Citizens for Tax Justice just published a thought provoking five-year tax study of U.S. multinationals, as covered in an article today by Thomas Reuters journalists Kevin Drawbaugh and Patrick Temple-West.  The study, which sampled 288 Fortune 500 companies, found that 26 of them paid zero federal income tax in the five year period from 2008 through 2012.  As the article points out, perhaps even more aggravating is that 111 of the 288 companies that were sampled paid zero federal income tax in at least one of the five years. 

Among the 26 companies that paid no federal income tax in five years, are perennial Ferraro 500 list topping companies, General Electric and Verizon.  Naturally, corporations defend themselves by asserting that they play by the tax rules.  The article quotes GE spokesman Seth Martin who claims that Citizens for Tax Justice “inaccurately uses the current tax provision – a book accounting number – to make definitive statements about our U.S. income taxes.  This is not the same as the cash income tax that we pay for a given year.”  While that is an interesting defense, we are not going to get into differences between tax and book accounting here.  However, it is interesting to note that GE reserved over $6.5 billion for uncertain tax positions in 2013, and even topped the Ferraro 500 in 2010 with over $8.7 billion in tax reserves.  We’ll just leave it there. 

Lynam Knott