Bernie's been our Cassandra, warning us about things to come, and people weren't listening to him.
The term "corporate social responsibility" is fast becoming an oxymoron. A new report on how little big companies pay in taxes is further proof.
"A comprehensive, five-year study of 288 profitable Fortune 500 companies finds that twenty-six paid no federal corporate income tax over the five-year period; 111 paid no federal corporate income tax in at least one of the last five years, and one-third paid a U.S. tax rate less than 10 percent over the same period," says a recent study by Citizens for Tax Justice, a Washington, D.C.-based group.
Among the companies that paid not a single penny over five years, despite making huge profits, are household names such as Boeing, General Electric, Priceline.com, and Verizon.
"It's a sorry situation when most Americans can rightly say, 'I pay more in federal income taxes than General Electric, Boeing, Verizon, Pepco, Priceline, Duke Energy and twenty other big corporations, all put together!' '' said the head of Citizens for Tax Justice, Robert McIntyre, riffing off a bumper sticker the organization had when I interned there in the 1990s.
Overall, the 288 companies in the study paid a mere 19.4 percent of their profits in corporate income taxes -- far below the 35 percent rate on the books that Republican politicians use to incessantly complain that U.S. corporations are overtaxed.
The unwillingness of companies to fork over their fair share has consequences for all of us -- especially in these hard times of fiscal cliffs and sequestrations. The 288 profitable corporations studied by Citizens for Tax Justice enjoyed tax subsidies to the tune of a whopping $362 billion from 2008 to 2012. This is $362 billion that could have been instead spent on education, health care, and social services for the betterment of all of us.
And with all this tax-dodging, the burden of running the federal treasury has shifted to you and me.
"Corporate taxes paid for more than a quarter of federal outlays in the 1950s and a fifth in the 1960s," says the report. "In fiscal 2012, corporate taxes paid for a mere 7 percent of the federal government's expenses."
One of the more interesting revelations in the report is how corporations are masters at using arcane breaks to avoid paying any taxes at all. Take the deduction that companies get on stock options, in which they're able to subtract from their taxes the difference between the amount employees pay for a company's shares and the face value. Facebook used this one deduction to avoid paying any federal income tax at all in 2012 on a billion dollars of profit.
Even more brazen is the use of offshore tax havens, where companies engage in the legal fiction of registering in no-tax jurisdictions such as the Cayman Islands. Citizens for Tax Justice estimates that U.S. corporations end up not paying at least tens of billions of tax dollars using this charade.
What can be done to counter this outrage? Citizens for Tax Justice has good proposals: overseas profits need to be taxed to limit the use of tax havens; the use of stock options for tax avoidance needs to be curbed; and a strong alternative minimum corporate tax needs to be put into place to make sure that corporations are paying their fair share.
These are all great suggestions. The question is whether the current corporate-run, Republican-controlled Congress has the will to act on any of these.