Republicans in the House want to balance the budget by denying more than 200,000 little children the opportunity to receive an early education through Head Start; reducing or eliminating Pell Grants for 9.4 million college students; eliminating primary health care services to 11 million Americans; and delaying Social Security benefits to half a million eligible Americans, among other things.
Before Congress cuts funding for Head Start, Social Security, and financial aid for college, we have got to make sure that large, profitable corporations are paying their fair share of taxes.
At a time when we have a $14.2 trillion national debt and a $1.6 trillion federal deficit, it is unacceptable that Exxon Mobil, General Electric, Bank of America, Chevron, Boeing, and other large, profitable corporations are not only avoiding paying any federal income taxes at all but have actually received huge refund checks from the IRS.
Loopholes in the tax code, offshore tax havens, tax breaks to companies that export American jobs to China, and other tax breaks have allowed giant corporations in America to receive billions in refunds from the IRS.
Meanwhile corporations are sitting on nearly $2 trillion in cash on hand, and big banks have nearly a trillion dollars in excess reserves parked at the Federal Reserve.
In 2005, one out of four large corporations paid no income taxes at all even though they collected $1.1 trillion in revenue over that one-year period.
Bank of America received a $1.9 billion tax refund from the IRS last year, even though it made $4.4 billion in profits and received a bailout from the Federal Reserve and the Treasury Department of nearly $1 trillion.
Boeing, which received a $30 billion contract from the Pentagon to build 179 airborne tankers, got a $124 million refund from the IRS last year.
Valero Energy, the 25th largest company in America with $68 billion in sales last year, received a $157 million tax refund check from the IRS and, over the past three years, it received a $134 million tax break from the oil and gas manufacturing tax deduction.
In 2008, Goldman Sachs only paid 1.1 percent of its income in taxes even though it earned a profit of $2.3 billion and received an almost $800 billion from the Federal Reserve and U.S. Treasury Department.
Last year, Citigroup made over $4 billion in profits but paid no federal income taxes, even though it received a $2.5 trillion bailout from the Federal Reserve and U.S. Treasury Department. Over the past five years, while General Electric made $26 billion in profits in the United States, it received a $4.1 billion refund from the IRS. According to a New York Times article, "G.E. is so good at avoiding taxes that some people consider its tax department to be the best in the world, even better than any law firm's."
Chevron received a $19 million refund from the IRS last year, even though it made $10 billion in profits in 2009.
ConocoPhillips, the fifth largest oil company in the United States, which made $16 billion in profits from 2006 through 2009, received $451 million in tax breaks through the oil and gas manufacturing deduction.
Ford's federal income tax rate was just 2.3 percent in 2009 even though it made $3 billion in profits.
Over the past five years, Carnival Cruise Lines made over $11 billion in profits, but its federal income tax rate during those years was just 1.1 percent.
Over the last five years, Southwest Airlines paid a federal income tax rate of 6.3 percent, Yahoo paid 7 percent, and Prudential Financial paid 7.6 percent.
Shared sacrifice means that corporate America must play its part in reducing the deficit.
The time has come for corporate America to start paying its fair share. We simply cannot balance the budget on the backs of the elderly, the sick, the middle class, little kids and the most vulnerable people in our society.
Here are just a few things we could do to make sure corporations pay their fair share:
1. End abusive and illegal offshore tax shelters.
Each and every year, the United States loses an estimated $100 billion a year in tax revenues due to offshore tax abuses by the wealthy and large corporations.
The situation has become so absurd that one five story office building in the Cayman Islands is now the home to more than 18,000 corporations. That is wrong.
The wealthy and large corporations should not be allowed to avoid paying $100 billion a year in taxes by setting up tax shelters in the Cayman Islands, Bermuda, the Bahamas or other tax haven countries.
2. End tax breaks for big oil and gas companies. Exxon Mobil, the most profitable corporation in the history of the world, not only paid nothing in federal income taxes in 2009, but received a $156 million tax refund from the IRS, according to their own shareholder report. Repealing tax breaks for big oil and gas companies as President Obama has recommended would raise more than $35 billion in revenue over the next decade.
3. Stop giving tax breaks to companies that ship jobs overseas. Today, the U.S. government is actually rewarding companies that move U.S. manufacturing jobs overseas through loopholes in the tax code known as deferral and foreign source income.
This is unacceptable. During the Bush years, the U.S. lost nearly 30 percent of its manufacturing jobs and since 2001, 50,000 manufacturing plants have been shut down. Today, corporations in this country are outsourcing jobs to China and other low wage countries where workers are paid pennies an hour. The last thing we should be doing is providing a tax break to companies that move jobs overseas.
Ending these tax loopholes could raise more than $400 billion over a 10-year period.
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