By Amanda Litvinov
A comprehensive new study shows some of the nation’s most successful businesses paid little or no taxes between 2008 and 2012.
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Tax handouts to the 288 Fortune 500 companies that were profitable each of those five years cost the nation $362 billion, according to the study by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.
Corporate tax subsidies are part of the reason there is never enough money to pay for critical programs and services that benefit us all–things like universal early childhood education, grants for all hard-working students to access higher education, and full funding of the Individuals with Disabilities Education Act.
Because state corporate income taxes are typically based on federal taxable income, state revenues suffer in turn. And that results in cuts to state education budgets that jam students into larger classes with fewer resources and supports, like classroom aides.
For decades, corporate interest groups like the American Legislative Exchange Council (ALEC) have worked to stack the deck–in this case the tax code– in favor of the nation’s richest corporations and CEOs at the expense of the middle class. But these top-grossing companies still aren’t satisfied.
“Corporate lobbyists incessantly claim that our corporate tax rate is too high, and that it’s not ‘competitive’ with the rest of the world,” said Robert McIntyre, director of Citizens for Tax Justice and lead author of the report.
“Most of the biggest companies aren’t paying anywhere near 35 percent of their profits in taxes and far too many aren’t paying U.S. taxes at all.”
Here are other jaw-dropping facts from the report:
- While the federal corporate tax rate is 35 percent, the 288 corporations in the study on average paid barely more than half that amount: 19.4 percent over the 2008-12 period.
- Many companies paid far less, including 26 that paid nothing at all over the entire five-year period.
- Most everyday Americans pay more in federal income taxes than General Electric, Boeing, Verizon, Pepco, Priceline, Duke Energy and 20 other big corporations put together.
During roughly the same period in response to the ailing economy, Congress cut $1.5 trillion to services including education, veteran’s benefits and transportation in 2011, and the across-the-board sequester cuts that went into effect in 2013 drained another $3 billion from federal education programs.
Students are relying on us to speak up for them. Sign our petition to tell lawmakers to close these egregious corporate tax loopholes and do right by middle class families.