Corporate America, including the U.S. telecommunications industry, is apparently having its way with the IRS.
A joint study by Citizens for Tax Justice and the Institute on Taxation and Economic Policy finds that 280 of America’s largest and most profitable companies received a whopping $222.7 billion in tax subsidies from 2008 through 2010 despite earning total pretax U.S. profits of $1.4 trillion. .
Some of those corporations, including Verizon Communications, have paid absolutely no income taxes in recent years, according to the study.
“This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author, commenting last week on the subsidies.
The non-profit organizations, Citizens for Tax Justice and the Institute on Taxation and Economic Policy, assert that the federal corporate tax code ostensibly requires large corporations to pay a 35 percent corporate income tax rate. Yet, on average, the 280 companies studied paid roughly only half of that amount, the report found.
Over three years, the telecommunications industry earned profits of $114.64 billion and paid $9.41 billion in taxes, representing a tax rate of just 8.2 percent, according to the report.
Pepco Holdings had the lowest effective tax rate of all companies studied at a negative 57.6 percent, found the report, “Corporate Taxpayers & Corporate Tax Dodgers 2008 – 10.”
The study also found that 56 percent of total tax subsidies went to just four industries: financial; utilities; telecommunications; and oil, gas and pipelines.
During the period 2008 through 2010, Wells Fargo received the most tax subsidies totaling $17.96 billion. But AT&T and Verizon weren’t far behind, receiving $14.49 billion and $12.33 billion in tax breaks, respectively, according to the study.
“Oil and gas companies are so profitable that even George W. Bush said they did not need tax breaks. He could have said the same about telecommunications companies,” the report noted. “And does anyone think that financial companies need bailouts from the IRS, too?”
Another interesting finding: Dozens of corporations have paid absolutely no federal income taxes in recent years, including Verizon in 2009 and 2010.
New York-based Verizon, however, disputes the findings.
“Verizon fully complies with all tax laws and pays its fair share of taxes,” the Boston Herald quoted Verizon spokesman Phil Santoro in a statement.
Santoro told the Herald that Verizon paid $1.79 billion in taxes over 2008-2010 and reported earnings of $5.25 billion over this same period.
To access the report, click here.