Obama's new plan would push down the corporate tax rate and close loopholes. From GE to Verizon, these are the companies that’d be hit hardest by a tougher policy.
“Corporations are people, my friend,” Mitt Romney famously said last summer while speaking at the Iowa State Fair.
If only corporations paid taxes on their profits, as people must.
Even Romney, with his offshore accounts in the Cayman Islands, paid nearly $3 million in taxes on the $21.7 million he made in 2010.
In contrast, there are those U.S.-based multinationals that Citizens for Tax Justice dubbed the “Dirty 30”: behemoths that collectively earned tens of billions in profits between 2008 and 2010 but paid no taxes during that three-year period. These companies “so deftly exploited carve outs and loopholes in the tax code that all but one of them enjoyed a negative tax rate”—that is, they received money back from the U.S. Treasury.
Expect to hear plenty more about the messy corporate tax code over the coming months. President Obama declared it "outdated, unfair, and inefficient,” and proposed reducing it to 28 percent while cleaning out—or making permanent—some of the loopholes and exceptions it’s accumulated over the years. GOP presidential hopefuls want the rate lowered further and more of the exemptions made permanent.
The Dirty 30 have spent millions to get the tax code the way it is, and will likely spend millions more to keep it that way. In the three years studied by Citizens for Tax Justice, the 30 spent nearly half a billion dollars on lobbying Congress.
They’ve certainly profited from the friendly tax code. Together the 30, which include Wells Fargo, Mattel, Verizon, GE, and other well-known corporate brands, collected $10.6 billion in tax rebates during the three years Citizens for Tax Justice studied. Many of the companies on the list claim tax rebates while avoiding taxes altogether by parking profits in overseas shelters.
In total, the top 30 companies dodged $67.9 billion in taxes over three years, costs that are passed on to American taxpayers and small businesses that lack the teams of tax analysts necessary to exploit loopholes in the code. “Spread out over every individual tax filer in America, the taxes avoided by the Dirty Thirty break down to an average of $481 per taxpayer over the three years,” according to Citizens for Tax Justice.