Dozens of US corporations paid no federal taxes in recent years, and many received government subsidies despite earning healthy profits, a new study showed Thursday.
The report by Citizens for Tax Justice and the Institute on Taxation and Economic Policy, which examined 280 US firms, found 78 of them paid no federal income tax in at least one of the last three years.
It found 30 companies enjoyed a negative income tax rate — which in some cases means getting tax rebates — over the three-year period, despite combined pre-tax profits of $160 billion.
“These 280 corporations received a total of nearly $223 billion in tax subsidies,” said the report’s lead author, Robert McIntyre, director at Citizens for Tax Justice.
“This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”
The study looked at 280 corporations from the Fortune 500 list, all of which were profitable in each of the last three years and provided sufficient data to analyst profits and taxes.
It found the average effective tax rate for the 280 companies in the study over the three years period was 18.5 percent, well below the statutory rate of 35 percent.
The study concluded that 78 of the companies had at least one year in which their federal income tax was zero or less.
Thirty companies had a negative income tax rate over the entire three year period on their combined pre-tax profits of $160 billion.
The study said banking giant Wells Fargo topped the list of corporations receiving the most in tax subsidies, getting nearly $18 billion in tax breaks in the last three years.
The report comes as US lawmakers are struggling to find ways to curb a bulging US deficit and are looking at possible revenue sources, despite opposition by conservatives to any tax increases.
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