Thursday, September 23, 2004
Citizens for Tax Justice and Institute on Taxation and Economic Policy have published a 76-page report, Corporate Income Taxes in the Bush Years, noting that roughly one-third of the 275 largest American companies paid zero or less in federal income taxes in at least one year from 2001 to 2003. Here is part of the introduction to the report:
Following the tragic events of September 11, 2001, Americans joined together in grief and solidarity to support each other and our country. Corporate America also rallied to a cause, but it wasn’t in support of our nation. On the contrary, it was tax avoidance….
[C]orporate income taxes in fiscal 2002 and 2003 fell to their lowest sustained share of the economy since World War II….From 2001 to 2003, the Commerce Department reports that pretax corporate profits grew by 26%. But over that same period, corporate income tax payments to the federal government fell by 21%.
This study details which companies have benefitted the most from the decline in corporate taxes over the past three years, and which have been less fortunate. It also measures the effects of loopholes in our corporate tax laws that predated the George W. Bush administration. Specifically, the study looks at the federal income taxes paid or not paid by 275 of America’s largest corporations in 2001, 2002 and 2003. The companies in our report are all from Fortune’s 2004 list of America’s 500 largest corporations, and all of them were profitable in each of the three years analyzed. Over the three years, the 275 companies in our survey reported pretax U.S. profits of $1.1 trillion. Pretax profits for our 275 companies jumped by 26% from 2001 to 2003—just as the Commerce Department reports for corporations overall—even as their average effective income tax rate fell by a fifth. In total, the meager tax payments by our 275 companies represented more than two-fifths of total federal corporate income tax collections over the calendar 2001-03 period.
For some of the many media stories about the report, see the New York Times and the Wall Street Journal
