Corporate Tax Dodgers: The Dirtiest Dozen

Written by Becky Tarbotton

Topics: Climate, Coal, Finance, Oil

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Federal Income Tax Rate for Dirty DozenCo-authored by Matt Leonard

Billionaire real estate investor and legendary tax evader Leona Helmsley famously said: “Only the little people pay taxes.” It turns out Helmsley was all too right.

Last month’s discovery that GE paid zero in taxes in 2010 has exploded across the news. But GE is not alone. Rainforest Action Network reviewed the top four banks, oil and coal companies in the country, and found that all of them are gaming the system. In fact, Bank of America, Citi, Massey Energy and Chevron have also all paid zero in federal income taxes this year or in year’s past.

We reviewed 12 of the dirtiest corporate tax dodgers: Bank of America, Citi, JPMorgan, Wells Fargo, Chevron, BP, Shell, Exxon, Massey Energy, Alpha Natural Resources, Peabody Energy and Arch Coal. These 12 banks, oil and coal companies are responsible for foreclosing on millions of people’s homes and polluting our air, water and climate. At the same time, we found that they pay next to nothing into a tax system that provides the very services that protect the homeless, the sick and our environment.

As the graphic below shows, banks, oil and coal companies are making billions in profits annually and paying much less than their fair share in taxes. In fact, the top four oil companies in the country made $1.26 trillion in gross revenues and paid a shocking 2.04% average tax rate.

Dirty Corporate Tax Dodgers Infographic

Click here to see graphic at full size

If just the top banks, oil and coal companies actually paid the IRS corporate tax rate of 35%, they would be giving back $62 billion this tax season. That is almost double the current $38 billion proposed federal budget cuts.

To add insult to injury, while these multi-billion dollar industries are raking in the profits and evading their taxes they were also paying millions in CEO compensation and lobby dollars. These corporations are happy to pay large sums to manipulate our democracy but aren’t so interested in paying to support that democracy.

So, let’s get one thing straight: America is not broke, and these dirty corporations don’t need any more handouts, bailouts, or subsidies. We don’t have a money problem, we have a priorities problem. We’re slashing billions from our budget, much of which will come out of social services and environmental protections, while allowing corporate giants to slip ever-increasing profits into offshore accounts.

By reversing years of tax giveaways to the largest corporations, Congress could raise trillions in revenue not only covering our budget deficit but also enhancing education, health and environmental programs that safeguard our families and our future.

Pissed off? You should be. It’s time corporate tax dodgers pay their fair share.

8 Comments For This Post I'd Love to Hear Yours!

  1. Carol says:

    This is just crap! I don’t care how much money they say they give to charity or how much money they say help their consumers “save”. We as the American people have the right to make these men and women pay! I’m so sick of hearing how they claim to help so many people and yet they are monetarily strangulating the real American people. I say real because a real American pays their taxes. And these guys think they are above the rest of us. I can’t believe how the government doesn’t even do anything about this to address the true and real and very valid problems with this whole picture!!!!

    I think we should start a campaign call “MAKE THEM PAY!” and make the government MAKE THEM PAY!!! This is why I hate corporate america, the are vicious dogs who care nothing about anything except making a buck off those they hurt and were talking MILLIONS of people – were talking US the American people.

  2. Harrison Picot says:

    “It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.”

    Joseph Stiglitz, Nobel laureate in economics Vanity Fair “Of the 1%, by the 1%, for the 1%”

    No business would allow its employees to accept money from vendors, but that is exactly how congress works; they accept bribes (campaign funds) from business, and reward the givers with the common wealth. Any business would fire that employ, and so must you if you expect change,

  3. Padremellyrn says:

    You know I wouldn’t care if they only paid %2 or so in taxes (which, yes I know works out to millions) but when everyone else is coughing up more and more while these people are cutting benifits, laying off workers “too make more profit than ever”, destroying the economy and the environment, this is ridiculous and it’s not really news. Then the first thing these greedy bastards do is ‘demand lower wages and no benefits’, hire People like Scot Walker who would make the Nazis green with envy they way they have become dictator, then piss and moan because no one is ‘buying’ thier products, which often are little more than recycled garbage.

    When are they going to wake up and realise that 1) if no one has a job, then all the manufacturing in the world is worthless because no one can buy thier trash, and 2) eventually the people get tired of this and start revolutions. All we need to do is look at Egypt, Libby, Tunisia and the other places and we see the future here.

    Lets fire the idiots in office who have supported this Corporate Carpet baggers for the last 20 years or more, and then give the Corporation an option. Either you pay your taxes, or you take your punk butt and go live in those countries you think are so great because you can have workers that are being payed sub-subsistant wages, and everything you send here will be subject to import fees.

  4. DJG says:

    This sounds awfully unlikely. Chevron’s annual statement, for instance, says they paid something like 40% in income taxes last year, not to mention all the sales, use and property taxes they pay. Can you elaborate on your investigation beyond “we reviewed” them.

  5. Martha says:

    DJG, you can view our data sources here: http://ran.org/taxdodgersdata. The tax rate information was based on data from SEC filings (company 10-k).

  6. Matt Leonard says:

    DJG – thanks for asking. Accounting is tricky business – and all the more so for complex corporate balance sheets.

    Companies cheat on their taxes in many ways – the biggest schemes involving shuffling around profits, expenses, and tax credits amongst various countries. They claim profits in countries where taxes are low, claim expenses in countries where they get the most tax credit; and then maybe use a few tax havens in the Cayman Islands for good measure.

    Chevron claims a “40% tax rate” – but they don’t really give much details on how they came up with that figure. Some of that certainly includes taxes they paid in other countries, and possibly sales tax, property taxes etc. But they are using some fuzzy math, as most corporations do who are trying to make convincing arguments to lower their taxes further.

    In the simplest sense – income taxes are generally based on your total pre-tax income. For corporations – the statutory rate is 35%. Most people would agree that Chevron should pay Federal Income Tax – the country where Chevron is headquartered, where their executives are, and where they obviously do a tremendous amount of business. But RAN looked the amount of Federal Income Tax they actually paid – did the math based on their profits – and this is the pathetically low rate that RAN uncovered.

    I pay, you pay, and it’s time that Chevron paid too.

  7. Ethan Lipman says:

    Becky and Matt,

    I quite like what you’ve created here… and I’ve referenced it in my personal blog post http://etlipman.blogspot.com/2011/04/end-oil-subsidies.html, but I wanted to verify that 2% oil number for actual corporate taxes. (one needs to be a skeptic while consuming content on the internet)

    There was a brief academic exchange between Martin A. Sullivan
    http://www.tax.com/taxcom/taxblog.nsf/Permalink/MSUN-8DVR7U?OpenDocument
    and Robert S. McIntyre and Steve Wamhoff, Citizens for Tax Justice
    http://www.tax.com/taxcom/features.nsf/Articles/A276A2A68C3C993B8525783300510DDF?OpenDocument

    and neither comes to a conclusion the oil companies pay only 2%.. strangely, exxon is reported by Citizens for Tax Justice to have paid -34% in 2009 which I don’t understand at all.

  8. Martha says:

    Hi Ethan-

    Sorry your comment got lost in our spam filter for a little while, must have been all those hyperlinks. The 2.04% number was an average based on the federal income taxes paid by each of these four companies. You can view our data sources here: http://ran.org/taxdodgersdata. The tax rate information was based on data from SEC filings (company 10-k). The above comment by Matt goes into a bit more detail.

Trackbacks For This Post

  1. BankTrack BLOG » Corporate tax dodgers: The dirtiest dozen
  2. Chevron CEO John Watson Interview With WSJ Removes All Doubt That He’s An Out Of Touch Hack » Rainforest Action Network Blog
  3. The Dirtiest Dozen at Merge Left
  4. Martha G Pettit » Dirty Corporate Tax Dodgers
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