The myth that is constantly repeated by the right wing says that businesses are not creating jobs because they’re weighed down with taxes. How true is that myth? Not very. According to a new report by Think Progress, one in nine companies listed on the S&P 500 pay a zero percent tax rate. That means that over ten percent of these companies, which are raking in billions of dollars in profits, are not contributing a dime to the communities or to the country that allowed them to build their success.
Some of the companies that have avoided paying any taxes include Verizon and News Corp. and General Motors, well known corporations that could be considered household names. There are also lesser-known, but disgustingly wealthy corporate giants like Seagate, a data storage company whose market value is  $15.9 billion, and Public Storage, a huge corporation with a market value $29.5 billion. In total, 57 of the top 500 billion dollar corporations in the United States, pay zero taxes.
Part of the problem is that there are so many loopholes in the tax code. Exploiting those loopholes has become the name of game. There are any numbers of ways that corporations can reduce the amount of taxes they have to pay, whether by deducting expenses, writing off losses or amassing large amounts of credits, some of which can be applied up to 20 years into the future (like the General business credit).
While we’re on the subject of the types of expenses and credits that are available to multi-billion dollar corporations, it’s time we pointed out that tax payers have been footing the bill for things like travel, lodging and meals for millionaires for years. I’ve yet to hear to people complain about feeding the rich, the way they complain about feeding the poor. Yet a CEO can claim as much as $300 for a single meal on incomes taxes, while the entire federal food assistance program costs the average tax payer a just $3.00 a month, or a total of $38.00 dollars per year.
How can companies that bring in billions of dollars a year be paying zero taxes? Besides off setting their profits with deductions and credits, one of the most common tactics used by tax evaders is the creation of foreign subsidiaries. A corporation can transfer a massive amount of profits to smaller ‘branches’ it owns, which are located outside of the United States. That money is placed in offshore accounts, in countries that are considered “tax havens” because they don’t cooperate with foreign governments, who would otherwise be able to collect unpaid tax revenues. This kind of tax dodging costs the country an estimated $300 billion a year.
Tax codes are meant to be expression of our values system as a country. Credits and deductions are there to help ease the tax burden on those who would be adversely affected by a tax. We have a progressive tax policy in the United States because we are supposedly a country that strives to achieve fairness when it comes to taxation. Yet Republicans often attack tax credits and deductions for the poor and working class, while demanding more of those same benefits for themselves. As a result the United States tax code no longer resembles a progressive code, but has become one where the working class now pay more in taxes then many billion dollars corporations.
All of this altering of the tax code was supposedly meant to help promote growth and increase the number of jobs being created in the United States. We haven’t seen that happen as a side effect of tax policy changes. What we’ve seen is an increase in the number of businesses paying zero taxes. These companies are not only failing to create new jobs, they are actively shipping existing jobs overseas where they can reduce costs and increase profits by paying slave wages.
The tax code should reflect our values and it should also reflect our goals and priorities. If job creation is on the list of things that we want to accomplish, then we need to crack down on corporations who are benefiting from shipping jobs overseas. If our priorities include reducing income inequality in the United States, a problem many economists say is the biggest threat to world stability, then we need to raise the tax rates for the rich and lower them for the poor. We need to work with other countries to collect unpaid corporate taxes and hold the tax evaders accountable for stealing from our country, just to enrich themselves. Finally, we need to close the loopholes and reduce the number of deductions and credits that these businesses can claim, in order to declare themselves profit-less for income tax purposes, while still raking in massive amounts of cash.
Watch: In this video Rachel Maddow highlights some of the ways that billion dollar corporations are able to avoid paying any U.S. taxes