Support Those Who Support Us: Let Your Dollar Be Your Vote for Responsible Corporate Taxpayers
by Scott Klinger, 9/15/2014
Tax Rates Paid by Major Retailers,
Restaurants, Banks, and Cable/Cell Providers
Over the last month, American consumers have sent a strong message to companies thinking about abandoning the U.S. and moving offshore: if you stop supporting the U.S. by avoiding taxes, we’ll stop supporting you and shop elsewhere.
The offshore move, known in policy circles as "corporate inversion," occurs when a large American business buys a smaller foreign firm, then trades in its U.S registration for the foreign papers of its merger partner. It is the latest tax-dodging strategy for companies that have grown up and prospered in America.
After incurring consumer outrage, including calls for a boycott, drug retailer Walgreens backed away from plans to move to Switzerland in order to slash its U.S. tax bill. Late last month, Burger King became the latest to suffer calls for boycotts after the nation’s second-largest burger chain announced it would merge with Tim Horton’s, a Canadian coffee and donut chain, and move its corporate registration to Canada.
For many years, consumers have been using information on corporate social responsibility to inform their purchase decisions, preferring companies that are more environmentally responsible, or those that avoid sweatshops and respect workers’ rights.
But basing purchasing decisions on the taxes corporations pay is a new tool for engaged consumers and represents a new twist in the corporate tax debate. Corporate inversions are only the latest in a long series of strategies that corporations have used to take advantage of gaping loopholes in the tax code. Many corporations invest heavily in lobbying for loopholes and mining the tax code for deductions, credits, and other tax perks. All of this is legal, but that doesn’t make it right.
While some companies have turned tax dodging into an art form, others pay their fair share toward the cost of operating the federal government. To help consumers interested in supporting corporations that are supporting their country, we offer the following list of effective corporate tax rates paid by retailers, restaurants, banks, and consumer products corporations.
Current Federal Tax ($ Millions) |
U.S. Pre-Tax Income ($ Millions) |
Effective Tax Rate |
|
Banks | |||
Sun Trust | -206 | 1,634 | -12.6% |
JP Morgan | -1,316 | 17,229 | -7.6% |
Citigroup | -260 | 6,397 | -4.1% |
PNC | 117 | 5,568 | 2.1% |
Wells Fargo | 4,601 | 32,629 | 14.1% |
Capital One | 1,360 | 5,958 | 22.8% |
U.S. Bancorp | 1,885 | 7,764 | 24.3% |
BB&T | 1,004 | 3,124 | 32.1% |
Drugstores | |||
Rite Aid | 0 | 250 | 0.0% |
Walgreens | 1,122 | 3,477 | 32.3% |
CVS | 2,623 | 7,528 | 34.8% |
Retailers | |||
Amazon.com | 130 | 704 | 18.5% |
Staples | 193 | 881 | 21.9% |
Costco | 572 | 2,070 | 27.6% |
Kroger | 638 | 2,282 | 28.0% |
Target | 1,213 | 3,984 | 30.4% |
Bed, Bath & Beyond | 515 | 1,613 | 31.9% |
Home Depot | 2503 | 7,770 | 32.2% |
Wal-Mart Stores | 6,377 | 19,412 | 32.9% |
Lowe's | 1,342 | 3,673 | 36.5% |
Macy's | 859 | 2,290 | 37.5% |
Best Buy | 306 | 687 | 44.5% |
Restaurants | |||
Wendy's | -2 | 50 | -4.0% |
Darden Restaurants* | 40 | 189 | 21.2% |
Burger King | 30 | 127 | 23.6% |
Starbucks | 617 | 2,110 | 29.2% |
Yum Brands** | 159 | 464 | 34.3% |
McDonalds | 1,238 | 2,913 | 42.5% |
Cell Phone Providers | |||
Verizon | -197 | 28,833 | -0.7% |
AT&T | 3,043 | 27,777 | 11.0% |
U.S. Cellular | 180 | 258 | 69.8% |
Sprint | 1 | -1,815 | NMF |
Cable TV Providers | |||
DISH Network | -163 | 1,128 | -14.5% |
Time Warner Cable | 631 | 3,039 | 20.8% |
DirecTV | 911 | 3,509 | 26.0% |
Comcast | 3,183 | 10,590 | 30.1% |
Current federal taxes paid and U.S. pre-tax income taken from tax footnote in each company’s most recent annual report (Form 10-K) filed with the U.S. Securities and Exchange Commission. Data current as of Aug. 31, 2014. Starbucks pre-tax earnings excludes the effect of a litigation-related special charge.
*Darden’s restaurants include: Olive Garden, LongHorn Steakhouse, Bahama Breeze, Season 52, Eddie V’s, Yard House, and The Capital Grille.
**Yum Brand’s restaurants include: KFC, Taco Bell, and Pizza Hut.
For Further Reading:
20 Tax Dodgers: $240 Million for CEOs, Big Loss for the American People, The Fine Print, 8/17/2014
Corporate Inversions: A “Get Out of Taxes Free” Card, The Fine Print, 7/21/2014
Repatriating Taxes: An Unwarranted Gift to Unpatriotic Corporations, The Fine Print, 6/14/2014