“We're in the midst of a corporate crime wave.” Ralph Nader June 2010
Corporate profits grew 37 percent in 2010, the biggest gain since 1950, according to the latest report from the Bureau of Economic Analysis. In just the 4th Quarter of 2010, corporate profits reached $1.7 trillion – an increase of $38 billion over the Third Quarter of 2010. This growth in profits was concentrated primarily in banks and other financial corporations which saw their domestic profits increase by $58 billion.
As a consequence, Wall Street bankers handed out a record $50 billion in bonuses to their top executives in 2010. Goldman Sachs, Morgan Stanley and JPMorgan Chase’s investment bank handed out $28 billion in bonuses, according to analysts’ estimates. Since these three banks control about half of the capital in the US, total bonuses were certain to be more than $50 billion. That is 49 per cent higher than the previous high of $27 billion in 2007.
President, Barack Obama, called these bank bonuses “obscene.”
David Schmidt, a consultant at James Reda & Associates, a New York compensation firm said about the billions in bank bonuses, “The public perception is going to be that it’s a lot of money.”
With wealthy corporations posting record profits in 2010, you would think they would be happy to pay some taxes on those profits. You would be wrong. Tax breaks for corporations increased by $156 billion in the 4th Quarter of 2010. As a consequence of this increase in corporate welfare, corporate tax payments fell in the 4th Quarter by $1.3 billion despite the record increase in profits.
Below is another graph showing the decline in Corporate Share of total taxes during the past 50 years:
The New York Times reported that corporate taxes made up 30 percent of all federal revenue in the mid-1950s, but as of 2009 were only 6.6 percent of total revenues. It’s not hard to see that closing loopholes and ending billions of dollars of giveaways in corporate welfare could solve most if not all of our budget problems. The “theoretical” corporate tax rate is 35%. But with the ridiculous tax breaks for various industries and whatnot the “actual” tax rate is close to 6%.
Don’t let this Tea Party Congress pay for corporate welfare on the backs of poor and middle-class families. Demand Tax Fairness Now!
The reason corporate tax rates have plunged is due to a combination of skyrocketing corporate tax give aways and a huge increase in the number of “tax havens” which is just shifting corporate profits from where those profits were made to placed like the Caymen Islands.
12 Worst Corporate Tax Dodgers in 2010
Many of America’s largest corporations are not paying any taxes at all – despite making billions in profits. According to the Government Accounting Office, 83 of the top 100 largest US corporations use tax havens to reduce their US taxes. These large US corporations have mastered the art of evading taxes by booking expenses in the US and profits in low-tax countries. These accounting tricks are not available for corporations that only do business in the US. So Congress is rewarding corporations which ship US jobs overseas with huge tax subsidies.
Together these 12 corporations spent more than $1 billion during the past 10 years lobbying Congress in order to get hundreds of billions in corporate tax breaks. Because these corporations are not paying their fair share, the rest of US have to pay much more than our fair share. As you send in your tax return on April 15th, think about the multi-billion dollar corporations which Forbes reports had lower tax rates than you did.
Who made the list as last years top 12 corporate tax dodgers? Big Banks and Big Oil were 7 of the worst 12. Here is the list as compiled by Moveon.org and other tax justice organizations:
Sources: “Fortune 1000 Companies 1-100,” Fortune, accessed April 15, 2010
“What the Top U.S. Companies Pay in Taxes,” Forbes, April 1, 2010
Coming in at Number One is General Electric. According to The New York Times, last year General Electric (GE) made over $14 billion in profit, but paid NO federal tax. None. In fact, thanks to $20 million GE spends lobbying Congress, we American taxpayers actually owed GE $3.2 billion in tax credits.
A company spokesperson for GE recently stated, “GE did not pay US federal taxes last year because we did not owe any”.
Now GE is slashing health benefits and retirement benefits for new employees among non-union workers and is expected to push unions to accept similar cutbacks3, while its CEO, Jeff Immelt, gets a 100% pay raise.4 What’s worse? Immelt now sits as chair of the President’s Council on Jobs and Competitiveness (Jobs Council), representing corporate America to the President on matters like job creation and corporate taxation. That’s a slap in the face to every hardworking, tax-paying American—especially GE employees.
One of the chief ways GE avoids paying taxes is by shifting a large portion of its profits overseas, and jobs follow. Now GE’s CEO is the person charged with helping the President create jobs here in America. That’s just perverse.
“We cannot stand by and watch while we are led down this road. Mr. Immelt must step down from the president’s jobs panel — and if he won’t, President Obama needs to ask for his resignation,” Russ Feingold wrote. “How can someone like Immelt be given the responsibility of heading a jobs creation task force when his company has been creating more jobs overseas while reducing its American workforce? And under Immelt’s direction, GE spends hundreds of millions of dollars hiring lawyers and lobbyists to evade taxes.”
Last summer, Feingold voted against the Democrats’ sweeping financial regulatory bill because he believed it did not go far enough in reining in big banking institutions.
“It’s time for policymakers to stop coddling corporate interests, and get to work creating jobs and wealth for Main Street. We shouldn’t reward wealthy CEOs and Wall Street for behavior that undermines the nation’s economy,” Feingold wrote Wednesday.
Quick Facts on General Electric
Direct Campaign Contributions: $20 million in 2010.
Lobbying Expenditures: Total Over 10 Years (2001-2010), $205 million
Government Contracts: $3.9 billion in 2008; $24 billion from 2000-2008
Profits Over Last 5 Years: $26 billion
Taxes Paid Last 5 years: Zero.
Tax Refund for Last 5 Years: $4.1 billion
“G.E.’s Strategies Let It Avoid Taxes All Together,” The New York Times, March 24, 2011
“After Paying Zero Income Taxes, GE Plans To Ask Its Union Workers To Make Wage and Benefits Concessions”, ThinkProgress, March 28, 2011
“GE Doubles CEO Immelt’s Compensation, Shrinks Board”, Smart Money, March 14, 2011
GE isn’t unique. Tons of big corporations, including ExxonMobil and Citigroup, have paid little to nothing in federal taxes—or gotten huge refunds—in recent years.
2) Bank of America
Bank of America received a bailout from the Federal Reserve and the Treasury of nearly $1 TRILLION. As a consequence of this huge gift from us taxpayers, Bank of America earned pretax income of $4.4 billion in 2009, yet the financial services super market tallied up a $1.9 billion tax refund. Making matters worse for the US Treasury, Bank of America has a provision for credit losses of $49 billion which will carry over for a long, long time.
Quick Facts on Bank of America
Campaign Contributions: Total Over 10 Years (2001-2010), $11 million
Lobbying Expenditures: Total Over 10 Years (2001-2010), $24 million
Bailout Funds: $20 billion to save itself, $25 billion to buy Merrill Lynch, $118 in loan guarantees. $1 Trillion from the Federal Reserve and Treasury.
Profits in 2010: $4.4 billion
Tax Refund for 2010: $1.9 billion
3) Goldman Sachs
Goldman Sachs earned a record profit of $43 billion and handed out $20 billion in bonuses.
Goldman Sachs received $800 billion in Bail Out funds from the Federal Reserve and US Treasury. Yet it paid only 1% of its income in federal taxes. After the federal government devoted billions of taxpayers dollars to bailing them out, a Goldman Sachs spokesperson said the bank had been “clearly helped by government actions and policies.”
Quick Facts on Goldman Sachs
Campaign Contributions: Total Over 10 Years (2001-2010), $22 million
Lobbying Expenditures: Total Over 10 Years (2001-2010), $33 million – including 49 lobbyists.
Loans to weather financial crisis: $800 billion
Profits in 2008: $2.3 billion
Taxes Paid in 2008: 1.1 percent of income
Citigroup received a $2.5 trillion dollar bail out from the Federal Reserve and US Treasury. In 2010, its profits totaled more than $4 billion. But it paid ZERO dollars in federal income tax.
Quick Facts on Citigroup
Campaign Contributions: Total Over 10 Years (2001-2010), $15 million
Lobbying Expenditures: Total Over 10 Years (2001-2010), $62 million
Bailout Funds: $45 billion directly and hundreds of billions more in loan guarantees
Profits in 2010: $4 billion
Taxes Paid for 2010: $0
Tax Refund for 2010: $1.9 billion
5) Wells Fargo
Over the last two years, Wells Fargo earned $37 billion in profits but paid no federal taxes. Instead, it got a $4 billion tax refund. Sadly, Wells Fargo did not make it on to the Public Campaign.org Top 12 Tax Dodgers so we do not have a Quick Facts section for them.
ExxonMobile is the most profitable corporation in America with $284 billion in profits. They did pay $18 billion in taxes. However, unlike Chevron, none of Exxon’s taxes were paid in the US. Instead, the IRS sent Exxon a check for $156 million. That’s funny … I think they sell a fair amount of profitable gasoline here. You probably paid more taxes than ExxonMobil this year. Seriously. That is probably because they spent a lot more money lobbying Congress than you did. In fact, last year, they spent over $27 million in lobbying so they could take home a bigger chunk of the $284 billion they made.
Quick Facts on ExxonMobil
Campaign Contributions: Total Over 10 Years (2001-2010), $5.7 million
Lobbying Expenditures: Total Over 10 Years (2001-2010), $138 million
Government Contracts: $840 million in 2008; $6.8 billion from 2000-2008
Profits in 2009: $19 billion
Taxes Paid for 2009: $0
Tax Rebate for 2009: $156 million
Chevron made $10 billion in profit last year. But they received a $19 million REFUND. How did they do it? By recording nearly all of their profits in off shore tax havens. They should change their logo colors from red, white and blue to something more representative of the Cayman Islands.
Quick Facts on Chevron
Campaign Contributions: Total Over 10 Years (2001-2010), $4.4 million
Lobbying Expenditures : Total Over 10 Years (2001-2010), $91 million
Government Contracts: $324 million in 2008; $2.6 billion from 2000-2008
Profits in 2009: $10 billion
Tax Refund for 2009: $19 million
8) Conoco Phillips
Conoco Phillips from 2007 to 2009 had profits totaling $16 billion. But it paid no taxes. Instead, it got $451 million in tax breaks. As a reward for making record profits while paying no taxes, they recently raised the pay of their CEO to $18 million per year.
Quick Facts on ConocoPhillips
Campaign Contributions: Total Over 10 Years (2001-2010), $2.5 million
Lobbying Expenditures: Total Over 10 Years (2001-2010), $63 million
Profits from 2007 to 2009: $16 billion
Tax Breaks for 2007 to 2009: $451 million through the oil and gas manufacturing deduction
Boeing received a $30 billion contract from the Pentagon to build 179 airborne tankers that the Air Force says it does not even want. Despite having sales of $50 billion per year, Boeing received a $124 million refund from the IRS in 2010. We have a separate page describing Boeing’s Billion dollar blackmail of the State of Washington.
Quick Facts on Boeing
Campaign Contributions: Total Over 10 Years (2001-2010), $10 million
Lobbying Expenditures: Total Over 10 Years (2001-2010), $115 million
Government Contracts: $24 billion in 2008; $169 billion from 2000-2008. Recently received $35 billion contract from Pentagon.
Taxes Paid in 2010: $0
Tax Refund in 2010: $124 million
In 2010, Verizon made $12 billion in profits, but paid no federal income taxes.
Quick Facts on Verizon
Campaign Contributions: Total Over 10 Years (2001-2010), $12 million
Lobbying Expenditures: Total Over 10 Years (2001-2010), $131 million
Government Contracts: $488 million in 2008; $5.1 billion from 2000-2008
Profits in 2010: $12 billion
Taxes Paid for Last 2 Years: $0
11) Federal Express
FedEx made $1.9 billion in profits on which it paid almost no taxes. It’s secret accounting trick? Using 21 different tax havens. Unlike its main rival, UPS, FedEx classifies the men and women who drive its trucks as independent contractors, thereby avoiding hundreds of millions of dollars in employer taxes.
Quick Facts on FedEx
Campaign Contributions: Total Over 10 Years (2001-2010), $8.7 million
Lobbying Expenditures: Total Over 10 Years (2001-2010), $71 million
Government Contracts: $64 million in 2008; $7.3 billion from 2000-2008
Recent Profits: $1.9 billion
Recent Taxes Paid: .0005 percent of income, paid in 21 tax havens
Quiz Question: What is the name of the corporation which is teaching all the other corporations to evade paying their fair share of State and federal taxes? The answer is Accenture… a corporation most Americans have never heard of. This corporation used to be part of Arthur Anderson, the corrupt accounting firm which gave us the Enron scandal. In 2002, they spent a record $2 billion rebranding themselves as Accenture. But while their name changed, their business practices remain as corrupt as ever.
Because this is the corporation responsible for all the other corporate tax dodgers, and because corporate tax evasion is their primary business, Accenture may well be the most corrupt corporation in America.
We therefore have a separate page detailing why Accenture may be the most corrupt corporation in America.
Senator Bernie Sanders of Vermont also put out a Top 10 list of corporations with high profits and no taxes in recent years including Exxon-Mobil, Chevron, Bank of America, Goldman Sachs, and Boeing.
What can you to do end this corporate corruption?
Please Sign Our Petition to require wealthy corporations to pay their fair share of State taxes!
David Spring M. Ed. Director Fair School Funding Coalition