There's renewed hope that the special bipartisan committee charged with finding a way to cut the federal deficit can reach an agreement now that some Republicans have softened their no-tax stance.
And the most optimistic among us, which varies depending on the latest reports from Capitol Hill, still cling to the dream that Congress eventually will come up with a comprehensive tax reform plan.
But based on one of those mood-changing Washington news items I was talking about, it will be very difficult to convince many companies that change is needed.
The 280 most profitable corporations in the United States received a total of nearly $224 billion in tax subsidies between 2008 and 2010, according to a new study by the Citizens for Tax Justice.
The liberal-leaning Washington, D.C., think tank found that the average effective tax rate for all 280 companies in the study over the three-year period was 18.5 percent. That's less than half the 35 percent corporate tax rate that's been a popular target for reform.
The Citizens for Tax Justice's "Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010" report also found that 30 companies enjoyed a negative income tax rate over the three-year period, despite combined pretax profits of $160 billion. That's D.C. tax speak for saying they got tax money back from Uncle Sam.
Other interesting or infuriating findings, depending on your political and tax points of view, from the report include:
- Seventy-eight of the companies had at least one no-tax year.
- More than half the tax subsidies for companies in the study went to four industries: financial services, utilities, telecommunications and oil, gas and pipelines.
- Financial services received the largest share of all federal tax subsidies over the last three years.
And what about those cries from multinational companies that say U.S. business taxes are too high?
Citizens for Tax Justice data show that American companies that made significant profits in other countries paid taxes to those foreign countries at an income tax rate that was almost a third higher than what they paid to Uncle Sam on domestic profits.
Based on this study, it looks like members of Congress who want to totally redo the current tax code have their work cut out for them in convincing at least 280 corporations that the system needs to be changed.
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