Effective Tax Rates Plunge for Industrial Giants as Multinationals Keep Cash Offshore
Yang, Jia Lynn, St Louis Post-Dispatch (MO)
Procter & Gamble, the Cincinnati-based company behind Pampers diapers and Tide detergent, reported a federal tax burden in 1969 that was 40 percent of its total profits, a typical rate in those days.
More than four decades later, P&G is a very different company, with operations that span the globe. It also reports paying a very different portion of its profits in federal taxes: 15 percent.
The world's biggest maker of consumer products isn't the only one. Most of the 30 companies listed on the Dow Jones industrial average have seen a dramatically smaller percentage of their profits go to U.S. coffers over time, even as their share prices have driven the Dow to an all-time high.
A Washington Post analysis found that in the late 1960s and early 1970s, companies in the current Dow 30 routinely cited U.S. federal tax expenses that were 25 to 50 percent of their worldwide profits. Now, most report less than half that share.
Still, company executives have complained for years that their firms face the highest tax burden in the world, citing the United States' 35 percent top corporate tax rate as the highest among developed economies.
P&G chief executive Bob McDonald was among 20 business executives including other leaders of Dow 30 companies who met with President Barack Obama in November to discuss the country's fiscal issues, including the tax code. …