U.S. companies are making record profits; and more and more of their money is staying offshore --- and barely being taxed. A recent Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166 billion offshore last year in 2012 --- and they shielded more than 40% of their annual profits from U.S. taxes. These 60 companies were chosen for the Wall Street Journal analysis because each of them had held at least $5 billion offshore in 2011.
Further on in this post is a list of 64 companies that, on average over the past 5 years, collectively only paid an average of 8.1% in actual U.S. corporate taxes to the U.S. Treasury --- and 40% of their profits aren't being taxed by the IRS at all. (The financial data is from the SEC at http://www.sec.gov/edgar.shtml)
The total profits held offshore
(as "permanently reinvested")
by 60 big U.S. companies grew 15% in 2012 - WSJ (Source: SEC)
It's not that 64 major U.S. corporations (listed in a chart further below) pay "the highest tax rate in the world", because they don't...at least, not to the U.S. Treasury. It's foreign taxes on foreign profits that these 64 major U.S. companies mostly pay to the treasuries of foreign countries. So essentially, because the U.S. government collects so little as a percent, these U.S. corporations are essentially paying more (and a greater percentage) for the operations of foreign governments than they are for our own.
The Top Offenders are as Follows (The Full List is Further Below)
- General Electric: The worst tax record over five years, with $81 billion in profits and a $3 billion refund. Chairman and CEO Jeffrey Immelt received compensation for 2012 that was 80 percent more than his pay in 2011 ($20.6 million in 2012 compared with $11.4 million in 2011).
- Boeing: In addition to receiving a refund, despite $21.5 billion in profits, the company ranked high in job cutting, under-funded pensions (and contractor misconduct, but this website is temporarily down for maintenance). Boeing awarded Chief Executive Jim McNerney almost $27.5 million in annual compensation for 2012, a 20% increase from a year earlier.
- Exxon Mobil: Made by far the largest profits in the group, but paid less than 1% in U.S. taxes, and yet received oil subsidies along with their tax breaks. Unabashedly reports a 2012 “theoretical tax” of over $27 billion, almost 90% of its total income tax expense. The company was also near the top in contractor misconduct. Last year the company's board boosted Chairman and CEO Rex W. Tillerson's compensation by 17 percent to $25.2 million.
- Verizon: Second worst tax record, with a refund despite $48 billion in profits. Verizon Communications CEO Lowell McAdam's 2012 pulled in more than $36 million stock option gains.
- Kraft Foods: Received a refund from the public despite $13.5 billion in profits. Also a leading job-cutter. Chairman and Chief Executive Irene Rosenfeld received total compensation of $21.9 million in 2011, up 13.5%.
- Citigroup: One of the five big banks who are estimated to get a bailout / refund from the American public amounting to three cents from every tax dollar. Citgroup paid its new CEO Michael Corbat $11.5 million in 2012.
- Dow Chemical: Received a refund despite almost $10 billion in profits. CEO Andrew N. Liveris earned $10.41 million and had a 5-Year Compensation of $40.89 million.
- IBM: Paid less than 3% in taxes while ranking as one of the leading job cutters, and near the top in contractor misconduct. IBM's Chairman and CEO Virginia Rometty was paid $15.4 million for her first year.
- Chevron: In addition to a meager 4.3% tax rate and a share of oil subsidies, the company has been the main beneficiary of tax-exempt government bonds. John Watson, the chairman and CEO received about $25 million in total compensation in 2011, up 52% from the previous year.
- FedEx: The company paid less than 5% in federal taxes while relying on the publicly-funded Post Office to deliver thirty percent of its ground packages. The founder and top executive Fred Smith received a pay package worth $13.7 million last year, nearly double a year earlier.
- Honeywell: Less than 6% in taxes, a leading job cutter, near the top in instances of contractor misconduct, and run by the “Fix the Debt” CEO with the largest pension fund. An 8% tax rate, a leader in job cuts and under-funded pensions, and in the top 20 of contractor misconduct instances. Notable for an 8.4% tax rate, job cuts, offshore holdings, and the top U.S. spot on the contractor misconduct dollar list. CEO David Cote made $37 million in total compensation in 2011, but thinks the corporate tax rate should be ZERO.
- Apple: Where to begin? Avoiding federal taxes, avoiding state taxes, hiding overseas earnings, engaging in intellectual property schemes, using the “Double Irish” to transfer profits from Europe to Bermuda, and underpaying its store workers despite conducting most of its product and research development in the United States. Apple's CEO Tim Cook's salary is 378 million times as much as Steve Jobs --- $900,000 of cash salary and a $377 million stock grants.
- Pfizer: One of the leaders in stockpiling untaxed profits overseas, and right behind Merck in contractor misconduct dollars. CEO Ian Read saw his pay nearly triple after his first year on the job - $18.12 million in 2011.
- Google: A master at the “Double Irish” revenue shift to Bermuda tax havens, while using tax loopholes to bring a lot of the money back to the U.S. without paying taxes on it. Recognized as one of the world’s biggest tax avoiders.
- Microsoft: Named as one of the biggest offshore hoarders while using tax strategies to bring much of their untaxed money back to the U.S., where it also avoids state taxes.
All these companies, after using our infrastructure, technology, research facilities, higher education and national defense to build incomparably successful businesses, are now doing everything in their power to avoid paying anything back. Instead they have been using a carefully manipulated set of “legal” business write-offs, exemptions and loopholes to cut their tax bills to almost nothing --- and all the while they rant about the unfairness of the U.S. tax code (and then complain about President Obama, like the co-founder of Home Depot).
The real madness is that real American people are suffering because of the tax games these corporations play...thanks to our Congress, who go on TV to complain about the tax loopholes --- but they write the tax loopholes!
It's no wonder we have a deficit and the CEOs and executive board members are earning 380 limes more than their average employee. I wonder how many of these CEOs and executive board members (like Mitt Romney) also use off-shore tax havens to avoid paying taxes on their personal wealth. And how many of these CEOs and executive board members pay the lower capital gains tax rate (like Mitt Romney). And how many of these CEOs and executive board members have $100 million stashed in an IRA retirement account (like Mitt Romney).
The Big 64 U.S. Tax Cheaters from 2008-2012 - The Financial Data is from the SEC and is listed in order of the least % of U.S. tax paid (in millions) SOURCE: http://www.sec.gov/edgar.shtml
*** I'll let you contact me to give me an average of what percent they paid as taxes to foreign governments...then we should make that the statutory (and mandatory and effective) tax rate they should all pay to the U.S. Treasury.
More Corporate Tax Avoidance Rankings from www.payupnow.org
- By Company Name
- By Industry
- By Revenue (2008-2010)
- By Profits (2008-2010)
- By U.S. Tax %
- By Foreign Tax %
* As of this post the website http://www.contractormisconduct.org/ was down for maintenance.