Gary Zuckett: Tax rebates for big-profit brands are startling, unfair
Across the state and nation this past month, individuals filed and paid their personal federal and state income taxes. However, there was one notable exception — the Fortune 500 companies singled out in a recent Citizens for Tax Justice report called “Fifteen Reasons Why we need Corporate Tax Reform.”
This report is an eye opener for a number of reasons. All of these profitable big name companies paid either zero federal income tax or actually had a “negative” tax rate and got a check back from the government. These companies are just the tip of the iceberg and represent a broad range of our economy. Here are a few on the list:
• Broadcaster CBS Corporation enjoyed $1.8 billion in U.S. profits last year, and received a federal income tax rebate of $235 million.
• Toy maker Mattel, which has paid zero federal income taxes over the past five years, received a tax rebate of $46 million in 2014.
• The financial services corporation Prudential avoided all federal income taxes on its $3.5 billion in U.S. profits in 2014.
• Ryder System, which provides truck rentals and services, paid a negative 0.3 percent federal income tax rate in 2014 and over the past five years a negative 0.5 percent rate.
• California-based utility PG&E had negative tax rates both in 2014 and over the five-year period.
These companies are not just using the high-profile offshore tax shelters to hide their profits. They are taking advantage of the seemingly endless loopholes carved into our domestic tax laws. One of the most onerous is the one used by Priceline to more than zero out its taxes. It actually got $9 million back from Uncle Sam by writing off the value of executive stock options. Priceline has used this to generate negative tax rates all the way back to 2010 and, unless the law is changed, will likely do so years into the future.
Over the years, as high-priced DC lobbyists have drilled more and more holes in our corporate tax system, the percent of federal revenue paid by corporations has fallen from 32 percent in 1952 to just 14 percent today according to the National Priorities Project.
Meanwhile, this leaves small business and individual taxpayers to pick up the tab to cover the funding of roads and bridges, schools, libraries, police and fire protection and other socially essential infrastructure. While corporate taxes have been reduced by over half since the 1950s, the total federal revenue provided by individuals has increased by about this same amount. What’s wrong with this picture?
Plugging these myriad corporate tax loopholes could bring in needed revenue to put America back to work rebuilding our crumbling infrastructure, if it’s not used instead to justify lowering the corporate tax rate even further.
Everyone, including profitable corporations that make use of our public infrastructure and educated workforce, all paid for with tax revenue, should pay their fair share to keep this country strong and secure a decent living for working families.
Gary Zuckett is executive director of WV Citizen Action Group.
