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Two reports from CTJ demonstrate that the U.S. corporate tax is not the huge burden that corporate lobbyists say it is. The first report explains why claims that the U.S. has the highest corporate tax in the world are false. The second report follows up on the thirty Fortune 500 corporations that CTJ identified last year as paying no corporate income taxes and concludes that most of them have not changed their tax dodging ways since then.
America has one of the lowest corporate income taxes of any developed country, but you wouldn’t know it given the hysteria of corporate lobbying outfits like the Business Roundtable. They say that because Japan lowered its corporate tax rate by a few percentage points on April 1, the U.S. now has the most burdensome corporate tax in the world. This CTJ reports explains that large, profitable U.S. corporations only pay about half of the 35 percent corporate tax rate on average, and most U.S. multinational corporations actually pay higher taxes in other countries where they do business.
Last November, Citizens for Tax Justice and the Institute on Taxation and Economic Policy issued a major study of the federal income taxes paid, or not paid, by 280 big, profitable Fortune 500 corporations. That report found, among other things, that 30 of the companies paid no net federal income tax from 2008 through 2010. New information for 2011 shows that almost all these 30 companies have maintained their tax dodging ways.
26 of the 30 companies continued to enjoy negative federal income tax rates. Of the remaining four companies, three paid four-year effective tax rates of less than 4 percent. Had these 30 companies paid the full 35 percent corporate tax rate over the 2008-11 period, they would have paid $78.3 billion more in federal income taxes.