Top 25 Corporate Tax Break Recipients 2001-03

from ITEP (Institute on Taxation and Economic Policy)

September 2004

Introduction

Ostensibly, the federal tax code requires corporations to pay 35 percent of their profits in income taxes. But only a small proportion of the 275 corporations in our study paid federal income taxes anywhere near that statutory 35 percent tax rate. Instead, the vast majority paid considerably less. In fact, in 2002 and 2003, the average effective tax rate for all 275 companies was less than half the statutory 35 percent rate.

Over the 2001-03 period, our 275 companies earned almost $1.1 trillion in pretax profits in the United States. Had all of those profits been reported to the IRS and taxed at the statutory 35 percent corporate tax rate, then the 275 companies would have paid $370 billion in income taxes over the three years. But instead, the companies reported only about half of their profits – $557 billion – to the IRS. Instead of a 35 percent tax rate, the companies as a group paid a three-year effective tax rate of only 18.4 percent.

Loopholes and other tax subsidies cut taxes for the 275 companies by $43.4 billion in 2001, $60.8 billion in 2002 and $71.0 billion in 2003, for a total of $175.2 billion in tax breaks over the three years.

The top 25 companies

Half of the total tax-break dollars over the three years – $87.1 billion – went to just 25 companies, each with more than a billion-and-a-half dollars in tax breaks.

General Electric topped the list of corporate tax break recipients, with $9.5 billion in tax breaks over the three years.

In fact, in 2002 and 2003, our 275 companies sheltered more than half of their profits from tax. They told their shareholders they earned $739 billion in those two years, but they paid taxes on less than half of that, only $363 billion.

 

All amounts in millions of US dollars
Rank	Company	Pretax Profits	Tax Breaks	Breaks cut taxes by
1	General Electric	$36,809	$9,481	–74%
2	SBC Communications	30,321	9,032	–85%
3	Citigroup	42,968	4,626	–31%
4	IBM	13,935	4,617	–95%
5	Microsoft	29,455	4,599	–45%
6	AT&T	13,453	4,572	–97%
7	ExxonMobil	21,388	4,268	–57%
8	Verizon	12,264	4,234	–99%
9	JPMorgan Chase	10,885	3,929	–103%
10	Pfizer	14,517	3,889	–77%
11	Altria (Philip Morris)	29,192	3,341	–33%
12	Wachovia	12,846	3,259	–72%
13	Boeing	5,688	3,058	–154%
14	Bank of America	38,574	2,959	–22%
15	Time Warner	6,229	2,637	–121%
16	Wells Fargo	23,885	2,459	–29%
17	ConocoPhillips	7,906	1,985	–72%
18	Intel	9,895	1,972	–57%
19	Merrill Lynch	8,893	1,966	–63%
20	Prudential Financial	2,264	1,838	–232%
21	Viacom	9,523	1,812	–54%
22	United Technologies	5,155	1,750	–97%
23	BellSouth	12,663	1,632	–37%
24	Allstate	6,396	1,631	–73%
25	American Express	7,282	1,541	–60%
	Total these 25 companies	$412,387	$87,089	–60%
	Other 250 companies	$644,651	$88,075	–39%
	All 275 companies	$1,057,038	$175,164	–47%