From Holden:
A new study shows that US corporations’ share of the tax burden decreased remarkably under Bush. This is an issue touches on the American ideal of basic fairness, cronyism, and our ever-increasing budget deficit. Watch for Kerry, or more likely Edwards as Kerry is resting his throat, to mention this report today.
America’s largest and most profitable companies paid less in corporate income taxes in the last three years, even as they increased profits, according to a study released yesterday.
Companies have always used write-offs, depreciation, deductions and loopholes to lower their taxes, but the study, by Citizens for Tax Justice and its affiliate, the Institute on Taxation and Economic Policy, suggested that tax breaks and subsidies enacted during the Bush administration had accelerated the decline in tax payments.
[snip]
The study, Corporate Income Taxes in the Bush Years, surveyed public filings by 275 of the nation’s largest and most profitable companies, based on revenue from the Fortune 500 list of 2004. The 275 companies reported pretax profits from operations in the United States of $1.1 trillion from 2001 through 2003, the study said, yet reported to the Internal Revenue Service and paid taxes on half that amount.
Robert S. McIntyre, the lead author of the study, wrote, “The fact that America’s companies were allowed to report less than half of their actual U.S. profits to the I.R.S., while ordinary wage earners have to report every penny of their earnings, has to undermine public respect for the tax system.”
[snip]
The study cited, among other things, tax breaks enacted in 2002 and 2003 as prompting the decline in corporate payments. Such tax breaks, as used by the 275 companies, totaled more than $175 billion over the last three years, including $71 billion last year, up from $43.4 billion in 2001. That compares, roughly, with $98 billion in tax breaks for the top 250 profitable companies over 1996 through 1998, according to a similar study by Citizens for Tax Justice in 2000.
[snip]
According to the study, some 28 corporations paid no taxes from 2001 to 2003, despite having profits in the period of nearly $45 billion.
Industry sectors that paid the lowest taxes or no taxes included aerospace and military, telecommunications, transportation, and industrial and farm equipment.
The 2000 study found that from 1996 to 1998, 11 of the 250 largest and most profitable companies paid no taxes, even though all reported profits. The earlier study found that the 250 companies showed a 23.5 percent increase in pretax profit, while the tax payments rose 7.7 percent.
The current study seemed to echo government data. Commerce Department figures showed that pretax corporate profit rose 26 percent from 2001 to 2003 but that corporate tax payments fell 21 percent.
Corporate taxes as a share of the national economy are at their lowest sustained level since World War II, the study said, and financed only 6 percent of government expenses in the last two fiscal years.
The current study found that nearly one in three companies, or 82, of the 275 examined paid no federal income tax in at least one year from 2001 to 2003, the period covered by the study. In the period, 82 companies had pretax profit of $102 billion.
Last year, 46 of the 275 companies surveyed paid no federal income tax, up from 42 companies in 2002 and 33 in 2001, according to the study. Over all, the number of companies that paid no taxes increased 40 percent during the period.