Entries in Corporate Taxes (4)


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


26 US Companies Not Paying Federal Income Tax, Report Finds

SEBASTIEN BOZON/AFP/Getty Images(WASHINGTON) -- In November, the liberal lobbying group Citizens for Tax Justice stirred controversy with a report citing 280 so-called corporate tax-dodgers, highlighting companies they said were paying under the 35 percent federal income corporate tax rate.  This week, the group revised its list with new data and said most of the companies that paid no taxes previously repeated that in 2011.

The latest update estimates that all but four of the 30 Fortune 500 companies that paid an average negative federal income tax rate from 2008 to 2010 continued to do so for 2011.  Among the companies listed are Pepco Holdings and General Electric.

"One of the reasons we [released an update] is so many of these 30 companies asserted this was a temporary aberration in 2008 to 2010," Bob McIntyre, director of the Citizens for Tax Justice (CTJ), said.  "They said they will pay a lot of taxes soon, but 'soon' hasn't come yet."

McIntyre said the 280 companies analyzed were Fortune 500 companies that made money from 2008 to 2010.  The Citizens for Tax Justice created their latest estimates from company annual reports, based on U.S. profit and amounts companies report for federal income taxes.

General Electric, which appears on the list, called the report "misleading."  Spokesman Andrew Williams said, "GE paid $2.9 billion in income cash taxes in 2011 across all of its tax jurisdictions, including payments in the U.S.  In addition, GE paid more than $1 billion in other state, local and federal taxes in the U.S."

Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, CTJ's research arm, said CTJ's study focuses on whether companies are paying a 35 percent rate for federal income taxes, and focusing on overall taxes is "trying to change the subject."

"As GE has said in the past, we pay taxes worldwide.  But they don't dispute that CTJ is wrong.  It's an exercise in misdirection," Gardner said.  "When deferred taxes are paid, they will show up in our report as having been paid.  But the harsh reality is that GE in particular is able to defer the taxes indefinitely."

William McBride, an economist with the Tax Foundation, said the best source of information would be a company's tax return, which is not public information.

"The CTJ is estimating the true figure from what the company is reporting," McBride said.  "They are guessing what companies are paying in taxes."

Copyright 2012 ABC News Radio


Obama Official: Corporate Tax Reform Proposal Would Cut Rate to 28%

Alex Wong/Getty Images(WASHINGTON) -- The Obama administration is set to unveil a proposal on Wednesday that will call for lowering the country's corporate tax rate to 28 percent, a senior administration official tells ABC News.

Doing so would put the U.S. in line with its major competitors and encourage greater investment. At 35 percent, the nation's current corporate tax rate stands among the highest in the world.

The president's plan will also include cutting the effective rate on manufacturing to 25 percent, according to the official. Both deductions would be paid for by closing dozens of tax loopholes and eliminating subsidies.

Furthermore, the official says the proposal will introduce a minimum tax on foreign earnings to discourage moving jobs overseas.

Details of the plan will be announced Wednesday by the Treasury Department.

Copyright 2012 ABC News Radio


Tax Reform Game: How Low Will Obama Go?

Photo Courtesy - Getty Images(WASHINGTON) -- In a speech to the Chamber of Commerce on Monday, President Obama vowed to boost the country's competitiveness and cut corporate taxes, but he gave few hints about how he would reform the tax code.

While lawmakers are just starting the long road to simplifying the tax code, the president said he wants to reform taxes without raising the $14 trillion deficit.

"I am eager to work with both parties and with the Chamber to take additional steps across the budget to put our nation on sounder fiscal footing," the president said.

Reforming the tax code, however, is sure to be a complicated process -- from lowering corporate taxes to closing loopholes.  Lawmakers are not sure exactly where to begin.

"There are different levels in the debate right now," said Scott Hodge, president of The Tax Foundation.  "At the forefront, there is growing recognition that the U.S. corporate tax rate is too high and needs to be cut to make the U.S. more competitive.  The president acknowledged that in the State of the Union Address."

The U.S. corporate tax rate will be the highest of the 34 countries in The Organization for Economic Cooperation and Development when Japan lowers its corporate tax rate this year, according to Eric Toder, co-director of the Tax Policy Center.  The rate, 35 percent, is 39 percent when including average state corporate taxes, according to the Tax Policy Center.

However, federal taxes are at their lowest level since 1950 by some measures, and many companies are able to dodge taxes entirely or pay very little.  A report from the Government Accountability Office found that two-thirds of U.S. companies, or 1.3 million businesses, did not pay federal income taxes between 1998 and 2005.

Hodge said most companies were waiting with "bated breath" to see if the president would announce specific proposals during the speech to the Chamber of Commerce, but he did not expect Obama to highlight specific tax breaks.  Hodge said he was hoping to hear how low the president believes corporate tax rate needs to for the country to be competitive globally.

Instead of divulging details, the president called for reforming the "burdensome corporate tax rate" and a fairer distribution of taxes.  He said some industries' tax burdens are four or five times higher than other industries and that companies are making too many decisions based on their tax implications.

Copyright 2011 ABC News Radio

ABC News Radio