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Dayton Business Journal...
Tax group names ‘Dirty Thirty’ companies
by DBJ Staff
Saturday, January 21, 2012 

U.S. Public Interest Research Group and Citizens for Tax Justice has released a list of 30 corporations that spent more to lobby Congress than they did in taxes. 

The report, Representation without Taxation: Fortune 500 Companies that Spend Big on Lobbying and Avoid Taxes, focuses on an area the group that corporate power and influence is on full display: corporate tax policy. 

“By exploiting loopholes and special provisions in the tax code, 280 consistently profitable Fortune 500 companies paid about half the statutory corporate tax rate while spending $2 billion to lobby Congress on tax policy and other issues,” according to the groups. 

The report also looks at what it calls the “Dirty Thirty” particularly aggressive tax avoiders that spent more on federal lobbying than income taxes between 2008 and 2010. 

“Corporations should not be able to shirk their tax burden by using gimmicks to game the tax code,” said Dan Smith, U.S. PIRG Tax and Budget Associate, who co-authored the report. “When corporations don’t pay, ordinary taxpayers and responsible small businesses are left to pick up the tab. The fact that so many corporations can spend more money lobbying than they pay in taxes makes a mockery of our tax code and our democracy.” 

The “Dirty Thirty” companies all told made $163.7 billion in profits while paying zero dollars in federal income taxes and collecting a total of $10.6 billion in various tax rebates. Meanwhile, they collectively spent $475.7 million in lobbying expenses for the three year period 

“On the second anniversary of Citizens United, corporate tax dodging should be seen as a cautionary tale. In the wake of that disastrous decision, special interest influence will only continue to grow and policy will reflect that unless we get corporate money out of elections,” added Blaire Bowie, U.S. PIRG Democracy Advocate. 

“Many lawmakers insist that there is a budget crisis and that Americans must sacrifice some of the essential public services they depend on. But Congress has yet to make sure corporations pay their fair share in taxes,” said CTJ director Robert McIntyre. “The most plausible explanation for this inaction is the power of corporate money in politics. Campaign contributions and highly-paid lobbyists give corporate executives a louder voice than the millions and millions of working families who wonder why they pay more in taxes than GE, Boeing, Wells Fargo, Verizon, and dozens of other huge, profitable corporations, all put together.” 

Many of the companies on the list have operations in the Dayton region, including Navistar International Corp.    , which has a truck assembly plant in Springfield, and Duke Energy, which services power customers in Warren and Butler counties. 

In a report released this week, Pepco Holdings Inc. was named the top company on the list with what the group said was a -57 percent effective tax rate. 

Based on corporate taxes, U.S. PIRG claims that between 2008 and 2010, Pepco paid a negative federal tax rate, which returned $508 million in tax rebates despite making $882 million in domestic profit over the same period. 

Bob Hainey, manager of media relations at Pepco, told the Washington Business Journal that Pepco paid $1.2 billion in real estate taxes, payroll taxes, personal property taxes, delivery taxes, use taxes and gross receipts tax between 2008 and 2010. 

“Over the three-year period noted in the report, (Pepco) invested approximately $2 billion of capital into its operations of which over 50 percent of this amount was allowable as a current deduction against taxable income,” Hainey said in a statement. 

He also states that policy actions such as accelerated depreciation are economic incentives, not “loopholes” that “policy makers put in place to achieve economic objectives  stimulate investment and create jobs.” 

Read this and other articles at the Dayton Business Journal



 
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