Hours after I called attention to a column by former Reagan and Bush 41 economic adviser Bruce Bartlett that debunked the right-wing narrative that taxes on the wealthy are too high (it’s quite the opposite), Citizens for Tax Justice released a preliminary report of what Fortune 500 corporations are paying in taxes. The headline: 12 corporations pay an effective tax rate of negative 1.5 percent. That’s right: 12 corporations are getting more money back from the government than they pay in income taxes, to the tune of $2.5 billion over three years.
From the report:
Not a single one of the companies paid anything close to the 35 percent statutory tax rate. In fact, the “highest tax” company on our list, Exxon Mobil, paid an effective three-year tax rate of only 14.2 percent. That’s 60 percent below the 35 percent rate that companies are supposed to pay. And over the past two years, Exxon Mobil’s net tax on its $9.9 billion in U.S. pretax profits was a minuscule $39 million, an effective tax rate of only 0.4 percent.
Had these 12 companies paid the full 35 percent corporate tax, their federal income taxes over the three years would have totaled $59.9 billion. Instead, they enjoyed so many tax subsidies that they paid $62.4 billion less than that. If just these 12 companies had paid at a 35 percent tax rate over the past three years, total federal revenues from corporate taxes would have been 12 percent higher than they actually were.
This is the reason any any suggestion that taxes should be cut further for corporations should be a non-starter. First, we should insist that corporations not get another dime from the federal treasury. I propose, since the Supreme Court in Citizens United said corporations are individuals in the context of political speech, that corporations pay an alternative minimum tax just as individuals do. It is immoral that working-class people are facing cuts in government services they need so that these 12 corporations can get a net payment of $2.5 billion without paying as dime of federal tax.
Eventually, we will need tax reform that ends the gamesmanship and collects from corporations and the millionaires their fair share of revenue—not a “revenue neutral” share that codifies the results of their tax avoidance.