Monday, February 07, 2011
Officially, corporations are supposed to pay a tax rate of 35%. But thanks to myriad loopholes in the U.S. tax code, many large businesses pay less—sometimes only a fraction of what they are supposed to pay.
Carnival Corporation, owner of the well-known cruise line by the same name, paid total corporate taxes (federal, state, local and foreign) equal to only 1.1% of its cumulative $11.3 billion in profits over a five-year period. Carnival is not alone in paying so little in taxes. The New York Times reports that of the 500 big companies in the Standard & Poor’s stock index, 115 paid a total corporate tax rate (both federal and otherwise) of less than 20% over the last five years. For 39 of these companies, the paid rate was less than 10%.
For instance, Boeing paid a total tax rate of just 4.5%, Southwest Airlines 6.3%, Yahoo 7%, Prudential Financial 7.6% and General Electric 14.3%.