Despite reaping tens of billions of dollars in profits between them over the past five years, General Motors and Ford paid an average combined tax rate of just 1% on total pre-tax income, an analysis published Tuesday by economic justice advocates revealed — as the auto giants claimed they cannot afford striking workers’ demands for better pay.
The Americans for Tax Fairness (ATF) analysis — which posits that “the tax system is rigged to benefit multinational corporations over the workers who keep them running” — notes that over the past five years, GM and Ford made a total of $34 billion and $8 billion respectively, but paid an effective federal tax rate of only 1.3% for GM and -0.2% for Ford.
“While some of those tax savings have found their way into rapidly rising compensation packages for the firms’ top executives and board members, wages of rank-and-file workers have lagged,” the report states. “Average executive pay at GM and Ford grew by 32% over the past five years, while median autoworker pay grew by just 8.8% over the same period, widening the executive-to-worker pay gap to 183-to-1.”
“Over that same period, GM and Ford paid out a combined total of $14 billion in dividends (34 times more than they paid in taxes), spent $3.6 billion on stock buybacks (nine times more than they paid in taxes), and lavished $614 million on top company executives (50% more than they paid in taxes),” the publication continues.
The analysis comes five days into a “stand-up strike” by around 13,000 United Auto Workers (UAW) members at GM, Ford, and Stellantis plants. The workers are seeking better pay and benefits.
“General Motors and Ford are refusing to meet UAW’s demands, claiming that what workers are asking for is unreasonable,” the report states. “An Americans for Tax Fairness analysis of GM and Ford’s most recent [Securities and Exchange Commission] filings finds that what is truly unreasonable is how the auto giants get away with paying practically nothing in federal taxes while further enriching their top executives with huge pay packages and their shareholders with dividend payments and stock buybacks.”
ATF executive director David Kass argued that “Ford and GM have thrown their priorities into reverse.”
“They’re overcompensating their already wealthy executives, board members, and shareholders, while shortchanging the workers and nation that made their success possible,” Kass continued. “They need to offer serious proposals for sharing the wealth with rank-and-file employees and start paying their fair share of taxes.”
Kass additionally asserted that the National Labor Relations Board “must ensure these corporations treat their workers justly; and in its upcoming budget negotiations, Congress must ensure big corporations like Ford and GM are contributing what they should to America’s fiscal health.”
Corporate tax dodging is pervasive in most U.S. industries. According to a Government Accountability Office (GAO) analysis commissioned by Sen. Bernie Sanders (I-Vt.) and released in January, more than a third of large, profitable corporations in the United States paid no federal income tax in 2018, the year that the so-called Republican “tax scam” signed into law by then-President Donald Trump took effect.
The GAO report also found that “average effective tax rates — the percentage of income paid after tax breaks — among profitable large corporations fell from 16% in 2014 to 9% in 2018.”
Other analyses of more recent data confirms the trend continues. A Center for American Progress study of 2021 investor filings for Fortune 100 companies revealed that 19 of the largest profitable corporations in America “are paying effective tax rates that are in the single digits — or paying nothing at all.”
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.