How Corporations Get Out of Paying Federal Income Taxes

From Ring of Fire:

Tax activist group Citizens for Tax Justice (CTJ) released a report indicating that America’s top corporations pay little or no federal taxes despite the 35 percent tax they are mandated to pay on their profits. Corporations use offshore tax havens, loopholes in tax law, corporate stock options, and outright non-payment of federal income taxes to avoid paying their fair share.

During a five-year study, the CTJ found that from 2008 to 2012, 26 of the 288 most-profitable Fortune 500 companies paid absolutely no federal income taxes. The accumulated pre-tax profits of these companies equaled $170 billion. Some of those companies are Boeing, General Electric, and Verizon. In the same period, 111 of the 288 companies didn’t pay federal income taxes for at least one year of the five years observed.

The U.S. tax code mandates the 35 percent rate and has often been criticized by lawmakers and the public for its complexity and loopholes. The current code, Tax Reform Act of 1986, was introduced 27 years ago, during the Reagan Administration, and lowered the corporate tax rate from 48 percent to its current rate. Despite not paying taxes outright, corporations still lobby for a lower rate, 25 percent.

You can read the full article here at Ring of Fire.