How 12 Multinational Corporations Avoid Paying Taxes
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Over the past month, General Electric has been held up as the pinnacle of corporate vampirism –– the world’s largest corporation in the world’s lowest tax bracket. But it’s not just GE that’s bilking the system and paying zero dollars in taxes.
A new report out today illustrates that at least 11 other multinational, billion-dollar corporations managed to get a free pass from the IRS – and not only that, but while average Americans scraped their piggy banks to pay hefty taxes on paltry paychecks, many of these companies actually got a refund. Want to know how they pulled that off? By the fatcat’s swindle: lobbying, campaign contributions, and other legal gladhanding that helps them exploit corporate loopholes and keeps their pockets flush while the rest of us struggle to get by.
The campaign reform group Public Campaign has released a report called "Artful Dodgers," identifying 12 corporations – including GE – that used these tactics to avoid paying any taxes while reaping huge benefits. More disturbingly, the report notes they collectively spent over a billion dollars influencing politicians to make Washington more corporate-friendly. As the report points out, the money invested to sway groups such as the House Ways and Means Committee and the Senate Finance Committee has been wildly successful. Legislation from both parties has created these tax loopholes, while providing incentives that effectively destroy the American workforce. Public Campaign:
According to the non-partisan Government Accountability Office (GAO), eighty-three of the 100 largest publicly traded U.S. corporations utilize such tax havens to reduce their U.S. tax liability. Ironically, these accounting tricks aren’t available for companies that only do business in the United States, so Congress in effect is providing tax incentives to ship jobs overseas and dismantle the middle class.
Public Campaign (PC) researched "the lobbying expenses and political contributions of 12 large, well-known corporations, their political action committees (PACs), and their executives," and broke them down into four categories: Oil, Banks, Transportation, and Telecommunication and Technology.
Let’s use an example from the latter category first, since GE falls into it. While the general brouhaha surrounding the company involved its tax-free 2010, PC notes that it has in fact not paid any taxes since 2006, despite raking in $26 billion since then. Since 2006, it has collected tax refunds of $4.1 billion. Further, despite being "one of the worst polluters in the world," GE has gained these benefits from aggressively lobbying for green tax breaks for using wind turbines. Its zealousness in political contributions has probably helped; in 10 years, GE, employees and PACs have given more than $13 million in federal contributions, along with a whopping $205 million on lobbying.
GE's partner in the telecommunications category, Verizon, is no less absurd. PC reminds us that last year the company caused an outrage when it "exploited a tax loophole to sell 4.8 million rural phone lines at a profit while avoiding $600 million in taxes." The shocking amount it ponied up in federal taxes? Zilch. And like GE, Verizon’s quite generous when it comes to contributions to committees that control taxation and regulation: in 10 years, it's dropped $12 million in campaign contributions, and another $131 million on lobbying. That’s a lot, but still less than it would have had to pay in taxes if it was held to the same standards as the rest of us.
So who else made the hotlist? Aside from the lucrative oil industry – ExxonMobil, Chevron, ConocoPhillips, Valero – there were a few surprises on the transportation list – Boeing, sure, but also FedEx and Carnival Cruise Lines? But perhaps the most infuriating corporations included are big-time recipients of corporate welfare – Bank of America, Citi, and Goldman Sachs, which helped decimate the housing market, were all rescued by the taxpayer-supported bailout but managed to pay little to no taxes in 2010. Last year, Bank of America made $4.4 billion...and received a refund of $1.9 billion.