Corporation that Paid Nothing in Taxes for Four Years Tells Congress it Pays Too Much in Taxes

Travis Waldron
Think Progress / News Report
Published: Saturday 21 July 2012
“Ford told the committee that Corning paid an effective tax rate of 36 percent in 2011, but as CTJ notes, she is counting taxes on profits earned overseas that haven’t yet been paid and won’t be unless the company decides to bring the money back to the United States.”
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Over a four years period from 2008 to 2011, Corning Inc. was one of 26 companies that managed to avoid paying any American income taxes, even though it earned nearly $3 billion during that time. In fact, according to Citizens For Tax Justice, the company received a $4 million refund from 2008 to 2010. That didn’t stop Susan Ford, a senior executive at the company, from telling the House Ways and Means Committee this week that America’s high corporate tax rate was putting her company at a disadvantage:

American manufacturers are at a distinct disadvantage to competitors headquartered in other countries. Specifically, foreign manufacturers uniformly face a lower corporate tax rate than U.S. manufacturers, and virtually all operate under territorial systems which encourage investment both abroad and at home.

Ford told the committee that Corning paid an effective tax rate of 36 percent in 2011, but as CTJ notes, she is counting taxes on profits earned overseas that haven’t yet been paid and won’t be unless the company decides to bring the money back to the United States. Corning’s actual tax rate in 2011, according to CTJ’s analysis, was actually negative 0.2 percent.

The territorial system Ford testified in favor of would actually encourage the offshoring of profits earned by American companies, thereby reducing the amount they pay in taxes even more. And rather than helping remove a disadvantage that prevents companies from creating jobs, an economic analysis of such a tax system found that it could actually cost the United States as many as 800,000 jobs.

The United States does, indeed, have one of the highest marginal corporate tax rates in the world. In reality, however, few corporations pay it, and the nation’s effective tax rate is far lower than the rate in other developed countries.



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ABOUT Travis Waldron

Travis Waldron is a reporter/blogger for ThinkProgress.org at the Center for American Progress Action Fund. Travis grew up in Louisville, Kentucky, and holds a BA in journalism and political science from the University of Kentucky. Before coming to ThinkProgress, he worked as a press aide at the Health Information Center and as a staffer on Kentucky Attorney General Jack Conway’s 2010 Senate campaign. He also interned at National Journal’s Hotline and was a sports writer and political columnist at the Kentucky Kernel, the University of Kentucky’s daily student newspaper.

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32 comments on "Corporation that Paid Nothing in Taxes for Four Years Tells Congress it Pays Too Much in Taxes"

Lightning Joe

July 24, 2012 12:09pm

Ann Arbor Liberal:

If you think people are "finally getting it," you should go to the Amazon discussion groups and get a load of the seemingly endless thread on "What exactly do people have against hippies/liberals?"

Most of the posters there seem hard-Reich in their attitudes to helping people other than themselves, and equally ignorant as to just what Hippies and Liberals were/are about -- besides doing drugs and having free sex with anything that will hold still (really!).

I've been around with them a couple of times, but I've got other projects going. If you want to give it a shot... they never seem to learn, and new Reichies are coming all the time.

If you do go, get ready for endless cascades of FAUX Noise-driven hate -- hate that calls Liberals hateful for "wanting everyone else's money."

ironhead

July 23, 2012 8:24am

Much of this discussion misses the point. Wealthy people who run the corporate world understand that they need infrastructure in order to survive. However, they find it absurd to pay to provide it when they can get paid FOR providing it. The trick is to lend governments the money that they don't pay in taxes. This is done through the purchase of government bonds whose income is tax-free. Deficit spending, occasioned by lowering taxes, establishes a market for these investments. The hue and cry over deficits results from concern that burdensome debt affects the "full faith and credit" of the government and thereby the security of the investments. Should a government default on its obligations, the investments become taxes in a sense. This goes to the heart of the debate over deficits. Reducing national debt increases investor confidence in government bonds. Reducing debt by demanding cuts to "entitlements" shifts the spotlight away from this cozy - and profitable - arrangement.

mcnatenick

July 22, 2012 5:01pm

Going after individual Corporations won't get us a fair tax lcode. The answer lies at the feet of our US House of Representitives. The Representitives in our Individual districts need to have some sunlight shined on their voting records. The way the present House has obstructed so many bills designed to protect the so-called middle class, should give us a clue as to who is working for the people. Clean-up the Congress and we have a chance to get a fair tax code.

AnnieMO

July 22, 2012 12:14pm

If you haven't heard of ALEC, here's a bit of information on them. They are the brain child of the Koch brothers, and they work directly to enhance the profits of the rich and corporations...and our legislators let them.

By Zaid Jilani, Republic Report | Report

The American Legislative Exchange Council (ALEC) is the most powerful corporate front group you’ve never heard of. The group, sponsored by some of America’s largest corporations, writes legislation that tends to benefit its donors and ships these template bills to state legislatures for compliant lawmakers to pass.

ALEC has pushed for legislation doing everything from attacking workers’ collective bargaining rights, to making it harder for low-income Americans to vote, to the Stand Your Ground law that could prevent justice in the Trayvon Martin case.

One of the reasons ALEC is able to do this is because it’s extremely secretive. ALEC does not openly brand the legislation it passes off to legislators, and its staff is mostly hidden from the public eye. Until now. We dug into ALEC’s personnel to make a short profile of just some of the key Washington, D.C.-based ALEC staffers who help write the laws that pollute our communities, deny Americans access to health care, suppress our right to vote, and generally harm Americans. Their corporate-written bills may be secretly passed on to legislators, but these staffers can’t hide behind ALEC’s veil and avoid taking responsibility for the laws they produce and advance.

pgloor

July 22, 2012 6:01am

Here's an elegant alternative I've seen to our broken, corrupt system of taxes:

Fair Share Tax (google it)
1. Federal Income Tax: All household income & compensation is taxed at a 20% rate; except the following which are taxed at a 3% rate: a)Income under a realistic poverty line (eg$30,000 for a family of three); b)Expenses & compensation for medical expenses exceeding 6% of income; c)Income placed into or spent from tax-free education-retirement accounts      
No other adjustments, deductions, or exemptions! Effective rates (family of three): 3%- $20,000; 10%-$65,000; 15%-$140,000; 20%-$20mill+.
2. Federal Net-Worth Tax: All household accumulated wealth, except the first ~$800,000 (essentially median home price and tax-free account value) is taxed at 2% rate. This tax is paid once a year and replaces current property, capital gains, and estate taxes.
3. State and local governments funded entirely with combined ~50% surcharge on Federal tax. End sales, property, estate, Social Security taxes.
4. Substantial cut to military so we're spending only 3.5 times that of next most militarized country. Substantial cost savings on medical care, like that practiced at Mayo Clinic

Result:
Returns federal taxes revenue to that of Clinton era (% of GDP)
$2 in spending cuts for every $1 in revenue increases
Large tax savings for working-poor and middle class
& Increased education, research, infrastructure spending -> stable economy
1-page Tax Returns
Federal surpluses within 10yrs

AnnieMO

July 22, 2012 12:27pm

I'll be darned if I think it is fair to tax a family or person making 50 thousand a year at 20% and also tax a multimillionaire at the same 20% as well. Even the Bible points out that a rich man tithing 10% is not giving as much as a poor woman who tithes 10%.
A family at 50 thousand a year may use an air port once a year, depend on roads for shipping goods even less (at most a post man or UPS sometimes) depend on the same amount of water (they usually don't have swimming pools and hot tubs, or more than one or two bath rooms) so their water use is less; they watch the thermostat in the winter and summer to keep their bills low so they use less electricity and gas so city lines and pipes are not so used by them (* it is usually the city that repairs or replaces gas lines and the general public is charged in their bills for line repairs) where those at the top1% have multi uses of large amounts of electricty & lines, water and gas lines and they sure as heck use airports more and roads.
It doesn't take much to sit down and add up how much MORE of every tax and public supported commodity the wealthy use more than the middle and lower income group. So why in the heck should the tax rate be the same for all, except those in poverty?

jussmartenuf's picture
jussmartenuf

July 22, 2012 5:48am

"The United States Chamber of Commerce" has a nice patriotic ring to it, doesn't it? However, the USCofC is not a patriotic organization and is a dedicated shill organization that does the bidding of the oligarchic owners of industry, such as this tax avoiding Corning Glass Co. These owners are dedicated to only one cause and that is to make more and more profit at the expense of everyone they can skin.
My rule of thumb is to oppose all they put forth as they are self serving and not in the best interests of me or my fellow citizens.

Ann Arbor Liberal

July 21, 2012 8:21pm

It seems some people are finally getting it. This country has become a country of the corporation, by the corporation and for the corporation. Things will continue to get worse unless we demand changes in the way our democracy is governed. The revolving door between business and government has compromised the role of government and to a large extent made it impotent. The Republican Party is essentially a private corporation that acts in its own interest not the interest of the American people. The large tax cut the 1% enjoy and the billions of untaxed corporate profits stashed overseas fuel political campaigns here at home. It’s not surprising the republicans are fighting the disclosure of corporate and offshore donations. The supreme court has declared corporations are people and should enjoy free speech and representation like the rest of us. For some odd reason, this doesn’t feel like a level playing field.
Obviously the problem is campaign financing and Washington lobbyists. What appears to be a functioning government of the people, by the people and for the people is one that takes its orders from Corporate America. Strangely enough the Tea Party got it right but in name only. The idea of no taxation without representation is just as relevant today as it was in 1773. However it seems those paying little or no taxes are receiving all the representation while the rest of us have no voice in government. There once was a silent majority who demanded to be heard. Where are they now?

G.E.R.R.Y.

July 22, 2012 12:30pm

"There once was a silent majority who demanded to be heard. Where are they now?"

"Silent majorities" never demand to be heard because they are silent. Vocal minorities are the ones who demand and push. Majorities like the 99% are only now STARTING to finally speak up. There's still a long way to go!

Brian Glennie

July 21, 2012 2:39pm

AND if these corporations actually paid their taxes, think how fast the defecit would be paid off.

Monique DC

July 21, 2012 1:44pm

Travis: would you please publish a followup to this article that details what the committee's response was? I would be curious to know if they were aware of the firm's lack of tax payments in total and the relationship to the foreign revenues. It would be most helpful to know if our Congress is actually pushing back on these guys/gals or just believing them naively.

oldhat

July 21, 2012 1:35pm

corps are people they want to be like the 49% that pay no taxes

G.E.R.R.Y.

July 22, 2012 12:35pm

You mean the 49% who have no money on which to pay taxes?

BTW, do you find it a satisfying life sitting in your mother's basement lobbing verbal potshots at NofC commenters who actually have something intelligent to say? Only asking...

oldhat

July 22, 2012 2:08pm

yea rangel ,timmy, etc have no money with the amount dnc pays you you should move out of the basement [ other than into public parks which you tear up] and maybe even help your parents

TheFuzz

July 21, 2012 4:03pm

No, corporations are definitely NOT natural people. Corporations comprise Natural people, not the other way around. In other words, corporations are made up of Natural people. People, those that the preamble of the Constitution refers to, are natural people. Corporations exist only by statute. Natural people exist by God, or whatever you believe, but they are not in existence by statute! The Supreme Court made the most liberal interpretation of the Constitution by declaring that corporations are people, thus distorting our democracy and risking turning it into a corporatocracy and aristocracy.

AnnieMO

July 22, 2012 12:33pm

Amen, THEFUZZ. SCOTUS, by declaring a corporation a person, is making the assumption that all the REAL people in a corporation want to be part of whatever donation to campaigns the corporation is choosing, it would seem, LOL. We are already a Plutocracy, even before SCOTUS mad that horrible decision. I'll go along with the person who stated that when a corporation was executed in Texas, they would then believe a corporation was a person.

jussmartenuf's picture
jussmartenuf

July 22, 2012 5:35am

Thefuzz,
You are right, Corps are NOT people. However you misstate the SCOTUS made the most liberal interpretation of the constitution, beg pardon, the most Conservative is correct.
We are in a plutocracy already and have been for decades. Republican billionaires control our government to the advantage of their holdings, i.e. private investments in corporations.
Our only way to fight back to overcome this injustice is to vote Democrats in and Republicans out.

jeltez42

July 21, 2012 1:28pm

It is just a matter of time before corporate offices of major US companies start moving overseas. It doesn't matter how much Congress kisses the region about 3 feet up from their shoes. We could offer them a 0% tax rate and it still will not matter. Demand is shrinking here and will continue to shrink until the US starts making most of what it consumes.

What people need to realise is that we should set tax rates and say either you pay up or you leave. We know that many people will step up and fill any needs after these corporate freeloaders leave.

Thomas Jefferson strongly desired to leave manufacturing in England/Europe. There are several theories as to his reasons and most are not wholesome. Still, as if almost to spite him, people set up manufacturing in the US as needs arose.

Norman Allen's picture
Norman Allen

July 21, 2012 12:09pm

When the elite IMPOSED W. and his Dick on the USA, they did whatever they wanted and got unprecedented tax breaks. W. was a manna from heaven to corporate, religious and other members of the elite whose assets were enhanced and their cash-flow made a lot easier. Once the Genie is out of the bottle, it is almost impossible to squeeze it back in. It will take a long time, if ever, to go back to taxation WITH representation instead of the current situation where 99% of the middle class taxpayers are shut out of the system's resource allocation but have to pay for corporate wars and the destruction of our planet with blood, sweat, tears and toil! If there are going to be any taxes on the corporations, it will be paid again by the wage earners. Don't hold your breath that the elite is going to change their ways without clear and present danger to their power/cash-flow.

AnnieMO

July 22, 2012 11:56am

Amen, Mr. Allen. The Tea Partiers and fanatical Republicans kept their mouths shut all during the GWBush and Cheney years and are now howling against corporate and wealthy incomes have their taxes raised to pay off the Bush Admin bungling of the deficit. Cheney is back in the news, pushing no cuts in Pentagon spending because of 'the next war'....which I have no doubt he is anticipating, because of all the stock he has in Halliburton and KBR, who will be the main suppliers to the Pentagon again.

It is sad enough that those in the Tea Party are campaigning to cut their own throats with what they advocate, but the fact that the majority of Americans will sit home and not raise their haunches to protest or even sign an on line petition to do anything to change the power that corporations and the wealthy have over all the rest of us is the ruin of all of us.

Msdori

July 21, 2012 11:34am

The countries that are 'housing' such corporations as Corning are in a financial crisis worse than the US, their 'low' corp tax and cheap labor have contributed to their worse case scenerio. Yet, Congress wants the US corp tax to 'be like' other countrys...yes, we could be them if the tax rate is reduced, a country of cheap corporate taxes and low middle class wages. The irony is that Congress is doing exactly the same thing they accuse Obama...trying to change the US to be like the same socialist countries that 'they' want to be like with corporate taxes. Congress needs to get out of the back pockets of Big Business and get back to working for the 'people'!

stratmandave

July 21, 2012 11:26am

If you are a US corporation you have a duty to pay US taxes. Why? Taxes support the government that provides your stable, safe and functional infrastructure that allows you to do business. If you keep all your money elsewhere simply to prevent paying taxes, eventually your infrastructure will crumble, your security will diminish and the stability of your environment will decline.

If you don't like US tax rates then bring back just enough money so that your overall tax rate(foreign plus US) is acceptable; assuming that you consider ANY taxes to be acceptable. To deprive your home country's government of ANY revenue is inviting disaster.

AnnieMO

July 22, 2012 12:04pm

That is exactly what Elizabeth Warren and then Obama told crowds recently and was so terribly and deliberately misquoted by Romney in his recent speeches. I have gone to Google to bring up both Warren's and Obama's speeches and posting them on Faceb00k and other sites. It is one thing to fight for an office, another entirely to deliberately lie to get it. We have already had 8 years of the Bush-Cheney lies we are still paying for, we certainly don't need another lying Romney in the White House.

Not only is depriving your home country's government of ANY revenue inviting disaster, it is about as UNPATRIOTIC as one can get. I wonder if there is a list somewhere of how many corporate CEO's, bankers, the top 1% every volunteer to fight in the wars they make such profits from-and they DO make profits.

TheFuzz

July 21, 2012 6:45pm

I totally agree with stratmandave.

It is unfortunate that many of those who benefit the most from our society don't want to contribute, and they cry the loudest when asked to contribute.

The U.S. Federal Government, supported by its taxpayers, fights terrorists and enemies, and wins the cooperation of foreign countries to secure resources it needs, thus maintaining itself as a competitive economic superpower. Corporations that enjoy economic and political security should thank the Federal Government by paying their share. If they want to move to a less stable country with less security just to avoid paying the (small) difference in the taxes between the U.S. and another country, then they should have already left. But I call their bluff.

G.E.R.R.Y.

July 22, 2012 12:46pm

"If they want to move to a less stable country with less security just to avoid paying the (small) difference in the taxes between the U.S. and another country, then they should have already left. But I call their bluff."

With calling their bluffs, there needs to be a virtual club held over their heads that, if they do not cooperate, you revoke their "licence" to do business in your country. America is still the largest single market in the world, don't let the pissants have access to it to sell their products. The market America is letting them have at the moment is TOO free.

ladypenelope

July 21, 2012 12:58pm

I agree totally...show me a corporation that has actually paid taxes at a 36% tax rate. Corporations get to reduce their large profits with the large expenses of their well-paid tax attorneys and tax accountants. (Romney's tax accountants are playing some special magic during his extension, the rest of us had to have everything ready and paid by April 15th!!) Congress has created a tax game to play and the Corporations and their special interests are taking the people of the United States of America and our country down a deep, dark hole. Fact, if raising taxes kills job creation then where are the JOBS that should have been created since 2000? Corporations and very rich individuals (supposed job creators) have had extremely low taxes compared to the middle class over the past 10 years...where are the JOBS? Republicans, Democrats and Independents, please tell me where the jobs have been created by keeping corporate income taxes and earned income over $1,000,000 taxes low? I see no JOBS!!!! The middle class has no "extra" money to invest to even have a chance at paying only 15% on the capital gains. YIKES!

Ronni85

July 21, 2012 11:19am

THE CORPORATIONS LIE!!!! They can improve their companies, change ways of manufacturing, pay employees more, pay benefits for those employees, and NOT PAY TAXES ON THAT MONEY!! They only pay on NET profits, not gross profits.
Do not believe their BS, they are BALD-FACED LIES!!

G.E.R.R.Y.

July 22, 2012 12:51pm

"pay employees more, pay benefits for those employees"

Do you mean that they CAN do the above but DON'T or are you really saying that this is what they do? It's kind of ambiguous.

Jeffrey Hill

July 21, 2012 11:18am

Why should filthy rich corporations and individuals pay income taxes when they can simply bribe influence-peddling legislators to rig the game for them -- billionaires make politicians instant millionaires and arrange to get corporate welfare/taxpayer subsidies by kicking back some of that corporate welfare to their politician whore buddies. The sysytem couldn't work better (for them).

larronm

July 21, 2012 10:54am

It is the same old song and dance we've been getting for years. They cry foul to Congress, who listens intently while their hands are out to the lobbiests. Then the news media repeats the story with the caveat that "so and so said..." even though they know it's a lie. Then FOX edits the tape to show only what they want and before long everyone believes it to be true. Corporations that cry foul because they have to pay taxes are fooling only those who choose to believe them. Nobody ever did not start or grow a business because of taxes. As a business person, you just factor in the taxes and move forward. Lots of folks got very, very rich when taxes rates were a lot higher then they are now. We the People need to stop listening to these cry babies. They are coning us all the way to the bank.

AnnieMO

July 22, 2012 12:40pm

Lorronm, you wrapped a giant wad of truth up very nicely!!! And taxes WERE higher......from 1940 to the mid seventies (mostly a time of great growth for the middle class as so many climbed out of poverty, and incomes were good) the tax rates varied between 90% and 50% for those at the very top........and they were still filthy rich, unless they gambled it all away themselves.

For those that gripe about how much is spent on those in poverty today, they should be reminded that when the top was taxed by percentage of income, regulation forbid banks playing dice with the savings of clients, regulations forbid actions like derivatives on Wall Street, and the minimum wage was decent, and labor was strong, we didn't HAVE so many people who were in poverty.

William Bednarz

July 21, 2012 10:26am

The problem with this is the same as the Republican Party - it is a SECRET......you can not boycott a product / country if you do not know what is being made.....The dropping of the labeling requirement with the country of origin -.- boycott WHO -.-
DISCARD... CONGRESS... THEY ARE NOT DOING THEIR JOBS OF PROTECTING THE PEOPLE....THEY ARE NOT PROTECTING OUR JOBS.....BUT THEY DO PROTECT THEMSELVES.......
PUBLICIZE THE NAMES OF THESE CORPORATIONS....NOT ONE LINE ON PAGE TWELVE.........PAGE ONE EVERYDAY
GIVE A VOICE TO THE PEOPLE..........LET THEM VOTE EVERYTIME THEY GO SHOPPING........