Monday, June 06, 2011
Three months ago, General Electric made headlines with a report that it earned $14.2 billion in profits last year but paid no federal taxes. In fact, it got a $3.2 billion tax credit.
Turns out America's largest corporation is not alone.
Citizens for Tax Justice, an advocacy group that seeks fair tax policy for middle- and low-income families, released a report last Wednesday that showed other blue-chip corporations have taken similar advantage of the tax code's loopholes, subsidies and exemptions. Some of the provisions, of course, encourage job creation, research and other positive behaviors.
From 2008 through 2010, 12 companies -- including GE, DuPont, Verizon, Boeing, IBM and ExxonMobil -- reported $171 billion in pretax U.S. profits, but their federal taxes were a negative $2.5 billion, meaning the government paid them. Ten of the companies saw at least one no-tax year.
No one is saying this friendly tax treatment was illegal. But to the average American taxpayer, who gets far smaller breaks, seeing profitable companies pay nothing is outrageous.
With the standard corporate tax rate 35 percent and some in Congress eager to reduce it, these numbers are a timely reality check, not to mention a sad commentary on who is really paying their fair share.