Who pays on tax day? Not 25 of the nation’s richest corporations


By Amanda Litvinov

Here’s what we know:

Everyday Americans pay more in federal income taxes than some of the nation’s most profitable corporations.

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Twenty-five Fortune 500 corporations paid nothing in federal income taxes between 2008 and 2012, while working families–some of whom are struggling to stay afloat–filed their taxes every year.

Tax handouts to the 288 Fortune 500 companies that were profitable each of those five years cost the nation $362 billion, according to a recent study by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

Here’s why it matters:

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.

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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’s what you can do about it:

Sign our new petition to tell lawmakers to ask those who can afford it to pay their fair share. That will allow us to make more investments in neighborhood schools.

Reader Comments

  1. It’s true that taxes for everyone have been lower for the last 31 years. Lower tax rates never really impact economic behavior. Warren Buffet doesn’t care what US tax rates are for income or investment income.
    Nice trick to tax capital @ 15%, and tax middle-class workers income @ 25%-39.6%. We need to raise the tax on capital investment to 25%-35%, depending on earnings. We also need more progressivity in the tax code for ordinary income. Now it’s capped @ 39.6% for folks making upper middle-class money @ $350,000 or so.
    What about those that earn $1,000,000? Or $5,000,000? Or $10,000,000? Or $200,000,000 and more? They all ONLY PAY 39.6%!!
    We Must do better than this.
    Tell Senator Ron Wyden-D from Oregon, who is the new chairman of the Senate Finance committee, to include more progressivity into our so-called progressive income tax code.
    We also must consider a return to higher investment tax rates. From the current 15% to 20%, up to 25% to 35%, depending on the annual earnings.
    As has been pointed out, the American middle-class was at it’s peak in the 1960’s when income tax rates for the highest earners was 70% to 90%. 39.6% is much to low and capping it at $350-$360-K has been an enormous reason for the worst income inequality in the last 130 years. As people proud of our experiment in self-government, this can be repaired through democratic strategies! Education regarding the problem, and education regarding the above mentioned solutions, along with any others that actually address the problem of income inequality.

    1. Citizens continually confuse the impact of income taxes and payroll taxes. Income taxes are on wages (earned income0 and while impacted by taxes like the Bush 2001 and 2003 cuts income taxes are not the most burdensome for American middle/lower income families. Every wage earner also pays a set 15.3% of wages as payroll taxes. Payroll taxes have remained unchanged since the early 1990s but extract more dollars than income taxes from every paycheck. Most middle/lower workers pay about 10% in income taxes and 15.3% payroll taxes from each check.

      Here is an example of how Republican tax cuts [Like the Bush cuts] affect an average American wage earner. When,an average worker earns $50,000 a year he will pay about 10% in income taxes ($5,000)and another 15.3% in payroll taxes ($7,650)that year. The tax cut
      applied ONLY to income tax NOT Payroll tax. So, a 10% tax cut means the average worker would get back 10% of his paid taxes of $5,000 or $500. Comparing this cut with that for a guy earning a $1 million taxed at 10%, his tax cut gives him back $100,000. Is this an fair tax cut for all citizens? If you as an average job worker thinks so, then have I got some land deals in Louisanna for ya!

  2. One of the two biggest drains on the USA economy is this 20 year trend of offshoring our first rate, world class industrial sector technology and jobs, which saw 9 million manufacturing sector jobs move abroad since the 70s, but hit high gear with GATT, NAFTA in the 90s, and the WTO in 2001. When there’re no jobs for the middle class, then there’s no disposable income to circulate throughout the economy, clearing retail shelves, and cranking up production, but equally important; there’s no revenue in the Local, State, and Federal treasuries to fund our public sector we all use. Revenue that comes right off the payroll checks of millions of middle class workers; none of the itemized deductions and other tax credits that are available to the wealthy (most of the wealthiest citizens’ income is from capital gains (15%), and stock options riding on the market in deferred status.

    The other big drain is the effect of our corporatists evolving into “multinationals” or “transnationals” who are garnering record gains exploiting sweatshops abroad, then marketing this cheap #$%$ here, maximizing gains, then using our tax code, rife with loopholes, to evade taxation (see: 26 Major Corporations Earn Billions, Pay Zero Taxes), and park their gains in offshore tax havens.

    Those benefitting from or in collusion with the corporatists, who’ve found a way to fleece from America the Beautiful, but put nothing back, always point to the 35-39% marginal effective USA corporate tax rate, among the world’s highest, but without exception, fail to mention that the after-tax effective rate on their $$$ Tens of Billions in clear profits, is somewhere between 8-13%, while many pay zero in taxes, and get an after-tax refund check from the USA taxpayer of $3 BILLION, thanks to the myriad of exemptions, credits, deductions, write-offs, subsidies and other loopholes in our tax code. BRILLIANT!

    1. I actually remember reading in the newspaper and hearing about how U.S. workers in the tech field were sent oversees by U.S corporations to train foreign workers to do their jobs then laid them off once they trained their replacements. It was terrible. They (Americans) were taking any jobs they could get to support their families which in turn took jobs away from less skilled workers that were also trying to stay afloat. What I am afraid of today is that the younger generation doesn’t know the whole story and are being told we aren’t smart enough in science and technology and are falling behind as a country. Isn’t that rich. Are we going to allow our sons and daughters to be used once again ?

  3. I noticed you failed to mention the $41 billion profit the Federal Government made on their student loan program! No wonder they wanted to take it away from the private sector. That’s more profit than every US company except Exxon Mobil and Apple. ( you know, the one that makes cell phones in China to cut costs). The Fed could give every college student in the US a $5000 pell grant with that money. It’s the truth Google it if you don’t trust me. Who pays on tax day? Not Obama and his boys.

    1. And your point is??? Mike, for 30 years now, our wealthy have benefited from the lowest tax rates in a century (see capital gains rates vs the rates the middle class pays).

      Our magnificent industrial sector leaders (which have evolved into “multinationals) have offshored jobs to exploit sweatshop labor, then these cheap products roll up onto our ports in Maersk freighters (capacity: 2.2 MILLION train car size “containers”) to soak our nation through our large box retailers, and fleece our declining middle class consumer/workforce they’ve kicked to the curb.

      These corporations are realizing record gains as they stiff the USA, their nation of origin, then park their $$$Tens of BILLIONS (with a B) in offshore tax havens to escape taxation (many pay zero taxes on their $BILLIONS).

      I am not saying that our government’s capitalizing on our students’ loans is right, I’m saying that had our financial corporations had their way, they would be funneling our student’s interest rates into their deep pockets.

      1. Kerry, I wonder whatever or whoever made you believe we are all entitled to share the wealth of others? Yes the capital gains tax is 15%, for everyone, not just the wealthy. We both know the wealthy pay higher tax rates than the middle class and you imply something other. If the Financial Corp. you mention funneled the money into their deep pockets they would have been taxed. The Government lined their pockets tax free. How kind of us to let the wealthy benefit with the lowest taxes in thirty years and keep their own money! The NEA is a huge Corp also that lines it’s pockets with union dues. Let’s stop complaining about what someone else has and be content to have a good job and benefits. Of course you could always strike out on your own, start a new company and make your own fortune and become wealthy. When you were finished Obama and the Union could decide how much of your earnings you could keep! That’s my point.

        1. Dear Mike,
          The fact is, corporations are making record gains and are sitting on over $5 Trillion of cash garnered mostly from a declining middle class consumer market that is witnessing more and more of its constituents slipping into poverty in recent years. The nation’s wealth isn’t being “redistributed” from the wealthy to the poor through a burdensome tax code pitted against the rich, quite the opposite. Here’s why I say that:

          The great wage disparity that has occurred over the past 30 years has consolidated wealth at the top like we haven’t seen since the days of the Robber Barons a century ago. Maybe you think that there’s something wrong with a USA that promoted all of its citizens’ prosperity, but I don’t; it’s smart business. A middle class with disposable income will bolster retail sales and crank up the economy (this is if this increase actually boosts production in the USA and results in paychecks going into the pockets of USA workers like it used to do before the middle class was kicked to the curb for sweatshop labor on foreign soil.) Even so, during the past 30 years real output in the business sector grew by 140%. Real compensation per hour (includes wages, benefits, pensions, and health insurance) increased by only 38% for the middle class worker.
          Post WWII, 1947-1979 America shared equally in the increase in output. During those years the increase that the bottom 20% received was 116%, the top 20% got an increase of 99%, and the middle quintiles increased somewhere within that range.

          Then the world flipped! From 1980 to 2007 the rich took practically all the increase in income. Over those decades, the poor received only a 15% increase and the middle three quintiles got a 25% increase, while the top 20% got a 95% increase and the top 1% received a raise of close to 300%, and they were being compensated fabulously before this 30 year trend began. (Paul Heise, PhD, Economics).


        2. I couldn’t help but note that Bill makes use of several standard logical fallacies in lieu of responding directly to the claims made by Kerry: (1) petitio principii (Kerry on sharing wealth entitlement), (2) ad hominems (attacks Kerry and the NEA and government entities instead of disputing the statistics cited by Kerry, (3) attempts to change the subject of the debate to the activities of the people we elect to public office, and (4) tries to change the subject of tax PAYMENTS to a discussion of tax RATES — related but different in ways relevant to the discussion, slippery definition and straw man fallacies.

          The approach Bill takes is very much like the approach I have witnessed from a a group of Arizona legislators who eschew reason for non- and irrational claims — sadly enough, the evidence is that their and Bill’s approach are likely to persuade more than is reason. The same can be said of Ayn Rand who called for reason but substituted emotional appeals in the form of some fun-to-read novels — and provided us with an incoherent worldview, rationally.

          And, unfortunately, the fact that non- and irrational appeals are so effective and reason so ineffective reflects poorly on our attempts at education (including mine). I continue to struggle to maintain a rational approach even after years of having studied logic. Why? “Thinking, Fast and Slow” by Daniel Kahneman provides what seems to me to be a decent explanation.

          “Thinking” (the book as well as the act) is a bit of a slog, but it is very much research-based and well worth pushing through.

  4. Did NEA accept $$ from Bill Gates to promote and push common core on its members and the public? Why are teachers paying dues to an organization that is suppose to represent them when in fact it appears the association is answering to the beat of a different drummer. Thanks man.

  5. Those who know how a Republican President, Dwight D. Eisenhower’s 91 percent tax rate lifted our economy, created subsidiaries, and legitimately doubled our stock market know what has to be done to make, not only our schools, but all facets of our country strong again. However, will the greed of the leadership in both parties allow it is the 64-million dollar question?

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