Friday, February 17, 2006

The Tax Dodgers

The Bush administration and the goose-stepping Congress are corporate America's wet dream. While the Fortune 500 wrap themselves in the flag and use those tax breaks to fund a few more lobbyists on the Hill, read about their true sense of civic responsibility:

"The Decline in U.S. Corporate Taxes and the Rise in Offshore Tax Haven Abuses
Although the corporate income tax rate is still 35 percent, in reality most corporations pay much less. Through the 1990s and even up until the third quarter of 2001, according to the Commerce Department, the effective tax burden for all U.S. companies, public and private, was around 30%. But from the fourth-quarter of 2001 onward, companies have paid out just 20% of their profits in taxes. For publicly traded companies only, the tax burden appears even lower.
The
sharp decline in corporate taxes in recent years can be measured in a variety of ways. According to the Congressional Budget Office, between 2000 and 2003 overall corporate income taxes colected by the federal government dropped from $207 billion to $132 billion. Although the federal government reports that the number rose to $ 183.8 billion in 2004, that figure still represents just 9.6 percent of total federal revenues, down almost half-way from the 17 percent rate it stood at in 1970.

"The corporate tax rate is also declining by comparison to the size of the economy (i.e. as a percentage of GDP). According to the Congressional Budget Office’s Historical Budget Data, corporate income taxes declined from 4.2 percent of the GDP in 1967 to 1.2 percent in 2003, rising only slightly to 1.6 percent in 2004.

"Many large multinational corporations pay no taxes at all. According to the GAO more than 60% of U.S. controlled corporations with at least $250 million in assets (representing 93 percent of all corporate assets reported to the IRS) reported no federal tax liability each year between 1996 and 2000, while the economy boomed and corporate profits soared. 71% of foreign-based firms operating in the U.S. during that same period paid no U.S. income taxes. According to Citizens for Tax Justice, 82 of 275 top U.S. corporations paid zero taxes between 2001 and 2003, although they earned $102 billion in pre-tax profits. 46 companies with a combined profit of $42.6 billion paid no federal income taxes in 2003 alone. Instead they received rebates totaling $5.4 billion.

"Offshore Shelter Abuses
The rise of corporate tax haven abuses has contributed significantly to the precipitous decline of corporate taxes raised by the U.S. government in recent years particularly when it comes to U.S. multinationals who are able to shift their pretax income offshore. Martin Sullivan, editor of
Tax Notes, reports that U.S. Corporations shifted $75 billion of their taxable profits into tax havens in 2003, depriving the IRS of between $10 billion and $20 billion in expected tax revenues. Sullivan says “the figures provide just one more indication that the U.S. system of taxing international income is nearing a breakdown.” Sullivan, a former Treasury Department economist, based his study on Commerce Department data. (See “Economic Analysis: Profit Shift Out of U.S. Grows, Costing Treasury $10 Billion or More,” Tax Analysts, September 28, 2004)."

There's lot's more where that came from at the Center for Corporate Policy.

Groups That Work Against Corporate Tax Abuses:
U.S. Groups
Citizens for Tax Justice
Citizen Works's Tax Dodgers Page
Taxpayers for Common Sense
Fair Taxes For All
Center for Budget and Policy Priorities
United for a Fair Economy
Outside the U.S./International Groups
Tax Justice Network
New Economics Foundation (UK)
Oxfam Tax Havens page

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