-Caveat Lector-
Friday October 20 6:35 PM ET
Many Large U.S. Companies Paid No Taxes -- Study
By Kristin Roberts
NEW YORK (Reuters) - Some of the largest U.S. companies paid no
income tax between 1996 and 1998 despite earning billions of dollars
during those years, according to a recent study.
Drugs giant Pfizer Inc., banking group J.P. Morgan & Co. and automaker
General Motors Corp. were among the 41 companies that not only paid
zero tax but received $3.2 billion in rebate checks, the study found.
The study, released this week, was done by the Institute on Taxation and
Economic Policy, a nonprofit organization based in Washington. The
institute is associated with the Citizens for Tax Justice, another nonprofit
organization that supports tax reform and says the U.S. tax system favors
the wealthy.
``With significant help from Congress, corporations appear to be finding
ways around the tax reforms adopted in 1986,'' said Robert S. McIntyre, a
principal author of the study, in reference to an overhaul of the U.S. tax
system 14 years ago meant to close many loopholes.
The study analyzed 250 companies, their profits and the amount of taxes
paid during the years of 1996, 1997 and 1998 -- a period when U.S.
corporate profits grew more than 23 percent, according to government
statistics.
Under the federal tax code, corporations pay 35 percent of their profits in
income tax. The average tax rate, or the ratio of taxes to profits, is often
much lower due to tax credits and write-offs allowed under law.
The average tax rate in 1996, for example, was 25.8 percent, according to
data from the Treasury Department (news - web sites)'s Office of Taxation.
The study found that the 41 companies reported $25.8 billion in pretax U.S.
profits. With a 35 percent tax rate, they would have paid some $9 billion in
taxes. Instead, they received rebates, the group said.
More than half of the companies, or 133, of those studied paid less than
half the statutory tax rate in at least one of the three years, the institute said.
Some of the companies named in the group's report took issue with the
study's methodology. But industry and policy analysts on Wall Street noted
that companies often pay lower tax bills thanks to allowances that have
been under federal law for ages.
General Motors said did not take into account the taxes corporations paid
years ago that put them in a credit position during the period of the study.
``You're in a credit position not because somebody's giving you something
but because you've already paid,'' said Mark Tanner, spokesman at GM.
``The key point to make about GM is that we pay taxes,'' Tanner said,
noting GM paid $2.4 billion in taxes in 1999. ``We have a positive account
balance with the IRS, which consists of tax prepayments that were paid in
prior years as well as tax credit carryforwards.''
Indeed, industry and policy analysts on Wall Street noted that companies
often pay lower tax bills thanks to allowances that have been under federal
law for ages that include credits for things such as research and
development.
One example is a long-standing provision in the tax code allowing
companies to deduct gains from employee stock options. A corporation
will, for instance, issue employees options that vest over three years. After
that period, the employee can exercise those options at the previously
agreed price.
The difference between the price actually paid and the price of that stock
on the market is recorded as compensation by the corporation.
``That's a major compensation deduction for companies without the cash
outflow. That will certainly lower your tax base,'' said Kevin Johnson, partner
at accounting firm Silverman Linden Higgins LLP.
Of the 250 companies studied, the institute said it found 233 of them had
received stock-option benefits over the 1996-1998 period, lowering their
taxes by $25.8 billion.
------------------------------------------------------------------------
}}}> ANOMALOUS RADIO <{{{ - Techno, Ambient, Talk (33k+)
http://www.live365.com/cgi-bin/directory.cgi?autostart=anomalous
}}}> RADIO ANOMALY <{{{ - Techno, Ambient, Jazz (Cable, DSL)
http://www.live365.com/cgi-bin/directory.cgi?autostart=stevew168
Anomalous Images and UFO Files
http://www.anomalous-images.com
<A HREF="http://www.ctrl.org/">www.ctrl.org</A>
DECLARATION & DISCLAIMER
==========
CTRL is a discussion & informational exchange list. Proselytizing propagandic
screeds are unwelcomed. Substance—not soap-boxing—please! These are
sordid matters and 'conspiracy theory'—with its many half-truths, mis-
directions and outright frauds—is used politically by different groups with
major and minor effects spread throughout the spectrum of time and thought.
That being said, CTRLgives no endorsement to the validity of posts, and
always suggests to readers; be wary of what you read. CTRL gives no
credence to Holocaust denial and nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://peach.ease.lsoft.com/archives/ctrl.html
<A HREF="http://peach.ease.lsoft.com/archives/ctrl.html">Archives of
[EMAIL PROTECTED]</A>
http:[EMAIL PROTECTED]/
<A HREF="http:[EMAIL PROTECTED]/">ctrl</A>
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
