Corporations Pay Historically Low Tax Rates While Lobbying To Make Them Even Lower

[Bill USA]

http://thinkprogress.org/economy/2013/03/27/1781921/corporate-tax-rates-lobbying/

As large American companies continue to lobby Congress for tax reform that would lower their tax rates, a study of historical corporate tax rates found that they are in fact paying at rates roughly half of those they paid decades ago.

The Washington Post analyzed 30 large companies listed on the Dow Jones Industrial Average — companies like McDonalds, Microsoft, and Exxon Mobil — and found that their tax rates have fallen even as profits have risen, thanks in large part to tax laws that provide incentives to store overseas profits in offshore tax havens. Many of the companies, the Post found, are paying rates less than half what they paid in the 1960s and 1970s, and most of the 30 have vastly reduced their rates in that time:

A Washington Post analysis of data from S&P Capital IQ, a research firm, found that in the late 1960s and early 1970s, companies listed on the current Dow 30 routinely cited U.S. federal tax expenses that were 25 to 50 percent of their worldwide profits. Now, most are reporting less than half that share. [...]

Out of all the firms in the Dow 30, 22 have seen a drop of more than 10 percentage points between the oldest year for which data are available and the most recent year.

American tax law allows companies to shield foreign profits from taxation until they are brought back to the United States, and corporations have happily obliged. The largest 83 corporations moved $166 billion overseas in 2012 alone, bringing their total to $1.46 trillion, and most of it, according to a Congressional Research Service study, was kept in tax havens like Bermuda, the Cayman Islands, Luxembourg, and Ireland. As a result, they have seen huge reductions in tax rates: McDonald’s, for example, saw its tax rate plunge from 37 percent in 1973 to 14 percent in 2012.

Corporate profits hit a 60-year high in 2011, right as the effective corporate tax rate hit a 40-year low. America’s largest companies, in fact, haven’t paid the full corporate tax rate in 45 years, and 26 have avoided taxation altogether for the past four years. At the same time, business leaders have lobbied Congress to reform the corporate tax code by adopting a territorial tax system that would exempt most foreign profits from American taxation, making it even easier for the companies to shift profits, investments, and jobs overseas.

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[msongs]

1. congress goes right along with it, so why not lobby for lower? nt

[xtraxritical]

2. This should be pointed out frequently but everybody's known it for a long long time.

[reigs61]

3. free

This reminds me of Pennsylvania,frack for free and the Delaware loophole corporations pay no taxes,let the people pay for the roads and bridges.