Bernie Sanders declares: ‘At a time when we have massive wealth and income inequality, and when corporate profits are soaring, it is an outrage that many large, profitable corporations paid nothing in federal income taxes last year.’
Pointing to egregious examples of Fortune 500 corporations “manipulating the tax system to avoid paying even a dime in tax on billions of dollars in U.S. profits,” a new report from Citizens for Tax Justice makes a sharp case for corporate tax reform.
The 15 companies cited in the CTJ analysis represent a range of sectors within the U.S. economy, from toy maker Mattel to financial services corporation Prudential to broadcaster CBS to media giant Time Warner.
All told, the report reveals that the 15 companies paid no federal income tax on $23 billion in profits in 2014, and they paid almost no federal income tax on $107 billion in profits over the past five years. All but two received federal tax rebates in 2014, and almost all paid “exceedingly low” rates over five years.
“These 15 corporations’ tax situations shed light on the widespread nature of corporate tax avoidance,” Citizens for Tax Justice declared.
As Chuck Collins noted in an op-ed published at Common Dreams on Friday, America’s wealthiest individuals and companies are notorious for finding ways to minimize their tax burdens—including by hiding their money offshore.
“Global Financial Integrity, a financial watchdog agency, estimates that global corporations and wealthy individuals are hiding a total of over $21 trillion,” Collins wrote.
But corporate tax avoidance goes beyond offshoring. CTJ’s analysis shows that many businesses are exploiting tax breaks that “are, by and large, perfectly legal, and often have been on the books for decades.”
For example, the report explains:
Jetblue, PG&E, PEPCO Holdings, and Ryder used accelerated depreciation, a tax break that allows companies to write off the cost of their capital investments much faster than these investments wear out, to dramatically reduce their tax rates. CTJ has estimated that closing the accelerated depreciation loophole could raise more than $428 billion over the next decade.
Despite that potential revenue, both Congress and President Barack Obama have supported expanding the scope of the accelerated depreciation tax break in recent years.
But such loopholes have found strident critics in Congress, too. A major plank of the Congressional Progressive Caucus’s budget proposal, unveiled last month, is that corporations pay their fair share of taxes.
And on Thursday, Sen. Bernie Sanders (I-Vt.) blasted the tax dodgers in a press release.
“At a time when we have massive wealth and income inequality, and when corporate profits are soaring, it is an outrage that many large, profitable corporations not only paid nothing in federal income taxes last year, but actually received a rebate from the IRS last year,” Sanders said.
Echoing CTJ’s call to overhaul the corporate tax code, the senator continued: “Instead of balancing the budget on the backs of the elderly, the children, the sick and the poor, as the Republicans in Congress have proposed, we need a tax system that demands that large, profitable corporations and the wealthy start paying their fair share in taxes.”
It’s unclear, however, when that reform will happen.
As The Hill reported in March: “Serious tax reform discussions are now into their fifth year. With a presidential race already heating up, many say those talks will likely spill into at least year seven before the tax code can be overhauled.”