2011-07-28 "Report: U.S. corporations avoided paying $60 billion in federal income taxes" by Vicki Needham from "The Hill"
U.S. corporations avoided paying about $60 billion in federal income taxes while the Fortune 100 companies took advantage of $90 billion in taxpayer-funded contracts last year, the Greenlining Institute reports in a new analysis released Thursday.
The report finds that top companies added 44 new subsidiaries in countries identified as “tax havens” since the Government Accountability Office (GAO) analyzed the issue in 2008, according to report authors Samuel Kang, Greenlining Institute general counsel and legal associate Tuan Ngo.
“America’s richest corporations avoid $60 billion a year in taxes by hiding $1 trillion in profits overseas while making billions in federal contracts,” Kang said. “It should be illegal, yet Congress is looking to cut the deficit by slashing Medicare, Social Security, food safety, education and health without collecting another dime from these wealthy companies.”
The report mentioned that a recent study found that eight of the top 12 companies effectively paid no federal income taxes from 2008 through 2010.
In 2010, General Electric paid no federal income tax, the report determined.
Of the 77 Fortune 100 companies with subsidiaries in so-called tax haven countries, 69 had federal contracts.
The largest in terms of dollar amounts was General Dynamics, with nearly $15 billion in federal contracts and 14 subsidiaries in tax haven or financial privacy jurisdictions.
The pharmaceutical and tech sectors loom particularly large, including Merck, Pfizer, General Electric, Dell and Google. G.E., had more than $3 billion in federal contracts.
“Individual Americans pay on average 20.4 percent of their income in federal income taxes, while Exxon pays 14.2 percent, IBM pays 3.8 percent and DuPont and General Electric pay virtually nothing, even though the corporate tax rate is supposed to be 35 percent,” Ngo said.