The Hill: Liberals call for corporate ‘Buffett Rule’
media mentionBy Bernie Becker – 11/03/11 10:47 AM ET
In the wake of a new study on corporate tax practices, some liberals are calling for a “Buffett Rule” for the business world.
The study, released Thursday by a pair of liberal advocacy groups, found that a slew of Fortune 500 companies paid well below the statutory corporate tax rate of 35 percent between 2008 and 2010.
In all, 30 companies that made $160 billion in profits over that three-year span paid no total income tax, according to the report from Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Those corporations include General Electric, Duke Energy, Verizon and Wells Fargo.
The “Buffett Rule,” named after billionaire investor Warren Buffett and announced by President Obama in September, basically asserts that those making more than $1 million a year should not pay a lower share of their income than the middle class.
With that in mind, liberals have called for broadening that idea to include businesses — an idea Rebecca Wilkins of CTJ dubbed the “G.E. rule” on Thursday.
“Warren Buffett spotlighted the madness of a tax code that lets him pay a lower rate than his secretary,” Scott Klinger, director of tax policy for Business for Shared Prosperity, said in a news release. “Likewise, Big Business shouldn’t be paying lower taxes than small businesses.”
The corporations themselves and more business-friendly analysts have questioned the report and previous ones from the groups, and say they pay a much higher effective tax rate than the study found.
For instance, Boeing, one of the 30 companies the groups said had a subzero tax rate, said its effective rate ranged from 23 percent to almost 34 percent between 2008 and 2010. G.E. has also called the report “inaccurate and distorted.”
CTJ and ITEP only considered federal taxes, while companies often count taxes paid to state, local and foreign governments as well as deferred taxes.