Far too many of the largest corporations have come up with ways to avoid paying taxes on billions of dollars in profits each year. A new report on state corporate tax-dodging finds that 265 of the nation’s largest corporations paid state corporate income taxes on only about a half of $1.33 trillion in profits between 2008 and 2010. That amounts to nearly $43 billion in state income tax avoidance over the three years!
Far too many of the largest corporations have come up with ways to avoid paying taxes on billions of dollars in profits each year. A new report on state corporate tax-dodging finds that 265 of the nation’s largest corporations paid state corporate income taxes on only about a half of $1.33 trillion in profits between 2008 and 2010. That amounts to nearly $43 billion in state income tax avoidance over the three years!
The report doesn’t identify state-specific tax payments since the companies don’t disclose their profits and taxes on a state-by-state basis. It only reports total state corporate tax payments made.
Of the 265 Fortune 500 companies examined, 68 paid no state corporate income tax in at least one of the last three years and 20 averaged a tax rate of zero or less during the 2008-2010 period. Among the companies paying no net state income tax over the full three-year period were DuPont, Goodrich, International Paper, and Intel.
Of the 14 corporations headquartered in Pennsylvania that were examined in the report, H.J. Heinz, Air Products & Chemicals, and Comcast paid no state corporate income tax in at least one of the last three years. Among the Pennsylvania companies, H.J. Heinz averaged the lowest tax rate over the 2008-2010 period (at less than 1%), while PNC Financial Services Group, Airgas, and Air Products & Chemicals averaged three-year tax rates of less than 2%. On the other end of the spectrum among the Pennsylvania corporations, Universal Health Services averaged a three-year tax rate of 4.9%, while UGI and Dick’s Sporting Goods averaged three-year rates of 5.3%.
The report comes at a pivotal time. As The New York Times notes:
This year, there has been a great deal of discussion about whether corporations are paying their fair share of federal taxes. But the issue resonates at the state level as well, where corporate taxes have long been a shrinking share of state revenues. While corporate income taxes made up 9.7 percent of state revenues in 1980, according to the Nelson A. Rockefeller Institute of Government, they now make up only an estimated 5.7 percent. {See the graphic above.}
In Pennsylvania, state corporate taxes as a share of state revenues went from 11.9% in 1980 to 5.8% in 2009, according to U.S. Census data.
For the past three years, states have made recession-driven cuts to public schools, colleges, and health care for children and families. Pennsylvania has cut $860 million from public schools and reduced funding for colleges by 18%. Had all corporations paid their fair share, Pennsylvania could have avoided many of these cuts.