Taxes: Big Companies, Small Bills

Over the past three years, General Electric earned $65 billion domestic profits but paid no federal income taxes Though that may represent the biggest tax advantage enjoyed by any major U.S. corporation, it is not rare. A study released last week by Citizens for Tax Justice, a Washington-based public interest coalition, shows that loopholes and incentive programs are reducing many corporate tax bills to zero. Among 250 major companies whose financial records were surveyed, 51% paid no federal income taxes in at least one of the past three years.

The decline in corporate taxes is largely the result of two decades of congressional changes in the tax code. In most cases legislators designed the rate reductions for such well-intended' purposes as spurring investment, helping struggling industries or boosting jobs. The overall effect has been to shrink the corporate contribution to federal revenue from more than 20% in the 1960s to 6% last year, leading critics to complain that individuals are now bearing a disproportionate share of the federal tax burden. Not all companies have benefited equally, however. Whirlpool for example, paid out 45.6% of its profits in taxes over the past three years, indicating that it received almost no big breaks.