30 Major US Corporations Paid More to Lobby Congress Than Income Taxes, 2008-10

[MikeWB]

Theft continues at an accelerated pace.

http://www.ibtimes.com/30-major-us-corporations-paid-more-lobby-congress-income-taxes-2008-2010-380982

30 Major U.S. Corporations Paid More to Lobby Congress Than Income Taxes, 2008-2010

Despite a growing federal deficit and the widespread economic instability that has swept the U.S since 2008, the companies in question managed to accumulate profits of $164 billion between 2008 and 2010, while receiving combined tax rebates totaling almost $11 billion. Moreover, Public Campaign reports these companies spent about $476 million during the same period to lobby the U.S. Congress, as well as another $22 million on federal campaigns, while in some instances laying off employees and increasing executive compensation.

29 Major Corporations Paid No Federal Taxes, 2008-2010

Of the 30 companies analyzed in the report, which include corporate giants such as General Electric, Verizon Communications, Wells Fargo (WFC), Mattel (MAT) and Boeing (BA), 29 of them managed to pay no federal taxes from 2008 to 2010. Only FedEx, which raked in about $4.2 billion in profits during that period, paid a three-year tax rate of 1 percent -- totaling $37 million -- far less than the statutory federal corporate tax rate of 35 percent.

The Public Campaign report expanded on a newly released analysis on corporate tax dodging by the liberal-leaning Citizens for Tax Justice, a non-profit research and advocacy group, as well as lobbying expenditure data provided by the non-partisan Center for Responsive Politics.

Citizens for Tax Justice, the sister organization to the Institute on Taxation and Economic Policy, reports that 68 of the 265 most consistently profitable Fortune 500 companies did not pay a state corporate income tax during at least one year between 2008 and 2010, while 20 of them paid no taxes at all during that period.

Our report shows these corporations raked in a combined $1.33 trillion in profits in the last three years, and far too many have managed to shelter half or more of their profits from state taxes, Matthew Gardner, Executive Director at the Institute on Taxation and Economic Policy and the report's co-author, said in a statement. They're so busy avoiding taxes, it's no wonder they're not creating any new jobs.

According to the report, titled Corporate Tax Dodging in the Fifty States, 2008-2010, state corporate tax revenues have been declining for 20 years, due to the passage of multiple state tax subsidies, as well federal tax breaks that further reduce state corporate income tax revenues since states usually accept corporations' federal tax. Moreover, Gardner said multi-state corporations are constantly devoting their money and legal firepower to coming up with tax avoidance schemes.

Between 2008 and 2010, the 265 companies analyzed paid state income taxes equal to only 3 percent of their U.S. profits, half of the statutory 6.2 percent state corporate tax rate. As a result, these companies avoided a total of $42.7 billion in state corporate taxes over three years.

As recently as 1986, state corporate income taxes equaled 0.5 percent of nationwide Gross State Product (a measure of nationwide economic activity), states the report. But in fiscal year 2010, state and local corporate income taxes were just 0.28 percent of nationwide GSP, equaling the low-water mark set in 2002.

Companies' Laying Off Workers While Receiving Tax Rebates, Raising Executive Pay

Among the 20 companies who paid zero or less in state corporate taxes are utility provider Pepco Holdings, the pharmaceutical company Baxter International, and Intel Corporation (INTC).

Baxter International (BAX) and Intel are among the corporations that Public Campaign reports did not did not pay federal incomes during the same three-year period.

Of those companies, General Electric (GE) spent the most on lobbying, expending about $84 million on lobbying while paying a federal income tax rate of negative 45 percent on more than $10 billion in U.S. profits. PG&E Corp. followed General Electric, spending almost $79 million on lobbying, while paying a negative 21 percent tax rate on $4.8 billion of U.S profits, and Verizon Communications, which spent $52 million on lobbying while paying a negative 3 percent tax rate on $32.5 billion of profits.

A negative effective tax rate means that a company enjoyed a tax rebate, usually obtained by carrying back excess tax deductions and credits to an earlier year, thereby allowing the company to receive a tax rebate check, according to Citizens for Tax Justice.

U.S. House Deputy Whip Kevin Brady, R-Tex., is currently making a last-ditch effort to include a corporate tax repatriation holiday on legislation to extend a payroll tax cut, an extension that Senate Majority Leader Harry Reid, D-Nev., said could put an extra $1,500 into the pockets of middle class families each year. While those in favor of the corporate tax repatriation provision -- which would give U.S. businesses a temporary tax break on as much as $1 trillion in overseas income -- insist it would boost the nation's sluggish economy and make it easier for corporations to create jobs, the Congressional Budget Office reports tax repatriation holidays ranks dead last among 13 policy options for creating jobs. The CBO estimates that over the 2012-2013 period, a repatriation holiday would, at best, create the equivalent of one-full time job for every $1 million in federal costs.

Even while dodging most of their state and federal taxes between 2008 and 2010, Verizon (VZ) laid off more than 21,000 U.S. employees, while Boeing, Wells Fargo, General Electric, American Electric Power, and FedEx also let go of thousands of workers. Because companies can be reluctant to make data changes in U.S. employment available, Public Campaign reports it was not able to find up-to-date employment statistics for many of the companies evaluated in the report.

Moreover, as it was laying off employees, General Electric gave their top executives a 27 percent pay raise between 2008 and 2010 -- executives received more than $75 million in compensation in 2010. Wells Fargo increased executive pay by a whopping 180 percent, upping executive compensation from $17.8 million in 2008 to almost $50 million in 2010, while Boeing,  FedEx and American Electric Power also instituted lavish executive pay raises while laying off thousands of lower-level workers.

In fact, 2010 year was a record year for executive compensation. The CEO's of some of the largest U.S. corporations made, on average, $11.4 million in 2010, about 343 times more than workers' median pay, according to an analysis by the American Federation of Labor, the widest gap between executive and employee pay in the world. CEO pay has skyrocketed since 1980, when chief executives were only paid about 42 times more than the average blue collar worker.

Meanwhile, the U.S. Census Bureau reports that the median household income fell $3,719 between 2000 and 2010, when measured in 2010 dollars.

Public Campaign released its report on Wednesday, just as thousands of unemployed Americans from across the nation swarmed K Street in Washington, D.C., the lobbying center for some of the world's most profitable corporations. The march was part of Take Back the Capitol, a four-day series of events aimed at persuading Congress to pass comprehensive job creation measures that will benefit their constituents, rather than special interest groups.