The Cap Times: State firms named in tax avoidance report
media mentionMIKE IVEY | The Capital Times | [email protected] | @BizBeatIvey | Posted: Wednesday, December 7, 2011 12:30 pm
A new report is out showing — once again — that the largest and most profitable U.S. corporations manage to skirt paying state and local income taxes.
The Washington-based Institute on Taxation and Economic Policy in its report profiles 265 of the most profitable Fortune 500 corporations and finds 68 companies — including Milwaukee-based Rockwell Automation — paid no state corporate income tax in at least one of the last three years.
Twenty of these corporations averaged a tax rate of zero or less during the 2008-2010 period, the report found.
Wisconsin companies named in the report include include Rockwell Automation, Harley-Davidson and Kohl’s.
Rockwell, the former Allen Bradley Corp., reported annual profits each year from 2008 to 2010, netting $670 million, but paid negative taxes, according to WISPIRG. How did it manage that? With state tax rebates totaling $17 million.
The problem, says Bruce Speight, the director of the Wisconsin Public Interest Research Group (WISPIRG) is that other taxpayers have to make up the difference.
“Individual taxpayers and small businesses in Wisconsin end up having to pick up the tab when these corporations avoid paying their taxes,” says Speight in a statement.
Biz Beat contacted Rockwell for comment but hasn’t heard back yet.
WISPIRG’s own study last year of offshore tax havens found that households in Wisconsin pay on average $372 in additional federal taxes to make up for that revenue lost.
The big question on corporate taxation, of course,is what to do about it. If regulators clamp down or the laws get changed, companies will just pass the higher taxes along to consumers.
No wonder so many small businesses owners feel like the deck is stacked against them — especially if they can’t afford to hire an expensive accountant or tax lawyer.
Here is the New York Times story on the report.