Entries in Corporate Tax Rates (2)


Report: Eight Firms That Paid Most in Lobbying Had Lower Tax Rates

KAREN BLEIER/AFP/Getty Images(WASHINGTON) -- The eight companies that spent the most on lobbying happened to have a lower corporate tax rate, according to a report released this week from the Sunlight Foundation.

The watchdog group, which advocates for government transparency, analyzed the 200 largest U.S. companies, ranked by 2010 pre-tax income, and found those that spent the most on lobbying between 2007 and 2009 had lower 2010 tax rates than what they paid in 2007.  Some of the companies say their tax rates have little to do with their lobbying efforts though.

The average corporate tax rate fell, after all, to 29.3 percent in 2010, compared to 29.9 percent in 2007, a period that included many companies struggling to recover during the financial crisis.

Lee Drutman, senior fellow at the Sunlight Foundation, acknowledged that the lower tax rates are not entirely driven by lobbying, but the "correlation is strong."  Drutman analyzed the reported tax rates described in company financial statements.

"Certainly, there are a variety of reasons why corporations pay the taxes that they do from year to year, some of which are no doubt idiosyncratic.  But for this pattern to occur entirely by chance is statistically unlikely, though possible," he said.  "These corporations all report substantial lobbying on tax issues, and if it's having no effect on their effective tax rates, then they might wish to explain to their shareholders why they are wasting their money."

Here's the list of the companies that paid the most in lobbying from 2007 to 2009, based on data from the Senate's Office of Public Records, and the change in their tax rates in 2010, according to the Sunlight Foundation:

1. ExxonMobil
Lobbying: $81.92 million
Estimated tax reduction: -$565.32 million

2. Verizon Communications
Lobbying: $77.58 million
Estimated tax reduction: -$1,005.51 million

3. General Electric
Lobbying: $73.17 million
Estimated tax reduction: -$1,082.70 million

4. AT&T
Lobbying: $70.96 million
Estimated tax reduction: -$7,359.95 million

5. Altria
Lobbying: $63.31 million
Estimated tax reduction: -$160.66 million

6. Amgen
Lobbying: $58.33 million
Estimated tax reduction: -$377.16 million

7. Northrop Grumman
Lobbying: $57.56 million
Estimated tax reduction: -$296.08 million

8. Boeing

Lobbying: $56.99 million
Estimated tax reduction: -$321.5 million´╗┐

Copyright 2012 ABC News Radio


Corporate Tax Slayers: Obama vs. Republicans

SAUL LOEB/AFP/Getty Images(WASHINGTON) -- In an election-year showdown likely to hinge on the economy, President Obama and his Republican rivals are all fashioning themselves as corporate tax slayers.

Obama on Wednesday unveiled his proposal to cut the corporate tax rate from 35 to 28 percent, ultimately higher than taxes under Mitt Romney’s plan, which would lower corporate rates drop to 25 percent.

The current nominal U.S. corporate tax rate -- 35 percent -- is the highest in the world behind Japan.

Rick Santorum, Ron Paul and Newt Gingrich say they would each make the statutory rate even lower -- slashing it to 17.5, 15 and 12.5 percent respectively.

But behind the top line numbers and a consensus that corporate rates are too high, differences in the fine print (or lack thereof) suggest bipartisan reform isn’t going anywhere fast.

Cutting corporate tax rates as proposed will require significant offsets to avoid blowing a hole in the federal budget, experts say.  None of the candidates has fully or specifically articulated details on how their plans might address this.

The Obama administration claims it would, “eliminate dozens of tax loopholes and subsidies” to cover the cost, including those for oil companies, hedge fund managers and private equity firms, but doesn’t list precisely which ones.

Officials also say they would impose a new minimum tax on foreign earnings and end special preferences for companies that move work offshore, netting $250 billion more from corporations over the next 10 years.

That some corporations would end up paying more in taxes than they do now is a non-starter for many Republicans.

The Republican candidates, none of whom has advocated widespread elimination of loopholes or subsidies, favor extending additional tax credits to corporations.  The offset would come on deep cuts in government spending, they say.

Romney advocates temporarily extending the investment tax credit and expensing allowance. He also favors a tax holiday for repatriation of foreign profits with an eventual elimination of the existing system.

Santorum also favors expanding the research and development tax credit from 14 to 20 percent and allowing all companies to fully expense investments in new equipment.

One tax policy priority that only Obama and Santorum have in common: special treatment in the corporate tax code for U.S. manufacturers.

Santorum wants companies that manufacture goods in America not to be taxed at all. Obama doesn’t go as far, but favors a special lower effective tax rate of 25 percent for manufacturers.

Copyright 2012 ABC News Radio

ABC News Radio