Twenty-six Fortune 500 companies did not have to pay a single cent in federal income taxes over the last four years, wrote a report by consumer group Citizens for Tax Justice and the Institute on Taxation and Economic Policy on Monday, with corporate tax breaks allowing some companies to actually make a profit from filing their taxes.
According to the report, at least half of the companies cited made use of accelerated depreciation, an accounting provision that allows for increased deduction in taxes for the early years of the life of an asset, to lower their tax rates; while other government subsidies and tax provisions provided up to $78 billion in breaks for major US corporations.
As a result, the 26 companies enjoyed negative federal income tax rates from 2008-2011, with Wells Fargo alone generating over $21.6 billion in tax subsidies over the same period, while General Electric, Verizon and Boeing garnered $10.6 billion, $7.7 billion and $6.0 billion respectively.
The director of the left-leaning tax research group blamed corporate lobbying for the failure to overhaul the US tax code in more than 25 years, with accelerated depreciation expected to cost the US Treasury $37 billion between 2010 and 2014.
Still, both Democrat and Republican politicians have already backed an expansion of the tax break through bonus depreciation this time, which will give companies an even faster and larger first-year write-off.
According to a study by ThinkProgress.org, the “effective” corporate tax rate in the US is at a 40-year low of 12.1 percent, despite the US possessing one of the highest corporate tax rates among developed countries at 39.2 percent.
The Citizens for Tax Justice consumer group has thus called for the government to either close off the tax loopholes or reduce the tax provisions given to top corporations.
McIntyre’s study was conducted among just thirty Fortune 500 companies based in the US. The study revealed that if these 30 companies had paid the full corporate tax rate over the 2008-11 period, they would have had to pay more than $78.3 billion to the US government.