Heard about corporations complaining that they are paying too much in taxes?
Actually, no. According to the financial site NerdWallet, the 10 most profitable U.S. companies paid an average federal tax rate of just 9 percent last year. The group includes heavyweights like Chevron, Exxon Mobil, Apple, Microsoft, JPMorgan Chase and General Electric.
Why can’t we all pay the same rate? Ask your tax accountant.
Thinkprogress reports that the two companies with the lowest tax rates were these two oil companies: ExxonMobil paid $1.5 billion in taxes on $73.3 billion in earnings, a tax rate of 2 percent, and Chevronís tax rate was just 4 percent.
None of the companies paid anywhere near the 35 percent top corporate tax rate, providing more evidence to debunk claims that Americaís corporate tax rate is stunting economic growth and job creation.
In fact, American corporations pay one of the lowest effective corporate tax rates in the world. Mitt Romney, what do you have to say about that?
The study also calculated the overall amount the companies owed in both domestic and foreign taxes. This includes deferred taxes that will, theoretically, be paid in the future, once the companies bring foreign profits back to the United States. Apple, for instance, avoided $2.4 billion in American taxes last year by utilizing offshore tax havens.
If Republicans have their way, however, those deferred taxes may never be paid. Switching to a territorial tax system, a policy leading Republicans have considered, would allow corporations to repatriate foreign profits back to the United States nearly free of taxation, costing the country billions of dollars and thousands of jobs.
The effective corporate tax rate has been on its way down for decades, recently hitting a 40-year low even as corporate profits have reached an all-time high.
And here’s another interesting fact: many of the companies that have seen their tax rates fall in recent years, including Exxon Mobil, Verizon, General Electric and AT&T, are among the biggest spenders when it comes to lobbying, according to a recent analysis by the Sunlight Foundation.
Some interesting food for thought.
Photo Credit: romleys