There's an intriguing new study out by Citizens for Tax Justice (CTJ). The report claims that a dozen U.S. companies are barely paying their share of taxes. Tax reform, an issue that's currently being discussed on both sides of the aisle, continues to be a contentious subject among American lawmakers and the public at large. The Hill has more:
Citizens for Tax Justice (CTJ) released an examination on Wednesday that said that a dozen major companies had, between them, an average effective tax rate of roughly -1.5 percent between 2008 and 2010 — well below the top marginal corporate rate of 35 percent.
The liberal-leaning group’s analysis comes more than a quarter-century after it released a similar report that is widely credited with adding momentum to the push for the last successful overhaul of the tax code, which was completed in 1986...
In all, CTJ found that two-thirds of the 12 companies in the analysis, which come from a wide range of industries, had an overall negative effective tax rate between 2008 and 2010. (When the group says negative rate, it means the companies got a tax benefit — not necessarily that the business got a check from the government.)
According to CTJ, the Treasury Department lost out on $60 billion in revenue during the three years that were analyzed. General Electric is among the companies that have benefited immensely from the current tax code. From 2008 through 2010, GE had the lowest tax rate of all of the companies examined, -61.3 percent (yes, that's a negative sign). The company claimed a $3.2 billion "tax benefit" for 2010 alone. The Hill reminds us that "Jeffrey Immelt, GE’s chief executive, is the chairman of President Obama’s Council on Jobs and Competitiveness."
Aside from GE, the other companies that barely paid any taxes were American Electric Power, Dupont, Verizon, Boeing, Wells Fargo, FedEx, Honeywell, IBM, Yahoo!, United Technoloties and ExxonMobil.
While the study is certainly interesting, it doesn't rely on tax returns. Instead, it looks at financial and accounting records. Some critics caution that this data is not as accurate or reliable as the information from the returns would be. Either way, this study certainly provides some viable information for lawmakers to examine as the ongoing debate about America's tax code continues.
What do you think? Should tax loopholes be closed to avoid the extremely low rates these companies enjoy, or do corporations deserve the tax benefits they're receiving?
This story has been updated.