Corporation That Paid Nothing In Taxes For 4 Years Tells Congress It Pays Too Much
Corporation That Paid Nothing In Taxes For Four Years Tells Congress It Pays Too Much In Taxes
By Travis Waldron, ThinkProgress
July 21, 2012
Over a four years period from 2008 to 2011, Corning Inc. was one of 26 companies that managed to avoid paying any American income taxes, even though it earned nearly $3 billion during that time. In fact, according to Citizens For Tax Justice, the company received a $4 million refund from 2008 to 2010. That didnít stop Susan Ford, a senior executive at the company, from telling the House Ways and Means Committee this week that Americaís high corporate tax rate was putting her company at a disadvantage:
American manufacturers are at a distinct disadvantage to competitors headquartered in other countries. Specifically, foreign manufacturers uniformly face a lower corporate tax rate than U.S. manufacturers, and virtually all operate under territorial systems which encourage investment both abroad and at home.
Ford told the committee that Corning paid an effective tax rate of 36 percent in 2011, but as CTJ notes, she is counting taxes on profits earned overseas that havenít yet been paid and wonít be unless the company decides to bring the money back to the United States. Corningís actual tax rate in 2011, according to CTJís analysis, was actually negative 0.2 percent.
The territorial system Ford testified in favor of would actually encourage the offshoring of profits earned by American companies, thereby reducing the amount they pay in taxes even more. And rather than helping remove a disadvantage that prevents companies from creating jobs, an economic analysis of such a tax system found that it could actually cost the United States as many as 800,000 jobs.
The United States does, indeed, have one of the highest marginal corporate tax rates in the world. In reality, however, few corporations pay it, and the nationís effective tax rate is far lower than the rate in other developed countries.
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