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NEW BRUNSWICK, January 18, 2012 – With the second anniversary approaching of the Supreme Court’s decision in the Citizens United case – which opened the floodgates to corporate spending on elections – NJPIRG and Citizens for Tax Justice reveal 30 corporations, including one based in New Jersey, that spent more to lobby Congress than they did in taxes.
The report, Representation without Taxation: Fortune 500 Companies that Spend Big on Lobbying and Avoid Taxes takes a close look at one area where corporate power and influence is on full display: corporate tax policy. By exploiting loopholes and special provisions in the tax code, 280 consistently profitable Fortune 500 companies paid about half the statutory corporate tax rate while spending $2 billion to lobby Congress on tax policy and other issues. The report also looks at the “Dirty Thirty” particularly aggressive tax avoiders that spent more on federal lobbying than income taxes between 2008 and 2010. Twenty-nine of these corporations actually received a net tax rebate during the three year period of the study.
One of the thirty companies in the report is based in New Jersey – Honeywell International, located in Morristown NJ. Honeywell International payed an effective federal tax rate of negative 0.7 percent, on its nearly $5 billion in profits between 2008 and 2010. In other words, Honeywell received $33 million from the federal government over that period. Meanwhile, it spent $18.3 million lobbying.
“The fact that so many corporations can spend more money lobbying than they pay in taxes makes a mockery of our tax code and our democracy,” said NJPIRG Program Associate Gideon Weissman.
The report takes a deeper look at one of the most egregious ways corporations skirt taxes – by shifting profits legitimately earned in America to offshore tax havens, where they are subject to little, if any taxes. At least 22 of the thirty companies studied had subsidiaries in tax haven countries.
Solutions do exist - the Stop Tax Haven Abuse Act could permanently end the practice of tax havens. Four New Jersey Congressmen are currently cosponsors of the bill. Congressmen Robert Andrews, Rush Holt, Bill Pascrell, and Donald Payne.
Congressman Pascrell, from New Jersey’s 8th District, said “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.” He continued, “I'm a proud original sponsor of the Stop Tax Haven Abuse Act (HR 2669) because it will close the loopholes that too many multinational corporations use to ship American jobs overseas. Common sense reform like this bill will grow our economy and create jobs that will help middle class Americans.”
Congressman Holt, from New Jersey’s 12th District, said “New Jersey taxpayers deserve fairness. NJPIRG's report "Representation Without Taxation" illustrates the need to bring reform to the corporate tax code. Passing the "Stop Tax Haven Abuse Act" will end the corporate practice of stashing profits overseas to avoid paying taxes, and is an important step towards making sure that corporations pay their fair share like the rest of us.”
“Corporations should not be able to shirk their tax burden by using gimmicks to game the tax code,” continued Weissman. “When corporations don’t pay, ordinary taxpayers and responsible small businesses are left to shoulder pick up the tab.”
The “Dirty Thirty” companies all told made $163.7 billion in profits while paying zero dollars in federal income taxes and collecting a total of $10.6 billion in various tax rebates. Meanwhile, they collectively spent $475.7 million in lobbying expenses for the three year period.
“On the second anniversary of Citizens United, corporate tax dodging should be seen as a cautionary tale. In the wake of that disastrous decision, special interest influence will only continue to grow and policy will reflect that unless we get corporate money out of elections,” Weissman added.
CTJ director Robert McIntyre issued the following statement: “Large majorities of Americans say corporations pay too little in taxes, and yet members of Congress take no action to close corporate tax loopholes. Lawmakers insist that there is a budget crisis and that Americans must sacrifice some of the essential public services they depend on. But lawmakers do nothing to get corporations to pay their fair share in taxes. The most plausible explanation for lawmakers ignoring their constituents on this issue is the power of corporate money in politics. Campaign contributions and highly-paid lobbyists give corporate executives a louder voice than the millions and millions of working families who wonder why they pay more in taxes than GE, Boeing, Wells Fargo, Verizon, and dozens of other huge, profitable corporations, all put together.”
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