As state, local and federal governments move to ramp up their tax and debt collection activity in light of widespread budget deficits, many of the most indebted organizations have managed to bypass payment through a series of legal maneuvers and loopholes.
A report released this week by the Institute on Taxation and Economic Policy and Citizens for Tax Justice found 68 out of 265 consistently profitable Fortune 500 companies paid no state corporate income tax during at least one of the last three years. The study also found 20 of these organizations averaged a tax rate of zero or less from 2008 to 2010. "Our report shows these corporations raked in a combined $1.33 trillion in profits in the last three years, and far too many have managed to shelter half or more of their profits from state taxes," said Matthew Gardner, report co-author and executive director at ITEP. "They're so busy avoiding taxes, it's no wonder they're not creating any new jobs." Consumer debt collection activity has also risen in recent years on behalf of governments. As much as the recession racked public budgets, it also drove up consumer debt in the form of mortgage dues, student loans and credit card balances.