TRENTON – Nearly two years removed from the U.S. Supreme Court’s Citizens United decision, some public interest advocates are claiming the floodgates of corporate power over politics and government have been opened.
A study released by U.S. Public Interest Research Group (USPIRG) and Citizens for Tax Justice reveal 30 corporations, the “Dirty 30,” that spent more to lobby Congress than they did in taxes, including one corporation based in New Jersey.
The report, “Representation without Taxation: Fortune 500 Companies that Spend Big on Lobbying and Avoid Taxes,” culled 280 Fortune 500 companies that paid about half the statutory corporate tax rate while spending $2 billion to lobby Congress on tax policy and other issues.
The advocacy groups accuse the corporations of taking advantage of loopholes and special provisions in the tax code.
“(It) makes a mockery of both our tax code and our democracy,” said Dan Smith, USPIRG tax and budget associate, in a conference call today.
Rebecca Wilkins, senior tax policy counsel for Citizens for Tax Justice, said at least 22 of the 30 companies studied had subsidiaries in tax haven countries. When that happens, she said, “All Americans pick up the slack” by paying more in taxes or contracting services.
The advocacy groups said part of the solution is to plug the offshore tax haven loophole, as is the focus of the Stop Tax Haven Abuse Act, cosponsored by four New Jersey Congressmen: U.S. Reps. Rob Andrews, (D-1), Haddon Heights; Rush Holt, (D-12), Hopewell; Bill Pascrell, (D-8), Paterson; and Donald Payne, (D-10), Newark.
Holt said in a statement that the bill “will end the corporate practice of stashing profits overseas to avoid paying taxes, and is an important step towards making sure that corporations pay their fair share like the rest of us.”
According to the report, the “Dirty 30” companies recorded $163.7 billion in profits over a three-year period while paying zero dollars in federal income taxes. The companies were also awarded $10.6 billion in various tax rebates while pending $475.7 million for lobbying.
The single New Jersey company in the “Dirty 30,” Honeywell International in Morristown, pays an effective federal tax rate of negative 0.7 percent on its nearly $5 billion in profits, the study showed. Honeywell receives $33 million from the federal government each year, while spending $18.3 million for lobbying, the groups said.
Gov. Chris Christie expanded a business relocation grant program to keep Honeywell in-state last year and used it as an example of de facto job creation by stopping job loss before it happens.
The three states that are home to the most representatives on the list are New York (Consolidated Edison, Verizon Communications, Interpublic Group, Corning); California (PG&E Corp., Wells Fargo, Mattel); and Texas (CenterPoint Energy, Tenet Heathcare, El Paso).