Meet 5 Greedy Big Businesses That Rip Off Taxpayers

The April 15 tax deadline is just around the corner, and while you’re poring over receipts, let us draw your attention to a tale of two Pauls. Right now, Senator Paul Ryan is talking up a Republican budget plan that cuts Medicaid, Pell grants, and school lunches. Meanwhile Senator Rand Paul is congratulating companies that cook their books to avoid paying taxes.  The two Pauls perfectly encapsulate the insanity of GOP positioning on taxes and public investment.  

A new study by Citizens for Tax Justice, which looked at the most profitable U.S. corporations, found that many of them paid little or no federal income tax from 2008 to 2012. Out of 288 companies, 111 paid nothing in federal income tax in at least one of the five years measured. Meanwhile, the tax code has not been seriously overhauled in 27 years.

We now give you five companies who excel in giving the middle finger to the American taxpayer and preventing us from doing things like educating our children, maintaining our infrastructure, or investing in our future.  Through our taxes, we have subsidized these companies out the Wazoo. Here’s how they repay us.

1. Caterpillar Inc.

What a greedy worm! The heavy-equipment manufacturer came up with a bald-faced scheme to avoid around $2.4 billion in taxes since 2000. Forking over $55 million to its tax consultant, PricewaterhouseCoopers, to come up with the bookkeeping hustle allowed it to hold on to many times that amount — money that should have gone to the U.S. Treasury. Like those taxes you pay, for example.

Last Tuesday, Senator Carl Levin’s Permanent Subcommittee on Investigations, which has been looking into corporate offshore tax avoidance, got an earful about sneaky moves concerning spare parts headed for global shipment that Caterpillar kept in its U.S. warehouses. Normally, these parts sales would be subject to U.S. taxes, but Caterpillar cleverly ceded their ownership to a Swiss subsidiary called CSARL, which would book sale as its own and report it to the Swiss authorities, thereby enjoying a tax rate 4 percent to 5 percent.

2. Boeing

Boeing is certainly a high-flyer when it comes to not paying taxes. Though the company benefits from the boatloads of money taxpayers have paid for things like basic research, jet technology, airports, tax payer-funded defense contracts, etc., etc., Boeing repays this largesse by being a tax deadbeat.

When Boeing CEO James McNerney is not screwing over his workers and machinists, he is lobbying to cut Social Security and other vital services because “we” can’t afford them. He sits on the CEO Council of the notorious “Fix the Debt” (read: Screw the People) gang that tells us that the best way to help the economy is to lower taxes on corporations. As head of the Business Roundtable, he has fought to raise the age of retirement for Americans, and as head of Boeing, he froze the pensions of his workers.

With this packed schedule, he still finds plenty of time for tax-dodging. Want to know how much Boeing paid in taxes in 2013? Nothing. Nada. Zip.

Citizens for Tax Justice reported in November that Boeing received the largest state tax subsidy in history while paying exactly zero state corporate income taxes over the last decade.

In 2013, McNerney’s salary rocketed into the stratosphere. His overall compensation went up a remarkable 66 percent, and he hauled in over $23 million. That’s peanuts compared to what he’s going to get when he retires (perhaps this year) with massive pension benefits, including his “supplemental retirement benefit” valued at $34.15 million.

3. Shell

Though not based in the U.S., Shell is supposed to pay U.S. taxes when it does business in the fifty states. Which is not too much to ask, considering that the American government subsidizes Big Oil. Yet according to reports, it was pure greed and a hankering to avoid millions in U.S. taxes that drove oil and gas multinational Royal Dutch Shell Plc to move a drilling rig from Alaska to Seattle for repairs during the hazardous winter season in 2012. If the rig had stayed in Alaskan waters beyond January 1, 2013, Shell would have had to pay millions in Alaska property taxes. This same rig later broke free from a tow boat in rough seas and ran aground on an uninhabited Alaskan island. The 155,000 gallons of fuel and other hazardous materials the rig was carrying did not spill, but it was a close call.

Commenting on the U.S. Coast Guard report (funded by U.S. taxpayers), which described Shell’s reckless activities, Sen. Ed Markey castigated the profits-over-safety mindset of the company:

"This report shows that Shell ran through every single safety and common sense red light in moving this rig because of financial considerations…This kind of behavior should raise major red flags for any future Arctic drilling plans. Shell should be held accountable for its reckless behavior.”

Shell has suspended its Arctic drilling plans and Wall Street is now treating the company as if it has the plague.

4. Apple

You gotta hand it to Apple. The company figured out how to dodge corporate income tax on tens of billions in overseas profits by setting up an Irish subsidiary that didn't owe Irish taxes because it was managed and controlled from the U.S., but didn't owe U.S. taxes because it was incorporated overseas. Neat trick!

Last year, Senator Carl Levin called the scheme the “holy grail of tax avoidance.”

Apple also plays sneaky games with its intellectual property, maneuvering to avoid California and U.S. tax on such property by holding it in low-tax Irish affiliates. And just who is responsible for the wondrous technology in Apple’s iPhones? That would be the California workers who made and marketed the products, and the U.S. taxpayers who funded everything from touch-screen technology to GPS to the creation of the Internet. Apple thanks them by paying workers crap wages and screwing taxpayers.

In the last three years, Apple’s profits held offshore have more than quadrupled. Data show that the company currently has $54.4 billion parked overseas to avoid taxes.

5. Amazon

Amazon’s tax avoidance schemes have become the stuff of legend. In fact, the company was built on a tax-dodging strategy.

For a long time, Amazon had a critical advantage — up to a 10 percent advantage — over brick-and-mortar retailers: it didn't charge sales taxes to shoppers. For over 15 years, Jeff Bezos managed to keep things this way by various strong-arming techniques, from refusing to build warehouses in states that tried to collect taxes to firing workers if states didn’t comply. (For an in-depth look at these shenanigans, see Fortune magazine’s “Amazon's (not so secret) war on taxes”).

Spouting the libertarian gibberish of Silicon Valley, Amazon executives claimed to be fighting for the nation’s founding principles in upholding the constitutional limitation on states’ authority to collect sales tax. Bezos famously said that he looked into setting up Amazon on an Indian reservation to avoid taxes.

The company finally lost its war against state taxes and now collects them in 20 states, but there are signs that Amazon will make up for what it has lost in the form of rebates and other giveaways it has wrangled in places like Texas.

Meanwhile, state governments still reeling from the Wall Street-driven recession have been cutting vital services and worker pensions.