Politics

Report: 49 of Fortune 500 companies had negative federal tax rate in Obama’s first year

Betsi Fores The Daily Caller News Foundation

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.

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