Wells Fargo gets big break in federal income taxes
Report identifies Wells Fargo as recipient of largest subsidy
Updated 4:15 am, Wednesday, February 26, 2014, https://www.sfgate.com/business/networth/article/Wells-Fargo-gets-big-break-in-federal-income-taxes-5267883.php
Out 0f 288 Fortune 500 companies that made money every year between 2008 and 2012, Wells Fargo received the largest estimated federal income tax subsidies – $21.6 billion over the five-year period, according to a report issued Tuesday by Citizens for Tax Justice.
The group, which says it is dedicated to tax fairness, published a similar report in November 2011, but it covered only three years of data and a slightly different group of companies. Wells Fargo topped the subsidy list in that report, too, with $18 billion in tax breaks.
The new report looked at how much the 288 companies would have paid in federal income tax on their U.S. profits over the five-year period at the statutory corporate rate of 35 percent, compared with what they reported having paid. It considers the difference a tax subsidy, and says it comes from a variety of tax breaks Congress has bestowed on U.S. companies.
Some are widely available, such as accelerated depreciation, which lets companies write off the value of capital assets faster than they really wear out. Another is a deduction for profits that workers make when they exercise the most common type of employee stock options. Employees pay income tax on this profit, but companies get to deduct it. It can be a huge write-off for tech and other companies that bestow options widely and generously.