Dianne Feinstein: “A September 22, 2004 report by the Citizens of Tax Justice and the Institute of Taxation and Economic Policy reveals…”

“A September 22, 2004 report by the Citizens of Tax Justice and the Institute of Taxation and Economic Policy reveals that 82 of the 275 (30 percent) large and profitable, Fortune 500 companies studied paid no tax on federal income or received rebates from the Treasury in at least one year from 2001 to 2003. In the years they paid no income tax, these 82 companies reported $102 billion in pretax U.S. profits. Moreover, instead of paying $35.6 billion in income taxes as the statutory 35 percent corporate tax rate required, these companies received tax rebate checks from the U.S. Treasury totaling $12.6 billion. These rebates meant that the companies made more after taxes than before taxes in those no-tax years. Twenty-eight corporations enjoyed negative federal income tax rates over the entire 2001-2003 period. These companies, whose pretax U.S. profits totaled $44.9 billion over the 3 years, included: Pepco Holdings (-59.6 percent tax rate), Prudential Financial (-46.2 percent), ITT Industries (-22.3 percent), Boeing (-18.8 percent), Unisys (-16.0 percent), and CSX (-7.5 percent), the company previously headed by Secretary of the Treasury Snow. General Electric topped the corporate tax breaks recipients with $9.5 billion in tax breaks over 3 years. The average effective rate for the 275 Fortune 500 companies was only 17.2 percent in 2002-2003, though the corporate tax rate is 35 percent. How is this happening? Accelerated depreciation.…”