Thirty large and profitable Fortune 500 corporations paid no federal income taxes between 2008 and 2010, according to a new study Thursday on corporate loopholes.
In fact, the 30 companies enjoyed a negative effective income tax rate over the three-year period, even as they earned pre-tax profits of $160 billion, according to two think tanks, Citizens for Tax Justice and the Institute on Taxation and Economic Policy. A negative tax rate represents a tax benefit like a credit, not necessarily direct funds from the government.
Pepco Holdings, a Washington, D.C.-area power company, had the lowest effective tax rate at negative 57.6 percent and 78 of the 280 Fortune 500 corporations studied enjoyed at least one year in which they paid an effective tax rate of zero or less.
In addition, the average effective tax rate for the entire group of corporations studied over three years was only 18.5 percent, compared to the statutory rate of 35 percent.
The total amount of tax subsidies given to the 280 Fortune 500 firms was $222.7 billion from 2008-2010. Wells Fargo got the largest tax breaks, receiving $18 billion in breaks from 2008-2010.
The top 10 defense contractors saw their combined tax rate fall from 19.3 percent in 2008 to just 10.6 percent in 2010.
“Corporate taxes paid for more than a quarter of federal outlays in the 1950s and a fifth in the 1960s,” the report noted. “If we are going to get our nation’s fiscal house in order, increasing corporate income taxes should play an important role.”
Poster Comment:
This is why their taxes have to be cut now! Someday they might screw up and owe taxes after all. We can't allow that, it wouldn't be fair.
