A national consumer advocacy group has published its “Dirty Thirty” list of companies that received more money in tax breaks than they paid in federal income taxes – and five of the companies on that list are involved in the trucking industry.
The U.S. Public Interest Research Group, or PIRG, studied the profits, taxes paid, tax subsidies, lobbying expenses and tax shelters for dozens of large corporations from 2008 through 2010. PIRG’s report it titled “Representation Without Taxation: Fortune 500 Companies That Spend Big on Lobbying and Avoid Taxes.”
While companies like Pepco Holdings and General Electric topped the list of companies that effectively had “negative tax rates,” truck manufacturer Paccar also made the list as did Con-way, Ryder Systems, Navistar International and FedEx.
“Having a negative tax rate means that these companies were able to game our tax system and our tax code to the point that on Tax Day, instead of paying taxes on the profit that they made they got money back from the federal government,” PIRG federal tax and budget associate Dan Smith told “Land Line Now” on Sirius XM.
Smith points out that what the companies did to grow their profits while avoiding the tax man is legal under the current code.
“We’re just trying to call attention to the need to end some of these tax games that these companies are able to play, to call attention to one area of policy in corporate taxation where companies have been especially able to use their influence to game the system in their favor,” he said.
The research group also highlighted lobbying expenses, effectively showing how the “Dirty Thirty” companies spent considerably more on lobbying in Washington than they paid in taxes.
Pepco and General Electric were the top examples. GE spent $84.4 million on lobbying while receiving $8.4 billion in tax subsidies and earning nearly $10.5 billion in profits. PIRG says that amounted to a negative tax rate of 45.3 percent for GE. Pepco’s negative tax rate was 57.6 percent.
By comparison, Paccar spent $800,000 in lobbying, received $239.5 million in tax subsidies and earning $365.5 million in profits. That amounted to a negative tax rate of 30.5 percent.
According to PIRG, the negative tax rate was 9.1 percent for Con-way, 7.3 percent for Ryder Systems, and 2 percent for Navistar International. FedEx had a positive tax rate of 0.9 percent, according to PIRG. FedEx paid $37 million in federal taxes from 2008 to 2010, while the other 29 companies on the list paid negative tax rates. FedEx spent $50.8 million on lobbying and earned $1.45 billion in tax breaks during the same time period.
Smith said the 30 companies paid a combined $475.7 million in lobbying while receiving $67.9 billion in tax subsidies, earning $163.7 billion in profits and averaging a 6.5-percent negative tax rate.
Some companies on the list, such as Duke Energy, Boeing, Wells Fargo and DuPont, moved millions into offshore tax havens to avoid paying federal taxes. Other groups making the “Dirty Thirty” list included Mattel, Tenet Healthcare, Verizon Communications, Honeywell and PG&E Corp. Click here to download the complete report.
“When these companies don’t pay money in taxes on their profits like the rest of us have to, ordinary taxpayers end up picking up the tab,” Smith said.
“Land Line Now” Staff Reporter Reed Black contributed to this report.
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