Wall Street Cheat Sheet: Uncle Sam Must Love These 30 Companies
media mentionBy Eric McWhinnie
May 15 2012
Forget Tax-mageddon, Washington already has tax issues it is avoiding. Last year, Citizen for Tax Justice and the Institute on Taxation and Economic Policy issued a report on federal income taxes paid or not paid by large corporations. Despite the U.S. corporate tax rate being 35 percent, the study found that the average tax rate of 280 S&P 500 companies investigated was only 18.5 percent between 2008 and 2010. Furthermore, 30 of the companies paid no net federal income tax in the same period. Now, the Citizen for Tax Justice has updated the report to reflect information for the 2011 tax year.
Twenty-six of the original 30 tax dodgers managed to keep a negative federal income tax rate after 2011 taxes were figured, meaning they still made more money after tax than before tax between 2008 and 2011. Three out of the remaining four companies paid four-year effective tax rates of less than 4 percent. The company at the bottom of the list paid a 2008-2011 tax rate of almost 11 percent.
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The report explains, “Had these 30 companies paid the full 35 percent corporate tax rate over the 2008-2011 period, they would have paid $78.3 billion more in federal income taxes. Or put another way, over the four years, the 30 companies received more than $78 billion in total tax subsidies.”
Listed below are the 30 corporations with the lowest federal income tax rates on U.S. profits between 2008 and 2011, according to CTJ:
Pepco Holdings Inc. (NYSE:POM): -39.5%
General Electric Co. (NYSE:GE): -18.9%
PG&E Corp. (NYSE:PCG): -18.4%
Wisconsin Energy Corp. (NYSE:WEC): -13.2%
NiSource Inc. (NYSE:NI): -13.0%
Paccar Inc. (NASDAQ:PCAR): -13.0%
Integrys Energy Group Inc. (NYSE:TEG): -11.6%
CenterPoint Energy Inc. (NYSE:CNP): -11.3%
Atmos Energy Corp. (NYSE:ATO): -9.6%
Tenet Healthcare Corp. (NYSE:THC): -8.2%
American Electric Power Inc. (NYSE:AEP): -6.4%
Boeing Co. (NYSE:BA): -5.5%
Ryder System Inc. (NYSE:R): -5.4%
Con-way Inc. (NYSE:CNW): -5.4%
Verizon Communications Inc. (NYSE:VZ): -3.8%
Duke Energy Corp. (NYSE:DUK): -3.5%
Interpublic Group Inc. (NYSE:IPG): -2.5%
NextEra Energy Inc. (NYSE:NEE): -2.0%
CMS Energy Corp. (NYSE:CMS): -1.4%
Navistar International Corp. (NYSE:NAV): -1.3%
Consolidated Edison Inc. (NYSE:ED): -1.3%
Mattel Inc. (NASDAQ:MAT): -0.9%
El Paso Corp. (NYSE:EP): -0.9%
Baxter International Inc. (NYSE:BAX): -0.6%
Apache Corp. (NYSE:APA): -0.3%
Corning Inc. (NYSE:GLW): -0.2%
DTE Energy Co. (NYSE:DTE): 0.2%
Honeywell International Inc. (NYSE:HON): 2.0%
Wells Fargo & Co. (NYSE:WFC): 3.8%
DuPont Co. (NYSE:DD): 10.9%
CTJ explains the bottom line of their study by stating, “The information on these 30 companies helps illustrate why overall federal corporate income tax collections are so low. The Treasury Department reports that corporate taxes fell to only 1.2 percent of our gross domestic product over the past three fiscal years. That’s lower than at any time since the 1940s except for one single year during President Reagan’s first term. By comparison, corporate taxes averaged almost 4 percent of our GDP during the 1960s.”