Wednesday, April 11, 2012

The facts about US Corporate Taxes

Robert McIntyre sets the record straight in this Huff Post piece about the US allegedly having the highest corporate tax rates in the world. Excerpts:

"But it's the highest on paper only. In practice, the true U.S. corporate tax rate is barely half of the 35 percent nominal rate. A major study by Citizens for Tax Justice last November found that the biggest and most profitable Fortune 500 corporations paid only 18.5 per percent in federal income taxes on their U.S. profits from 2008 through 2010. Many companies paid little or nothing.

"Let's take some examples. The Business Roundtable's executive committee is chaired by Boeing CEO, James McNerney. Over the last 10 years, Boeing has only paid federal income taxes in two years (in 2002 and 2007) and has gotten tax refunds from the U.S. Treasury all the others. Boeing's average federal tax rate in the last decade? Negative 6.5 percent.

"GE's Jeffery Immelt is also on that executive committee. His corporation famously paid no taxes last year and, in the last ten years, has averaged a federal income tax rate of 2.3 percent on its $83 billion in U.S. profits.

"The reason for the extraordinarily low U.S. corporate tax payments, of course, is that our corporate tax code is riddled with loopholes and tax breaks, most of them indefensible. These include rules that let companies shift their profits, on paper, to low-tax foreign tax havens, and thereby avoid their U.S. tax responsibilities. The price tag for these subsidies is slated to approach $2 trillion over the next 10 years."

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