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Thirty companies, including Morris Township-based Honeywell International, made a tax advocacy group’s list of corporations it says that spend big bucks on lobbying and save millions in federal tax subsidies annually, according to a report released yesterday.
Honeywell used offshore subsidiaries and tax loopholes to pay a negative tax rate between 2008 and 2010, according to the report.
The company reported $5 billion in domestic profits and received $1.75 billion in federal tax subsidies, making its effective tax rate negative 0.7 percent the group reported, citing 2010 10-K reports for the company.
The global manufacturing conglomerate’s lobbying expenses totaled $4.7 million in 2008, $7 million in 2009, $6.5 million in 2010 and $4.9 million through 2011’s third quarter according to OpenSecrets.org, a website run by the Center for Responsive Politics.
Most years the company, which makes everything from home thermostats to aircraft parts, funneled its lobbying dollars towards the manufacturing and distribution industry.
Reached yesterday, Honeywell spokeswoman said the company obeys all applicable tax laws.
"Honeywell adheres to the tax laws of all jurisdictions in which it operates, is subject to ongoing review by tax authorities and is compliant in all respects," she said.
The U.S. Public Interest Research Group, a D.C.-based nonprofit, used tax data collected by the Citizens for Tax Justice and lobbying data from the Center for Responsible Politics to compile its "Dirty Thirty" list in a report titled "Representation Without Taxation."
The findings make a strong argument that the corporate tax code offers corporations too many tax loopholes, said Gideon Weissman, a New Jersey-based spokesman for the research group.
The report claims that most of the companies that made its list, including Verizon Communications, Wells Fargo and Consolidated Edison, avoid paying taxes on earnings by keeping money in "offshore tax havens," or subsidiaries.
"When corporations don’t pay, ordinary taxpayers and responsible small businesses are left to pick up the tab," he said.
Honeywell has five such subsidiaries, according to the study.
Four New Jersey congressmen, including Rep. Rob Andrews (D-1st Dist.), Rep. Rush Holt (D-12th Dist.) and Rep. Donald Payne (D-10th Dist.), currently co-sponsor the Stop Tax Haven Abuse Act (HR 2669), which would create new rules to deter offshore transactions designed to avoid U.S. income taxes.
"As New Jersey’s only member of the House Committee on Ways and Means, I know it is clear as day that we must reform the tax code to ensure a fair economic policy," said Rep. Bill Pascrell (D-8th Dist.).
Stacy Jones: 973-392-7969 or email@example.com.
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