CTJ: Twelve Corporations Pay Effective Tax Rate of Negative 1.5% on $171 Billion in Profits

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http://ctj.org/ctjreports/2011/06/twelve_corporations_pay_effective_tax_rate_of_negative_15_on_171_billion_in_profits_reap_624_billion.php

Twelve Corporations Pay Effective Tax Rate of Negative 1.5% on $171 Billion in Profits; Reap $62.4 Billion in Tax Subsidies

Analysis: 12 Corporations Pay Effective Tax Rate of Negative 1.5%
on $171 Billion in Profits; Reap $62.4 Billion in Tax Subsidies
Exxon Mobil, Boeing, Verizon, Others Illustrate Why Revenue-Raising Reform is Needed

Washington, DC – To better inform the public and lawmakers about how successful many
American corporations have been in reducing or eliminating their federal income taxes, Citizens
for Tax Justice is releasing a preview of its forthcoming major study of Fortune 500 companies
and the taxes they paid — or failed to pay — over the 2008-10 period. Today’s release details
the pretax U.S. profits, federal taxes paid and effective tax rates of (in alphabetical order):
American Electric Power, Boeing, Dupont, Exxon Mobil, FedEx, General Electric, Honeywell
International, IBM, United Technologies, Verizon Communications, Wells Fargo and Yahoo.
CTJ’s full corporate report is scheduled for release this summer.1
The analysis serves to illuminate the current corporate tax debate in Washington, DC, and
demonstrates that real corporate tax reform is long overdue. President Obama has indicated that
he wants to reduce or eliminate corporate tax subsidies, but use all the increased revenue to
lower the statutory corporate tax rate. Lobbyists for big business, along with many Republican
political leaders, reject this “revenue-neutral” approach, and call for changes that would reduce
corporate tax payments by trillions of dollars over the upcoming decade.

[NewJeffCT]

1. just imagine

taking just over half of that $171 billion and then getting out of Iraq & Afghanistan... we'd have an extra $200 billion.

[Oceansaway]

2. k & r...nt

[OhioChick]

3. K&R n/t

[sinkingfeeling]

4. I'm not sure I believe that.

ftp://public.dhe.ibm.com/annualreport/2010/2010_ibm_annual.pdf

The 2010 IBM Annual Report says that they had $9.1 billion in US revenue and paid $190 million in federal taxes, deferring $1.015 billion. They also paid about $500 million to the states.

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6. I think it's called "Two sets of books"

http://www.usinvestorclubs.org/article.php?id=6

For many years now U.S corporations have been legally carrying two sets of financial books. One set of books was given to the IRS when it came to tax time. Many of these reports showed well known, leading corporations reporting a loss for the year which reduced their taxable income, or in some cases allowed them to avoid paying taxes at all. In these accounting records the companies that issued stock options to their employees deducted the value of these options as an expense. After all, they did have value, and the company did give them to their employees for services rendered. These options were often given as compensation and incentives, in lieu of higher wages and salaries. It definitely saved the companies a lot of cash flow, an important commodity for any business.

But then we have that second set of books. The second set of books was presented to the SEC and the public at quarterly earnings reporting time. These books did not deduct the value of the options granted to employees, and the granted option values only showed up as teeny-tiny footnotes at the bottom of the pages, and at the back of the quarterly and annual reports. By doing this companies were able to report that they had made money, and had met those important earnings projections. The reasoning was that if a company had to show these options grants as an expense, as it did with the filings with the IRS, we would see a huge number of companies that never made a profit. And if that were the case they would not the ability to leverage themselves, with stock and options, into giant corporations such as WorldCom. Nor could they get employees to work for lower wages by offering stock options.

Two sets of books -- one for the IRS, one for the SEC.
I would guess this is the reason, but don't know for sure.

I also would not doubt CTJ's (Citizens for Tax Justice). I have found they do good work.

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7. more here... ltte to USA Today

http://www.usatoday.com/news/opinion/letters/2011-04-05-letters05_ST_N.htm

Corporations avoid taxes by keeping two sets of books

Publicly traded companies keep two sets of books. They use one set of accounting rules when preparing financial statements for the Securities and Exchange Commission and investors, and another set of rules, the Internal Revenue Code, when preparing their tax returns. All perfectly legal. It will come as no surprise that companies are inclined to maximize the earnings they report to shareholders and minimize the income reported to the IRS.

[Jefferson23]

5. Yea for the oligarchs..they are after all, the job creators!

If we do not begin a serious process/fight to eliminate lobby money, nothing will change. Obama's decisions
since he took office have convinced me of this.


I'm not suggesting this is all we need to do, but for some time now we know we can't depend on MSM journalism to
challenge any of this disgusting display of stealing from the country to profit the smallest percentage
of Americans.

They don't refer to them as the filthy rich for nothing.

[antigop]

8. Yes, the job creators need even more tax cuts! n/t

[Snarkoleptic]

9. Honeywell?!?!

Their ass-clown of a CEO was on MTP Sunday whining about taxes and the business climate.
Fuggg!!