DAVE ZWEIFEL | Cap Times editor emeritus | email@example.com | Posted: Friday, December 9, 2011 5:30 am
You probably saw the story a few weeks ago that despite the official 35 percent U.S. corporate tax rate, many of the nation’s most profitable corporations wind up paying little in federal taxes.
Now there’s yet another report that details how little they pay in state taxes as well.
A study of 265 profitable companies on the Fortune 500 list conducted by two nonprofit research organizations — Citizens for Tax Justice and the Institute on Taxation and Economic Policy — found that the corporate tax payments to states have been shrinking precipitously in recent years. In 1980, corporate income taxes made up 9.7 percent of state revenues and now they make up only an estimated 5.7 percent.
Sixty-eight of the firms in the study paid no state corporate income tax in at least one of the last three years and 20 of them averaged a tax rate of zero or less from 2008 to 2010.
The Wisconsin public interest group known as WISPIRG, which worked with the research groups in the study, reported that three Wisconsin corporations were included among the 265 — Rockwell Automation, Harley-Davidson and Kohl’s Department Stores. Rockwell was among the 68 that didn’t pay state taxes in two of the three years.
In fact, according to WISPIRG Director Bruce Speight, Rockwell reported annual profits during the three years of the study totaling $670 million, but actually received tax rebates of $17 million. Headquartered in Milwaukee, Rockwell is the successor to the old Allen-Bradley, whose heirs set up a foundation that is among America’s largest supporters of conservative causes.
Nationally, the giant DuPont corporation reported paying no state corporate taxes for any of the three years in the study.
Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, said that there are several reasons for the diminishing state tax payments. Many states calculate their taxes based on federal taxes, so many recent corporate tax breaks have lowered their collections. Other states have granted their own tax breaks to promote economic development or to lure companies from other states, like we’ve done here in Wisconsin.
The consequence, of course, is that the state tax burden is falling more and more on the individual taxpayer.
Yet we keep getting told that corporations have too high a tax burden, which has prevented them from creating jobs.
It’s beginning to look like this is just one more little white lie.
The Cap Times: Another report shows corporate taxes shrinking