Wells Fargo One of the ‘Dirty Thirty’

Media Contacts
Sonia Ashe

Fortune 500 Companies that Paid More to Lobby Congress than they Paid in Federal Income Taxes

Iowa PIRG Ed Fund

Des Moines – With the second anniversary approaching of the Supreme Court case Citizens United rapidly approaching – it is clear that the floodgates to corporate political spending are open, and that Fortune 500 Companies are taking full advantage. A report released today by Iowa PIRG Education Fund and Citizens for Tax Justice reveals 30 of our nations most profitable corporations that spent more to lobby Congress than they did in taxes.

The report, Representation without Taxation: Fortune 500 Companies that Spend Big on Lobbying and Avoid Taxes takes a close look at one area where corporate power and influence is on full display: corporate tax policy. By exploiting loopholes and special provisions in the tax code, 280 consistently profitable Fortune 500 companies paid about half the statutory corporate tax rate while spending $2 billion to lobby Congress on tax policy and other issues.

The report also looks at the “Dirty Thirty” particularly aggressive tax avoiders that spent more on federal lobbying than income taxes between 2008 and 2010. Twenty-nine of these corporations actually received a net tax rebate during the three year period of the study.

“The fact that so many corporations can spend more money lobbying than they pay in taxes makes a mockery of our tax code and our democracy,” said U.S. PIRG Democracy Advocate Blair Bowie, co-author of the report.

Wells Fargo, one of the ‘Dirty Thirty’ highlighted in the report, boasted $49 billion in domestic profit between 2008-2010 – but after devoting $11 million of that to lobbying, they wound up paying zero dollars in federal taxes and pulled in over $681 million in various tax credits and rebates. Even here in Iowa, Wells Fargo has been identified as one of the top ten beneficiaries of state tax incentives – to the tune of $29 million dollars.

“As we continue to chop away at funding for public priorities, and families and small businesses struggle to pay their taxes, it is outrageous that highly profitable corporations like Wells Fargo can use their big money influence to score millions in tax incentives and keep corporate tax loopholes open to avoid putting in their fair share,” said Iowa PIRG advocate, Sonia Ashe.

The report takes a deeper look at one of the most egregious ways corporations skirt taxes – by shifting profits legitimately earned in America to offshore tax havens, where they are subject to little, if any taxes. At least 22 of the thirty companies studied had subsidiaries in tax haven countries. Wells Fargo alone has 55 known subsidiaries in tax havens abroad. 
A recent poll by the Des Moines Register showed that 87 percent of likely GOP caucus goers were in support of closing corporate tax loopholes so that every U.S. business pays some taxes.

“On the second anniversary of Citizens United, corporate tax dodging should be seen as a cautionary tale. In the wake of that disastrous decision, special interest influence will only continue to grow and policy will reflect that unless we get corporate money out of elections,” Bowie added.

The report recommends strong public disclosure policy as one step towards improving transparency and public awareness of corporate spending, particularly during elections cycles. Iowa Senator Tom Harkin is one of a dozen U.S. Congressmen who agrees, and has signed a petition to the Securities Exchange Commission (SEC) to mandate disclosure of corporate spending.

Other recommendations to curb unlimited spending power of corporations include empowering shareholders with the ability to weigh in on corporate political spending policies, and reversal of Citizens United with a constitutional amendment.

Iowa PIRG Education Fund is a 501(c)3 organization that works to protect consumers and promote good government. We investigate problems, craft solutions, educate the public, and offer Iowans meaningful opportunities for civic participation. For more information, please visit www.iowapirg.org/edfund.