Photo: Courtesy of Sotheby’s Realty
20-six of the largest U.S. companies made more money after tax than before tax over the last four years, according to Citizen’s for Tax Justice and reported by Pat Garofalo at ThinkProgress.The report is an update of a 2010 study by Citizens for Tax Justice and the Institute on Taxation and Economic Policy that examined federal income taxes paid by 280 Fortune 500 corporations and found that 30 of the companies paid no net federal income tax from 2008 through 2010 despite $205 billion in pretax U.S. profits.
If the 30 companies would have paid the statutory corporate tax rate of 35 per cent from 2008-11, they would have paid $78.3 billion more in federal income taxes, according to Citizens for Tax Justice.
Overall, the companies — including General Electric, Boeing, Pepco, Verizon, and Mattel — enjoyed an average effective federal income tax rate of –3.1 per cent over the four years.
And this is not a problem that only afflicts the U.S., as the UK found out last week that online retailer Amazon made billions in sales in 2011, while paying nothing in corporate taxes.
Garafalo previously reported that total corporate federal taxes paid fell to 12.1 per cent of profits earned from activities within the U.S. in fiscal 2011, which is the lowest rate since 1972 and well below the 25.6 per cent companies paid on average from 1987 to 2008.
In October ThinkProgress reported that corporate profits as a share of the nation’s GDP were at their highest point since 1950 (including a record $1.97 trillion in profits in the third quarter of last year), while two out of every five small businesses reported falling profits and real wages fell 2 per cent in 2011.
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