One year ago the Citizens for Tax Justice stirred controversy with a report highlighting 280 corporate tax-dodgers, highlighting companies they said were paying under the 35 percent federal income corporate tax rate. Later the group revised its list with new data and said most of the companies that paid no taxes previously repeated that in 2011.
That latest update estimated that all but four of the 30 Fortune 500 companies that paid an average negative federal income tax rate from 2008 to 2010 and continued to do so for 2011. Among the companies listed are Pepco Holdings and General Electric.
"One of the reasons we released an update is so many of these 30 companies asserted this was a temporary aberration in 2008 to 2010," Bob McIntyre, director of the Citizens for Tax Justice (CTJ), said. "They said they will pay a lot of taxes soon, but 'soon' hasn't come yet."
McIntyre said the 280 companies analyzed were Fortune 500 companies that made money from 2008 to 2010. The Citizens for Tax Justice created their latest estimates from company annual reports, based on U.S. profit and amounts companies report for federal income taxes.
General Electric, which appeared on the list, called the report "misleading." Spokesman Andrew Williams said: "GE paid $2.9 billion in income cash taxes in 2011 across all of its tax jurisdictions, including payments in the U.S. In addition, GE paid more than $1 billion in other state, local and federal taxes in the U.S."
Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, CTJ's research arm, said CTJ's study focuses on whether companies are paying a 35 percent rate for federal income taxes, and focusing on overall taxes is "trying to change the subject."
"As GE has said in the past, we pay taxes worldwide. But they don't dispute that CTJ is wrong. It's an exercise in misdirection," Gardner said. "When deferred taxes are paid, they will show up in our report as having been paid. But the harsh reality is that GE in particular is able to defer the taxes indefinitely."
The U.S. became the industrialized country with the highest "statutory" corporate tax rate this year when Japan lowered its corporate rate on April 1, the Tax Foundation said. The U.S. has a combined federal-state rate of 39.2 percent, according to the Tax Foundation, while Japan's rate is 38.01 percent.
"For every company that shows up as a low-tax corporation, there are competitors that are paying close to 35 percent," Gardner said. "The issue is about a number of privileged companies that have found ways to game the system and have a tax advantage over their competitors."
The CTJ said they found roughly a quarter of companies are paying 10 percent of their profit while only another quarter are paying a rate approaching the statutory 35 percent rate.
Wells Fargo was one of the four companies that CTJ said moved from paying no taxes from 2008 to 2010 to having a having a positive tax rate from 2008 to 2011 --- just 3.8 percent.
Gardner said, "Our study is narrowly tailored to answer the question --- Do companies pay the 35 percent tax rate that they say are too high? The answer is: Clearly not."Over a quarter century ago, in 1984, the Washington, D.C.based Citizens for Tax Justice released its first in-depth report on how much America’s top profitable corporations were actually paying in taxes. Their initial study found that they were paying only 14.1 percent of their profits in taxes, less than a third of the corporate tax rate then in effect. That's why these U.S. corporations have over $2 trillion sitting in offshore banks and not repatriating these revenues --- to avoid paying U.S. taxes. (Also read: 280 Corporations are "Too Big to Tax")
And a more recent analysis by the Wall Street Journal found that 64 major U.S. corporations, on average over the past 5 years, only paid an "effective" corporate tax rate of 8.1% in U.S. --- while actually paying more in foreign taxes.
CNN's Ali Velshi regularly allows Stephen Moore, the Wall Street Journal columnist (and corporate shill) to propagate this lie that U.S. corporations actually PAYS the highest "statutory" corporate tax rate. Facebook is just the latest example, who's getting almost a ½ billion dollars in tax credits for 2012.
When Stephen Moore (a regular on both Fox News and CNN) makes his usual false claim in the video below, Senator Bernie Sanders and Bill Maher call him out on his big lie as Jon Huntsman's daughter helplessly Abby looks on.