Tag: Corporate Income Tax

Profiles in tax avoidance: IBM

October 23, 2013 at 3:48 pmCategory:NC Budget and Tax Center

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The government shutdown finally ended last week, but the fight for a balanced approach to the federal budget continues. As part of the deal struck last week, Congress agreed to negotiate a comprehensive budget agreement that addresses sequestration and opens the door for new revenues. Perhaps the best potential source of new revenues comes from reining in the special tax loopholes, deductions, and outright giveaways that allow too many corporations to avoid paying their fair share in taxes.

Over the last year, we’ve profiled some of these tax loopholes, along with the corporations that use them to avoid their responsibilities. This month’s issue takes a look at IBM, which earned $45 billion in profits over the past five yeas, and managed to shelter almost $20 billion of those profits in offshore bank accounts to avoid US taxation. As a result, Big Blue managed to lower its actual effective tax rate to 5.8 percent, well below the statutory corporate tax rate of 35 percent.

As long as corporations like IBM are able to avoid paying their taxes, the rest of us will be asked to pick up the tab for addressing our nation’s budget challenges through spending cuts to key investments that grow our economy and protect our most vulnerable.

For more details, see the profile on IBM.

New revenues play essential role in balanced approach to federal budget, reducing poverty

September 27, 2013 at 4:07 pmCategory:NC Budget and Tax Center

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Poverty continues to impact 1 in 5 North Carolinians, according to 2012 Census Bureau Data released last week. The extent of poverty would be far greater without the safety net and work supports, however. This post is part of a blog series that will explain how the new poverty data demonstrates the important role public programs play and the need for continued support. Read the other posts in this series on SNAP, Social Security, Unemployment Insurance, and the EITC.

As poverty continues to grow across many of North Carolina’s communities, Congress should reject federal budget policies that ask our poorest and most vulnerable citizens to bear the greatest load in putting our nation’s fiscal house in order. Congress needs to chart a course away from asking poor children, hungry seniors, and working families to solve our nation’s budget challenges on their own—through spending cuts to key investments in food assistance, early childhood education, and healthcare—and instead, take a balanced approach to the federal budget, one that includes new revenues and does not increase poverty.

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Profiles in tax avoidance: DuPont

August 30, 2013 at 2:59 pmCategory:NC Budget and Tax Center

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***This post was authored by Jelicia Diggs.

As Congress debates reforming the federal tax code, it is critically important to raise new revenues that can support our nation’s long-term economic recovery.  One excellent source of new revenues involves the billions of dollars in corporate tax loopholes, deductions, credits, and outright giveaways that allow too many multinational corporations to avoid paying their fair share of taxes.  This year, N.C. Policy Watch and the N.C. Budget and Tax Center are focusing on federal corporate tax reform as a means of highlighting a frequently under-reported fact: Namely, not all American corporations are paying the statutory tax rate and therefore are failing to support fiscal responsibility and the investments that are needed for a strong economy.

To underscore this message, we are shining a light on a number of corporate tax avoiders with strong connections to North Carolina by summarizing:

  1. the size and scope of their businesses,
  2. the taxes they have avoided paying in recent years, and
  3. the methods they use to accomplish this.

Click here to read previous profiles of Duke Energy, Merck & Co. and International Paper.

Company: DuPont

Background and North Carolina connections:

Founded over two centuries ago as a gunpowder mill, DuPont has grown into one of the top five largest chemical companies in the world. In fact, Fortune Magazine ranks Dupont as one of the nation’s “Most Admired Companies” and second in the world among chemical companies. DuPont is headquartered in Wilmington, Delaware.

DuPont is best described as a global science company that offers products and services in fifteen industries such as automotive, chemical, medical, and energy. With diverse industries in more than 90 countries, this company puts out to introduce hundreds of products and patents every year. In 1968 DuPont opened its fourth United States location in Fayetteville, North Carolina. The Fayetteville plant manufactures a variety of fibers, new films and specialty chemicals needed by businesses, the military, and consumers.  The Fayetteville location employs just over 900 employees.

Over the past several years, DuPont has experienced a successful recovery from the Great Recession, and is continuing to generate significant profits.  After cutting more than 17,000 jobs in 2010 due to the recession, DuPont has since managed to regain its dominant footing in the chemical industry. The company currently has more than 150 research and development centers and more than 70,000 employees worldwide and $49.7 billion in assets. Forbes.com reported last year that DuPont’s CEO Ellen Kullman has received an average compensation of around $9.7 million per year, for each of the last six years.

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Fayetteville Observer columnist pans conservative priorities

July 22, 2013 at 8:57 amCategory:Uncategorized

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Myron Pitts of the Fayetteville Observer has a worth-reading column in this morning’s paper in which he says the conservatives running the state may come to regret the extreme path they’ve followed this session.

“For sure, the wealthiest folks in the state will do quite well in the new scenario. With their top tax rate of 7.75 percent replaced with a regressive, flat tax, they stand to make thousands more per year in personal income. The corporate tax rate has been reduced, too, from 6.9 to 6 percent.

But should we be surprised by this shift of money up the ladder? The state’s budget director, Art Pope, is very rich with money he made off the very poor, through his discount retail chains, such as Roses and Maxway. Read More…

Editorial: Tax plans hurt NC’s poorest workers

July 8, 2013 at 9:14 amCategory:Uncategorized

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This is from this morning’s Fayetteville Observer:

“The state’s fiscal year began last week, but it did so without benefit of a new budget. That’s on hold until the House and Senate can agree on much-needed changes in the tax code.

Unfortunately, the two legislative bodies are miles apart in their tax plans and appear determined to stay that way for a while. Until they settle on the way they’ll tax us, they can’t move forward on the way they’ll spend the money.

The Senate did blink last week. It passed a watered-down version of its tax plan Wednesday. But even that modified bill may be stronger medicine than many state interests want to take. It eliminates corporate income taxes over the next few years and cuts personal income taxes to a flat 5.75 percent.

Legislative analysts conclude that the measure will be most beneficial to the wealthy. Read More…