While state budgets, jobs and social programs are taking the worst hits since the Great Depression, the nation’s largest corporations are paying little or no state taxes.
Out of the top 265 consistently profitable Fortune 500 corporations, 68 companies paid no state corporate income tax in at least one of the last three years and 20 of them averaged a tax rate of zero or less during the 2008-2010 period.
This is the conclusion of the study, “Corporate Tax Dodging in Fifty States, 2008-2010,” done by the Institute on Taxation and Economic Policy (ITEP) and released by the California Public Interest Research Group (CALPIRG) earlier this month.
“Thanks to the armies of accountants, paying taxes has become optional for some of the most profitable corporations in the world,” said Pedro Morillas, CALPIRG legislative director. “That leaves small businesses and individual taxpayers to pick up the tab.”
The corporations that paid no net income tax over all three-years include brand names Goodrich, DuPont, Intel and International Paper.
Citing California as an example, the study revealed that the tax bills of 33 corporations ranged from minus-1.5 percent (McKesson Corp.) to 8 percent (Apple).
Wells Fargo bank, California’s corporation with the biggest profit at $49.7 billion during the period, paid 0.7 percent in state taxes and second-place Intel Corp., with $23.3 billion in profits, paid zero state income taxes.
The report reveals that the 265 corporations piled up a combined $1.33 trillion in profits in the last three years.
“Far too many (companies) have managed to shelter half or more of their profits from state taxes,” said Matthew Gardner, ITEP’s Executive Director and the report’s co-author. “They’re so busy avoiding taxes, it’s no wonder they’re not creating any new jobs.”
In its own study last year, CALPIRG revealed that household tax filers in California pay an average $435 in additional federal taxes to make up for the revenue lost due to offshore tax havens. That report is titled “How Much Did Offshore Tax Havens Cost You in 2010.”
Photo: Tax the rich protest outside Citicorp’s downtown Los Angeles offices in April. By craigdietrich (CC BY 2.0)