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Doc Mercer · 06-11-08, 05:43 PM

http://www.ctj.org/corpfed04pr.pdf

Citizens for Tax Justice 1311 L St. NW, Washington, DC Citizens for Tax Justice Home Page CTJ 202-626-3780
WEDNESDAY, SEPTEMBER 22, 2004 at 12:30 P.M. EDT
CONTACT: Bob McIntyre, 202/626-3780, ext. 22 (6 pages)

Bush Policies Drive Surge in Corporate Tax Freeloading

82 Big U.S. Corporations Paid No Tax in One or More Bush Years

Eighty-two of America’s largest and most profitable corporations paid no federal income tax in at least one year during the first three years of the George W. Bush administration — a period when federal corporate tax collections fell to their lowest sustained level in six decades. This is one of the many troubling findings of a major new report on corporate tax
avoidance by Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy (ITEP). The report covered 275 profitable Fortune 500 corporations, with total U.S. profits of $1.1 trillion over the three-year period.

“The sharp increase in the number of tax-avoiding companies reflects the results of aggressive corporate lobbying and a White House and a Congress eager to do the lobbyists’ bidding,” said Robert S. McIntyre, director of CTJ and co-author of the report with T.D. Coo Nguyen of ITEP.

Skyrocketing Corporate Tax Avoidance

In part due to a major expansion in corporate tax breaks in 2002 and 2003, along with continued failure by Congress and the White House to curb abusive corporate offshore tax sheltering, corporate tax avoidance has skyrocketed. For example:

# Eighty-two of the 275 companies, almost a third of the total, paid zero or less in federal income taxes in at least one year from 2001 to 2003. Many of them enjoyed multiple no-tax years. In the years they paid no income tax, these companies earned $102 billion in pretax U.S. profits. But instead of paying $35.6 billion in income taxes as the statutory 35 percent corporate tax rate seems to require, these companies generated so many excess tax breaks that they received outright tax rebate checks from
the U.S. Treasury, totaling $12.6 billion. These companies’ “negative tax rates” meant that they made more after taxes than before taxes in those no-tax years.

# Twenty-eight corporations enjoyed negative federal income tax rates over the entire 2001-03 period. These companies, whose pretax U.S. profits totaled $44.9 billion over the three years, included, among others: Pepco Holdings (–59.6% tax rate), Prudential Financial (–46.2%), ITT Industries (–22.3%), Boeing (–18.8%), Unisys (–16.0%), Fluor (–9.2%) and CSX (–7.5%), the company previously headed by our current Secretary of
the Treasury.

# In 2003 alone, 46 companies paid zero or less in federal income taxes. These 46 companies, one out of six of the companies in the study, told their shareholders they earned U.S. pretax profits in 2003 of $42.6 billion, yet received tax rebates totaling $5.4 billion. In 2002, almost as many companies, 42, paid no tax, reporting $43.5 billion in pretax profits, but $4.9 billion in tax rebates. From 2001 to 2003, the number of no-tax
companies jumped from 33 to 46, an increase of 40 percent.

# After 2001, the average effective rate for all 275 companies dropped by a fifth, from 21.4 percent in 2001 to 17.2 percent in 2002 and 2003, less than half the statutory 35 percent corporate tax rate that corporations ostensibly are supposed to pay.
MORE...

Page 2 of 6
The Size of the Corporate Tax Subsidies

Over the 2001-03 period, the 275 companies in the survey earned almost $1.1 trillion in pretax profits in the United States. Had all of those profits been reported to the IRS and taxed at the statutory 35 percent corporate tax rate, the 275 companies would have paid $370 billion in income taxes over the three years. But instead, the companies reported only
about half of their profits — $557 billion — to the IRS. Over the
three years, the effective tax rate on the companies as a group was
only about half the ostensibly required 35 percent rate.

# Loopholes and other tax subsidies cut taxes for the
275 companies by $43.4 billion in 2001, $60.8 billion in
2002 and $71.0 billion in 2003, for a total of $175.2
billion in tax breaks over the three years.

# Half of the total tax-break dollars over the three years —
$87.1 billion — went to just 25 companies, each with
more than a billion-and-a-half dollars in tax breaks.

# General Electric topped the list of corporate tax break
recipients, with $9.5 billion in tax breaks over the three
years.

# In 2002 and 2003, the 275 companies sheltered more
than half of their profits from tax. They told their
shareholders they earned $739 billion in those two
years, but they told the IRS they made less than half of
that, only $363 billion.

The Failure of Corporate Tax Incentives Legislation adopted in 2002 and 2003 vastly increased corporate write-offs for “accelerated depreciation” and made it easier for corporations to use their excess tax
subsidies to generate tax-rebate checks from the U.S. Treasury, at a three-year cost of $175 billion. Backers of those so-called “incentives” said they would encourage new corporate investments in plant and equipment. But the study finds that they failed to do so: MORE...

Page 3 of 6
# The 25 companies in the study who reported the largest tax savings from accelerated depreciation — garnering two-thirds of the total depreciation benefits for all 275 companies over the three years — cut their total property, plant and equipment investments by 27 percent from 2001 to 2003.

# In contrast, the remaining 250 companies reduced their investments by only 8 percent.

# Overall, the 275 companies in the study reported that their capital investments fell by 15 percent from 2001 to 2003.

Likewise, the 25 companies in the survey with the largest total tax breaks from all sources over the three years (getting half of the total tax breaks for all 275 companies) cut their capital investments from 2001 to 2003 by 22 percent. In contrast, the remaining 250 companies in the survey reduced their investments by 13 percent.

The five industries whose companies got the largest average benefits, on a per-company basis, from accelerated depreciation over the 2001-03 period received 61 percent of the total depreciation benefits.

# From 2001 to 2003, these five industries — telecommunications, petroleum and pipelines, transportation, gas and electric utilities, and electronics and electric equipment — reduced their capital investments by 22 percent.

# In contrast, the remaining 15 industries reduced their investments by only 9 percent. “We do not mean to imply in our report that corporate tax breaks actively discourage capital investments,” McIntyre said. “But the evidence shows, as it has so often in the past, that business investment decisions are primarily driven by supply and demand, not by
government attempts to micro-manage the economy. The $175 billion in revenues lost to the tax subsidies enacted in 2002 and 2003 appears to have been exceedingly poorly spent.”

Wide, Economically-Distorting Disparities in Tax Rates
The study found wide disparities in taxes among industries and among companies within particular industries. Over the 2001-03 period, industry effective tax rates for the 275 corporations ranged from a low of 1.6 percent to a high of 27.7 percent. In 2003, the range
of industry tax rates was even greater, ranging from a low of –30.0 percent (a negative rate) up to a high of 27.9 percent.

# Aerospace and defense companies enjoyed the lowest effective tax rate over the three years, paying only 1.6 percent of their profits in federal income taxes. This industry’s taxes declined sharply over the three years, falling to –30.0 percent of profits in 2003.

# Other very low-tax industries, paying less than half the statutory 35 percent tax rate over the entire 2001-03 period, included: transportation (4.3%), industrial and farm equipment (6.2%), telecommunications (7.5%), electronics and electrical equipment (10.8%), petroleum and pipelines (13.3%), miscellaneous services (14.4%), gas and electric utilities (14.4%), computers, office equipment, software and data (16.0%), and
metals & metal products (17.4%).

# Not a single industry paid an effective tax rate of more than 29 percent, either for the entire three-year period or in any given year.
MORE ...
Page 4 of 6

Within industries, effective tax rates also varied widely. For example:
# Over the three-year period, average tax rates on oil companies ranged from 3.0 percent for Devon Energy up to 31.4 percent on Marathon Oil.
# Among aerospace and defense companies, three-year effective tax rates ranged from a low of –18.8 percent for Boeing up to a high of 25.0 percent for General Dynamics.

# In the pharmaceutical industry, Merck paid an effective U.S. tax rate of 32.5 percent, while Pfizer paid only 8.2 percent.
Conclusion

The study points out that the losers from widespread corporate tax avoidance include:

# The general public, who must pay higher taxes, lose public services, or be responsible for big future debt burdens.
# Relatively disadvantaged industries and companies that will find it harder to compete for investment capital with tax-favored corporations.
# The U.S. economy, which is harmed by the distortions that corporate subsidies produce.
# State governments and state taxpayers, which see their corporate tax systems erode along with the federal system.
# The integrity and sustainability of the tax system as a whole.

“Most of the loopholes and tax dodges that corporations use to slash their taxes may be technically ‘legal’ in the sense that the tax law allows them,” said McIntyre. “But remember that these subsidies got into the tax code because corporations lobbied to put them there. Saying something is ‘legal’ doesn’t mean that it’s right.”

Two pages of selected tables and charts from the study follow.

Citizens for Tax Justice and the Institute on Taxation and Economic Policy have analyzed corporate profits and corporate income taxes in a series of reports dating back to the 1980s.

These reports are widely credited with helping persuade President Ronald Reagan and Congress to enact the loophole-closing Tax Reform Act of 1986. ITEP’s research for the new study was funded by a grant from the Nathan Cummings Foundation.

A copy of the full 68-page report can be found at Citizens for Tax Justice Home Page CTJ or ITEP Home Page: Institute on Taxation and Economic Policy.
MORE ...

Page 5 of 6
MORE ...
82 COMPANIES PAYING ZERO OR LESS IN TAXES
IN ONE OR MORE YEARS, 2001-2003 ($-million)
In the no-tax years
Profits Rebates Rate
2003 (46 cos.) $ 42,622 $ –5,438 –12.8%
2002 (43 cos.) 43,530 –4,945 –11.4%
2001 (33 cos.) 15,664 –2,184 –13.9%
$ 101,816 $ –12,568 –12.3%
82 Companies Paying Zero Tax or Less in at Least One Year, 2001–2003
In No-Tax Years # of zero In No-Tax Years # of zero Company ($-millions) Profit Tax Rate tax years Company ($-millions) Profit Tax Rate tax years
Pepco Holdings $ 725 $ –432 –59.6% 3 Consolidated Edison 852 –120 –14.0% 1

ITT Industries 821 –183 –22.3% 3 Brunswick 106 –15 –13.7% 1
Unisys 334 –53 –16.0% 3 Southwest Airlines 398 –51 –12.8% 1
Principal Group 2,025 –259 –12.8% 3 Verizon 5,642 –685 –12.1% 1
NCR 708 –41 –5.8% 3 Kelly Services 18 –2 –12.6% 1
Ryder 318 –10 –3.1% 3 Devon Energy 344 –39 –11.3% 1
Computer Sciences 1,291 –31 –2.4% 3 Toys “R” Us 147 –16 –10.9% 1
Shaw Group 276 –6 –2.2% 3 Smith International 39 –4 –11.5% 1
Saks 271 –6 –2.2% 3 American Express 1,367 –140 –10.2% 1
Prudential Financial 437 –1,146 –262.3% 2 Marriott International 384 –38 –9.9% 1
Ingram Micro 53 –21 –40.3% 2 Boston Scientific 376 –37 –9.9% 1
CenterPoint Energy 1,218 –401 –32.9% 2 Ikon Office Solutions 146 –11 –7.7% 1
Reebok 35 –9 –26.1% 2 Rockwell Automation 113 –8 –7.0% 1
AT&T 5,628 –1,389 –24.7% 2 Newell Rubbermaid 249 –14 –5.5% 1
CSX 556 –137 –24.7% 2 SBC Communications 8,941 –476 –5.3% 1
Reliant Resources 340 –74 –21.7% 2 Eaton 329 –17 –5.2% 1
Timken 90 –19 –21.6% 2 John Hancock 756 –39 –5.1% 1
Pitney Bowes 1,108 –200 –18.0% 2 Ball 121 –5 –4.4% 1
Baxter 1,278 –198 –15.5% 2 Wachovia 4,055 –164 –4.0% 1
Fisher Scientific International 91 –14 –15.4% 2 Humana 188 –7 –3.7% 1
FPL Group 2,243 –252 –11.2% 2 Disney, Walt 1,764 –59 –3.4% 1
Time Warner 4,882 –487 –10.0% 2 United Technologies 1,760 –57 –3.3% 1
Caterpillar 830 –81 –9.8% 2 Dominion Resources 1,999 –63 –3.2% 1
KeySpan 1,366 –109 –8.0% 2 Engelhard 192 –5 –2.8% 1
Valero Energy 679 –57 –8.4% 2 Pfizer 6,088 –168 –2.8% 1
Triad Hospitals 333 –28 –8.3% 2 SPX 478 –13 –2.7% 1
Caremark RX 794 –65 –8.2% 2 Lehman Brothers 1,825 –39 –2.1% 1
Manpower 78 –5 –6.0% 2 Metlife 2,926 –67 –2.3% 1
Danaher 1,037 –46 –4.4% 2 Anadarko Petroleum 698 –15 –2.1% 1
Cendant 1,822 –58 –3.2% 2 Bank of New York 1,773 –29 –1.6% 1
Boeing 1,069 –1,700 –159.0% 1 Sara Lee 1,256 –20 –1.6% 1
Entergy 562 –758 –135.0% 1 Burlington Northern Santa Fe 1,226 –18 –1.5% 1
Nucor 79 –59 –74.9% 1 3M 1,656 –21 –1.2% 1
Fluor 46 –29 –63.3% 1 Kinder Morgan 360 –4 –1.2% 1
Wesco International 19 –14 –73.5% 1 Lexmark 307 –2 –0.8% 1
Graybar Electric 14 –8 –57.3% 1 Allstate 1,540 –14 –0.9% 1
JPMorgan Chase 2,515 –1,398 –55.6% 1 Health Net 136 –1 –0.7% 1
Dillard’s 20 –5 –27.0% 1 General Electric 11,998 –33 –0.3% 1
Advance Auto Parts 92 –18 –19.2% 1 Allied Waste Industries 274 –0 –0.1% 1
OGE Energy 215 –36 –16.6% 1 Autoliv 59 –0 –0.0% 1
Public Service Enterprise Group 1,369 –208 –15.2% 1 Sysco 1,264 — — 1
Totals, these 82 companies $ 101,816 $ –12,568 –12.3% 121
Page 6 of 6
–000–
Effective Corporate Tax Rates Over Time
—
5%
10%
15%
20%
25%
Reagan Pre-
Reform
(1986)
Reagan
Post-
Reform
(1988)
Clinton
1996-98
Bush 2001 Bush 2002 Bush 2003
Federal Corporate Taxes as a % of GDP, Fiscal 1960 to 2003
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002

06-11-08, 05:43 PM	#1
Doc Mercer EOG Dedicated Join Date: Apr 05, 2006 Posts: 30,575	Good info ... REALITY on Corpt Taxes in the good ol USA http://www.ctj.org/corpfed04pr.pdf Citizens for Tax Justice 1311 L St. NW, Washington, DC Citizens for Tax Justice Home Page CTJ 202-626-3780 WEDNESDAY, SEPTEMBER 22, 2004 at 12:30 P.M. EDT CONTACT: Bob McIntyre, 202/626-3780, ext. 22 (6 pages) Bush Policies Drive Surge in Corporate Tax Freeloading 82 Big U.S. Corporations Paid No Tax in One or More Bush Years Eighty-two of America’s largest and most profitable corporations paid no federal income tax in at least one year during the first three years of the George W. Bush administration — a period when federal corporate tax collections fell to their lowest sustained level in six decades. This is one of the many troubling findings of a major new report on corporate tax avoidance by Citizens for Tax Justice (CTJ) and the Institute on Taxation and Economic Policy (ITEP). The report covered 275 profitable Fortune 500 corporations, with total U.S. profits of $1.1 trillion over the three-year period. “The sharp increase in the number of tax-avoiding companies reflects the results of aggressive corporate lobbying and a White House and a Congress eager to do the lobbyists’ bidding,” said Robert S. McIntyre, director of CTJ and co-author of the report with T.D. Coo Nguyen of ITEP. Skyrocketing Corporate Tax Avoidance In part due to a major expansion in corporate tax breaks in 2002 and 2003, along with continued failure by Congress and the White House to curb abusive corporate offshore tax sheltering, corporate tax avoidance has skyrocketed. For example: # Eighty-two of the 275 companies, almost a third of the total, paid zero or less in federal income taxes in at least one year from 2001 to 2003. Many of them enjoyed multiple no-tax years. In the years they paid no income tax, these companies earned $102 billion in pretax U.S. profits. But instead of paying $35.6 billion in income taxes as the statutory 35 percent corporate tax rate seems to require, these companies generated so many excess tax breaks that they received outright tax rebate checks from the U.S. Treasury, totaling $12.6 billion. These companies’ “negative tax rates” meant that they made more after taxes than before taxes in those no-tax years. # Twenty-eight corporations enjoyed negative federal income tax rates over the entire 2001-03 period. These companies, whose pretax U.S. profits totaled $44.9 billion over the three years, included, among others: Pepco Holdings (–59.6% tax rate), Prudential Financial (–46.2%), ITT Industries (–22.3%), Boeing (–18.8%), Unisys (–16.0%), Fluor (–9.2%) and CSX (–7.5%), the company previously headed by our current Secretary of the Treasury. # In 2003 alone, 46 companies paid zero or less in federal income taxes. These 46 companies, one out of six of the companies in the study, told their shareholders they earned U.S. pretax profits in 2003 of $42.6 billion, yet received tax rebates totaling $5.4 billion. In 2002, almost as many companies, 42, paid no tax, reporting $43.5 billion in pretax profits, but $4.9 billion in tax rebates. From 2001 to 2003, the number of no-tax companies jumped from 33 to 46, an increase of 40 percent. # After 2001, the average effective rate for all 275 companies dropped by a fifth, from 21.4 percent in 2001 to 17.2 percent in 2002 and 2003, less than half the statutory 35 percent corporate tax rate that corporations ostensibly are supposed to pay. MORE... Page 2 of 6 The Size of the Corporate Tax Subsidies Over the 2001-03 period, the 275 companies in the survey earned almost $1.1 trillion in pretax profits in the United States. Had all of those profits been reported to the IRS and taxed at the statutory 35 percent corporate tax rate, the 275 companies would have paid $370 billion in income taxes over the three years. But instead, the companies reported only about half of their profits — $557 billion — to the IRS. Over the three years, the effective tax rate on the companies as a group was only about half the ostensibly required 35 percent rate. # Loopholes and other tax subsidies cut taxes for the 275 companies by $43.4 billion in 2001, $60.8 billion in 2002 and $71.0 billion in 2003, for a total of $175.2 billion in tax breaks over the three years. # Half of the total tax-break dollars over the three years — $87.1 billion — went to just 25 companies, each with more than a billion-and-a-half dollars in tax breaks. # General Electric topped the list of corporate tax break recipients, with $9.5 billion in tax breaks over the three years. # In 2002 and 2003, the 275 companies sheltered more than half of their profits from tax. They told their shareholders they earned $739 billion in those two years, but they told the IRS they made less than half of that, only $363 billion. The Failure of Corporate Tax Incentives Legislation adopted in 2002 and 2003 vastly increased corporate write-offs for “accelerated depreciation” and made it easier for corporations to use their excess tax subsidies to generate tax-rebate checks from the U.S. Treasury, at a three-year cost of $175 billion. Backers of those so-called “incentives” said they would encourage new corporate investments in plant and equipment. But the study finds that they failed to do so: MORE... Page 3 of 6 # The 25 companies in the study who reported the largest tax savings from accelerated depreciation — garnering two-thirds of the total depreciation benefits for all 275 companies over the three years — cut their total property, plant and equipment investments by 27 percent from 2001 to 2003. # In contrast, the remaining 250 companies reduced their investments by only 8 percent. # Overall, the 275 companies in the study reported that their capital investments fell by 15 percent from 2001 to 2003. Likewise, the 25 companies in the survey with the largest total tax breaks from all sources over the three years (getting half of the total tax breaks for all 275 companies) cut their capital investments from 2001 to 2003 by 22 percent. In contrast, the remaining 250 companies in the survey reduced their investments by 13 percent. The five industries whose companies got the largest average benefits, on a per-company basis, from accelerated depreciation over the 2001-03 period received 61 percent of the total depreciation benefits. # From 2001 to 2003, these five industries — telecommunications, petroleum and pipelines, transportation, gas and electric utilities, and electronics and electric equipment — reduced their capital investments by 22 percent. # In contrast, the remaining 15 industries reduced their investments by only 9 percent. “We do not mean to imply in our report that corporate tax breaks actively discourage capital investments,” McIntyre said. “But the evidence shows, as it has so often in the past, that business investment decisions are primarily driven by supply and demand, not by government attempts to micro-manage the economy. The $175 billion in revenues lost to the tax subsidies enacted in 2002 and 2003 appears to have been exceedingly poorly spent.” Wide, Economically-Distorting Disparities in Tax Rates The study found wide disparities in taxes among industries and among companies within particular industries. Over the 2001-03 period, industry effective tax rates for the 275 corporations ranged from a low of 1.6 percent to a high of 27.7 percent. In 2003, the range of industry tax rates was even greater, ranging from a low of –30.0 percent (a negative rate) up to a high of 27.9 percent. # Aerospace and defense companies enjoyed the lowest effective tax rate over the three years, paying only 1.6 percent of their profits in federal income taxes. This industry’s taxes declined sharply over the three years, falling to –30.0 percent of profits in 2003. # Other very low-tax industries, paying less than half the statutory 35 percent tax rate over the entire 2001-03 period, included: transportation (4.3%), industrial and farm equipment (6.2%), telecommunications (7.5%), electronics and electrical equipment (10.8%), petroleum and pipelines (13.3%), miscellaneous services (14.4%), gas and electric utilities (14.4%), computers, office equipment, software and data (16.0%), and metals & metal products (17.4%). # Not a single industry paid an effective tax rate of more than 29 percent, either for the entire three-year period or in any given year. MORE ... Page 4 of 6 Within industries, effective tax rates also varied widely. For example: # Over the three-year period, average tax rates on oil companies ranged from 3.0 percent for Devon Energy up to 31.4 percent on Marathon Oil. # Among aerospace and defense companies, three-year effective tax rates ranged from a low of –18.8 percent for Boeing up to a high of 25.0 percent for General Dynamics. # In the pharmaceutical industry, Merck paid an effective U.S. tax rate of 32.5 percent, while Pfizer paid only 8.2 percent. Conclusion The study points out that the losers from widespread corporate tax avoidance include: # The general public, who must pay higher taxes, lose public services, or be responsible for big future debt burdens. # Relatively disadvantaged industries and companies that will find it harder to compete for investment capital with tax-favored corporations. # The U.S. economy, which is harmed by the distortions that corporate subsidies produce. # State governments and state taxpayers, which see their corporate tax systems erode along with the federal system. # The integrity and sustainability of the tax system as a whole. “Most of the loopholes and tax dodges that corporations use to slash their taxes may be technically ‘legal’ in the sense that the tax law allows them,” said McIntyre. “But remember that these subsidies got into the tax code because corporations lobbied to put them there. Saying something is ‘legal’ doesn’t mean that it’s right.” Two pages of selected tables and charts from the study follow. Citizens for Tax Justice and the Institute on Taxation and Economic Policy have analyzed corporate profits and corporate income taxes in a series of reports dating back to the 1980s. These reports are widely credited with helping persuade President Ronald Reagan and Congress to enact the loophole-closing Tax Reform Act of 1986. ITEP’s research for the new study was funded by a grant from the Nathan Cummings Foundation. A copy of the full 68-page report can be found at Citizens for Tax Justice Home Page CTJ or ITEP Home Page: Institute on Taxation and Economic Policy. MORE ... Page 5 of 6 MORE ... 82 COMPANIES PAYING ZERO OR LESS IN TAXES IN ONE OR MORE YEARS, 2001-2003 ($-million) In the no-tax years Profits Rebates Rate 2003 (46 cos.) $ 42,622 $ –5,438 –12.8% 2002 (43 cos.) 43,530 –4,945 –11.4% 2001 (33 cos.) 15,664 –2,184 –13.9% $ 101,816 $ –12,568 –12.3% 82 Companies Paying Zero Tax or Less in at Least One Year, 2001–2003 In No-Tax Years # of zero In No-Tax Years # of zero Company ($-millions) Profit Tax Rate tax years Company ($-millions) Profit Tax Rate tax years Pepco Holdings $ 725 $ –432 –59.6% 3 Consolidated Edison 852 –120 –14.0% 1 ITT Industries 821 –183 –22.3% 3 Brunswick 106 –15 –13.7% 1 Unisys 334 –53 –16.0% 3 Southwest Airlines 398 –51 –12.8% 1 Principal Group 2,025 –259 –12.8% 3 Verizon 5,642 –685 –12.1% 1 NCR 708 –41 –5.8% 3 Kelly Services 18 –2 –12.6% 1 Ryder 318 –10 –3.1% 3 Devon Energy 344 –39 –11.3% 1 Computer Sciences 1,291 –31 –2.4% 3 Toys “R” Us 147 –16 –10.9% 1 Shaw Group 276 –6 –2.2% 3 Smith International 39 –4 –11.5% 1 Saks 271 –6 –2.2% 3 American Express 1,367 –140 –10.2% 1 Prudential Financial 437 –1,146 –262.3% 2 Marriott International 384 –38 –9.9% 1 Ingram Micro 53 –21 –40.3% 2 Boston Scientific 376 –37 –9.9% 1 CenterPoint Energy 1,218 –401 –32.9% 2 Ikon Office Solutions 146 –11 –7.7% 1 Reebok 35 –9 –26.1% 2 Rockwell Automation 113 –8 –7.0% 1 AT&T 5,628 –1,389 –24.7% 2 Newell Rubbermaid 249 –14 –5.5% 1 CSX 556 –137 –24.7% 2 SBC Communications 8,941 –476 –5.3% 1 Reliant Resources 340 –74 –21.7% 2 Eaton 329 –17 –5.2% 1 Timken 90 –19 –21.6% 2 John Hancock 756 –39 –5.1% 1 Pitney Bowes 1,108 –200 –18.0% 2 Ball 121 –5 –4.4% 1 Baxter 1,278 –198 –15.5% 2 Wachovia 4,055 –164 –4.0% 1 Fisher Scientific International 91 –14 –15.4% 2 Humana 188 –7 –3.7% 1 FPL Group 2,243 –252 –11.2% 2 Disney, Walt 1,764 –59 –3.4% 1 Time Warner 4,882 –487 –10.0% 2 United Technologies 1,760 –57 –3.3% 1 Caterpillar 830 –81 –9.8% 2 Dominion Resources 1,999 –63 –3.2% 1 KeySpan 1,366 –109 –8.0% 2 Engelhard 192 –5 –2.8% 1 Valero Energy 679 –57 –8.4% 2 Pfizer 6,088 –168 –2.8% 1 Triad Hospitals 333 –28 –8.3% 2 SPX 478 –13 –2.7% 1 Caremark RX 794 –65 –8.2% 2 Lehman Brothers 1,825 –39 –2.1% 1 Manpower 78 –5 –6.0% 2 Metlife 2,926 –67 –2.3% 1 Danaher 1,037 –46 –4.4% 2 Anadarko Petroleum 698 –15 –2.1% 1 Cendant 1,822 –58 –3.2% 2 Bank of New York 1,773 –29 –1.6% 1 Boeing 1,069 –1,700 –159.0% 1 Sara Lee 1,256 –20 –1.6% 1 Entergy 562 –758 –135.0% 1 Burlington Northern Santa Fe 1,226 –18 –1.5% 1 Nucor 79 –59 –74.9% 1 3M 1,656 –21 –1.2% 1 Fluor 46 –29 –63.3% 1 Kinder Morgan 360 –4 –1.2% 1 Wesco International 19 –14 –73.5% 1 Lexmark 307 –2 –0.8% 1 Graybar Electric 14 –8 –57.3% 1 Allstate 1,540 –14 –0.9% 1 JPMorgan Chase 2,515 –1,398 –55.6% 1 Health Net 136 –1 –0.7% 1 Dillard’s 20 –5 –27.0% 1 General Electric 11,998 –33 –0.3% 1 Advance Auto Parts 92 –18 –19.2% 1 Allied Waste Industries 274 –0 –0.1% 1 OGE Energy 215 –36 –16.6% 1 Autoliv 59 –0 –0.0% 1 Public Service Enterprise Group 1,369 –208 –15.2% 1 Sysco 1,264 — — 1 Totals, these 82 companies $ 101,816 $ –12,568 –12.3% 121 Page 6 of 6 –000– Effective Corporate Tax Rates Over Time — 5% 10% 15% 20% 25% Reagan Pre- Reform (1986) Reagan Post- Reform (1988) Clinton 1996-98 Bush 2001 Bush 2002 Bush 2003 Federal Corporate Taxes as a % of GDP, Fiscal 1960 to 2003 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002