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<div><font size="+1" color="#000000">Visionaries,</font></div>
<div><font size="+1" color="#000000">The national trend cited in the
following article from today's NY Times is mirrored in Idaho where the
State Tax Commission annual tax burden report finds that Idaho
corporations pay 29% less than the national average of corporations in
other states. This race to the bottom was accelerated by the Idaho
Legislature's tax cut of 2001 to the detriment of government services
and state employees.</font></div>
<div><font size="+1" color="#000000"><br></font></div>
<div><font size="+1" color="#000000">Mark Solomon</font></div>
<div><font size="+3" color="#000000"><b><br></b></font></div>
<div><font size="+3" color="#000000"><b><br></b></font></div>
<div><font size="+3" color="#000000"><b><br></b></font></div>
<div><font size="+3" color="#000000"><b>Study Finds Accelerating Drop
in Corporate Taxes<br>
</b></font><font size="-2" color="#000000"><b>By LYNNLEY BROWNING<br>
</b></font><font size="+2" color="#000000"> <br>
</font><font face="Arial" color="#000000">Published: September 23,
2004<br>
<br>
</font><font size="+2" color="#000000"> <br>
<br>
America's largest and most profitable companies paid less in corporate
income taxes in the last three years, even as they increased profits,
according to a study released yesterday.</font><br>
<font size="+2" color="#000000"></font></div>
<div><font size="+2" color="#000000"> Companies have always used
write-offs, depreciation, deductions and loopholes to lower their
taxes, but the study, by Citizens for Tax Justice and its affiliate,
the Institute on Taxation and Economic Policy, suggested that tax
breaks and subsidies enacted during the Bush administration had
accelerated the decline in tax payments.</font><br>
<font size="+2" color="#000000"></font></div>
<div><font face="Arial" size="-1" color="#000000"><br>
</font><font size="+2" color="#000000">The study also cited the
proliferation of abusive tax shelters and increasingly aggressive
corporate lobbying as fueling the decline in tax payments by
corporations.<br>
<br>
The study was done by nonprofit research and advocacy groups
that have been supported in part by labor unions. They contend that
the tax system favors wealthy corporations and individuals.<br>
<br>
The study, Corporate Income Taxes in the Bush Years, surveyed public
filings by 275 of the nation's largest and most profitable companies,
based on revenue from the Fortune 500 list of 2004. The 275 companies
reported pretax profits from operations in the United States of $1.1
trillion from 2001 through 2003, the study said, yet reported to the
Internal Revenue Service and paid taxes on half that amount.<br>
<br>
Robert S. McIntyre, the lead author of the study, wrote,
"The fact that America's companies were allowed to report less
than half of their actual U.S. profits to the I.R.S., while ordinary
wage earners have to report every penny of their earnings, has to
undermine public respect for the tax system."<br>
<br>
The 275 companies surveyed include nearly all of the 2004
Fortune 500 companies that were profitable from 2001 through 2003. The
list excluded those that reported losses in any year,
including </font><font size="+2" color="#000066"> General
Motors</font><font size="+2" color="#000000"> and </font><font
size="+2" color="#000066"> Ford</font><font size="+2"
color="#000000">; certain companies whose finances were considered too
opaque to decipher; and about 25 companies to maintain a balance.<br>
<br>
The study cited, among other things, tax breaks enacted in 2002 and
2003 as prompting the decline in corporate payments. Such tax breaks,
as used by the 275 companies, totaled more than $175 billion over the
last three years, including $71 billion last year, up from $43.4
billion in 2001. That compares, roughly, with $98 billion in tax
breaks for the top 250 profitable companies over 1996 through 1998,
according to a similar study by Citizens for Tax Justice in 2000.<br>
<br>
Not all experts agreed with the study's findings. William W. Beach, a
tax policy expert at the Heritage Foundation, a conservative research
group in Washington, said that even though the study surveyed the top
275 companies, he did not find it "typical of corporate America,"
adding that smaller and midsize businesses were "paying a lot in
taxes."<br>
<br>
According to the study, some 28 corporations paid no taxes from
2001 to 2003, despite having profits in the period of nearly $45
billion.<br>
<br>
Industry sectors that paid the lowest taxes or no taxes included
aerospace and military, telecommunications, transportation, and
industrial and farm equipment.<br>
<br>
The 2000 study found that from 1996 to 1998, 11 of the 250
largest and most profitable companies paid no taxes, even though all
reported profits. The earlier study found that the 250 companies
showed a 23.5 percent increase in pretax profit, while the tax
payments rose 7.7 percent.<br>
<br>
The current study seemed to echo government data. Commerce
Department figures showed that pretax corporate profit rose 26 percent
from 2001 to 2003 but that corporate tax payments fell 21
percent.</font></div>
<div><font size="+2" color="#000000"><br>
Corporate taxes as a share of the national economy are at their lowest
sustained level since World War II, the study said, and financed only
6 percent of government expenses in the last two fiscal years.<br>
<br>
The current study found that nearly one in three companies, or
82, of the 275 examined paid no federal income tax in at least one
year from 2001 to 2003, the period covered by the study. In the
period, 82 companies had pretax profit of $102 billion.<br>
<br>
Last year, 46 of the 275 companies surveyed paid no federal income
tax, up from 42 companies in 2002 and 33 in 2001, according to the
study. Over all, the number of companies that paid no taxes increased
40 percent during the period.<br>
<br>
The current study attributed lower corporate payments in part to
legislation supported by President Bush and enacted by Congress in
2002 that increased accelerated depreciation, an accounting move that
allows profitable companies to write off capital investments and claim
tax deferrals. Accelerated depreciation was intended in part to
encourage capital investment, but the study argued that it had done
the opposite. Capital investment by corporations dropped 12 percent in
2002 and 3 percent in 2003, the years when Congress enacted the new
accelerated depreciation rules.<br>
<br>
As a result, Mr. McIntyre concluded, "the $175 billion in
revenues lost to the 2002- and 2003-enacted tax breaks appears to have
been exceedingly poorly spent."<br>
<br>
Mr. Beach disagreed, saying that rates of capital investment were at
historic highs. "We're seeing an investment surge that's so
strong that you have to go back to the 1960's before you see a
comparable one."</font></div>
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