Corporate Tax Dodgers And Their Nervy CEOs
They’ve got some nerve, I’ll give them that. Recently, the CEOs of 18 large corporations sent an open letter to Treasury Secretary Tim Geithner urging the extension of the special tax rate for investment income (recently getting a lot of attention due to Mitt Romney’s astoundingly low 13.9% tax rate.) While most Americans would argue that income is income and should all be taxed accordingly, these CEOs argue that allowing the special rate to expire will greatly damage our tenuous recovery. (Research shows otherwise.)
What makes this letter appalling, however, is not the specious argument it makes, but the identity of the people signing it. Of the 18 corporations, 11 are on the Tax Justice Center’s list of Corporate Tax Dodgers. What’s more, of those eleven, four are the CEOs of companies which have actually paid less than zero corporate taxes in recent years. (In other words, we’ve been paying them for the privilege of - well I don’t know what – but something or other.) Another two signatories are the CEOs of companies which have paid an effective rate of 1% or less. A quick rundown of the culprits (source: CTJ):
- Gale E. Klappa, Wisconsin Energy Corp. — Average Negative 13.2% tax rate 2008-11
- David M. McClanahan, CenterPoint Energy — Average Negative 11.3% tax rate 2008-11
- Lowell McAdam, Verizon Communications Inc. — Average Negative 3.8% tax rate 2008-11
- James E. Rogers, Duke Energy Corp. — Average Negative 3.5% tax rate 2008-11
- Gerard M. Anderson, DTE Energy Co. — Average 0.2% tax rate 2008-11
- Benjamin G.S. Fowke III, Xcel Energy — Average 1.0% tax rate 2008-10
Oh, yes – I’m sure you’ve noticed that all but one of them are energy companies. Government subsidies, special tax rates, looking the other way while you pollute, plunder, and evade taxes — please, sirs, what else can we do for you??
But here’s a question: Why is it that when corporate CEOs speak out on tax issues, they are treated like objective financial experts, as if they had no agenda other than job growth? It’s not as if these captains of industry don’t own substantial quantities of stock in their own companies – asking for a tax break on the income from that stock is as self-serving as it gets.
An argument that is often made in favor of reduced rates for income from stock dividends is double taxation. (The idea that the income was already taxed once at the corporate level.) That argument becomes exceedingly hard to make when we’re talking about corporations which do not pay their corporate taxes.