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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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Today is the 78th birthday for Social Security, the flagship safety net initiative for our nation’s seniors, surviving spouses and children, and disabled workers.  Since first created in 1935, Social Security has kept millions of working Americans out of poverty, allowing them to live with dignity in difficult times of old age or the loss of spouses and parents.

As a new report from the Alliance of Retired Americans makes clear, the benefits of Social Security for North Carolinians in particular are obvious. Perhaps most notably, Social Security provided benefits to 1.2 million of our state’s seniors in 2012, effectively keeping almost 500,000 of them out of poverty. Almost 1 million of these recipients were women.

As Congress debates the future of the federal budget, it remains vitally important that seniors, children, and those with disabilities be protected from unnecessary and damaging cuts to the benefits provided by Social Security. Instead, Social Security needs to be protected and strengthened for future generations, and the best way to accomplish that goal is take a balanced approach to the federal budget, one that increases new revenues by closing the tax loopholes and special giveaways that allow corporations to evade paying taxes. According to Citizens for Tax Justice, more than $1 trillion in new revenues can be raised by closing these loopholes.

So on Social Security’s birthday, it’s important to remember: rather than ask Seniors and our most vulnerable to bear the brunt of reducing the federal budget deficit, it makes far more sense to take a balanced approach that raises new revenues through the elimination of these corporate loopholes.

It’s been a tough week for proponents of austerity economics—the misguided notion that government spending cuts and debt reduction magically produce economic growth. First, a team of respected mainstream economists completely discredited one of the foundational studies supporting the claim that excessive public debt holds back economic growth. Then, the International Monetary Fund—formerly a bastion of austerity economics—warned the United States that its budget cuts (including sequestration) had gone too far and would likely damage the nation’s economic growth.

Essentially, these developments repudiate the idea that high levels of public debt hurt economic growth along with the fantasy that cutting government spending help economic growth. Altogether, it’s been a bad week for austerity, as we can see below the fold….

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Deficit reduction graphIn the incessant yammering that continues about the federal budget deficit, one of the great underreported facts in recent months is that President Obama and Congress have actually already made enormous progress.

As Richard Kogan of the Center on Budget and Policy Priorities and Allan Freyer of the Budget and Tax Center have reported here and here, the fiscal cliff deal combined with other decisions have combined to slash the projected deficit over the next decade by $2.7 trillion. Indeed, with another $1.5 trillion in savings/tax increases, the country will be in a good place on this issue.

Today, Kogan highlights (see the graph at left) another related and underreported fact about the deficit reduction already enacted: the vast majority of it (70%) comes from program cuts.  Kogan’s data provides more compelling evidence that tax increases simply have to be a part of any new federal budget deal if the’re going to be a truly balanced approach to deficit reduction that doesn’t throw the country back into recession with Europe-like austerity.

Just in from the Budget and Tax Center Center

RALEIGH (March 27, 2013) — Critical federal funding for North Carolina’s schools, health care, clean water, law enforcement, and other key services would be slashed under the federal budget proposed by House Budget Committee Chairman Paul Ryan and passed by the U.S. House of Representatives last week, according to a new report released today by the non-partisan organization Center on Budget and Policy Priorities.

“Chairman Ryan’s budget would place the burden of deficit reduction squarely on the backs of North Carolina’s low-income and middle class families while providing a windfall in tax cuts to corporations and the wealthiest individuals,” said Allan Freyer of the Budget & Tax Center, a project of the North Carolina Justice Center. “Another round of deep funding cuts to our schools, public safety, and health would harm our families, communities and economy.”

Congressman Ryan’s budget would cut the part of the federal budget that supports Read More