03/05/2012 02:31 pm ET Updated Mar 05, 2012

U.S. Corporate Tax Rate Hit Ten-Year Low At End of 2011: Report

Nobody likes tax time. But for many companies, that annual burden is getting a lot lighter.

Corporations are enjoying not only record profits, but also record low tax rates.

The U.S. corporate tax rate plunged to its lowest level in 10 years at the end of 2011, according to the Financial Times. As U.S. companies make more of their money overseas, they are being taxed at lower rates in other countries, according to the FT.

The largest 1,500 public U.S. companies paid an average tax rate of 31.9 percent of pre-tax income during the fourth quarter of 2011 -- 10 percent lower than their average tax rate during the same period a year ago, according to figures from Morgan Stanley cited by the FT.

Corporate taxes as a percentage of corporate profits are at their lowest level in four decades. Though the top marginal corporate tax rate nominally is 35 percent, studies have found that the effective average corporate tax rate is closer to 25 percent after tax breaks. President Obama recently proposed closing corporate tax loopholes and lowering the top marginal corporate tax rate to 28 percent in order to bring in more tax revenue.

Many large companies pay very low taxes. General Electric has paid an average tax rate of just 2.3 percent over the past decade, according to a recent report. Industrial machinery companies, led by General Electric, paid a negative tax rate of minus 13.5 percent of their profits in federal income taxes between 2008 and 2010, and information technology companies paid taxes at a 2.5 percent rate, according to a recent analysis.

Google also has been saving about $1 billion per year by shifting much of its profit abroad through Ireland and the Netherlands to Bermuda in order to avoid paying taxes in the U.S., according to Bloomberg News.

Warren Buffett, the billionaire investor in charge of Berkshire Hathaway, recently said on CNBC that corporations should pay higher taxes. "It's a myth that American corporations are paying 35 percent or anything like it," Buffett told CNBC, referring to the top marginal corporate tax rate. "Corporate taxes are not strangling American competitiveness."

Even as corporate profits continue to hit all-time highs, their employees' wages are declining in general when inflation is taken into account, since high unemployment has given large corporations the flexibility to not raise wages.