that amount.
  • 56
    percent of the total tax subsidies went to just four industries: financial, utilities, telecommunications, and oil, gas & pipelines. It seems rather odd, not to mention highly wasteful, that the industries with the largest subsidies (driven in part by their large share of total profits) are ones that would seem to need them least.
  • Only two industries, Retail & Wholesale Trade and Health Care, paid an effective tax rate of 30 percent or more over the full three-year period.
  • 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.
  • If high U.S. corporate taxes were really encouraging companies to move operations and jobs abroad, then the simple solution would be to repeal our rule that lets corporations indefinitely “defer” paying U.S. taxes on their foreign profits. Without this “deferral,” companies that pay low
    foreign taxes on their foreign profits would owe some U.S. taxes on those profits too, so that there would be no income-tax advantage to operating abroad.
    Naturally, the corporate lobbyists are violently opposed to this long-overdue reform. In any event, it turns out that the corporate lobbyists’ assertion that U.S. taxes are higher than
    foreign taxes is wrong. In fact, in most cases just the opposite is true.
  • Twenty-five years after the major corporate tax reforms under Ronald Reagan in 1986, we now find the re-emergence of many of the problems that those reforms were designed to
    address, along with an array of new corporate tax-avoidance techniques. This report is not intended to provide a list of all the possible corporate tax reform measures that could be enacted to address these issues, but rather to illustrate the current consequences of inaction. The point is that if our nation’s leaders want to reform the corporate income tax to curb tax subsidies and make the taxation of different industries and companies more equal, they certainly could do so.
    And in doing so, like President Reagan, they should design corporate tax reform legislation so that it increases corporate tax revenues substantially, to help curb our nation’s large long-term deficits.
CE Petro's picture

Thanks

Thanks, Eric. I thought I added the link to the full report.

Factchecker's picture

RR, not to be confused with RR

From How to Speak Republican, the Republican-to-English dictionary:

- Ronald Reagan: A fictional character based loosely on President Ronald Reagan.

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