Citizens for Tax Justice: Corporations Are Cheating the Government

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Some of the corporations in question have already spoken back, questioning CTJ’s report. A spokesperson for General Electric told Reuters that, “CTJ inaccurately uses the current tax provision — a book accounting number — to make definitive statements about our U.S. income taxes. This is not the same as the cash income tax that we pay for a given year.” Spokespeople for Boeing and Verizon said they complied with all tax laws.

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It’s possible, though, that corporations are obeying the letter of the law but violating its spirit. This is the gamesmanship that the complexity and patchwork nature of the tax code allows, and its the same gamesmanship that led to the creation of the alternative minimum tax. If anything, corporates have only been getting better at this game. Among other things, the White House Office of Management and Budget reports on sources of federal revenue, and their data show that since 1950, the share of total government receipts accounted for by the corporate income tax has decreased. Meanwhile, payroll taxes, which are split with individuals, have grown enormously, and the share accounted for by the individual income tax has stayed relatively flat.

In 2012, 46 percent of federal revenue came from the individual income tax, 35 percent from payroll tax, 10 percent from corporate income tax, and 9 percent from excise, estate, and other taxes.

Source: White House Office of Management and Budget

Source: White House Office of Management and Budget

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