Report: 49 of Fortune 500 companies had negative federal tax rate in Obama’s first year
During the Obama administration’s first year, 49 U.S. corporations in the Fortune 500 paid a negative rate of income tax, some even receiving rebate checks from the Treasury Department, a report from Citizens for Tax Justice disclosed Wednesday. In 2010, 37 Fortune 500 companies paid a negative federal tax rate.
Perennial offenders include energy companies Pepco Holdings, PG&E and El Paso, as well as General Electric.
Pepco’s average federal tax rate for the 2008–2010 period was negative-57.6 percent — a net loss for Uncle Sam. General Electric’s was negative-45.3 percent.
Citizens for Tax Justice tracked $222.7 billion in federal tax subsidies granted to 280 of America’s most profitable companies, which its report said “earned almost $1.4 trillion in pretax profits in the United States” between 2008 and 2010.
More than $114.8 billion went to just 25 of those companies, each receiving more than $1.9 billion.
The most taxpayer-subsidized industries were the financial, utilities, telecommunications and energy industries. Together, they received more than $123 billion over the three-year span.
The tax-reform advocacy group’s report also found that the 280 heavily subsidized corporations paid federal taxes at, on average, only about one-half the standard 35-percent corporate rate.
Some large companies’ profitability also seemed impacted to a large degree by government subsidies and contracts.
Boeing, for example, won a $35 billion contract to build new airborne tankers for the U.S. Air Force. The company reported pre-tax profits of $9.7 billion over the last three years, more than one-third of which ($3.5 billion) consisted of contract-related tax subsidies.
General Electric, similarly, received $8.4 billion in tax subsidies between 2008 and 2010. And mortgage lender Wells Fargo received the largest slice of the federal pie, at $17.9 billion.