Washington - Today President Obama met with CEOs of multinational corporations to talk about the fiscal cliff. This list includes some of the CEOs from the “Fix the Debt” campaign, and some of the companies with the best tax avoidance strategies in the land. While the individual tax rates of the meeting participants vary, this group is particularly interesting because the companies’ average is far below the national average for corporations. For example, according to Citizens for Tax Justice, “General Electric’s (GE) annual SEC 10-K filing for 2011 (filed February 24, 2012) reveals that the company paid at most two percent of its $80.2 billion in U.S. pretax profits in federal income taxes over the last 10 years.”
The Financial Accountability and Corporate Transparency (FACT) coalition, made up of a broad range of state, national and international organizations, challenges the President to meet with small businesses about this issue in the same way. Most small businesses cannot use complex international tax structures to reduce their tax bills. The President should seek a balanced perspective—particularly since the President has acknowledged that it is the small businesses that drive job growth.
"Small businesses have been paying their fair share of taxes. It’s time that big businesses, including those tax dodgers who met with the President today, start paying their fair share. We need revenue-positive corporate tax reform that restores funding to invest in Main Street - including rehiring the teachers, first responders and infrastructure workers who have been laid off as a result of austerity-driven budget cuts. It’s the patriotic thing to do," said Lew Prince, Managing Partner of Vintage Vinyl Inc., in St. Louis, MO, and a leader in Business for Shared Prosperity.
The recent report of the Institute for Policy Studies, “CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks,” found that:
- The 63 “Fix the Debt” companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system.” Under this system, companies would not have to pay U.S. federal income taxes on foreign earnings when they bring the profits back to the United States.
- Of the 63 “Fix the Debt” CEOs at publicly held firms, 24 received more in compensation last year than their corporations paid in federal corporate income taxes.
Earlier this year, the President put forth a framework that states that the Administration will not support moving to a territorial tax system. Many experts believe such a move would basically amount to a permanent tax holiday, opening the doors to a massive shift of ALL profits offshore by multinational corporations, and not just some, which is the case now.
Still, talk of "revenue-neutral" corporate tax reform and meeting with these CEOs has caused alarm from those fighting to make sure corporations pay their share of taxes.
"Seeking advice on the debt from tax dodging companies who are driving the debt doesn't make much sense," said Nicole Tichon, coordinator of the FACT coalition. "The President campaigned on the idea that we need to stop rewarding companies that shift profits and jobs offshore. Closing the loopholes that make it possible for some of the most highly profitable corporations in the world to shirk their taxes should be where any real efforts to fix the debt should start."