26 US Companies Not Paying Federal Income Tax, Report Finds
Published at | Updated at
SEBASTIEN BOZON/AFP/Getty Images(WASHINGTON) — In November, the liberal lobbying group Citizens for Tax Justice stirred controversy with a report citing 280 so-called corporate tax-dodgers, highlighting companies they said were paying under the 35 percent federal income corporate tax rate. This week, the group revised its list with new data and said most of the companies that paid no taxes previously repeated that in 2011.
The latest update estimates that all but four of the 30 Fortune 500 companies that paid an average negative federal income tax rate from 2008 to 2010 continued to do so for 2011. Among the companies listed are Pepco Holdings and General Electric.
“One of the reasons we [released an update] is so many of these 30 companies asserted this was a temporary aberration in 2008 to 2010,” Bob McIntyre, director of the Citizens for Tax Justice (CTJ), said. “They said they will pay a lot of taxes soon, but ‘soon’ hasn’t come yet.”
McIntyre said the 280 companies analyzed were Fortune 500 companies that made money from 2008 to 2010. The Citizens for Tax Justice created their latest estimates from company annual reports, based on U.S. profit and amounts companies report for federal income taxes.
General Electric, which appears on the list, called the report “misleading.” Spokesman Andrew Williams said, “GE paid $2.9 billion in income cash taxes in 2011 across all of its tax jurisdictions, including payments in the U.S. In addition, GE paid more than $1 billion in other state, local and federal taxes in the U.S.”
Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, CTJ’s research arm, said CTJ’s study focuses on whether companies are paying a 35 percent rate for federal income taxes, and focusing on overall taxes is “trying to change the subject.”
“As GE has said in the past, we pay taxes worldwide. But they don’t dispute that CTJ is wrong. It’s an exercise in misdirection,” Gardner said. “When deferred taxes are paid, they will show up in our report as having been paid. But the harsh reality is that GE in particular is able to defer the taxes indefinitely.”
William McBride, an economist with the Tax Foundation, said the best source of information would be a company’s tax return, which is not public information.
“The CTJ is estimating the true figure from what the company is reporting,” McBride said. “They are guessing what companies are paying in taxes.”
Copyright 2012 ABC News Radio