ARE YOU KIDDING ME? Corporate profits have increased dramatically, yet big corporations are paying little to no taxes this year.
The Bureau of Economic Analysis shows that corporate profits hit an all-time high at the end of 2010, boasting an annualized $1.68 trillion in profit in the fourth quarter. At the same time, tax revenue from corporate receipts is down.
For example, General Electric made $5.1 billion profit from its American operations and $14.2 billion worldwide in 2010. Any guesses on how much they paid in U.S. taxes?
$0. Zero. Zilch. Not a penny. How is this possible?
As reported in the New York Times, G.E.’s “extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore.” But it’s not just G.E. Intense lobbying, pushing for loose tax laws enabled many companies to follow suit, “increasingly using a maze of shelters, tax credits and subsidies to pay far less.”
Look, in the mid-1950s, 30% of all federal revenue came from corporate tax receipts. In 2009, it was just 6.6%. Can you guess who’s paying more to make up the difference? (Hint: one corporate bigwig once called them ‘the little people.’)
This is important to our federal budget, but it’s also significant here in Oregon. Our tax code is linked to the federal system, which means that whatever loopholes exist in the federal system exist here, too.
Right now, as we’re looking at drastic cuts to education, public safety, and health services, big corporations are getting away with paying next to nothing. Or, as in G.E.’s case, paying nothing at all.