Thursday, September 23, 2004

Group critical of tax breaks

Lists U.S. corporations that wound up paying nothing

By Marilyn Groppe
Gannett News Service

WASHINGTON - Eighty-two of the nation's 275 largest corporations, including Dayton, Ohio-based NCR Corp., paid no federal corporate income taxes or got refunds during at least one of the last three years.

Many others - including Cinergy, Fifth Third and Kroger - were able to significantly reduce their tax rate for those years, according to a report released Wednesday.

The report's authors are critical of the tax cuts available to corporations. "It didn't happen by accident," said co-author Robert S. McIntyre, director of Citizens for Tax Justice, a nonprofit group supported in part by labor unions. "It happened because companies lobbied to get the laws changed."

Some of the companies in the report are pushing for a "tax holiday" that would let them bring billions of dollars in foreign profits back into the United States at a reduced tax rate for a limited time. The tax break is part of a package of business tax breaks that lawmakers hope to approve before Congress adjourns for the year.

The Government Accountability Office, the investigative arm of Congress, found in a report earlier this year that a majority of U.S. corporations didn't pay any income taxes between 1996 and 2000. That report was based on a sample of corporate tax returns and did not identify what individual corporations paid.

The maximum federal corporate tax rate is 35 percent.

U.S. Rep. Lloyd Doggett, a Democrat from Texas who is on the House tax-writing committee, said the new report ought to outrage individual taxpayers and small businesses that do pay their taxes. "These multinational companies have got the best friends in Congress that money can buy," he said.

McIntyre used public filings to determine the profits made and taxes paid by 275 of the nation's largest corporations during the last three years.

"Clearly their study is politically motivated," said Angeline Protogere, a spokeswoman for Cinergy.

The Institute on Taxation and Economic Policy is a Washington, D.C.-based research and education organization focused on tax and spending issues. Its backers include the Ben and Jerry Foundation and the Ford Foundation.

Citizens for Tax Justice describes itself as fighting for the interests of ordinary people against special interests. Its funding comes primarily from individuals and unions.

The Nathan Cummings Foundation, a nonprofit that describes itself as promoting social and economic justice, paid for the report.

Protogere said Cinergy's tax rate ranged from 25 percent to 36 percent in the years looked at, not the 9.4 percent the group reported. She said the tax breaks the company gets "go toward helping to create the possibility for more jobs and more capital investment."

The tax breaks used included those that allow companies to write off investments in buildings and equipment faster than they wear out and offshore tax shelters.

General Electric had the largest tax reduction of the companies studied, nearly $9.5 billion or 74 percent.

Companies based in Greater Cincinnati and Northern Kentucky or with major operations there listed in the report (with effective 2001-03 tax rate) included:

• American Financial Group, 18.4 percent.

• Federated Department Stores, 32.7 percent.

• Fifth Third Bank, 17.2 percent.

• Gannett Co. Inc., the parent company of the Enquirer, 21 percent.

• Kroger, 16.6 percent.

• Omnicare, 20.8 percent.

• Procter & Gamble, 26.2 percent.

Keep on trucking
TLQ's aggressive work force 'all about communication'
Group critical of tax breaks
New CEO hired as revivalist
CBS fined record $550,000 for Jackson's Super flash
Enzyte ads challenged
Peale: Marge Schott's share of Reds sold
Local business summary
Dobbs speaks downtown against offshoring
'Serious' problems reported in Fannie Mae accounting
Business digest
Manufacturing conference may return to N.Ky.
Business People
Software maker to pay back $225M
Top wholesale baker files for bankruptcy
Court limits malpractice coverage