By Jonathan Berr
The 35 percent statutory U.S. corporate tax rate is the highest in the world. But according to a paper published earlier this month by University of Southern California law professor Edward Kleinbard, many companies don't pay anywhere near that much due to the plethora of loopholes in the tax code.
Kleinbard's work was highlighted by the New York Times' Andrew Ross Sorkin in a column Monday, triggering a flood of social media buzz. Corporate taxation has become a hot-button issue as more U.S. companies have acquired foreign firms and then moved their headquarters overseas as a way to reduce their tax burden.
Other tax experts have made the same point as Kleinbard. A report by the advocacy group Citizens for Tax Justice noted that 111 of the 288 companies it examined paid zero or less in federal taxes in at least one year from 2008 and 2012.
Read the entire article
By Ben Hallman
Not long ago, the top executive at a large American drug company said that her company would be planting its corporate flag in the Netherlands, because the U.S. tax code is just so darn unfair.
Heather Bresch, the CEO of Mylan, told a New York Times columnist that her bid to acquire a smaller Dutch company and move ownership abroad through a controversial tactic known as an inversion was forced by Congress, which has refused to lower corporate tax rates and make U.S. businesses "more competitive."
... In 2010, profitable U.S. corporations paid an effective rate of less than 13 percent, according to the Government Accounting Office, a nonpartisan arm of Congress. Citizens for Tax Justice, a tax reform advocacy group, recently determined that most U.S. multinationals pay a higher foreign rate than they do abroad.
Read the entire post
Robert S. McIntyre is Director of Citizens for Tax Justice (CTJ), a nonpartisan research and advocacy group that fights for tax fairness—at the federal, state, and local levels. CTJ regularly issues reports, sometimes in conjunction with other organizations. For example, in February 2014 it issued a report entitled “The Sorry State of Corporate Taxes: What Fortune 500 Firms Pay (or Don’t Pay) in the USA And What they Pay Abroad—2008 to 2012.”
Read the full interview
Steve Wamhoff, CTJ's legislative director authored an op-ed for USA Today
The wave of corporations seeking to "invert," or reincorporate as offshore companies, requires action. But lobbyists' preferred solution, reducing our corporate tax rate, will not solve this problem.
America's official corporate tax rate is 35%, but few companies pay it thanks to various loopholes. In fact, a report from Citizens for Tax Justice found that most profitable, multinational Fortune 500 corporations actually pay lower effective tax rates in the United States than in other countries where they do business.
Countries where inverting corporations take up legal residence, such as Ireland and the Netherlands, have even more loopholes than the United States. These nations make it even easier for corporations to use accounting tricks to claim their profits are in countries such as Bermuda and the Cayman Islands, which have no corporate tax. That's why lowering the U.S. corporate tax rate won't solve anything.
Read the entire piece
By the Editorial Board
THE LEFT-LEANING Citizens for Tax Justice called the idea “silly.” The right-leaning Tax Foundation deemed it “poor policy.” So why do 16 states — including Maryland and Virginia — continue to offer sales tax holidays during the August back-to-school shopping season?
The most likely answer is that these policy gimmicks are popular among consumers and a certain set of retailers, especially big chain stores. But they aren’t in the public interest. The states that still stage sales tax holidays should do what the District did a few years ago: Get rid of them.
Read the entire editorial
Scott Harrison, Between the Lines host, interviewed CTJ Senior Counsel Rebecca Wilkens to get the scoop on corporate inversions.
Read a summary of the interview or listen to a clip of the interview here
By Kayla Tausche
The debate around "inversions"—the process of American companies buying foreign companies to access capital and lower tax rates overseas—has reached the dinner table.
A June study by Citizens for Tax Justice and the U.S. Public Interest Research Group found that Pepco Holdings, Pacific Gas and Electric, Wisconsin Energy and American Electric Power saw their effective tax rates go negative from 2008 to 2012, largely due to bonus depreciation.
Read the entire article
CTJ director Robert McIntrye authored an opinion piece for the Huffington Post.
I experienced a brief moment of joy when news broke last week that pharmacy chain Walgreens has, for now, set aside plans to invert, which is a euphemism for using paperwork to reincorporate as a foreign company for tax purposes. But my joy lasted for about one minute.
While Walgreen Co. has decided to remain American for tax purposes, a lot of what consumers buy in Walgreens drug stores may come from companies that are not such outstanding corporate citizens. The prescriptions you have filled there may be made by AbbVie, which plans to become a British company for tax purposes, or Mylan, which plans to become a Dutch company, or Pfizer which is also considering a corporate inversion.
Read the entire post
By Ama Sarfo
Recent political interest in comprehensive tax reform has been fickle at best, resurfacing recently only in the onslaught of several inversion announcements — and Citizens for Tax Justice director Robert McIntyre says the saga will continue because politicians aren't as easily embarrassed as they used to be.
When the nation implemented its last tax reform nearly 30 years ago in 1986, McIntyre was heralded as an important agent of that change thanks to acerbic corporate tax avoidance reports he wrote for CTJ that blasted companies like...
Check out the entire post (subscription)
By Erika Rawes
Last month, President Obama said in L.A. that, “My attitude is I don’t care if it’s legal — it’s wrong. And my attitude is, is that nobody begrudges our companies from turning a profit — we want them to be profitable. And in a global economy, there’s nothing wrong with companies expanding to foreign markets. But you don’t get to pick the tax rate you pay.”
Corporate taxes have been somewhat of a hot topic, as the majority of us members of the middle class are up to our necks in taxes (excuse the dramatic sentiment) and corporations use tactics such as inversion and transfers to get large breaks on tax bills. It makes some feel as though the little guy is being hounded while Goliath is receiving breaks left and right.