30 U.S. Corporations Pay No Income Taxes

By reports, and wire | Tribune-Review/Pittsburgh Tribune-Review, November 4, 2011 | Go to article overview

30 U.S. Corporations Pay No Income Taxes


reports, and wire, Tribune-Review/Pittsburgh Tribune-Review


Thirty large and profitable U.S. corporations paid no income taxes in 2008 through 2010, said a study on Thursday that arrives as Congress faces rising demands for tax reform but seems unable or unwilling to act.

Pepco Holdings Inc, a Washington-area power company, had the lowest effective tax rate at negative 57.6 percent, among the 280 Fortune 500 companies studied.

The statutory U.S. corporate income tax rate is 35 percent, one of the highest in the world, but over the 2008-2010 period, very few of the companies studied paid it, according to the report.

The average effective tax rate for the companies over the period was 18.5 percent, said Citizens for Tax Justice and the Institute on Taxation and Economic Policy, both think tanks.

Their report also listed General Electric Co., Paccar Inc., PG&E Corp., Computer Sciences Corp., Boeing Co. and NiSource Inc. as among the 30 that paid no taxes for the three years.

Corporations will say rightly that the loopholes that let them slash their taxes were perfectly legal, the report stated.

"But that does not mean that low-tax corporations bear no responsibility. ... The laws were not enacted in a vacuum; they were adopted in response to relentless corporate lobbying, threats and campaign support," the report said.

Some of the 30 companies disputed the report's findings.

A Pepco spokesman said it "pays all its required taxes."

Boeing paid its taxes "between 2008-2010. ... Our effective income tax rate was 26.5 percent, 22.9 percent, 33.6 percent in 2010, 2009, 2008," said a spokesman for the aerospace group.

Two Pittsburgh-based companies, PNC Financial Services Group Inc. and H.J. Heinz Co., paid no taxes in some of those years, the report showed.

PNC, Pittsburgh's largest bank, had federal income tax refunds of $208 million in 2010, when its income tax rate was negative 5.8 percent, and $110 million (minus 2.4 percent) in 2009.

A spokesman with the bank could not be reached for comment. PNC's annual report shows it paid total income taxes of $1.04 billion in 2010 and $867 million in 2009. But those figures were calculated by taking into account deferred, or future, tax payments the bank expected to make, Citizens for Tax Justice said.

The federal tax refund figures can be found in the annual report footnotes, which is how the group determined its figures.

The same holds true for ketchup maker H.J. Heinz Co., which Citizens for Tax Justice said had a federal income tax refund of $26 million (a negative 5.3 percent tax rate) for the 2009 calendar year. But according to Heinz's annual report, the refund came in its 2010 fiscal year, which ended April 28, 2010.

Citizens for Tax Justice listed Heinz among companies receiving refunds in 2009 because two-thirds of the company's 2010 fiscal year took place during calendar year 2009. …

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