With the national debt approaching $13 trillion and a record-breaking federal deficit, the Senate budget committee on Thursday approved an amendment that tells Exxon Mobil, Bank of America and other large, profitable corporations that paid no federal income taxes last year that it is time for them to start paying their fair share. The amendment by Senator Bernie Sanders would enact a windfall profits tax on large corporations that pay no federal income taxes. There are many of them. One out of every four large corporations in the United States paid no federal income taxes in 2005 on revenue of $1.1 trillion, the Government Accountability Office reported. From 1998 to 2005, two out of every three corporations in the United States paid no federal income taxes according, according to the report.
Forbes magazine reported that Exxon Mobil was able to avoid paying taxes "with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi." In fact, the most profitable corporation in the history of the world reported to the SEC that not only did it avoid paying federal income taxes it actually received a $46 million refund from the IRS. That is the same big oil company that had enough money to provide a $398 million retirement package to its outgoing CEO Lee Raymond just a few years ago. The same company is making its profits by gouging consumers at the pump by charging higher and higher prices for gasoline even when the demand is low and supply is high. That has got to stop.
Exxon is not alone. Forbes also reported that Bank of America paid no federal income taxes in 2009 and actually received a $1.9 billion tax refund although it reported a profit of $4.4 billion. That is the same Bank of America that had to be bailed out by American taxpayers in 2008.
Further, Citizens for Tax Justice reported in 2004 that 82 Fortune 500 companies "paid zero or less in federal income taxes in at least one year from 2001 to 2003. In the years they paid no income tax, these companies earned $102 billion in U.S. profits. But instead of paying $35.6 billion in income taxes as the statutory 35 percent corporate tax rate seems to require, these companies generated so many excess tax breaks that they received outright tax rebate checks from the U.S. Treasury, totaling $12.6 billion.
“Enough is enough,” Sanders said, “We can and must reduce the deficit in a way that does not harm the American middle class. Making sure that large and profitable corporations are not able to avoid paying taxes could significantly reduce the deficit.”
To watch the senator speaking about his amendment in the budget committee hearing, click here.