Market Watch: Nearly 30 Fortune 500 companies dodge taxes since 2008
media mentionApril 10, 2012, 2:02 PM
Twenty-six Fortune 500 companies including General Electric and Boeing paid no net federal income taxes from 2008 through 2011, according to a new report from the left-leaning group Citizens for Tax Justice.
Many of those companies avoided paying taxes by using a tax provision known as accelerated depreciation, which allows greater deductions in the earlier years of the life of an asset.
The companies’ tax avoidance “isn’t fair to the rest of us, it makes no economic sense, and it’s part of the reason our government is running huge budget deficits,” said Bob McIntyre, the group’s director.
Last year, the tax-research group and the nonpartisan Institute on Taxation and Economic Policy found that 30 of 280 Fortune 500 companies studied paid no federal income taxes or got tax rebates in 2008, 2009 and 2010. In 2011, only four of those 30 companies — DTE Energy, Honeywell International, Wells Fargo and DuPont — paid taxes, according to the report.
The top U.S. corporate tax rate is 35%. The White House and lawmakers of both parties have begun debating an overhaul of the tax code, including corporate taxes, but little progress is expected this election year.
A spokesman for Duke Energy, which had an average negative 3.5% tax rate over the four year period covered by the new report, told Reuters that the report is misleading.
“We’re in a modernization phase now and we’ll have four new plants by the end of this year,” spokesman Tom Williams said. “They cost $7 billion and so we’re taking the tax benefits allowed.” He said the taxes will be paid over the life of the assets.
– Robert Schroeder