April 15, 2013
As Americans celebrate both income tax filing deadline date and the one hundredth anniversary of the iconic income tax Form 1040 today, I write with just a bit of sarcasm, one only wonders what the financial health of the nation would be if only U.S. corporations would pay their fair share of taxes. Although corporate profits are at all-time highs, U.S. corporate tax revenues are at forty-year lows. America collects less in corporate taxes than all but two of the world’s thirty-four industrialized countries. Corporate tax revenue as a percentage of Gross Domestic Product (GDP), that being the total market value of all goods and services produced over a period of time was more than seven percent in 1945 and more than 6 percent in 1952, both times during a period of war. By 2012, this percentage had fallen to slightly more than one percent. Individual tax revenue as a percentage of GDP has remained fairly constant since the Great Depression, fluctuating between seven and nine percent.
Offshore tax havens such as the Bahamas, Bermuda, the Cayman Islands, Monaco, United Arab Emirates & the Virgin Islands, for both wealthy citizens and corporations cost the federal government an estimated one hundred and fifty billion dollars each year. In addition, this lost revenue is estimated to cost states another forty billion. The average taxpayer paid an estimated one thousand dollars more in taxes to cover this loss while the average small business has to pay more than three thousand dollars to offset the loss of revenue by large corporations. One need only remember that Republican presidential candidate Mitt Romney, once he files an amended return for 2011 if he hasn’t already done so, claiming the entire four million dollar charitable contribution instead of reporting little more than two million, all to make his effective tax rate a ridiculous fourteen percent on his nearly fourteen million dollars in earnings instead of an outrageous nine percent.
In 1986, twenty-four percent of American corporations were nontaxable businesses, thus paying no federal income tax. By 2008, nearly seventy percent were. The corporate tax rate is currently set at thirty-five percent, however as we are all aware, due to tax code loopholes and exemptions gained by high-priced lobbyists, many corporations actually pay far less than this percentage. A recent study of Fortune 500 corporations found that on average these titans of industry paid slightly more than eighteen percent in federal tax, nearly half of the statute amount. Many American companies with considerable profits abroad actually paid more taxes to foreign governments than they did in their homeland.
The following is an alphabetical list of American corporations that during the past five years have paid little, if any federal tax as a percentage of total revenue, some of which had a negative tax rate;
American Electric Power
Bank Of America
Carnival Cruise Lines
Host Hotels & Resorts
Pacific, Gas & Electric
Western Digital Corp.
Judging by this partial list of tax dodgers, the energy industry must have really great lobbyists, as nearly half of those on this list are energy providers.
Steven H. Spring