What about corporate taxes?

What about corporate taxes?
Jenny Brown
March 2001

"We are working in consumption breeding hells while our exploiters are rolling in luxury," said IWW signs at a cigar workers strike in 1913, the year the income tax was enacted. The inequality we are experiencing now rivals that in the U.S. in 1913. Bill Gates, for example, holds more wealth that the bottom 40% of Americans combined. The average CEO makes 326 times what the average production worker makes. As taxpayers, we work all of January just to pay off our share of corporate welfare, the $250 billion the U.S. treasury shells out to corporations every year.

Meanwhile, corporate income taxes, which are supposed to be 35%, are widely evaded. A study in October by Citizens for Tax Justice found that many large corporations pay no taxes. In a New York Times report (October 20, 2000) on the study they list 17 corporations that paid less than 3% in taxes from 1996-1998. Of these corporations, eight had a negative tax rate, that is, they received more subsidies than they paid in taxes.

Goodyear, for example, was refunded $65 million during this period. Texaco got $304 million, for an effective tax rate of negative 8.8 percent. MCI Worldcom got $61 million. Pfizer pharmaceuticals paid $104 million in taxes, which sounds like a lot, but they profited 3.37 billion in the same period, so it worked out to a tax rate of 3.1 percent. And Microsoft and Cisco Systems "paid no federal income tax in 1999 because stock options exercised by employees wiped out profits for tax purposes," according to the article. ("Study Finds that Many Large Companies Pay No Taxes" by David Cay Johnson, October 20, 2000, New York Times.)