Late EditionToday, periods of clouds and sun,warmer, high 75. Tonight, showersand a thunderstorm, mainly late,low 56. Tomorrow, showers, breezy,cooler, high 62. Details, Page A20.
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BEHIND THE HUNT FOR BIN LADEN
Islamabad
Abbottabad
PeshawarKabul
P A K I S T A N
AFGHANISTAN
INDIA
JalalabadJAMMU
ANDKASHMIR
Tri b
a l A
r ea s
100 MILES
Abbottabad
Bin Laden compound
Pakistan
Military
Academy
BILALTOWN
Kakul R
d.
Kar
akor
em H
wy.
Murree Rd. 1 MILE
The Raid
IN PLAIN SIGHT
The White House said on Monday that Bin Laden had been living in “plain sight” in Abbottabad, a city 35 miles northeast of Islamabad, the Pakistani capital.
The compound was less than a mile from a military academy of the Pakistani Army.
Sources: Department of Defense; Central Intelligence Agency; LeadDog Consulting THE NEW YORK TIMES; SATELLITE IMAGE BY DIGITALGLOBE AND GOOGLE EARTH
The building’s north side had opaque windows.
7-foot-high privacy wall
Residents burned their own trash here.
Bin Laden had long been rumored to be
hiding in remote tribal areas along the
Pakistani-Afghan border.
Other residentshad been occupyinga smaller building and the first floor of the main building.
One of the helicopters carrying American troops broke down, stalling as it flew over the compound wall. The team blew it up and called in a backup.
Osama bin Laden, three other men and a woman were killed during a 40-minute raid by the United States Navy Seals on the outskirts of Abbottabad, Pakistan early Monday.
Bin Laden and his family had occupied the second and third floors of the main building, the last area to be cleared by American forces. He was killed in the latter part of the battle.
GATEDENTRANCE
10-FOOT WALL
13-FOOT WALL
12-FOOT WALL
18-FOOT WALL
INTERNAL GATE
200 FEET
N
By JEFF ZELENYand JIM RUTENBERG
WASHINGTON — President Obamadrew praise from unlikely quarters onMonday for pursuing a risky and clan-destine mission to kill Osama binLaden, a successful operation that in-terrupted the withering Republican crit-icism about his foreign policy, worldview and his grasp of the office.
Former Vice President Dick Cheneydeclared, “The administration clearlydeserves credit for the success of theoperation.” New York’s former mayor,Rudolph W. Giuliani, said, “I admire thecourage of the president.” And Donald J.Trump declared, “I want to personally
congratulate President Obama.”As fleeting as it might prove to be, the
positive tone stood in blunt contrast tothe narrative Republicans have beenworking to build in the opening stagesof the 2012 presidential campaign.
The argument that most potential Re-publican candidates have been making— that Mr. Obama is an indecisive lead-er, incapable of handling rapidly evolv-ing events around the world — sudden-ly became more complicated. And theboost in stature for Mr. Obama, even iftemporary, comes when a number ofRepublicans are deciding whether tocommit themselves to the presidentialrace, and offered fresh evidence that hemight be less vulnerable than his oppo-nents thought.
The development came at a good timefor Mr. Obama, who received the worstforeign policy rating of his presidencyin a New York Times/CBS News polllast month, with 46 percent of respond-ents saying they disapproved of his han-dling of international affairs. But the im-plications for the president, who willvisit the World Trade Center on Thurs-day, were impossible to predict.
The nation’s unemployment rate re-mains relatively high, and the economicrecovery has yet to gain traction. Highgasoline prices are pinching consumerbudgets and eroding confidence. Sev-enty percent of Americans in theTimes/CBS poll last month said the
Gearing Up for Obama in ’12, Republicans Pause to Praise
Continued on Page F5
By A. G. SULZBERGER
EAST PRAIRIE, Mo. — RubenBennett, his back bent and hisfingers gnarled from a lifetime oflabor, has lived all of his 88 yearson an expanse of rich farmlandhere, just below where the OhioRiver pours into the Mississippi.He survived his share of floods —including the record-setting onethat swept away his boyhoodhome — but he has never runfrom one, until now.
For days he returned repeated-ly, despite a mandatory evacua-tion, with the hope of riding outanother major flood in his long-time home above his shuttered
grocery store. But under threatsfrom law enforcement officials,and the cajoling of his family, hefinally agreed to retreat. As ex-plosives tore open a protectivelevee Monday night, he waitedfor the news that his home hasbeen destroyed.
“I can’t tell you how I feel, be-cause there no feeling for that,”he said hours earlier, sitting in hisdaughter’s house — nearby, andsafe from possible flooding —where he has been sleeping onthe couch. “I hate it so bad.”
The Mississippi River, alreadyat record levels here, keeps ris-ing, fed by punishing rains. Asthe flood protection systems thatsafeguard countless communities
groan under the pressure, federalofficials executed a fiercely de-bated plan to destroy a part of thelevee holding back the river in
A Life’s Toil Along the Big River, Lost as It Rises
JENNIFER SILVERBERG
Ruben Bennett, 88.
Continued on Page A12
myriad breaks and loopholes thatother countries generally do notoffer, United States corporationspay only slightly more on aver-age than their counterparts inother industrial countries. Andsome American corporations useaggressive strategies to pay less— often far less — than theircompetitors abroad and at home.A Government Accountability Of-fice study released in 2008 foundthat 55 percent of United Statescompanies paid no federal in-come taxes during at least one
By DAVID KOCIENIEWSKI
The United States may soonwind up with a distinction thatmakes business leaders cringe —the highest corporate tax rate inthe world.
Topping out at 35 percent,America’s official corporate in-come tax rate trails that of onlyJapan, at 39.5 percent, which hassaid it plans to lower its rate. It isnearly triple Ireland’s and 10 per-centage points higher than inDenmark, Austria or China. Tohelp companies here stay com-petitive, many executives say,Congress should lower it.
But by taking advantage of
year in a seven-year period itstudied.
The paradox of the UnitedStates tax code — high rates witha bounty of subsidies, sheltersand special breaks — has madeAmerican multinationals “worldleaders in tax avoidance,” accord-ing to Edward D. Kleinbard, a
U.S. Has High Business Tax Rates, Technically
Continued on Page B9
Source: O.M.B. THE NEW YORK TIMES
TOTAL U.S. CORPORATE TAXESAS A SHARE OF G.D.P.
6543210
%
’50 ’60 ’70 ’80 ’90 ’00 ’10
BUT NOBODY PAYS THAT
A Wealth of Exceptions
This article is by Mark Mazzetti, He-lene Cooper and Peter Baker.
WASHINGTON — For years, the ago-nizing search for Osama bin Laden keptcoming up empty. Then last July, Paki-stanis working for the Central Intelli-gence Agency drove up behind a whiteSuzuki navigating the bustling streetsnear Peshawar, Pakistan, and wrotedown the car’s license plate.
The man in the car was Bin Laden’smost trusted courier, and over the nextmonth C.I.A. operatives would trackhim throughout central Pakistan. Ulti-mately, administration officials said, heled them to a sprawling compound atthe end of a long dirt road and sur-rounded by tall security fences in awealthy hamlet 35 miles from the Paki-stani capital.
On a moonless night eight months lat-er, 79 American commandos in four heli-copters descended on the compound,the officials said. Shots rang out. A heli-copter stalled and would not take off.Pakistani authorities, kept in the darkby their allies in Washington, scrambledforces as the American commandosrushed to finish their mission and leavebefore a confrontation. Of the five dead,one was a tall, bearded man with abloodied face and a bullet in his head. Amember of the Navy Seals snapped hispicture with a camera and uploaded it toanalysts who fed it into a facial recogni-tion program.
And just like that, history’s most ex-pansive, expensive and exasperatingmanhunt was over. The inert frame ofOsama bin Laden, America’s enemyNo. 1, was placed in a helicopter forburial at sea, never to be seen or fearedagain. A nation that spent a decade tor-mented by its failure to catch the manresponsible for nearly 3,000 fiery deathsin New York, Washington and Penn-sylvania on Sept. 11, 2001, at long lasthad its sense of finality, at least in thisone difficult chapter.
For an intelligence community thathad endured searing criticism for astring of intelligence failures over thepast decade, Bin Laden’s killing broughta measure of redemption. For a militarythat has slogged through two, and nowthree vexing wars in Muslim countries,it provided an unalloyed success. Andfor a president whose national securityleadership has come under question, itproved an affirming moment that willenter the history books.
The raid was the culmination of yearsof painstaking intelligence work, includ-ing the interrogation of C.I.A. detaineesin secret prisons in Eastern Europe,where sometimes what was not saidwas as useful as what was. Intelligenceagencies eavesdropped on telephonecalls and e-mails of the courier’s Arabfamily in a Persian Gulf state and poredover satellite images of the compoundin Abbottabad to determine a “patternof life” that might decide whether theoperation would be worth the risk.
As more than a dozen White House,intelligence and Pentagon officials de-scribed the operation on Monday, thepast few weeks were a nerve-rackingamalgamation of what-ifs and negative
Clues Slowly Ledto Location ofQaeda Chief
Continued on Page F3
At town-hall-style meetings lawmakersheld during the recent two-week Con-gressional recess, who filled the seats —and sprang out of them with questions— was not left to chance. Grass-roots ac-tivists from each party maneuvered tomake sure their side was heard. In SunLakes, Ariz.,friendly audi-ence mem-bers hadquestions forRepresenta-tive JeffFlake.
PAGE A9
NATIONAL A9-14
Stacking the AudienceRelations between Hamas and the Syri-an authorities have been strained, asthe Palestinian group has refused totake sides in the uprising there. PAGE A4
INTERNATIONAL A4-8
Pressing Hamas for a Stand For the first time in nearly 20 years, thenumber of homes in the United Stateswith television sets has dropped, ac-cording to a Nielsen survey. PAGE B1
BUSINESS DAY B1-10
Fewer U.S. Homes Have TVsOver the years, Norman Mailer filled hisBrooklyn Heights apartment with me-mentos that reflected the varied patch-work of his life. Now that he and hiswife, Norris Church, have died, his ninechildren havelisted the unitfor sale for $2.5million. Andthey may con-sider sellingsome of the con-tents, includingthis toy Ferriswheel.
PAGE A15
NEW YORK A15-19
Mailer’s Life, Reflected In rituals involving walks across hotcoals, audience members’ heart ratesquicken with those of the daredevils —but only if they are related. Persuadingpeople to wear heart monitors as part ofa study on what draws people to com-munal rituals was not easy, but wasprobably easier than the walk. PAGE D1
SCIENCE TIMES D1-8
Fire-Walking and Family
David Brooks PAGE A23
EDITORIAL, OP-ED A22-23
Dave Duerson, who committed suicide,had the same trauma-induced diseasefound in other players. PAGE B11
SPORTSTUESDAY B11-15
Brain Damage in N.F.L. PlayerIn “A Singular Woman,” Janny Scott re-counts the journey and legacy of BarackObama’s mother, Ann Dunham. PAGE C1
ARTS C1-8
A View of Obama’s Mother
Syrian security forces have escalated anarrest campaign in the most rebelliousregions, detaining hundreds. PAGE A4
Syria Steps Up ArrestsAn increase in tax receipts has givenCongress another month to considerraising the federal debt limit. PAGE B1
A Month’s Debt Limit Reprieve
EMOTIONS InNew York, jubi-lation wasmixed withhope and afeeling ofwounds re-opened.
ODDITY Inthe Arab world, a sensethat Bin Laden was from a bygone time.
EMBARRASSMENT For Pakistan, a floodof questions and suspicion.
EPITAPH From a privileged childhood,Bin Laden became the face of terrorism.
SECTION F
SPECIAL SECTION
The Death of Bin Laden
U(D54G1D)y+=!;!$!=!#
C M Y K Nxxx,2011-05-03,A,001,Bs-BK,E3May 3, 2011
Ø Ø N B9BUSINESSTHE NEW YORK TIMES TUESDAY, MAY 3, 2011
professor at the University ofSouthern California who washead of the Congressional jointcommittee on taxes. This has pro-found implications for business-es, the economy and the federalbudget.
As Congress wrestles with howto get the deficit under control,one big point of contention iswhether spending cuts will needto be accompanied by an in-crease in taxes on some individ-uals or businesses. Facing a full-court press from business lead-ers who say the tax system is out-dated and onerous, PresidentObama, Congress and businessleaders have been warily negoti-ating various proposals, thoughmostly about whether to cut thetop corporate rate and to tightentax laws and not about whetherto increase revenue.
The United States is virtuallyalone in trying to tax its multi-national corporations on theirforeign earnings, but it allowscompanies to avoid those taxesindefinitely by keeping profitsoverseas. That encourages com-panies to use accounting maneu-vers to shift profits to low-taxcountries and to invest profitsoffshore, says David S. Miller, apartner at Cadwalader, Wicker-sham & Taft in New York.
Honeywell International, theNew Jersey company that makesthings as diverse as aerospacecomponents and First Alertsmoke detectors, reported in reg-ulatory filings that in the last fiveyears, it paid cash income taxesin the United States and abroadequal to 15 percent of its profits.On Friday, a Honeywell spokes-woman pointed out that the com-pany had since made a large pen-sion contribution, which effec-tively cut its profits and made itstax rate closer to 22 percent.
A major domestic competitor,United Technologies, reported anaverage of 24 percent over thattime. A German rival, Siemens,reported 29 percent of its totalprofit.
In addition to being complexand uneven, the United Statescorporate tax code is inefficientand has become a diminishingsource of revenue. Corporate tax-es accounted for about 9 percentof all federal revenue in 2010. At$191 billion, they were equal to 1.3percent of the nation’s gross do-mestic product. Most industrialcountries collect more from com-panies, about 2.5 percent of out-put. Only a portion of that dis-parity can be explained by themany types of businesses in theUnited States that elect to betaxed at an individual rate.
“Whether the test is fairness orefficiency, the U.S. system getsreally low marks,” said MichelleHanlon, an M.I.T. professor whosays the country needs to com-pletely revamp the way it taxescorporations.
Not all American companiesare willing or able to reduce theirtaxes drastically. Taxes varymore by industry here thanabroad, according to a study re-leased in February by Kevin S.Markle of Dartmouth and Doug-las A. Shackelford of the Uni-versity of North Carolina. At thehigh end, American retailers paid31 percent in total income taxes,construction 30 percent and man-ufacturers 26 percent. Financialservices companies paid an aver-age of 20 percent, real estate 19
percent and mining 6 percent.(Measuring taxes paid by com-
panies is imprecise because taxfilings remain private. In manycases, the estimates reported in acompany’s financial filings withregulators overstate taxes paid ina year because they include de-ferred taxes. Nonetheless, aca-demics, economists and electedofficials use the estimates forcomparative purposes.)
Because some companies areso effective at minimizing taxes,the average works out to far lessthan the official rate. UnitedStates companies pay about aquarter of their profits in federalincome taxes, a few percentagepoints higher than the rate paidby companies in most other ma-jor industrial countries, accord-ing to a number of studies and
tax experts.Assorted proposals being dis-
cussed in Washington call for therate to be lowered officially toabout 25 percent and some taxbreaks to be eliminated so thatrevenue remains unchanged.
But some prominent businessleaders, including the chief exec-utive of Procter & Gamble, arepushing for the rate to be re-duced without reining in tax shel-ters. That would make the UnitedStates virtually the only countryto change corporate taxes in re-cent years in a way that ended upadding to its deficit.
“One fact we know is that in allof the countries that have low-ered their corporate rates in re-cent years, they still collected thesame amount in revenues ormore,” said Reuven S. Avi-Yonah,
an international tax lawyer whoteaches at the University ofMichigan. “This means that theywere broadening the base of theprofits that corporations were ac-tually taxed on.”
Procter & Gamble, whoseproducts include Tide detergentand Crest toothpaste, paid an av-erage of 24 percent of its profitsin worldwide income taxes overthe last three years, according toregulatory filings. That is nearlythe same rate reported by twobig European rivals, Unileverand Henkel.
Yet Robert A. McDonald,P.& G.’s top executive, testifiedbefore a Congressional commit-tee this year about the need tocut the United States tax ratewithout ending tax breaks andshelters. “We need a tax systemthat addresses today’s hyper-competitive global marketplace,”Mr. McDonald said, arguing thatthe playing field was tilted awayfrom American businesses.
Many liberal groups counterthat ending the breaks, subsidiesand shelters in the corporate taxcode could provide enoughmoney to lower the rate severalpercentage points and still in-crease revenue.
Furthermore, some businessowners complain that the Ameri-can system unfairly rewards dis-ingenuous bookkeeping ratherthan innovation. It forces compa-nies to compete “based not onproduct quality and services, buton accounting gymnastics,” saidPaul Egerman, former chairmanand chief executive of eScription,a medical transcription service inBoston.
No one is certain how muchcreative accounting costs the fed-eral government in lost revenue,but most estimates say it easilyexceeds $50 billion a year. Tar-geted tax preferences, whichCongress created to intentionallybenefit specific companies or in-dustries, cost an estimated $100billion more a year.
Many tax analysts are skepti-cal that Congress, business lead-ers and the Obama administra-tion will be able to reach a dealbefore the 2012 election.
“It’s human nature that peopleare going to fight harder to pre-serve a benefit they already havethan to get some new benefit,”said Clint Stretch, a principal atDeloitte Tax and a former coun-sel to the Congressional JointCommittee on Taxation. “Theonly way tax reform makes ev-eryone happy is if everyone wins.And with the federal budgetwhere it is today, that’s not pos-sible.”
ERIC MILLER/REUTERS
Honeywell International in Minnesota. In the last five years, the company said, about 22 percent of its profit went to income taxes.
U.S. Business Has High Tax Rates but Pays LessFrom Page A1
DOUG MILLS/THE NEW YORK TIMES
Edward D. Kleinbard, third from left, former head of the Congressional joint committee on taxes,said American multinational corporations had become “world leaders in tax avoidance.”
EFFECTIVE RATE, 2008* STATUTORY RATE, 2010†
Advocates for cutting the corporate tax rate in the United States usually cite the statutory limit, but the average effective tax rate is much lower. As a share of gross domestic product, companies pay less in the United States than elsewhere.
A Lighter Burden
THE NEW YORK TIMES
Source: Organization of Economic Cooperation and Development; PricewaterhouseCoopers
† Includes national, state and local rates. Countries that have significant state and local rates include the United States, Japan and Germany.
* Latest available data. Figures for 2009 would also not be typical because of the worldwide economic crisis.
§ Weighted average, excluding the United States.
The effective rate is based on data from 1,000 large corporations worldwide. The rate is calculated as total income taxes divided by pretax income. The figures exclude companies with pretax losses and oil and gas companies,which are often subject to atypical surcharges.
Japan
United States
France
Belgium
Germany
Spain
Britain
Sweden
Greece
Ireland
O.E.C.D.
39.5
39.2
34.4
34.0
30.2
30.0
28.0
26.3
24.0
12.5
29.6
%
§
46.3
27.1
24.1
22.4
31.1
21.4
27.4
23.8
21.4
19.2
24.9
%
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
% FEDERAL CORPORATE TAXES AS SHARE OF G.D.P.
’75 ’80 ’85 ’95 ’05 ’09’90 ’00
Members of the Organization of Economic Cooperation and Development
United States
By MARJORIE CONNELLY
While most Americans say cor-porations do not pay their fairshare in taxes, they still prefercuts in government spending toincreasing taxes on corporationsas a means of cutting the federalbudget deficit, according to a re-cent New York Times/CBS Newspoll.
But when given a choice be-tween raising taxes on corpora-tions and raising taxes on house-holds that make more than$250,000 a year, almost two-thirdsof respondents opt for taxingbusinesses.
There is a strong partisan di-vide: A majority of Republicansand independents favor cuttinggovernment spending over rais-ing taxes on businesses, whileDemocrats are evenly divided.Democrats strongly support in-creasing corporate taxes ratherthan adding to the taxes of afflu-ent households; Republicans andindependents are closely divided.
In general, however, few Amer-icans back increasing taxes onAmerican businesses: only 37percent said corporate taxesshould be increased to help re-duce the federal budget deficit.The rest agree with an alterna-tive argument that increased tax-es would discourage Americancompanies from creating jobsand hurt them in the global mar-ketplace. Thirty-two percentwould rather see corporate taxesremain as they are now and 26percent said taxes on corporate
profits should be decreased. “If you increase taxes, you lim-
it the ability to produce and com-pete, especially in a global mar-ket,” Larry Williams, 70, of Hoo-ver, Ala., said in a follow-up in-terview. “If we increase taxes onmanufacturers, they will turnaround and send the work over-seas because that’s the only waythey can survive,” said Mr. Wil-liams, a retired business owner.
Six in 10 Americans surveyedthink companies use their taxsavings to give bonuses to execu-tives and dividends to sharehold-ers. About a quarter, 23 percent,said they thought tax savingswere mostly reinvested back inthe corporation and only 4 per-cent said savings were used tocreate new jobs for Americanworkers.
Almost half, 46 percent, said allcompanies should be taxed at thesame rate. About a third saidsome industries deserved a taxbreak. Small businesses, greencompanies and those in thehealth care industry were mostfrequently mentioned as deserv-ing of tax breaks. “In this econ-omy we should be supportingsmaller business owners, whowill, hopefully, eventually turninto larger business owners,”said Scott Cochran, 34, a furnituredesigner who owns his own busi-ness in Columbus, Ohio.
The nationwide telephone sur-vey was conducted March 2 to 7with 1,266 adults and has a mar-gin of sampling error of plus orminus three percentage points.The complete methodology andquestionnaire are available atNYTimes.com.
Based on telephone interviews conductedMarch 2-7 with 1,266 adults. THE NEW YORK TIMES
Even though Americans think corporations pay less than their fair share in taxes, they express little support for raising taxes on American companies. According to a recent New York Times/CBS News poll, the public would rather cut government spending to help reduce the budget deficit than tax corporate profits more.
Marina Stefan contributed re-porting.
Articles in this series are examin-ing efforts by businesses to lowertheir taxes, and the debate overhow to improve the tax system.
nytimes.com/businessday
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Late EditionToday, periods of clouds and sun,warmer, high 75. Tonight, showersand a thunderstorm, mainly late,low 56. Tomorrow, showers, breezy,cooler, high 62. Details, Page A20.
$2.00
BEHIND THE HUNT FOR BIN LADEN
Islamabad
Abbottabad
PeshawarKabul
P A K I S T A N
AFGHANISTAN
INDIA
JalalabadJAMMU
ANDKASHMIR
Tri b
a l A
r ea s
100 MILES
Abbottabad
Bin Laden compound
Pakistan
Military
Academy
BILALTOWN
Kakul R
d.
Kar
akor
em H
wy.
Murree Rd. 1 MILE
The Raid
IN PLAIN SIGHT
The White House said on Monday that Bin Laden had been living in “plain sight” in Abbottabad, a city 35 miles northeast of Islamabad, the Pakistani capital.
The compound was less than a mile from a military academy of the Pakistani Army.
Sources: Department of Defense; Central Intelligence Agency; LeadDog Consulting THE NEW YORK TIMES; SATELLITE IMAGE BY DIGITALGLOBE AND GOOGLE EARTH
The building’s north side had opaque windows.
7-foot-high privacy wall
Residents burned their own trash here.
Bin Laden had long been rumored to be
hiding in remote tribal areas along the
Pakistani-Afghan border.
Other residentshad been occupyinga smaller building and the first floor of the main building.
One of the helicopters carrying American troops broke down, stalling as it flew over the compound wall. The team blew it up and called in a backup.
Osama bin Laden, three other men and a woman were killed during a 40-minute raid by the United States Navy Seals on the outskirts of Abbottabad, Pakistan early Monday.
Bin Laden and his family had occupied the second and third floors of the main building, the last area to be cleared by American forces. He was killed in the latter part of the battle.
GATEDENTRANCE
10-FOOT WALL
13-FOOT WALL
12-FOOT WALL
18-FOOT WALL
INTERNAL GATE
200 FEET
N
By JEFF ZELENYand JIM RUTENBERG
WASHINGTON — President Obamadrew praise from unlikely quarters onMonday for pursuing a risky and clan-destine mission to kill Osama binLaden, a successful operation that in-terrupted the withering Republican crit-icism about his foreign policy, worldview and his grasp of the office.
Former Vice President Dick Cheneydeclared, “The administration clearlydeserves credit for the success of theoperation.” New York’s former mayor,Rudolph W. Giuliani, said, “I admire thecourage of the president.” And Donald J.Trump declared, “I want to personally
congratulate President Obama.”As fleeting as it might prove to be, the
positive tone stood in blunt contrast tothe narrative Republicans have beenworking to build in the opening stagesof the 2012 presidential campaign.
The argument that most potential Re-publican candidates have been making— that Mr. Obama is an indecisive lead-er, incapable of handling rapidly evolv-ing events around the world — sudden-ly became more complicated. And theboost in stature for Mr. Obama, even iftemporary, comes when a number ofRepublicans are deciding whether tocommit themselves to the presidentialrace, and offered fresh evidence that hemight be less vulnerable than his oppo-nents thought.
The development came at a good timefor Mr. Obama, who received the worstforeign policy rating of his presidencyin a New York Times/CBS News polllast month, with 46 percent of respond-ents saying they disapproved of his han-dling of international affairs. But the im-plications for the president, who willvisit the World Trade Center on Thurs-day, were impossible to predict.
The nation’s unemployment rate re-mains relatively high, and the economicrecovery has yet to gain traction. Highgasoline prices are pinching consumerbudgets and eroding confidence. Sev-enty percent of Americans in theTimes/CBS poll last month said the
Gearing Up for Obama in ’12, Republicans Pause to Praise
Continued on Page F5
By A. G. SULZBERGER
EAST PRAIRIE, Mo. — RubenBennett, his back bent and hisfingers gnarled from a lifetime oflabor, has lived all of his 88 yearson an expanse of rich farmlandhere, just below where the OhioRiver pours into the Mississippi.He survived his share of floods —including the record-setting onethat swept away his boyhoodhome — but he has never runfrom one, until now.
For days he returned repeated-ly, despite a mandatory evacua-tion, with the hope of riding outanother major flood in his long-time home above his shuttered
grocery store. But under threatsfrom law enforcement officials,and the cajoling of his family, hefinally agreed to retreat. As ex-plosives tore open a protectivelevee Monday night, he waitedfor the news that his home hasbeen destroyed.
“I can’t tell you how I feel, be-cause there no feeling for that,”he said hours earlier, sitting in hisdaughter’s house — nearby, andsafe from possible flooding —where he has been sleeping onthe couch. “I hate it so bad.”
The Mississippi River, alreadyat record levels here, keeps ris-ing, fed by punishing rains. Asthe flood protection systems thatsafeguard countless communities
groan under the pressure, federalofficials executed a fiercely de-bated plan to destroy a part of thelevee holding back the river in
A Life’s Toil Along the Big River, Lost as It Rises
JENNIFER SILVERBERG
Ruben Bennett, 88.
Continued on Page A12
myriad breaks and loopholes thatother countries generally do notoffer, United States corporationspay only slightly more on aver-age than their counterparts inother industrial countries. Andsome American corporations useaggressive strategies to pay less— often far less — than theircompetitors abroad and at home.A Government Accountability Of-fice study released in 2008 foundthat 55 percent of United Statescompanies paid no federal in-come taxes during at least one
By DAVID KOCIENIEWSKI
The United States may soonwind up with a distinction thatmakes business leaders cringe —the highest corporate tax rate inthe world.
Topping out at 35 percent,America’s official corporate in-come tax rate trails that of onlyJapan, at 39.5 percent, which hassaid it plans to lower its rate. It isnearly triple Ireland’s and 10 per-centage points higher than inDenmark, Austria or China. Tohelp companies here stay com-petitive, many executives say,Congress should lower it.
But by taking advantage of
year in a seven-year period itstudied.
The paradox of the UnitedStates tax code — high rates witha bounty of subsidies, sheltersand special breaks — has madeAmerican multinationals “worldleaders in tax avoidance,” accord-ing to Edward D. Kleinbard, a
U.S. Has High Business Tax Rates, Technically
Continued on Page B9
Source: O.M.B. THE NEW YORK TIMES
TOTAL U.S. CORPORATE TAXESAS A SHARE OF G.D.P.
6543210
%
’50 ’60 ’70 ’80 ’90 ’00 ’10
BUT NOBODY PAYS THAT
A Wealth of Exceptions
This article is by Mark Mazzetti, He-lene Cooper and Peter Baker.
WASHINGTON — For years, the ago-nizing search for Osama bin Laden keptcoming up empty. Then last July, Paki-stanis working for the Central Intelli-gence Agency drove up behind a whiteSuzuki navigating the bustling streetsnear Peshawar, Pakistan, and wrotedown the car’s license plate.
The man in the car was Bin Laden’smost trusted courier, and over the nextmonth C.I.A. operatives would trackhim throughout central Pakistan. Ulti-mately, administration officials said, heled them to a sprawling compound atthe end of a long dirt road and sur-rounded by tall security fences in awealthy hamlet 35 miles from the Paki-stani capital.
On a moonless night eight months lat-er, 79 American commandos in four heli-copters descended on the compound,the officials said. Shots rang out. A heli-copter stalled and would not take off.Pakistani authorities, kept in the darkby their allies in Washington, scrambledforces as the American commandosrushed to finish their mission and leavebefore a confrontation. Of the five dead,one was a tall, bearded man with abloodied face and a bullet in his head. Amember of the Navy Seals snapped hispicture with a camera and uploaded it toanalysts who fed it into a facial recogni-tion program.
And just like that, history’s most ex-pansive, expensive and exasperatingmanhunt was over. The inert frame ofOsama bin Laden, America’s enemyNo. 1, was placed in a helicopter forburial at sea, never to be seen or fearedagain. A nation that spent a decade tor-mented by its failure to catch the manresponsible for nearly 3,000 fiery deathsin New York, Washington and Penn-sylvania on Sept. 11, 2001, at long lasthad its sense of finality, at least in thisone difficult chapter.
For an intelligence community thathad endured searing criticism for astring of intelligence failures over thepast decade, Bin Laden’s killing broughta measure of redemption. For a militarythat has slogged through two, and nowthree vexing wars in Muslim countries,it provided an unalloyed success. Andfor a president whose national securityleadership has come under question, itproved an affirming moment that willenter the history books.
The raid was the culmination of yearsof painstaking intelligence work, includ-ing the interrogation of C.I.A. detaineesin secret prisons in Eastern Europe,where sometimes what was not saidwas as useful as what was. Intelligenceagencies eavesdropped on telephonecalls and e-mails of the courier’s Arabfamily in a Persian Gulf state and poredover satellite images of the compoundin Abbottabad to determine a “patternof life” that might decide whether theoperation would be worth the risk.
As more than a dozen White House,intelligence and Pentagon officials de-scribed the operation on Monday, thepast few weeks were a nerve-rackingamalgamation of what-ifs and negative
Clues Slowly Ledto Location ofQaeda Chief
Continued on Page F3
At town-hall-style meetings lawmakersheld during the recent two-week Con-gressional recess, who filled the seats —and sprang out of them with questions— was not left to chance. Grass-roots ac-tivists from each party maneuvered tomake sure their side was heard. In SunLakes, Ariz.,friendly audi-ence mem-bers hadquestions forRepresenta-tive JeffFlake.
PAGE A9
NATIONAL A9-14
Stacking the AudienceRelations between Hamas and the Syri-an authorities have been strained, asthe Palestinian group has refused totake sides in the uprising there. PAGE A4
INTERNATIONAL A4-8
Pressing Hamas for a Stand For the first time in nearly 20 years, thenumber of homes in the United Stateswith television sets has dropped, ac-cording to a Nielsen survey. PAGE B1
BUSINESS DAY B1-10
Fewer U.S. Homes Have TVsOver the years, Norman Mailer filled hisBrooklyn Heights apartment with me-mentos that reflected the varied patch-work of his life. Now that he and hiswife, Norris Church, have died, his ninechildren havelisted the unitfor sale for $2.5million. Andthey may con-sider sellingsome of the con-tents, includingthis toy Ferriswheel.
PAGE A15
NEW YORK A15-19
Mailer’s Life, Reflected In rituals involving walks across hotcoals, audience members’ heart ratesquicken with those of the daredevils —but only if they are related. Persuadingpeople to wear heart monitors as part ofa study on what draws people to com-munal rituals was not easy, but wasprobably easier than the walk. PAGE D1
SCIENCE TIMES D1-8
Fire-Walking and Family
David Brooks PAGE A23
EDITORIAL, OP-ED A22-23
Dave Duerson, who committed suicide,had the same trauma-induced diseasefound in other players. PAGE B11
SPORTSTUESDAY B11-15
Brain Damage in N.F.L. PlayerIn “A Singular Woman,” Janny Scott re-counts the journey and legacy of BarackObama’s mother, Ann Dunham. PAGE C1
ARTS C1-8
A View of Obama’s Mother
Syrian security forces have escalated anarrest campaign in the most rebelliousregions, detaining hundreds. PAGE A4
Syria Steps Up ArrestsAn increase in tax receipts has givenCongress another month to considerraising the federal debt limit. PAGE B1
A Month’s Debt Limit Reprieve
EMOTIONS InNew York, jubi-lation wasmixed withhope and afeeling ofwounds re-opened.
ODDITY Inthe Arab world, a sensethat Bin Laden was from a bygone time.
EMBARRASSMENT For Pakistan, a floodof questions and suspicion.
EPITAPH From a privileged childhood,Bin Laden became the face of terrorism.
SECTION F
SPECIAL SECTION
The Death of Bin Laden
U(D54G1D)y+=!;!$!=!#
C M Y K Nxxx,2011-05-03,A,001,Bs-BK,E3
The United States may soon wind up with a distinction that makes business leaders cringe — the highest corporate tax rate in
the world.Topping out at 35 percent, America’s official
corporate income tax rate trails that of only Ja-pan, at 39.5 percent, which has said it plans to lower its rate. It is nearly triple Ireland’s and 10 percentage points higher than in Denmark, Austria or China. To help companies here stay competitive, many executives say, Congress should lower it.
But by taking advantage of myriad breaks and loopholes that other countries generally do not offer, United States corporations pay only slightly more on aver-age than their counterparts in other industrial countries. And some American corporations use aggressive strategies to pay less — often far less — than their competitors abroad and at home. A Government Accountability Office study re-leased in 2008 found that 55 percent of United States companies paid no federal income taxes during at least one year in a seven-year period it studied.
The paradox of the United States tax code — high rates with a bounty of subsidies, shelters and special breaks — has made American mul-tinationals “world leaders in tax avoidance,” ac-cording to edward D. Kleinbard, a professor at the University of Southern California who was head of the Congressional joint committee on taxes. This has profound implications for busi-nesses, the economy and the federal budget.
As Congress wrestles with how to get the deficit under control, one big point of contention is whether spending cuts will need to be accom-
panied by an increase in taxes on some indi-viduals or businesses. Facing a full-court press from business leaders who say the tax system is outdated and onerous, President Obama, Con-gress and business leaders have been warily negotiating various proposals, though mostly about whether to cut the top corporate rate and to tighten tax laws and not about whether to in-crease revenue.
The United States is virtually alone in try-ing to tax its multinational corpo-rations on their foreign earnings, but it allows companies to avoid those taxes indefinitely by keep-ing profits overseas. That encour-ages companies to use account-ing maneuvers to shift profits to low-tax countries and to invest profits offshore, says David S. Miller, a partner at Cadwalader, Wickersham & Taft in New York.
honeywell International, the New Jersey company that makes
things as diverse as aerospace components and First Alert smoke detectors, reported in regula-tory filings that in the last five years, it paid cash income taxes in the United States and abroad equal to 15 percent of its profits. On Friday, a honeywell spokeswoman pointed out that the company had since made a large pension con-tribution, which effectively cut its profits and made its tax rate closer to 22 percent.
A major domestic competitor, United Tech-nologies, reported an average of 24 percent over that time. A German rival, Siemens, reported 29 percent of its total profit.
In addition to being complex and uneven, the United States corporate tax code is ineffi-cient and has become a diminishing source of revenue. Corporate taxes accounted for about
Late EditionToday, periods of clouds and sun,warmer, high 75. Tonight, showersand a thunderstorm, mainly late,low 56. Tomorrow, showers, breezy,cooler, high 62. Details, Page A20.
$2.00
BEHIND THE HUNT FOR BIN LADEN
Islamabad
Abbottabad
PeshawarKabul
P A K I S T A N
AFGHANISTAN
INDIA
JalalabadJAMMU
ANDKASHMIR
Tri b
a l A
r ea s
100 MILES
Abbottabad
Bin Laden compound
Pakistan
Military
Academy
BILALTOWN
Kakul R
d.
Kar
akor
em H
wy.
Murree Rd. 1 MILE
The Raid
IN PLAIN SIGHT
The White House said on Monday that Bin Laden had been living in “plain sight” in Abbottabad, a city 35 miles northeast of Islamabad, the Pakistani capital.
The compound was less than a mile from a military academy of the Pakistani Army.
Sources: Department of Defense; Central Intelligence Agency; LeadDog Consulting THE NEW YORK TIMES; SATELLITE IMAGE BY DIGITALGLOBE AND GOOGLE EARTH
The building’s north side had opaque windows.
7-foot-high privacy wall
Residents burned their own trash here.
Bin Laden had long been rumored to be
hiding in remote tribal areas along the
Pakistani-Afghan border.
Other residentshad been occupyinga smaller building and the first floor of the main building.
One of the helicopters carrying American troops broke down, stalling as it flew over the compound wall. The team blew it up and called in a backup.
Osama bin Laden, three other men and a woman were killed during a 40-minute raid by the United States Navy Seals on the outskirts of Abbottabad, Pakistan early Monday.
Bin Laden and his family had occupied the second and third floors of the main building, the last area to be cleared by American forces. He was killed in the latter part of the battle.
GATEDENTRANCE
10-FOOT WALL
13-FOOT WALL
12-FOOT WALL
18-FOOT WALL
INTERNAL GATE
200 FEET
N
By JEFF ZELENYand JIM RUTENBERG
WASHINGTON — President Obamadrew praise from unlikely quarters onMonday for pursuing a risky and clan-destine mission to kill Osama binLaden, a successful operation that in-terrupted the withering Republican crit-icism about his foreign policy, worldview and his grasp of the office.
Former Vice President Dick Cheneydeclared, “The administration clearlydeserves credit for the success of theoperation.” New York’s former mayor,Rudolph W. Giuliani, said, “I admire thecourage of the president.” And Donald J.Trump declared, “I want to personally
congratulate President Obama.”As fleeting as it might prove to be, the
positive tone stood in blunt contrast tothe narrative Republicans have beenworking to build in the opening stagesof the 2012 presidential campaign.
The argument that most potential Re-publican candidates have been making— that Mr. Obama is an indecisive lead-er, incapable of handling rapidly evolv-ing events around the world — sudden-ly became more complicated. And theboost in stature for Mr. Obama, even iftemporary, comes when a number ofRepublicans are deciding whether tocommit themselves to the presidentialrace, and offered fresh evidence that hemight be less vulnerable than his oppo-nents thought.
The development came at a good timefor Mr. Obama, who received the worstforeign policy rating of his presidencyin a New York Times/CBS News polllast month, with 46 percent of respond-ents saying they disapproved of his han-dling of international affairs. But the im-plications for the president, who willvisit the World Trade Center on Thurs-day, were impossible to predict.
The nation’s unemployment rate re-mains relatively high, and the economicrecovery has yet to gain traction. Highgasoline prices are pinching consumerbudgets and eroding confidence. Sev-enty percent of Americans in theTimes/CBS poll last month said the
Gearing Up for Obama in ’12, Republicans Pause to Praise
Continued on Page F5
By A. G. SULZBERGER
EAST PRAIRIE, Mo. — RubenBennett, his back bent and hisfingers gnarled from a lifetime oflabor, has lived all of his 88 yearson an expanse of rich farmlandhere, just below where the OhioRiver pours into the Mississippi.He survived his share of floods —including the record-setting onethat swept away his boyhoodhome — but he has never runfrom one, until now.
For days he returned repeated-ly, despite a mandatory evacua-tion, with the hope of riding outanother major flood in his long-time home above his shuttered
grocery store. But under threatsfrom law enforcement officials,and the cajoling of his family, hefinally agreed to retreat. As ex-plosives tore open a protectivelevee Monday night, he waitedfor the news that his home hasbeen destroyed.
“I can’t tell you how I feel, be-cause there no feeling for that,”he said hours earlier, sitting in hisdaughter’s house — nearby, andsafe from possible flooding —where he has been sleeping onthe couch. “I hate it so bad.”
The Mississippi River, alreadyat record levels here, keeps ris-ing, fed by punishing rains. Asthe flood protection systems thatsafeguard countless communities
groan under the pressure, federalofficials executed a fiercely de-bated plan to destroy a part of thelevee holding back the river in
A Life’s Toil Along the Big River, Lost as It Rises
JENNIFER SILVERBERG
Ruben Bennett, 88.
Continued on Page A12
myriad breaks and loopholes thatother countries generally do notoffer, United States corporationspay only slightly more on aver-age than their counterparts inother industrial countries. Andsome American corporations useaggressive strategies to pay less— often far less — than theircompetitors abroad and at home.A Government Accountability Of-fice study released in 2008 foundthat 55 percent of United Statescompanies paid no federal in-come taxes during at least one
By DAVID KOCIENIEWSKI
The United States may soonwind up with a distinction thatmakes business leaders cringe —the highest corporate tax rate inthe world.
Topping out at 35 percent,America’s official corporate in-come tax rate trails that of onlyJapan, at 39.5 percent, which hassaid it plans to lower its rate. It isnearly triple Ireland’s and 10 per-centage points higher than inDenmark, Austria or China. Tohelp companies here stay com-petitive, many executives say,Congress should lower it.
But by taking advantage of
year in a seven-year period itstudied.
The paradox of the UnitedStates tax code — high rates witha bounty of subsidies, sheltersand special breaks — has madeAmerican multinationals “worldleaders in tax avoidance,” accord-ing to Edward D. Kleinbard, a
U.S. Has High Business Tax Rates, Technically
Continued on Page B9
Source: O.M.B. THE NEW YORK TIMES
TOTAL U.S. CORPORATE TAXESAS A SHARE OF G.D.P.
6543210
%
’50 ’60 ’70 ’80 ’90 ’00 ’10
BUT NOBODY PAYS THAT
A Wealth of Exceptions
This article is by Mark Mazzetti, He-lene Cooper and Peter Baker.
WASHINGTON — For years, the ago-nizing search for Osama bin Laden keptcoming up empty. Then last July, Paki-stanis working for the Central Intelli-gence Agency drove up behind a whiteSuzuki navigating the bustling streetsnear Peshawar, Pakistan, and wrotedown the car’s license plate.
The man in the car was Bin Laden’smost trusted courier, and over the nextmonth C.I.A. operatives would trackhim throughout central Pakistan. Ulti-mately, administration officials said, heled them to a sprawling compound atthe end of a long dirt road and sur-rounded by tall security fences in awealthy hamlet 35 miles from the Paki-stani capital.
On a moonless night eight months lat-er, 79 American commandos in four heli-copters descended on the compound,the officials said. Shots rang out. A heli-copter stalled and would not take off.Pakistani authorities, kept in the darkby their allies in Washington, scrambledforces as the American commandosrushed to finish their mission and leavebefore a confrontation. Of the five dead,one was a tall, bearded man with abloodied face and a bullet in his head. Amember of the Navy Seals snapped hispicture with a camera and uploaded it toanalysts who fed it into a facial recogni-tion program.
And just like that, history’s most ex-pansive, expensive and exasperatingmanhunt was over. The inert frame ofOsama bin Laden, America’s enemyNo. 1, was placed in a helicopter forburial at sea, never to be seen or fearedagain. A nation that spent a decade tor-mented by its failure to catch the manresponsible for nearly 3,000 fiery deathsin New York, Washington and Penn-sylvania on Sept. 11, 2001, at long lasthad its sense of finality, at least in thisone difficult chapter.
For an intelligence community thathad endured searing criticism for astring of intelligence failures over thepast decade, Bin Laden’s killing broughta measure of redemption. For a militarythat has slogged through two, and nowthree vexing wars in Muslim countries,it provided an unalloyed success. Andfor a president whose national securityleadership has come under question, itproved an affirming moment that willenter the history books.
The raid was the culmination of yearsof painstaking intelligence work, includ-ing the interrogation of C.I.A. detaineesin secret prisons in Eastern Europe,where sometimes what was not saidwas as useful as what was. Intelligenceagencies eavesdropped on telephonecalls and e-mails of the courier’s Arabfamily in a Persian Gulf state and poredover satellite images of the compoundin Abbottabad to determine a “patternof life” that might decide whether theoperation would be worth the risk.
As more than a dozen White House,intelligence and Pentagon officials de-scribed the operation on Monday, thepast few weeks were a nerve-rackingamalgamation of what-ifs and negative
Clues Slowly Ledto Location ofQaeda Chief
Continued on Page F3
At town-hall-style meetings lawmakersheld during the recent two-week Con-gressional recess, who filled the seats —and sprang out of them with questions— was not left to chance. Grass-roots ac-tivists from each party maneuvered tomake sure their side was heard. In SunLakes, Ariz.,friendly audi-ence mem-bers hadquestions forRepresenta-tive JeffFlake.
PAGE A9
NATIONAL A9-14
Stacking the AudienceRelations between Hamas and the Syri-an authorities have been strained, asthe Palestinian group has refused totake sides in the uprising there. PAGE A4
INTERNATIONAL A4-8
Pressing Hamas for a Stand For the first time in nearly 20 years, thenumber of homes in the United Stateswith television sets has dropped, ac-cording to a Nielsen survey. PAGE B1
BUSINESS DAY B1-10
Fewer U.S. Homes Have TVsOver the years, Norman Mailer filled hisBrooklyn Heights apartment with me-mentos that reflected the varied patch-work of his life. Now that he and hiswife, Norris Church, have died, his ninechildren havelisted the unitfor sale for $2.5million. Andthey may con-sider sellingsome of the con-tents, includingthis toy Ferriswheel.
PAGE A15
NEW YORK A15-19
Mailer’s Life, Reflected In rituals involving walks across hotcoals, audience members’ heart ratesquicken with those of the daredevils —but only if they are related. Persuadingpeople to wear heart monitors as part ofa study on what draws people to com-munal rituals was not easy, but wasprobably easier than the walk. PAGE D1
SCIENCE TIMES D1-8
Fire-Walking and Family
David Brooks PAGE A23
EDITORIAL, OP-ED A22-23
Dave Duerson, who committed suicide,had the same trauma-induced diseasefound in other players. PAGE B11
SPORTSTUESDAY B11-15
Brain Damage in N.F.L. PlayerIn “A Singular Woman,” Janny Scott re-counts the journey and legacy of BarackObama’s mother, Ann Dunham. PAGE C1
ARTS C1-8
A View of Obama’s Mother
Syrian security forces have escalated anarrest campaign in the most rebelliousregions, detaining hundreds. PAGE A4
Syria Steps Up ArrestsAn increase in tax receipts has givenCongress another month to considerraising the federal debt limit. PAGE B1
A Month’s Debt Limit Reprieve
EMOTIONS InNew York, jubi-lation wasmixed withhope and afeeling ofwounds re-opened.
ODDITY Inthe Arab world, a sensethat Bin Laden was from a bygone time.
EMBARRASSMENT For Pakistan, a floodof questions and suspicion.
EPITAPH From a privileged childhood,Bin Laden became the face of terrorism.
Late EditionToday, periods of clouds and sun,warmer, high 75. Tonight, showersand a thunderstorm, mainly late,low 56. Tomorrow, showers, breezy,cooler, high 62. Details, Page A20.
$2.00
BEHIND THE HUNT FOR BIN LADEN
Islamabad
Abbottabad
PeshawarKabul
P A K I S T A N
AFGHANISTAN
INDIA
JalalabadJAMMU
ANDKASHMIR
Tri b
a l A
r ea s
100 MILES
Abbottabad
Bin Laden compound
Pakistan
Military
Academy
BILALTOWN
Kakul R
d.
Kar
akor
em H
wy.
Murree Rd. 1 MILE
The Raid
IN PLAIN SIGHT
The White House said on Monday that Bin Laden had been living in “plain sight” in Abbottabad, a city 35 miles northeast of Islamabad, the Pakistani capital.
The compound was less than a mile from a military academy of the Pakistani Army.
Sources: Department of Defense; Central Intelligence Agency; LeadDog Consulting THE NEW YORK TIMES; SATELLITE IMAGE BY DIGITALGLOBE AND GOOGLE EARTH
The building’s north side had opaque windows.
7-foot-high privacy wall
Residents burned their own trash here.
Bin Laden had long been rumored to be
hiding in remote tribal areas along the
Pakistani-Afghan border.
Other residentshad been occupyinga smaller building and the first floor of the main building.
One of the helicopters carrying American troops broke down, stalling as it flew over the compound wall. The team blew it up and called in a backup.
Osama bin Laden, three other men and a woman were killed during a 40-minute raid by the United States Navy Seals on the outskirts of Abbottabad, Pakistan early Monday.
Bin Laden and his family had occupied the second and third floors of the main building, the last area to be cleared by American forces. He was killed in the latter part of the battle.
GATEDENTRANCE
10-FOOT WALL
13-FOOT WALL
12-FOOT WALL
18-FOOT WALL
INTERNAL GATE
200 FEET
N
By JEFF ZELENYand JIM RUTENBERG
WASHINGTON — President Obamadrew praise from unlikely quarters onMonday for pursuing a risky and clan-destine mission to kill Osama binLaden, a successful operation that in-terrupted the withering Republican crit-icism about his foreign policy, worldview and his grasp of the office.
Former Vice President Dick Cheneydeclared, “The administration clearlydeserves credit for the success of theoperation.” New York’s former mayor,Rudolph W. Giuliani, said, “I admire thecourage of the president.” And Donald J.Trump declared, “I want to personally
congratulate President Obama.”As fleeting as it might prove to be, the
positive tone stood in blunt contrast tothe narrative Republicans have beenworking to build in the opening stagesof the 2012 presidential campaign.
The argument that most potential Re-publican candidates have been making— that Mr. Obama is an indecisive lead-er, incapable of handling rapidly evolv-ing events around the world — sudden-ly became more complicated. And theboost in stature for Mr. Obama, even iftemporary, comes when a number ofRepublicans are deciding whether tocommit themselves to the presidentialrace, and offered fresh evidence that hemight be less vulnerable than his oppo-nents thought.
The development came at a good timefor Mr. Obama, who received the worstforeign policy rating of his presidencyin a New York Times/CBS News polllast month, with 46 percent of respond-ents saying they disapproved of his han-dling of international affairs. But the im-plications for the president, who willvisit the World Trade Center on Thurs-day, were impossible to predict.
The nation’s unemployment rate re-mains relatively high, and the economicrecovery has yet to gain traction. Highgasoline prices are pinching consumerbudgets and eroding confidence. Sev-enty percent of Americans in theTimes/CBS poll last month said the
Gearing Up for Obama in ’12, Republicans Pause to Praise
Continued on Page F5
By A. G. SULZBERGER
EAST PRAIRIE, Mo. — RubenBennett, his back bent and hisfingers gnarled from a lifetime oflabor, has lived all of his 88 yearson an expanse of rich farmlandhere, just below where the OhioRiver pours into the Mississippi.He survived his share of floods —including the record-setting onethat swept away his boyhoodhome — but he has never runfrom one, until now.
For days he returned repeated-ly, despite a mandatory evacua-tion, with the hope of riding outanother major flood in his long-time home above his shuttered
grocery store. But under threatsfrom law enforcement officials,and the cajoling of his family, hefinally agreed to retreat. As ex-plosives tore open a protectivelevee Monday night, he waitedfor the news that his home hasbeen destroyed.
“I can’t tell you how I feel, be-cause there no feeling for that,”he said hours earlier, sitting in hisdaughter’s house — nearby, andsafe from possible flooding —where he has been sleeping onthe couch. “I hate it so bad.”
The Mississippi River, alreadyat record levels here, keeps ris-ing, fed by punishing rains. Asthe flood protection systems thatsafeguard countless communities
groan under the pressure, federalofficials executed a fiercely de-bated plan to destroy a part of thelevee holding back the river in
A Life’s Toil Along the Big River, Lost as It Rises
JENNIFER SILVERBERG
Ruben Bennett, 88.
Continued on Page A12
myriad breaks and loopholes thatother countries generally do notoffer, United States corporationspay only slightly more on aver-age than their counterparts inother industrial countries. Andsome American corporations useaggressive strategies to pay less— often far less — than theircompetitors abroad and at home.A Government Accountability Of-fice study released in 2008 foundthat 55 percent of United Statescompanies paid no federal in-come taxes during at least one
By DAVID KOCIENIEWSKI
The United States may soonwind up with a distinction thatmakes business leaders cringe —the highest corporate tax rate inthe world.
Topping out at 35 percent,America’s official corporate in-come tax rate trails that of onlyJapan, at 39.5 percent, which hassaid it plans to lower its rate. It isnearly triple Ireland’s and 10 per-centage points higher than inDenmark, Austria or China. Tohelp companies here stay com-petitive, many executives say,Congress should lower it.
But by taking advantage of
year in a seven-year period itstudied.
The paradox of the UnitedStates tax code — high rates witha bounty of subsidies, sheltersand special breaks — has madeAmerican multinationals “worldleaders in tax avoidance,” accord-ing to Edward D. Kleinbard, a
U.S. Has High Business Tax Rates, Technically
Continued on Page B9
Source: O.M.B. THE NEW YORK TIMES
TOTAL U.S. CORPORATE TAXESAS A SHARE OF G.D.P.
6543210
%
’50 ’60 ’70 ’80 ’90 ’00 ’10
BUT NOBODY PAYS THAT
A Wealth of Exceptions
This article is by Mark Mazzetti, He-lene Cooper and Peter Baker.
WASHINGTON — For years, the ago-nizing search for Osama bin Laden keptcoming up empty. Then last July, Paki-stanis working for the Central Intelli-gence Agency drove up behind a whiteSuzuki navigating the bustling streetsnear Peshawar, Pakistan, and wrotedown the car’s license plate.
The man in the car was Bin Laden’smost trusted courier, and over the nextmonth C.I.A. operatives would trackhim throughout central Pakistan. Ulti-mately, administration officials said, heled them to a sprawling compound atthe end of a long dirt road and sur-rounded by tall security fences in awealthy hamlet 35 miles from the Paki-stani capital.
On a moonless night eight months lat-er, 79 American commandos in four heli-copters descended on the compound,the officials said. Shots rang out. A heli-copter stalled and would not take off.Pakistani authorities, kept in the darkby their allies in Washington, scrambledforces as the American commandosrushed to finish their mission and leavebefore a confrontation. Of the five dead,one was a tall, bearded man with abloodied face and a bullet in his head. Amember of the Navy Seals snapped hispicture with a camera and uploaded it toanalysts who fed it into a facial recogni-tion program.
And just like that, history’s most ex-pansive, expensive and exasperatingmanhunt was over. The inert frame ofOsama bin Laden, America’s enemyNo. 1, was placed in a helicopter forburial at sea, never to be seen or fearedagain. A nation that spent a decade tor-mented by its failure to catch the manresponsible for nearly 3,000 fiery deathsin New York, Washington and Penn-sylvania on Sept. 11, 2001, at long lasthad its sense of finality, at least in thisone difficult chapter.
For an intelligence community thathad endured searing criticism for astring of intelligence failures over thepast decade, Bin Laden’s killing broughta measure of redemption. For a militarythat has slogged through two, and nowthree vexing wars in Muslim countries,it provided an unalloyed success. Andfor a president whose national securityleadership has come under question, itproved an affirming moment that willenter the history books.
The raid was the culmination of yearsof painstaking intelligence work, includ-ing the interrogation of C.I.A. detaineesin secret prisons in Eastern Europe,where sometimes what was not saidwas as useful as what was. Intelligenceagencies eavesdropped on telephonecalls and e-mails of the courier’s Arabfamily in a Persian Gulf state and poredover satellite images of the compoundin Abbottabad to determine a “patternof life” that might decide whether theoperation would be worth the risk.
As more than a dozen White House,intelligence and Pentagon officials de-scribed the operation on Monday, thepast few weeks were a nerve-rackingamalgamation of what-ifs and negative
Clues Slowly Ledto Location ofQaeda Chief
Continued on Page F3
At town-hall-style meetings lawmakersheld during the recent two-week Con-gressional recess, who filled the seats —and sprang out of them with questions— was not left to chance. Grass-roots ac-tivists from each party maneuvered tomake sure their side was heard. In SunLakes, Ariz.,friendly audi-ence mem-bers hadquestions forRepresenta-tive JeffFlake.
PAGE A9
NATIONAL A9-14
Stacking the AudienceRelations between Hamas and the Syri-an authorities have been strained, asthe Palestinian group has refused totake sides in the uprising there. PAGE A4
INTERNATIONAL A4-8
Pressing Hamas for a Stand For the first time in nearly 20 years, thenumber of homes in the United Stateswith television sets has dropped, ac-cording to a Nielsen survey. PAGE B1
BUSINESS DAY B1-10
Fewer U.S. Homes Have TVsOver the years, Norman Mailer filled hisBrooklyn Heights apartment with me-mentos that reflected the varied patch-work of his life. Now that he and hiswife, Norris Church, have died, his ninechildren havelisted the unitfor sale for $2.5million. Andthey may con-sider sellingsome of the con-tents, includingthis toy Ferriswheel.
PAGE A15
NEW YORK A15-19
Mailer’s Life, Reflected In rituals involving walks across hotcoals, audience members’ heart ratesquicken with those of the daredevils —but only if they are related. Persuadingpeople to wear heart monitors as part ofa study on what draws people to com-munal rituals was not easy, but wasprobably easier than the walk. PAGE D1
SCIENCE TIMES D1-8
Fire-Walking and Family
David Brooks PAGE A23
EDITORIAL, OP-ED A22-23
Dave Duerson, who committed suicide,had the same trauma-induced diseasefound in other players. PAGE B11
SPORTSTUESDAY B11-15
Brain Damage in N.F.L. PlayerIn “A Singular Woman,” Janny Scott re-counts the journey and legacy of BarackObama’s mother, Ann Dunham. PAGE C1
ARTS C1-8
A View of Obama’s Mother
Syrian security forces have escalated anarrest campaign in the most rebelliousregions, detaining hundreds. PAGE A4
Syria Steps Up ArrestsAn increase in tax receipts has givenCongress another month to considerraising the federal debt limit. PAGE B1
A Month’s Debt Limit Reprieve
EMOTIONS InNew York, jubi-lation wasmixed withhope and afeeling ofwounds re-opened.
ODDITY Inthe Arab world, a sensethat Bin Laden was from a bygone time.
EMBARRASSMENT For Pakistan, a floodof questions and suspicion.
EPITAPH From a privileged childhood,Bin Laden became the face of terrorism.
Late EditionToday, periods of clouds and sun,warmer, high 75. Tonight, showersand a thunderstorm, mainly late,low 56. Tomorrow, showers, breezy,cooler, high 62. Details, Page A20.
$2.00
BEHIND THE HUNT FOR BIN LADEN
Islamabad
Abbottabad
PeshawarKabul
P A K I S T A N
AFGHANISTAN
INDIA
JalalabadJAMMU
ANDKASHMIR
Tri b
a l A
r ea s
100 MILES
Abbottabad
Bin Laden compound
Pakistan
Military
Academy
BILALTOWN
Kakul R
d.
Kar
akor
em H
wy.
Murree Rd. 1 MILE
The Raid
IN PLAIN SIGHT
The White House said on Monday that Bin Laden had been living in “plain sight” in Abbottabad, a city 35 miles northeast of Islamabad, the Pakistani capital.
The compound was less than a mile from a military academy of the Pakistani Army.
Sources: Department of Defense; Central Intelligence Agency; LeadDog Consulting THE NEW YORK TIMES; SATELLITE IMAGE BY DIGITALGLOBE AND GOOGLE EARTH
The building’s north side had opaque windows.
7-foot-high privacy wall
Residents burned their own trash here.
Bin Laden had long been rumored to be
hiding in remote tribal areas along the
Pakistani-Afghan border.
Other residentshad been occupyinga smaller building and the first floor of the main building.
One of the helicopters carrying American troops broke down, stalling as it flew over the compound wall. The team blew it up and called in a backup.
Osama bin Laden, three other men and a woman were killed during a 40-minute raid by the United States Navy Seals on the outskirts of Abbottabad, Pakistan early Monday.
Bin Laden and his family had occupied the second and third floors of the main building, the last area to be cleared by American forces. He was killed in the latter part of the battle.
GATEDENTRANCE
10-FOOT WALL
13-FOOT WALL
12-FOOT WALL
18-FOOT WALL
INTERNAL GATE
200 FEET
N
By JEFF ZELENYand JIM RUTENBERG
WASHINGTON — President Obamadrew praise from unlikely quarters onMonday for pursuing a risky and clan-destine mission to kill Osama binLaden, a successful operation that in-terrupted the withering Republican crit-icism about his foreign policy, worldview and his grasp of the office.
Former Vice President Dick Cheneydeclared, “The administration clearlydeserves credit for the success of theoperation.” New York’s former mayor,Rudolph W. Giuliani, said, “I admire thecourage of the president.” And Donald J.Trump declared, “I want to personally
congratulate President Obama.”As fleeting as it might prove to be, the
positive tone stood in blunt contrast tothe narrative Republicans have beenworking to build in the opening stagesof the 2012 presidential campaign.
The argument that most potential Re-publican candidates have been making— that Mr. Obama is an indecisive lead-er, incapable of handling rapidly evolv-ing events around the world — sudden-ly became more complicated. And theboost in stature for Mr. Obama, even iftemporary, comes when a number ofRepublicans are deciding whether tocommit themselves to the presidentialrace, and offered fresh evidence that hemight be less vulnerable than his oppo-nents thought.
The development came at a good timefor Mr. Obama, who received the worstforeign policy rating of his presidencyin a New York Times/CBS News polllast month, with 46 percent of respond-ents saying they disapproved of his han-dling of international affairs. But the im-plications for the president, who willvisit the World Trade Center on Thurs-day, were impossible to predict.
The nation’s unemployment rate re-mains relatively high, and the economicrecovery has yet to gain traction. Highgasoline prices are pinching consumerbudgets and eroding confidence. Sev-enty percent of Americans in theTimes/CBS poll last month said the
Gearing Up for Obama in ’12, Republicans Pause to Praise
Continued on Page F5
By A. G. SULZBERGER
EAST PRAIRIE, Mo. — RubenBennett, his back bent and hisfingers gnarled from a lifetime oflabor, has lived all of his 88 yearson an expanse of rich farmlandhere, just below where the OhioRiver pours into the Mississippi.He survived his share of floods —including the record-setting onethat swept away his boyhoodhome — but he has never runfrom one, until now.
For days he returned repeated-ly, despite a mandatory evacua-tion, with the hope of riding outanother major flood in his long-time home above his shuttered
grocery store. But under threatsfrom law enforcement officials,and the cajoling of his family, hefinally agreed to retreat. As ex-plosives tore open a protectivelevee Monday night, he waitedfor the news that his home hasbeen destroyed.
“I can’t tell you how I feel, be-cause there no feeling for that,”he said hours earlier, sitting in hisdaughter’s house — nearby, andsafe from possible flooding —where he has been sleeping onthe couch. “I hate it so bad.”
The Mississippi River, alreadyat record levels here, keeps ris-ing, fed by punishing rains. Asthe flood protection systems thatsafeguard countless communities
groan under the pressure, federalofficials executed a fiercely de-bated plan to destroy a part of thelevee holding back the river in
A Life’s Toil Along the Big River, Lost as It Rises
JENNIFER SILVERBERG
Ruben Bennett, 88.
Continued on Page A12
myriad breaks and loopholes thatother countries generally do notoffer, United States corporationspay only slightly more on aver-age than their counterparts inother industrial countries. Andsome American corporations useaggressive strategies to pay less— often far less — than theircompetitors abroad and at home.A Government Accountability Of-fice study released in 2008 foundthat 55 percent of United Statescompanies paid no federal in-come taxes during at least one
By DAVID KOCIENIEWSKI
The United States may soonwind up with a distinction thatmakes business leaders cringe —the highest corporate tax rate inthe world.
Topping out at 35 percent,America’s official corporate in-come tax rate trails that of onlyJapan, at 39.5 percent, which hassaid it plans to lower its rate. It isnearly triple Ireland’s and 10 per-centage points higher than inDenmark, Austria or China. Tohelp companies here stay com-petitive, many executives say,Congress should lower it.
But by taking advantage of
year in a seven-year period itstudied.
The paradox of the UnitedStates tax code — high rates witha bounty of subsidies, sheltersand special breaks — has madeAmerican multinationals “worldleaders in tax avoidance,” accord-ing to Edward D. Kleinbard, a
U.S. Has High Business Tax Rates, Technically
Continued on Page B9
Source: O.M.B. THE NEW YORK TIMES
TOTAL U.S. CORPORATE TAXESAS A SHARE OF G.D.P.
6543210
%
’50 ’60 ’70 ’80 ’90 ’00 ’10
BUT NOBODY PAYS THAT
A Wealth of Exceptions
This article is by Mark Mazzetti, He-lene Cooper and Peter Baker.
WASHINGTON — For years, the ago-nizing search for Osama bin Laden keptcoming up empty. Then last July, Paki-stanis working for the Central Intelli-gence Agency drove up behind a whiteSuzuki navigating the bustling streetsnear Peshawar, Pakistan, and wrotedown the car’s license plate.
The man in the car was Bin Laden’smost trusted courier, and over the nextmonth C.I.A. operatives would trackhim throughout central Pakistan. Ulti-mately, administration officials said, heled them to a sprawling compound atthe end of a long dirt road and sur-rounded by tall security fences in awealthy hamlet 35 miles from the Paki-stani capital.
On a moonless night eight months lat-er, 79 American commandos in four heli-copters descended on the compound,the officials said. Shots rang out. A heli-copter stalled and would not take off.Pakistani authorities, kept in the darkby their allies in Washington, scrambledforces as the American commandosrushed to finish their mission and leavebefore a confrontation. Of the five dead,one was a tall, bearded man with abloodied face and a bullet in his head. Amember of the Navy Seals snapped hispicture with a camera and uploaded it toanalysts who fed it into a facial recogni-tion program.
And just like that, history’s most ex-pansive, expensive and exasperatingmanhunt was over. The inert frame ofOsama bin Laden, America’s enemyNo. 1, was placed in a helicopter forburial at sea, never to be seen or fearedagain. A nation that spent a decade tor-mented by its failure to catch the manresponsible for nearly 3,000 fiery deathsin New York, Washington and Penn-sylvania on Sept. 11, 2001, at long lasthad its sense of finality, at least in thisone difficult chapter.
For an intelligence community thathad endured searing criticism for astring of intelligence failures over thepast decade, Bin Laden’s killing broughta measure of redemption. For a militarythat has slogged through two, and nowthree vexing wars in Muslim countries,it provided an unalloyed success. Andfor a president whose national securityleadership has come under question, itproved an affirming moment that willenter the history books.
The raid was the culmination of yearsof painstaking intelligence work, includ-ing the interrogation of C.I.A. detaineesin secret prisons in Eastern Europe,where sometimes what was not saidwas as useful as what was. Intelligenceagencies eavesdropped on telephonecalls and e-mails of the courier’s Arabfamily in a Persian Gulf state and poredover satellite images of the compoundin Abbottabad to determine a “patternof life” that might decide whether theoperation would be worth the risk.
As more than a dozen White House,intelligence and Pentagon officials de-scribed the operation on Monday, thepast few weeks were a nerve-rackingamalgamation of what-ifs and negative
Clues Slowly Ledto Location ofQaeda Chief
Continued on Page F3
At town-hall-style meetings lawmakersheld during the recent two-week Con-gressional recess, who filled the seats —and sprang out of them with questions— was not left to chance. Grass-roots ac-tivists from each party maneuvered tomake sure their side was heard. In SunLakes, Ariz.,friendly audi-ence mem-bers hadquestions forRepresenta-tive JeffFlake.
PAGE A9
NATIONAL A9-14
Stacking the AudienceRelations between Hamas and the Syri-an authorities have been strained, asthe Palestinian group has refused totake sides in the uprising there. PAGE A4
INTERNATIONAL A4-8
Pressing Hamas for a Stand For the first time in nearly 20 years, thenumber of homes in the United Stateswith television sets has dropped, ac-cording to a Nielsen survey. PAGE B1
BUSINESS DAY B1-10
Fewer U.S. Homes Have TVsOver the years, Norman Mailer filled hisBrooklyn Heights apartment with me-mentos that reflected the varied patch-work of his life. Now that he and hiswife, Norris Church, have died, his ninechildren havelisted the unitfor sale for $2.5million. Andthey may con-sider sellingsome of the con-tents, includingthis toy Ferriswheel.
PAGE A15
NEW YORK A15-19
Mailer’s Life, Reflected In rituals involving walks across hotcoals, audience members’ heart ratesquicken with those of the daredevils —but only if they are related. Persuadingpeople to wear heart monitors as part ofa study on what draws people to com-munal rituals was not easy, but wasprobably easier than the walk. PAGE D1
SCIENCE TIMES D1-8
Fire-Walking and Family
David Brooks PAGE A23
EDITORIAL, OP-ED A22-23
Dave Duerson, who committed suicide,had the same trauma-induced diseasefound in other players. PAGE B11
SPORTSTUESDAY B11-15
Brain Damage in N.F.L. PlayerIn “A Singular Woman,” Janny Scott re-counts the journey and legacy of BarackObama’s mother, Ann Dunham. PAGE C1
ARTS C1-8
A View of Obama’s Mother
Syrian security forces have escalated anarrest campaign in the most rebelliousregions, detaining hundreds. PAGE A4
Syria Steps Up ArrestsAn increase in tax receipts has givenCongress another month to considerraising the federal debt limit. PAGE B1
A Month’s Debt Limit Reprieve
EMOTIONS InNew York, jubi-lation wasmixed withhope and afeeling ofwounds re-opened.
ODDITY Inthe Arab world, a sensethat Bin Laden was from a bygone time.
EMBARRASSMENT For Pakistan, a floodof questions and suspicion.
EPITAPH From a privileged childhood,Bin Laden became the face of terrorism.
SECTION F
SPECIAL SECTION
The Death of Bin Laden
U(D54G1D)y+=!;!$!=!#
C M Y K Nxxx,2011-05-03,A,001,Bs-BK,E3
9 percent of all federal revenue in 2010. At $191 billion, they were equal to 1.3 percent of the na-tion’s gross domestic product. Most industrial countries collect more from companies, about 2.5 percent of output. Only a portion of that dis-parity can be explained by the many types of businesses in the United States that elect to be taxed at an individual rate.
“Whether the test is fairness or efficiency, the U.S. system gets really low marks,” said Mi-chelle hanlon, an M.I.T. professor who says the country needs to completely revamp the way it taxes corporations.
Not all American companies are willing or able to reduce their taxes drastically. Taxes vary more by industry here than abroad, according to a study released in February by Kevin S. Markle of Dartmouth and Douglas A. Shackel-ford of the University of North Carolina. At the high end, American retailers paid 31 percent in total income taxes, construction 30 percent and manufacturers 26 percent. Financial services
companies paid an average of 20 percent, real estate 19 percent and mining 6 percent.
(Measuring taxes paid by companies is im-precise because tax filings remain private. In many cases, the estimates reported in a com-pany’s financial filings with regulators over-state taxes paid in a year because they include deferred taxes. Nonetheless, academics, econo-mists and elected officials use the estimates for comparative purposes.)
Because some companies are so effective at minimizing taxes, the average works out to far less than the official rate. United States com-panies pay about a quarter of their profits in federal income taxes, a few percentage points higher than the rate paid by companies in most other major industrial countries, according to a number of studies and tax experts.
Assorted proposals being discussed in Washington call for the rate to be lowered offi-cially to about 25 percent and some tax breaks to be eliminated so that revenue remains un-
Ø Ø N B9BUSINESSTHE NEW YORK TIMES TUESDAY, MAY 3, 2011
professor at the University ofSouthern California who washead of the Congressional jointcommittee on taxes. This has pro-found implications for business-es, the economy and the federalbudget.
As Congress wrestles with howto get the deficit under control,one big point of contention iswhether spending cuts will needto be accompanied by an in-crease in taxes on some individ-uals or businesses. Facing a full-court press from business lead-ers who say the tax system is out-dated and onerous, PresidentObama, Congress and businessleaders have been warily negoti-ating various proposals, thoughmostly about whether to cut thetop corporate rate and to tightentax laws and not about whetherto increase revenue.
The United States is virtuallyalone in trying to tax its multi-national corporations on theirforeign earnings, but it allowscompanies to avoid those taxesindefinitely by keeping profitsoverseas. That encourages com-panies to use accounting maneu-vers to shift profits to low-taxcountries and to invest profitsoffshore, says David S. Miller, apartner at Cadwalader, Wicker-sham & Taft in New York.
Honeywell International, theNew Jersey company that makesthings as diverse as aerospacecomponents and First Alertsmoke detectors, reported in reg-ulatory filings that in the last fiveyears, it paid cash income taxesin the United States and abroadequal to 15 percent of its profits.On Friday, a Honeywell spokes-woman pointed out that the com-pany had since made a large pen-sion contribution, which effec-tively cut its profits and made itstax rate closer to 22 percent.
A major domestic competitor,United Technologies, reported anaverage of 24 percent over thattime. A German rival, Siemens,reported 29 percent of its totalprofit.
In addition to being complexand uneven, the United Statescorporate tax code is inefficientand has become a diminishingsource of revenue. Corporate tax-es accounted for about 9 percentof all federal revenue in 2010. At$191 billion, they were equal to 1.3percent of the nation’s gross do-mestic product. Most industrialcountries collect more from com-panies, about 2.5 percent of out-put. Only a portion of that dis-parity can be explained by themany types of businesses in theUnited States that elect to betaxed at an individual rate.
“Whether the test is fairness orefficiency, the U.S. system getsreally low marks,” said MichelleHanlon, an M.I.T. professor whosays the country needs to com-pletely revamp the way it taxescorporations.
Not all American companiesare willing or able to reduce theirtaxes drastically. Taxes varymore by industry here thanabroad, according to a study re-leased in February by Kevin S.Markle of Dartmouth and Doug-las A. Shackelford of the Uni-versity of North Carolina. At thehigh end, American retailers paid31 percent in total income taxes,construction 30 percent and man-ufacturers 26 percent. Financialservices companies paid an aver-age of 20 percent, real estate 19
percent and mining 6 percent.(Measuring taxes paid by com-
panies is imprecise because taxfilings remain private. In manycases, the estimates reported in acompany’s financial filings withregulators overstate taxes paid ina year because they include de-ferred taxes. Nonetheless, aca-demics, economists and electedofficials use the estimates forcomparative purposes.)
Because some companies areso effective at minimizing taxes,the average works out to far lessthan the official rate. UnitedStates companies pay about aquarter of their profits in federalincome taxes, a few percentagepoints higher than the rate paidby companies in most other ma-jor industrial countries, accord-ing to a number of studies and
tax experts.Assorted proposals being dis-
cussed in Washington call for therate to be lowered officially toabout 25 percent and some taxbreaks to be eliminated so thatrevenue remains unchanged.
But some prominent businessleaders, including the chief exec-utive of Procter & Gamble, arepushing for the rate to be re-duced without reining in tax shel-ters. That would make the UnitedStates virtually the only countryto change corporate taxes in re-cent years in a way that ended upadding to its deficit.
“One fact we know is that in allof the countries that have low-ered their corporate rates in re-cent years, they still collected thesame amount in revenues ormore,” said Reuven S. Avi-Yonah,
an international tax lawyer whoteaches at the University ofMichigan. “This means that theywere broadening the base of theprofits that corporations were ac-tually taxed on.”
Procter & Gamble, whoseproducts include Tide detergentand Crest toothpaste, paid an av-erage of 24 percent of its profitsin worldwide income taxes overthe last three years, according toregulatory filings. That is nearlythe same rate reported by twobig European rivals, Unileverand Henkel.
Yet Robert A. McDonald,P.& G.’s top executive, testifiedbefore a Congressional commit-tee this year about the need tocut the United States tax ratewithout ending tax breaks andshelters. “We need a tax systemthat addresses today’s hyper-competitive global marketplace,”Mr. McDonald said, arguing thatthe playing field was tilted awayfrom American businesses.
Many liberal groups counterthat ending the breaks, subsidiesand shelters in the corporate taxcode could provide enoughmoney to lower the rate severalpercentage points and still in-crease revenue.
Furthermore, some businessowners complain that the Ameri-can system unfairly rewards dis-ingenuous bookkeeping ratherthan innovation. It forces compa-nies to compete “based not onproduct quality and services, buton accounting gymnastics,” saidPaul Egerman, former chairmanand chief executive of eScription,a medical transcription service inBoston.
No one is certain how muchcreative accounting costs the fed-eral government in lost revenue,but most estimates say it easilyexceeds $50 billion a year. Tar-geted tax preferences, whichCongress created to intentionallybenefit specific companies or in-dustries, cost an estimated $100billion more a year.
Many tax analysts are skepti-cal that Congress, business lead-ers and the Obama administra-tion will be able to reach a dealbefore the 2012 election.
“It’s human nature that peopleare going to fight harder to pre-serve a benefit they already havethan to get some new benefit,”said Clint Stretch, a principal atDeloitte Tax and a former coun-sel to the Congressional JointCommittee on Taxation. “Theonly way tax reform makes ev-eryone happy is if everyone wins.And with the federal budgetwhere it is today, that’s not pos-sible.”
ERIC MILLER/REUTERS
Honeywell International in Minnesota. In the last five years, the company said, about 22 percent of its profit went to income taxes.
U.S. Business Has High Tax Rates but Pays LessFrom Page A1
DOUG MILLS/THE NEW YORK TIMES
Edward D. Kleinbard, third from left, former head of the Congressional joint committee on taxes,said American multinational corporations had become “world leaders in tax avoidance.”
EFFECTIVE RATE, 2008* STATUTORY RATE, 2010†
Advocates for cutting the corporate tax rate in the United States usually cite the statutory limit, but the average effective tax rate is much lower. As a share of gross domestic product, companies pay less in the United States than elsewhere.
A Lighter Burden
THE NEW YORK TIMES
Source: Organization of Economic Cooperation and Development; PricewaterhouseCoopers
† Includes national, state and local rates. Countries that have significant state and local rates include the United States, Japan and Germany.
* Latest available data. Figures for 2009 would also not be typical because of the worldwide economic crisis.
§ Weighted average, excluding the United States.
The effective rate is based on data from 1,000 large corporations worldwide. The rate is calculated as total income taxes divided by pretax income. The figures exclude companies with pretax losses and oil and gas companies,which are often subject to atypical surcharges.
Japan
United States
France
Belgium
Germany
Spain
Britain
Sweden
Greece
Ireland
O.E.C.D.
39.5
39.2
34.4
34.0
30.2
30.0
28.0
26.3
24.0
12.5
29.6
%
§
46.3
27.1
24.1
22.4
31.1
21.4
27.4
23.8
21.4
19.2
24.9
%
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
% FEDERAL CORPORATE TAXES AS SHARE OF G.D.P.
’75 ’80 ’85 ’95 ’05 ’09’90 ’00
Members of the Organization of Economic Cooperation and Development
United States
By MARJORIE CONNELLY
While most Americans say cor-porations do not pay their fairshare in taxes, they still prefercuts in government spending toincreasing taxes on corporationsas a means of cutting the federalbudget deficit, according to a re-cent New York Times/CBS Newspoll.
But when given a choice be-tween raising taxes on corpora-tions and raising taxes on house-holds that make more than$250,000 a year, almost two-thirdsof respondents opt for taxingbusinesses.
There is a strong partisan di-vide: A majority of Republicansand independents favor cuttinggovernment spending over rais-ing taxes on businesses, whileDemocrats are evenly divided.Democrats strongly support in-creasing corporate taxes ratherthan adding to the taxes of afflu-ent households; Republicans andindependents are closely divided.
In general, however, few Amer-icans back increasing taxes onAmerican businesses: only 37percent said corporate taxesshould be increased to help re-duce the federal budget deficit.The rest agree with an alterna-tive argument that increased tax-es would discourage Americancompanies from creating jobsand hurt them in the global mar-ketplace. Thirty-two percentwould rather see corporate taxesremain as they are now and 26percent said taxes on corporate
profits should be decreased. “If you increase taxes, you lim-
it the ability to produce and com-pete, especially in a global mar-ket,” Larry Williams, 70, of Hoo-ver, Ala., said in a follow-up in-terview. “If we increase taxes onmanufacturers, they will turnaround and send the work over-seas because that’s the only waythey can survive,” said Mr. Wil-liams, a retired business owner.
Six in 10 Americans surveyedthink companies use their taxsavings to give bonuses to execu-tives and dividends to sharehold-ers. About a quarter, 23 percent,said they thought tax savingswere mostly reinvested back inthe corporation and only 4 per-cent said savings were used tocreate new jobs for Americanworkers.
Almost half, 46 percent, said allcompanies should be taxed at thesame rate. About a third saidsome industries deserved a taxbreak. Small businesses, greencompanies and those in thehealth care industry were mostfrequently mentioned as deserv-ing of tax breaks. “In this econ-omy we should be supportingsmaller business owners, whowill, hopefully, eventually turninto larger business owners,”said Scott Cochran, 34, a furnituredesigner who owns his own busi-ness in Columbus, Ohio.
The nationwide telephone sur-vey was conducted March 2 to 7with 1,266 adults and has a mar-gin of sampling error of plus orminus three percentage points.The complete methodology andquestionnaire are available atNYTimes.com.
Based on telephone interviews conductedMarch 2-7 with 1,266 adults. THE NEW YORK TIMES
Even though Americans think corporations pay less than their fair share in taxes, they express little support for raising taxes on American companies. According to a recent New York Times/CBS News poll, the public would rather cut government spending to help reduce the budget deficit than tax corporate profits more.
Marina Stefan contributed re-porting.
Articles in this series are examin-ing efforts by businesses to lowertheir taxes, and the debate overhow to improve the tax system.
nytimes.com/businessday
But Nobody Pays That
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Const. SENIOR PROJECT MGRSeeking a dedicated detail-orientedprofessionalw/ superiormgmt, organi-zational, analytical & planning skills.Min. 10yrsconsecutiveexperasaP.M.,must be able to manage several pro-jects ranging up to 30+ million dollars,exclntwriting&oral & leadershipskills.Exclntsal. bonus & benes pckg. (EOE)e-mail res. to: [email protected]
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DENTAL OFFICESin Bronx (Whitestone Bridge)/ Queens(Glendale). Busy insurance/privatepractice, seeking a General DentistPT/FT; Periodontist PT; ReceptionistFT and Dental Assistant FT
PLUMBINGESTIMATORLargeplumb-ing co. seeks exp Comm/Resid Plumb-ing Est, 6-fig annual salary, health plan,vac/hol. Exp in high-rise resid/off const.comp lit. Email: [email protected]
RESTAURANT-Line cooks, experienceonly saute & grill. Large Fire IslandRestaurant, May-September, live-in.Faxresumeto: 631-665-7663
SECRETARY/RECEPTIONISTDiversified position. Phones, data en-try, greet visitors, time & attendance,payroll distribution, MSWord, EXCEL,some ACCESS. Motivated, ability toprioritize and take initiative. 50+wpmtyping. Sal comm.w/exp.FAXoremailresume with sal req. to 212-618-1135.NYS Task Force, 250 Broadway, NY10007.
Systems Analyst: Design & installservers. Plan, develop, test and docu-ment computer programs, applyingknowledge of programming tech-niques and computer systems; Eval.user request for app. support, for fin. orHRmgmt todetermine response timesandprovideresolutionsbasedonSLAs;Consultw/user to identify current oper-atingprocedures&clarify programob-jectives; Prepare flow charts & dia-grams to illustrate sequence of stepsprogram must follow and to describelogical operations involved; Analyze,review,&alter programto increaseop-erational efficiency or adapt to new re-qmnt; Write manual for users to de-scribe installation & operational proce-dures; Provide tech. assist to programuser utilizing ITIL procedures; M.S plus1 yr of exp or B.S + 5 yrs of relevant expreqd.Mail resumes toADS Inc, 156 Jeri-choTpke,FloralPark,NY11001.
SALESREPS -Majorbeveragedistribu-tor looking for reps to promote its Wine& Spirits Portfolio in 5 boroughs andSouth Fork of Nassau Co. Car a must.Email resumeto:[email protected]
FOX AGENCYONLYBABY& CHILDCARE
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NANNY **PROFESSIONAL**Needed for NYC working couple. Live-in. MUST be legal. Top Salary. CallMon-Fri 212-889-6609 Pavillion #624499
CO−OPS & CONDOSMANHATTAN
WESTSIDE(830)
Manhattan UnfurnishedOne & Two Rooms 874
Manhattan Apts. UnfurnishedThree, Four & Five Rms. 878
Manhattan Apts. UnfurnishedSix Rooms and Over 882
QueensCo−ops & Condos 1325
Help Wanted 2600
SALESOPPORTUNITIES
Household Help Wtd.Employment Services 3104
Nxxx,2011-05-03,B,009,Bs-BW,E3
Ø Ø N B9BUSINESSTHE NEW YORK TIMES TUESDAY, MAY 3, 2011
professor at the University ofSouthern California who washead of the Congressional jointcommittee on taxes. This has pro-found implications for business-es, the economy and the federalbudget.
As Congress wrestles with howto get the deficit under control,one big point of contention iswhether spending cuts will needto be accompanied by an in-crease in taxes on some individ-uals or businesses. Facing a full-court press from business lead-ers who say the tax system is out-dated and onerous, PresidentObama, Congress and businessleaders have been warily negoti-ating various proposals, thoughmostly about whether to cut thetop corporate rate and to tightentax laws and not about whetherto increase revenue.
The United States is virtuallyalone in trying to tax its multi-national corporations on theirforeign earnings, but it allowscompanies to avoid those taxesindefinitely by keeping profitsoverseas. That encourages com-panies to use accounting maneu-vers to shift profits to low-taxcountries and to invest profitsoffshore, says David S. Miller, apartner at Cadwalader, Wicker-sham & Taft in New York.
Honeywell International, theNew Jersey company that makesthings as diverse as aerospacecomponents and First Alertsmoke detectors, reported in reg-ulatory filings that in the last fiveyears, it paid cash income taxesin the United States and abroadequal to 15 percent of its profits.On Friday, a Honeywell spokes-woman pointed out that the com-pany had since made a large pen-sion contribution, which effec-tively cut its profits and made itstax rate closer to 22 percent.
A major domestic competitor,United Technologies, reported anaverage of 24 percent over thattime. A German rival, Siemens,reported 29 percent of its totalprofit.
In addition to being complexand uneven, the United Statescorporate tax code is inefficientand has become a diminishingsource of revenue. Corporate tax-es accounted for about 9 percentof all federal revenue in 2010. At$191 billion, they were equal to 1.3percent of the nation’s gross do-mestic product. Most industrialcountries collect more from com-panies, about 2.5 percent of out-put. Only a portion of that dis-parity can be explained by themany types of businesses in theUnited States that elect to betaxed at an individual rate.
“Whether the test is fairness orefficiency, the U.S. system getsreally low marks,” said MichelleHanlon, an M.I.T. professor whosays the country needs to com-pletely revamp the way it taxescorporations.
Not all American companiesare willing or able to reduce theirtaxes drastically. Taxes varymore by industry here thanabroad, according to a study re-leased in February by Kevin S.Markle of Dartmouth and Doug-las A. Shackelford of the Uni-versity of North Carolina. At thehigh end, American retailers paid31 percent in total income taxes,construction 30 percent and man-ufacturers 26 percent. Financialservices companies paid an aver-age of 20 percent, real estate 19
percent and mining 6 percent.(Measuring taxes paid by com-
panies is imprecise because taxfilings remain private. In manycases, the estimates reported in acompany’s financial filings withregulators overstate taxes paid ina year because they include de-ferred taxes. Nonetheless, aca-demics, economists and electedofficials use the estimates forcomparative purposes.)
Because some companies areso effective at minimizing taxes,the average works out to far lessthan the official rate. UnitedStates companies pay about aquarter of their profits in federalincome taxes, a few percentagepoints higher than the rate paidby companies in most other ma-jor industrial countries, accord-ing to a number of studies and
tax experts.Assorted proposals being dis-
cussed in Washington call for therate to be lowered officially toabout 25 percent and some taxbreaks to be eliminated so thatrevenue remains unchanged.
But some prominent businessleaders, including the chief exec-utive of Procter & Gamble, arepushing for the rate to be re-duced without reining in tax shel-ters. That would make the UnitedStates virtually the only countryto change corporate taxes in re-cent years in a way that ended upadding to its deficit.
“One fact we know is that in allof the countries that have low-ered their corporate rates in re-cent years, they still collected thesame amount in revenues ormore,” said Reuven S. Avi-Yonah,
an international tax lawyer whoteaches at the University ofMichigan. “This means that theywere broadening the base of theprofits that corporations were ac-tually taxed on.”
Procter & Gamble, whoseproducts include Tide detergentand Crest toothpaste, paid an av-erage of 24 percent of its profitsin worldwide income taxes overthe last three years, according toregulatory filings. That is nearlythe same rate reported by twobig European rivals, Unileverand Henkel.
Yet Robert A. McDonald,P.& G.’s top executive, testifiedbefore a Congressional commit-tee this year about the need tocut the United States tax ratewithout ending tax breaks andshelters. “We need a tax systemthat addresses today’s hyper-competitive global marketplace,”Mr. McDonald said, arguing thatthe playing field was tilted awayfrom American businesses.
Many liberal groups counterthat ending the breaks, subsidiesand shelters in the corporate taxcode could provide enoughmoney to lower the rate severalpercentage points and still in-crease revenue.
Furthermore, some businessowners complain that the Ameri-can system unfairly rewards dis-ingenuous bookkeeping ratherthan innovation. It forces compa-nies to compete “based not onproduct quality and services, buton accounting gymnastics,” saidPaul Egerman, former chairmanand chief executive of eScription,a medical transcription service inBoston.
No one is certain how muchcreative accounting costs the fed-eral government in lost revenue,but most estimates say it easilyexceeds $50 billion a year. Tar-geted tax preferences, whichCongress created to intentionallybenefit specific companies or in-dustries, cost an estimated $100billion more a year.
Many tax analysts are skepti-cal that Congress, business lead-ers and the Obama administra-tion will be able to reach a dealbefore the 2012 election.
“It’s human nature that peopleare going to fight harder to pre-serve a benefit they already havethan to get some new benefit,”said Clint Stretch, a principal atDeloitte Tax and a former coun-sel to the Congressional JointCommittee on Taxation. “Theonly way tax reform makes ev-eryone happy is if everyone wins.And with the federal budgetwhere it is today, that’s not pos-sible.”
ERIC MILLER/REUTERS
Honeywell International in Minnesota. In the last five years, the company said, about 22 percent of its profit went to income taxes.
U.S. Business Has High Tax Rates but Pays LessFrom Page A1
DOUG MILLS/THE NEW YORK TIMES
Edward D. Kleinbard, third from left, former head of the Congressional joint committee on taxes,said American multinational corporations had become “world leaders in tax avoidance.”
EFFECTIVE RATE, 2008* STATUTORY RATE, 2010†
Advocates for cutting the corporate tax rate in the United States usually cite the statutory limit, but the average effective tax rate is much lower. As a share of gross domestic product, companies pay less in the United States than elsewhere.
A Lighter Burden
THE NEW YORK TIMES
Source: Organization of Economic Cooperation and Development; PricewaterhouseCoopers
† Includes national, state and local rates. Countries that have significant state and local rates include the United States, Japan and Germany.
* Latest available data. Figures for 2009 would also not be typical because of the worldwide economic crisis.
§ Weighted average, excluding the United States.
The effective rate is based on data from 1,000 large corporations worldwide. The rate is calculated as total income taxes divided by pretax income. The figures exclude companies with pretax losses and oil and gas companies,which are often subject to atypical surcharges.
Japan
United States
France
Belgium
Germany
Spain
Britain
Sweden
Greece
Ireland
O.E.C.D.
39.5
39.2
34.4
34.0
30.2
30.0
28.0
26.3
24.0
12.5
29.6
%
§
46.3
27.1
24.1
22.4
31.1
21.4
27.4
23.8
21.4
19.2
24.9
%
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
% FEDERAL CORPORATE TAXES AS SHARE OF G.D.P.
’75 ’80 ’85 ’95 ’05 ’09’90 ’00
Members of the Organization of Economic Cooperation and Development
United States
By MARJORIE CONNELLY
While most Americans say cor-porations do not pay their fairshare in taxes, they still prefercuts in government spending toincreasing taxes on corporationsas a means of cutting the federalbudget deficit, according to a re-cent New York Times/CBS Newspoll.
But when given a choice be-tween raising taxes on corpora-tions and raising taxes on house-holds that make more than$250,000 a year, almost two-thirdsof respondents opt for taxingbusinesses.
There is a strong partisan di-vide: A majority of Republicansand independents favor cuttinggovernment spending over rais-ing taxes on businesses, whileDemocrats are evenly divided.Democrats strongly support in-creasing corporate taxes ratherthan adding to the taxes of afflu-ent households; Republicans andindependents are closely divided.
In general, however, few Amer-icans back increasing taxes onAmerican businesses: only 37percent said corporate taxesshould be increased to help re-duce the federal budget deficit.The rest agree with an alterna-tive argument that increased tax-es would discourage Americancompanies from creating jobsand hurt them in the global mar-ketplace. Thirty-two percentwould rather see corporate taxesremain as they are now and 26percent said taxes on corporate
profits should be decreased. “If you increase taxes, you lim-
it the ability to produce and com-pete, especially in a global mar-ket,” Larry Williams, 70, of Hoo-ver, Ala., said in a follow-up in-terview. “If we increase taxes onmanufacturers, they will turnaround and send the work over-seas because that’s the only waythey can survive,” said Mr. Wil-liams, a retired business owner.
Six in 10 Americans surveyedthink companies use their taxsavings to give bonuses to execu-tives and dividends to sharehold-ers. About a quarter, 23 percent,said they thought tax savingswere mostly reinvested back inthe corporation and only 4 per-cent said savings were used tocreate new jobs for Americanworkers.
Almost half, 46 percent, said allcompanies should be taxed at thesame rate. About a third saidsome industries deserved a taxbreak. Small businesses, greencompanies and those in thehealth care industry were mostfrequently mentioned as deserv-ing of tax breaks. “In this econ-omy we should be supportingsmaller business owners, whowill, hopefully, eventually turninto larger business owners,”said Scott Cochran, 34, a furnituredesigner who owns his own busi-ness in Columbus, Ohio.
The nationwide telephone sur-vey was conducted March 2 to 7with 1,266 adults and has a mar-gin of sampling error of plus orminus three percentage points.The complete methodology andquestionnaire are available atNYTimes.com.
Based on telephone interviews conductedMarch 2-7 with 1,266 adults. THE NEW YORK TIMES
Even though Americans think corporations pay less than their fair share in taxes, they express little support for raising taxes on American companies. According to a recent New York Times/CBS News poll, the public would rather cut government spending to help reduce the budget deficit than tax corporate profits more.
Marina Stefan contributed re-porting.
Articles in this series are examin-ing efforts by businesses to lowertheir taxes, and the debate overhow to improve the tax system.
nytimes.com/businessday
But Nobody Pays That
ADVERTISING - Top media buyingagency has entry level position avail-able immediately. Requirements: Col-lege grad, detail oriented, computer lit-erate&cancrunchnumbers.
Brooklyn-based bank seeks a qualifiedcandidate forBSA/AMLOfficer. Keyre-sponsibilities include: evaluating exist-ing programs, developing, implement-ing, managing, and enhancing pro-grams to ensure compliance with ap-plicable Bank Secrecy Act, AML andOFAC regulations. Ideal candidate pos-sesses a BA degree & 5-7 years BSA,AML, & OFAC experience. Please for-ward your resume and salary require-ments to:
ATTN:HUMANRESOURCESPOBOX110127
BROOKLYN,NY11211-9975 EOE
Const. SENIOR PROJECT MGRSeeking a dedicated detail-orientedprofessionalw/ superiormgmt, organi-zational, analytical & planning skills.Min. 10yrsconsecutiveexperasaP.M.,must be able to manage several pro-jects ranging up to 30+ million dollars,exclntwriting&oral & leadershipskills.Exclntsal. bonus & benes pckg. (EOE)e-mail res. to: [email protected]
ConstructionESTIMATOR/PROJECT MANAGERNewYorkMetroareacontractor seeksexperienced degreed civil engineerwith construction experience in esti-mating heavy and railroad track work.Local candidates only, Salary com-mensurate with experience. Send re-sumeto: [email protected]
DENTAL OFFICESin Bronx (Whitestone Bridge)/ Queens(Glendale). Busy insurance/privatepractice, seeking a General DentistPT/FT; Periodontist PT; ReceptionistFT and Dental Assistant FT
PLUMBINGESTIMATORLargeplumb-ing co. seeks exp Comm/Resid Plumb-ing Est, 6-fig annual salary, health plan,vac/hol. Exp in high-rise resid/off const.comp lit. Email: [email protected]
RESTAURANT-Line cooks, experienceonly saute & grill. Large Fire IslandRestaurant, May-September, live-in.Faxresumeto: 631-665-7663
SECRETARY/RECEPTIONISTDiversified position. Phones, data en-try, greet visitors, time & attendance,payroll distribution, MSWord, EXCEL,some ACCESS. Motivated, ability toprioritize and take initiative. 50+wpmtyping. Sal comm.w/exp.FAXoremailresume with sal req. to 212-618-1135.NYS Task Force, 250 Broadway, NY10007.
Systems Analyst: Design & installservers. Plan, develop, test and docu-ment computer programs, applyingknowledge of programming tech-niques and computer systems; Eval.user request for app. support, for fin. orHRmgmt todetermine response timesandprovideresolutionsbasedonSLAs;Consultw/user to identify current oper-atingprocedures&clarify programob-jectives; Prepare flow charts & dia-grams to illustrate sequence of stepsprogram must follow and to describelogical operations involved; Analyze,review,&alter programto increaseop-erational efficiency or adapt to new re-qmnt; Write manual for users to de-scribe installation & operational proce-dures; Provide tech. assist to programuser utilizing ITIL procedures; M.S plus1 yr of exp or B.S + 5 yrs of relevant expreqd.Mail resumes toADS Inc, 156 Jeri-choTpke,FloralPark,NY11001.
SALESREPS -Majorbeveragedistribu-tor looking for reps to promote its Wine& Spirits Portfolio in 5 boroughs andSouth Fork of Nassau Co. Car a must.Email resumeto:[email protected]
FOX AGENCYONLYBABY& CHILDCARE
212-753-2806 LIC259725
NANNY **PROFESSIONAL**Needed for NYC working couple. Live-in. MUST be legal. Top Salary. CallMon-Fri 212-889-6609 Pavillion #624499
CO−OPS & CONDOSMANHATTAN
WESTSIDE(830)
Manhattan UnfurnishedOne & Two Rooms 874
Manhattan Apts. UnfurnishedThree, Four & Five Rms. 878
Manhattan Apts. UnfurnishedSix Rooms and Over 882
QueensCo−ops & Condos 1325
Help Wanted 2600
SALESOPPORTUNITIES
Household Help Wtd.Employment Services 3104
Nxxx,2011-05-03,B,009,Bs-BW,E3
Ø Ø N B9BUSINESSTHE NEW YORK TIMES TUESDAY, MAY 3, 2011
professor at the University ofSouthern California who washead of the Congressional jointcommittee on taxes. This has pro-found implications for business-es, the economy and the federalbudget.
As Congress wrestles with howto get the deficit under control,one big point of contention iswhether spending cuts will needto be accompanied by an in-crease in taxes on some individ-uals or businesses. Facing a full-court press from business lead-ers who say the tax system is out-dated and onerous, PresidentObama, Congress and businessleaders have been warily negoti-ating various proposals, thoughmostly about whether to cut thetop corporate rate and to tightentax laws and not about whetherto increase revenue.
The United States is virtuallyalone in trying to tax its multi-national corporations on theirforeign earnings, but it allowscompanies to avoid those taxesindefinitely by keeping profitsoverseas. That encourages com-panies to use accounting maneu-vers to shift profits to low-taxcountries and to invest profitsoffshore, says David S. Miller, apartner at Cadwalader, Wicker-sham & Taft in New York.
Honeywell International, theNew Jersey company that makesthings as diverse as aerospacecomponents and First Alertsmoke detectors, reported in reg-ulatory filings that in the last fiveyears, it paid cash income taxesin the United States and abroadequal to 15 percent of its profits.On Friday, a Honeywell spokes-woman pointed out that the com-pany had since made a large pen-sion contribution, which effec-tively cut its profits and made itstax rate closer to 22 percent.
A major domestic competitor,United Technologies, reported anaverage of 24 percent over thattime. A German rival, Siemens,reported 29 percent of its totalprofit.
In addition to being complexand uneven, the United Statescorporate tax code is inefficientand has become a diminishingsource of revenue. Corporate tax-es accounted for about 9 percentof all federal revenue in 2010. At$191 billion, they were equal to 1.3percent of the nation’s gross do-mestic product. Most industrialcountries collect more from com-panies, about 2.5 percent of out-put. Only a portion of that dis-parity can be explained by themany types of businesses in theUnited States that elect to betaxed at an individual rate.
“Whether the test is fairness orefficiency, the U.S. system getsreally low marks,” said MichelleHanlon, an M.I.T. professor whosays the country needs to com-pletely revamp the way it taxescorporations.
Not all American companiesare willing or able to reduce theirtaxes drastically. Taxes varymore by industry here thanabroad, according to a study re-leased in February by Kevin S.Markle of Dartmouth and Doug-las A. Shackelford of the Uni-versity of North Carolina. At thehigh end, American retailers paid31 percent in total income taxes,construction 30 percent and man-ufacturers 26 percent. Financialservices companies paid an aver-age of 20 percent, real estate 19
percent and mining 6 percent.(Measuring taxes paid by com-
panies is imprecise because taxfilings remain private. In manycases, the estimates reported in acompany’s financial filings withregulators overstate taxes paid ina year because they include de-ferred taxes. Nonetheless, aca-demics, economists and electedofficials use the estimates forcomparative purposes.)
Because some companies areso effective at minimizing taxes,the average works out to far lessthan the official rate. UnitedStates companies pay about aquarter of their profits in federalincome taxes, a few percentagepoints higher than the rate paidby companies in most other ma-jor industrial countries, accord-ing to a number of studies and
tax experts.Assorted proposals being dis-
cussed in Washington call for therate to be lowered officially toabout 25 percent and some taxbreaks to be eliminated so thatrevenue remains unchanged.
But some prominent businessleaders, including the chief exec-utive of Procter & Gamble, arepushing for the rate to be re-duced without reining in tax shel-ters. That would make the UnitedStates virtually the only countryto change corporate taxes in re-cent years in a way that ended upadding to its deficit.
“One fact we know is that in allof the countries that have low-ered their corporate rates in re-cent years, they still collected thesame amount in revenues ormore,” said Reuven S. Avi-Yonah,
an international tax lawyer whoteaches at the University ofMichigan. “This means that theywere broadening the base of theprofits that corporations were ac-tually taxed on.”
Procter & Gamble, whoseproducts include Tide detergentand Crest toothpaste, paid an av-erage of 24 percent of its profitsin worldwide income taxes overthe last three years, according toregulatory filings. That is nearlythe same rate reported by twobig European rivals, Unileverand Henkel.
Yet Robert A. McDonald,P.& G.’s top executive, testifiedbefore a Congressional commit-tee this year about the need tocut the United States tax ratewithout ending tax breaks andshelters. “We need a tax systemthat addresses today’s hyper-competitive global marketplace,”Mr. McDonald said, arguing thatthe playing field was tilted awayfrom American businesses.
Many liberal groups counterthat ending the breaks, subsidiesand shelters in the corporate taxcode could provide enoughmoney to lower the rate severalpercentage points and still in-crease revenue.
Furthermore, some businessowners complain that the Ameri-can system unfairly rewards dis-ingenuous bookkeeping ratherthan innovation. It forces compa-nies to compete “based not onproduct quality and services, buton accounting gymnastics,” saidPaul Egerman, former chairmanand chief executive of eScription,a medical transcription service inBoston.
No one is certain how muchcreative accounting costs the fed-eral government in lost revenue,but most estimates say it easilyexceeds $50 billion a year. Tar-geted tax preferences, whichCongress created to intentionallybenefit specific companies or in-dustries, cost an estimated $100billion more a year.
Many tax analysts are skepti-cal that Congress, business lead-ers and the Obama administra-tion will be able to reach a dealbefore the 2012 election.
“It’s human nature that peopleare going to fight harder to pre-serve a benefit they already havethan to get some new benefit,”said Clint Stretch, a principal atDeloitte Tax and a former coun-sel to the Congressional JointCommittee on Taxation. “Theonly way tax reform makes ev-eryone happy is if everyone wins.And with the federal budgetwhere it is today, that’s not pos-sible.”
ERIC MILLER/REUTERS
Honeywell International in Minnesota. In the last five years, the company said, about 22 percent of its profit went to income taxes.
U.S. Business Has High Tax Rates but Pays LessFrom Page A1
DOUG MILLS/THE NEW YORK TIMES
Edward D. Kleinbard, third from left, former head of the Congressional joint committee on taxes,said American multinational corporations had become “world leaders in tax avoidance.”
EFFECTIVE RATE, 2008* STATUTORY RATE, 2010†
Advocates for cutting the corporate tax rate in the United States usually cite the statutory limit, but the average effective tax rate is much lower. As a share of gross domestic product, companies pay less in the United States than elsewhere.
A Lighter Burden
THE NEW YORK TIMES
Source: Organization of Economic Cooperation and Development; PricewaterhouseCoopers
† Includes national, state and local rates. Countries that have significant state and local rates include the United States, Japan and Germany.
* Latest available data. Figures for 2009 would also not be typical because of the worldwide economic crisis.
§ Weighted average, excluding the United States.
The effective rate is based on data from 1,000 large corporations worldwide. The rate is calculated as total income taxes divided by pretax income. The figures exclude companies with pretax losses and oil and gas companies,which are often subject to atypical surcharges.
Japan
United States
France
Belgium
Germany
Spain
Britain
Sweden
Greece
Ireland
O.E.C.D.
39.5
39.2
34.4
34.0
30.2
30.0
28.0
26.3
24.0
12.5
29.6
%
§
46.3
27.1
24.1
22.4
31.1
21.4
27.4
23.8
21.4
19.2
24.9
%
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
% FEDERAL CORPORATE TAXES AS SHARE OF G.D.P.
’75 ’80 ’85 ’95 ’05 ’09’90 ’00
Members of the Organization of Economic Cooperation and Development
United States
By MARJORIE CONNELLY
While most Americans say cor-porations do not pay their fairshare in taxes, they still prefercuts in government spending toincreasing taxes on corporationsas a means of cutting the federalbudget deficit, according to a re-cent New York Times/CBS Newspoll.
But when given a choice be-tween raising taxes on corpora-tions and raising taxes on house-holds that make more than$250,000 a year, almost two-thirdsof respondents opt for taxingbusinesses.
There is a strong partisan di-vide: A majority of Republicansand independents favor cuttinggovernment spending over rais-ing taxes on businesses, whileDemocrats are evenly divided.Democrats strongly support in-creasing corporate taxes ratherthan adding to the taxes of afflu-ent households; Republicans andindependents are closely divided.
In general, however, few Amer-icans back increasing taxes onAmerican businesses: only 37percent said corporate taxesshould be increased to help re-duce the federal budget deficit.The rest agree with an alterna-tive argument that increased tax-es would discourage Americancompanies from creating jobsand hurt them in the global mar-ketplace. Thirty-two percentwould rather see corporate taxesremain as they are now and 26percent said taxes on corporate
profits should be decreased. “If you increase taxes, you lim-
it the ability to produce and com-pete, especially in a global mar-ket,” Larry Williams, 70, of Hoo-ver, Ala., said in a follow-up in-terview. “If we increase taxes onmanufacturers, they will turnaround and send the work over-seas because that’s the only waythey can survive,” said Mr. Wil-liams, a retired business owner.
Six in 10 Americans surveyedthink companies use their taxsavings to give bonuses to execu-tives and dividends to sharehold-ers. About a quarter, 23 percent,said they thought tax savingswere mostly reinvested back inthe corporation and only 4 per-cent said savings were used tocreate new jobs for Americanworkers.
Almost half, 46 percent, said allcompanies should be taxed at thesame rate. About a third saidsome industries deserved a taxbreak. Small businesses, greencompanies and those in thehealth care industry were mostfrequently mentioned as deserv-ing of tax breaks. “In this econ-omy we should be supportingsmaller business owners, whowill, hopefully, eventually turninto larger business owners,”said Scott Cochran, 34, a furnituredesigner who owns his own busi-ness in Columbus, Ohio.
The nationwide telephone sur-vey was conducted March 2 to 7with 1,266 adults and has a mar-gin of sampling error of plus orminus three percentage points.The complete methodology andquestionnaire are available atNYTimes.com.
Based on telephone interviews conductedMarch 2-7 with 1,266 adults. THE NEW YORK TIMES
Even though Americans think corporations pay less than their fair share in taxes, they express little support for raising taxes on American companies. According to a recent New York Times/CBS News poll, the public would rather cut government spending to help reduce the budget deficit than tax corporate profits more.
Marina Stefan contributed re-porting.
Articles in this series are examin-ing efforts by businesses to lowertheir taxes, and the debate overhow to improve the tax system.
nytimes.com/businessday
But Nobody Pays That
ADVERTISING - Top media buyingagency has entry level position avail-able immediately. Requirements: Col-lege grad, detail oriented, computer lit-erate&cancrunchnumbers.
Brooklyn-based bank seeks a qualifiedcandidate forBSA/AMLOfficer. Keyre-sponsibilities include: evaluating exist-ing programs, developing, implement-ing, managing, and enhancing pro-grams to ensure compliance with ap-plicable Bank Secrecy Act, AML andOFAC regulations. Ideal candidate pos-sesses a BA degree & 5-7 years BSA,AML, & OFAC experience. Please for-ward your resume and salary require-ments to:
ATTN:HUMANRESOURCESPOBOX110127
BROOKLYN,NY11211-9975 EOE
Const. SENIOR PROJECT MGRSeeking a dedicated detail-orientedprofessionalw/ superiormgmt, organi-zational, analytical & planning skills.Min. 10yrsconsecutiveexperasaP.M.,must be able to manage several pro-jects ranging up to 30+ million dollars,exclntwriting&oral & leadershipskills.Exclntsal. bonus & benes pckg. (EOE)e-mail res. to: [email protected]
ConstructionESTIMATOR/PROJECT MANAGERNewYorkMetroareacontractor seeksexperienced degreed civil engineerwith construction experience in esti-mating heavy and railroad track work.Local candidates only, Salary com-mensurate with experience. Send re-sumeto: [email protected]
DENTAL OFFICESin Bronx (Whitestone Bridge)/ Queens(Glendale). Busy insurance/privatepractice, seeking a General DentistPT/FT; Periodontist PT; ReceptionistFT and Dental Assistant FT
PLUMBINGESTIMATORLargeplumb-ing co. seeks exp Comm/Resid Plumb-ing Est, 6-fig annual salary, health plan,vac/hol. Exp in high-rise resid/off const.comp lit. Email: [email protected]
RESTAURANT-Line cooks, experienceonly saute & grill. Large Fire IslandRestaurant, May-September, live-in.Faxresumeto: 631-665-7663
SECRETARY/RECEPTIONISTDiversified position. Phones, data en-try, greet visitors, time & attendance,payroll distribution, MSWord, EXCEL,some ACCESS. Motivated, ability toprioritize and take initiative. 50+wpmtyping. Sal comm.w/exp.FAXoremailresume with sal req. to 212-618-1135.NYS Task Force, 250 Broadway, NY10007.
Systems Analyst: Design & installservers. Plan, develop, test and docu-ment computer programs, applyingknowledge of programming tech-niques and computer systems; Eval.user request for app. support, for fin. orHRmgmt todetermine response timesandprovideresolutionsbasedonSLAs;Consultw/user to identify current oper-atingprocedures&clarify programob-jectives; Prepare flow charts & dia-grams to illustrate sequence of stepsprogram must follow and to describelogical operations involved; Analyze,review,&alter programto increaseop-erational efficiency or adapt to new re-qmnt; Write manual for users to de-scribe installation & operational proce-dures; Provide tech. assist to programuser utilizing ITIL procedures; M.S plus1 yr of exp or B.S + 5 yrs of relevant expreqd.Mail resumes toADS Inc, 156 Jeri-choTpke,FloralPark,NY11001.
SALESREPS -Majorbeveragedistribu-tor looking for reps to promote its Wine& Spirits Portfolio in 5 boroughs andSouth Fork of Nassau Co. Car a must.Email resumeto:[email protected]
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Nxxx,2011-05-03,B,009,Bs-BW,E3
Ø Ø N B9BUSINESSTHE NEW YORK TIMES TUESDAY, MAY 3, 2011
professor at the University ofSouthern California who washead of the Congressional jointcommittee on taxes. This has pro-found implications for business-es, the economy and the federalbudget.
As Congress wrestles with howto get the deficit under control,one big point of contention iswhether spending cuts will needto be accompanied by an in-crease in taxes on some individ-uals or businesses. Facing a full-court press from business lead-ers who say the tax system is out-dated and onerous, PresidentObama, Congress and businessleaders have been warily negoti-ating various proposals, thoughmostly about whether to cut thetop corporate rate and to tightentax laws and not about whetherto increase revenue.
The United States is virtuallyalone in trying to tax its multi-national corporations on theirforeign earnings, but it allowscompanies to avoid those taxesindefinitely by keeping profitsoverseas. That encourages com-panies to use accounting maneu-vers to shift profits to low-taxcountries and to invest profitsoffshore, says David S. Miller, apartner at Cadwalader, Wicker-sham & Taft in New York.
Honeywell International, theNew Jersey company that makesthings as diverse as aerospacecomponents and First Alertsmoke detectors, reported in reg-ulatory filings that in the last fiveyears, it paid cash income taxesin the United States and abroadequal to 15 percent of its profits.On Friday, a Honeywell spokes-woman pointed out that the com-pany had since made a large pen-sion contribution, which effec-tively cut its profits and made itstax rate closer to 22 percent.
A major domestic competitor,United Technologies, reported anaverage of 24 percent over thattime. A German rival, Siemens,reported 29 percent of its totalprofit.
In addition to being complexand uneven, the United Statescorporate tax code is inefficientand has become a diminishingsource of revenue. Corporate tax-es accounted for about 9 percentof all federal revenue in 2010. At$191 billion, they were equal to 1.3percent of the nation’s gross do-mestic product. Most industrialcountries collect more from com-panies, about 2.5 percent of out-put. Only a portion of that dis-parity can be explained by themany types of businesses in theUnited States that elect to betaxed at an individual rate.
“Whether the test is fairness orefficiency, the U.S. system getsreally low marks,” said MichelleHanlon, an M.I.T. professor whosays the country needs to com-pletely revamp the way it taxescorporations.
Not all American companiesare willing or able to reduce theirtaxes drastically. Taxes varymore by industry here thanabroad, according to a study re-leased in February by Kevin S.Markle of Dartmouth and Doug-las A. Shackelford of the Uni-versity of North Carolina. At thehigh end, American retailers paid31 percent in total income taxes,construction 30 percent and man-ufacturers 26 percent. Financialservices companies paid an aver-age of 20 percent, real estate 19
percent and mining 6 percent.(Measuring taxes paid by com-
panies is imprecise because taxfilings remain private. In manycases, the estimates reported in acompany’s financial filings withregulators overstate taxes paid ina year because they include de-ferred taxes. Nonetheless, aca-demics, economists and electedofficials use the estimates forcomparative purposes.)
Because some companies areso effective at minimizing taxes,the average works out to far lessthan the official rate. UnitedStates companies pay about aquarter of their profits in federalincome taxes, a few percentagepoints higher than the rate paidby companies in most other ma-jor industrial countries, accord-ing to a number of studies and
tax experts.Assorted proposals being dis-
cussed in Washington call for therate to be lowered officially toabout 25 percent and some taxbreaks to be eliminated so thatrevenue remains unchanged.
But some prominent businessleaders, including the chief exec-utive of Procter & Gamble, arepushing for the rate to be re-duced without reining in tax shel-ters. That would make the UnitedStates virtually the only countryto change corporate taxes in re-cent years in a way that ended upadding to its deficit.
“One fact we know is that in allof the countries that have low-ered their corporate rates in re-cent years, they still collected thesame amount in revenues ormore,” said Reuven S. Avi-Yonah,
an international tax lawyer whoteaches at the University ofMichigan. “This means that theywere broadening the base of theprofits that corporations were ac-tually taxed on.”
Procter & Gamble, whoseproducts include Tide detergentand Crest toothpaste, paid an av-erage of 24 percent of its profitsin worldwide income taxes overthe last three years, according toregulatory filings. That is nearlythe same rate reported by twobig European rivals, Unileverand Henkel.
Yet Robert A. McDonald,P.& G.’s top executive, testifiedbefore a Congressional commit-tee this year about the need tocut the United States tax ratewithout ending tax breaks andshelters. “We need a tax systemthat addresses today’s hyper-competitive global marketplace,”Mr. McDonald said, arguing thatthe playing field was tilted awayfrom American businesses.
Many liberal groups counterthat ending the breaks, subsidiesand shelters in the corporate taxcode could provide enoughmoney to lower the rate severalpercentage points and still in-crease revenue.
Furthermore, some businessowners complain that the Ameri-can system unfairly rewards dis-ingenuous bookkeeping ratherthan innovation. It forces compa-nies to compete “based not onproduct quality and services, buton accounting gymnastics,” saidPaul Egerman, former chairmanand chief executive of eScription,a medical transcription service inBoston.
No one is certain how muchcreative accounting costs the fed-eral government in lost revenue,but most estimates say it easilyexceeds $50 billion a year. Tar-geted tax preferences, whichCongress created to intentionallybenefit specific companies or in-dustries, cost an estimated $100billion more a year.
Many tax analysts are skepti-cal that Congress, business lead-ers and the Obama administra-tion will be able to reach a dealbefore the 2012 election.
“It’s human nature that peopleare going to fight harder to pre-serve a benefit they already havethan to get some new benefit,”said Clint Stretch, a principal atDeloitte Tax and a former coun-sel to the Congressional JointCommittee on Taxation. “Theonly way tax reform makes ev-eryone happy is if everyone wins.And with the federal budgetwhere it is today, that’s not pos-sible.”
ERIC MILLER/REUTERS
Honeywell International in Minnesota. In the last five years, the company said, about 22 percent of its profit went to income taxes.
U.S. Business Has High Tax Rates but Pays LessFrom Page A1
DOUG MILLS/THE NEW YORK TIMES
Edward D. Kleinbard, third from left, former head of the Congressional joint committee on taxes,said American multinational corporations had become “world leaders in tax avoidance.”
EFFECTIVE RATE, 2008* STATUTORY RATE, 2010†
Advocates for cutting the corporate tax rate in the United States usually cite the statutory limit, but the average effective tax rate is much lower. As a share of gross domestic product, companies pay less in the United States than elsewhere.
A Lighter Burden
THE NEW YORK TIMES
Source: Organization of Economic Cooperation and Development; PricewaterhouseCoopers
† Includes national, state and local rates. Countries that have significant state and local rates include the United States, Japan and Germany.
* Latest available data. Figures for 2009 would also not be typical because of the worldwide economic crisis.
§ Weighted average, excluding the United States.
The effective rate is based on data from 1,000 large corporations worldwide. The rate is calculated as total income taxes divided by pretax income. The figures exclude companies with pretax losses and oil and gas companies,which are often subject to atypical surcharges.
Japan
United States
France
Belgium
Germany
Spain
Britain
Sweden
Greece
Ireland
O.E.C.D.
39.5
39.2
34.4
34.0
30.2
30.0
28.0
26.3
24.0
12.5
29.6
%
§
46.3
27.1
24.1
22.4
31.1
21.4
27.4
23.8
21.4
19.2
24.9
%
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
% FEDERAL CORPORATE TAXES AS SHARE OF G.D.P.
’75 ’80 ’85 ’95 ’05 ’09’90 ’00
Members of the Organization of Economic Cooperation and Development
United States
By MARJORIE CONNELLY
While most Americans say cor-porations do not pay their fairshare in taxes, they still prefercuts in government spending toincreasing taxes on corporationsas a means of cutting the federalbudget deficit, according to a re-cent New York Times/CBS Newspoll.
But when given a choice be-tween raising taxes on corpora-tions and raising taxes on house-holds that make more than$250,000 a year, almost two-thirdsof respondents opt for taxingbusinesses.
There is a strong partisan di-vide: A majority of Republicansand independents favor cuttinggovernment spending over rais-ing taxes on businesses, whileDemocrats are evenly divided.Democrats strongly support in-creasing corporate taxes ratherthan adding to the taxes of afflu-ent households; Republicans andindependents are closely divided.
In general, however, few Amer-icans back increasing taxes onAmerican businesses: only 37percent said corporate taxesshould be increased to help re-duce the federal budget deficit.The rest agree with an alterna-tive argument that increased tax-es would discourage Americancompanies from creating jobsand hurt them in the global mar-ketplace. Thirty-two percentwould rather see corporate taxesremain as they are now and 26percent said taxes on corporate
profits should be decreased. “If you increase taxes, you lim-
it the ability to produce and com-pete, especially in a global mar-ket,” Larry Williams, 70, of Hoo-ver, Ala., said in a follow-up in-terview. “If we increase taxes onmanufacturers, they will turnaround and send the work over-seas because that’s the only waythey can survive,” said Mr. Wil-liams, a retired business owner.
Six in 10 Americans surveyedthink companies use their taxsavings to give bonuses to execu-tives and dividends to sharehold-ers. About a quarter, 23 percent,said they thought tax savingswere mostly reinvested back inthe corporation and only 4 per-cent said savings were used tocreate new jobs for Americanworkers.
Almost half, 46 percent, said allcompanies should be taxed at thesame rate. About a third saidsome industries deserved a taxbreak. Small businesses, greencompanies and those in thehealth care industry were mostfrequently mentioned as deserv-ing of tax breaks. “In this econ-omy we should be supportingsmaller business owners, whowill, hopefully, eventually turninto larger business owners,”said Scott Cochran, 34, a furnituredesigner who owns his own busi-ness in Columbus, Ohio.
The nationwide telephone sur-vey was conducted March 2 to 7with 1,266 adults and has a mar-gin of sampling error of plus orminus three percentage points.The complete methodology andquestionnaire are available atNYTimes.com.
Based on telephone interviews conductedMarch 2-7 with 1,266 adults. THE NEW YORK TIMES
Even though Americans think corporations pay less than their fair share in taxes, they express little support for raising taxes on American companies. According to a recent New York Times/CBS News poll, the public would rather cut government spending to help reduce the budget deficit than tax corporate profits more.
Marina Stefan contributed re-porting.
Articles in this series are examin-ing efforts by businesses to lowertheir taxes, and the debate overhow to improve the tax system.
nytimes.com/businessday
But Nobody Pays That
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ConstructionESTIMATOR/PROJECT MANAGERNewYorkMetroareacontractor seeksexperienced degreed civil engineerwith construction experience in esti-mating heavy and railroad track work.Local candidates only, Salary com-mensurate with experience. Send re-sumeto: [email protected]
DENTAL OFFICESin Bronx (Whitestone Bridge)/ Queens(Glendale). Busy insurance/privatepractice, seeking a General DentistPT/FT; Periodontist PT; ReceptionistFT and Dental Assistant FT
PLUMBINGESTIMATORLargeplumb-ing co. seeks exp Comm/Resid Plumb-ing Est, 6-fig annual salary, health plan,vac/hol. Exp in high-rise resid/off const.comp lit. Email: [email protected]
RESTAURANT-Line cooks, experienceonly saute & grill. Large Fire IslandRestaurant, May-September, live-in.Faxresumeto: 631-665-7663
SECRETARY/RECEPTIONISTDiversified position. Phones, data en-try, greet visitors, time & attendance,payroll distribution, MSWord, EXCEL,some ACCESS. Motivated, ability toprioritize and take initiative. 50+wpmtyping. Sal comm.w/exp.FAXoremailresume with sal req. to 212-618-1135.NYS Task Force, 250 Broadway, NY10007.
Systems Analyst: Design & installservers. Plan, develop, test and docu-ment computer programs, applyingknowledge of programming tech-niques and computer systems; Eval.user request for app. support, for fin. orHRmgmt todetermine response timesandprovideresolutionsbasedonSLAs;Consultw/user to identify current oper-atingprocedures&clarify programob-jectives; Prepare flow charts & dia-grams to illustrate sequence of stepsprogram must follow and to describelogical operations involved; Analyze,review,&alter programto increaseop-erational efficiency or adapt to new re-qmnt; Write manual for users to de-scribe installation & operational proce-dures; Provide tech. assist to programuser utilizing ITIL procedures; M.S plus1 yr of exp or B.S + 5 yrs of relevant expreqd.Mail resumes toADS Inc, 156 Jeri-choTpke,FloralPark,NY11001.
SALESREPS -Majorbeveragedistribu-tor looking for reps to promote its Wine& Spirits Portfolio in 5 boroughs andSouth Fork of Nassau Co. Car a must.Email resumeto:[email protected]
FOX AGENCYONLYBABY& CHILDCARE
212-753-2806 LIC259725
NANNY **PROFESSIONAL**Needed for NYC working couple. Live-in. MUST be legal. Top Salary. CallMon-Fri 212-889-6609 Pavillion #624499
CO−OPS & CONDOSMANHATTAN
WESTSIDE(830)
Manhattan UnfurnishedOne & Two Rooms 874
Manhattan Apts. UnfurnishedThree, Four & Five Rms. 878
Manhattan Apts. UnfurnishedSix Rooms and Over 882
QueensCo−ops & Condos 1325
Help Wanted 2600
SALESOPPORTUNITIES
Household Help Wtd.Employment Services 3104
Nxxx,2011-05-03,B,009,Bs-BW,E3
changed.But some prominent business leaders, in-
cluding the chief executive of Procter & Gam-ble, are pushing for the rate to be reduced with-out reining in tax shelters. That would make the United States virtually the only country to change corporate taxes in recent years in a way that ended up adding to its deficit.
“One fact we know is that in all of the coun-tries that have lowered their corporate rates in recent years, they still collected the same amount in revenues or more,” said Reuven S. Avi-Yonah, an international tax lawyer who teaches at the University of Michigan. “This means that they were broadening the base of the profits that corporations were actually taxed on.”
Procter & Gamble, whose products include Tide detergent and Crest toothpaste, paid an av-erage of 24 percent of its profits in worldwide income taxes over the last three years, accord-ing to regulatory filings. That is nearly the same rate reported by two big european rivals, Unile-ver and henkel.
Yet Robert A. McDonald, P.& G.’s top execu-
tive, testified before a Congressional committee this year about the need to cut the United States tax rate without ending tax breaks and shelters. “We need a tax system that addresses today’s hypercompetitive global marketplace,” Mr. Mc-Donald said, arguing that the playing field was tilted away from American businesses.
Many liberal groups counter that ending the breaks, subsidies and shelters in the corporate tax code could provide enough money to lower the rate several percentage points and still in-crease revenue.
Furthermore, some business owners com-plain that the American system unfairly re-wards disingenuous bookkeeping rather than innovation. It forces companies to compete “based not on product quality and services, but on accounting gymnastics,” said Paul egerman, former chairman and chief execu-tive of eScription, a medical transcription ser-vice in Boston.
No one is certain how much creative ac-counting costs the federal government in lost revenue, but most estimates say it easily ex-ceeds $50 billion a year. Targeted tax prefer-
Ø Ø N B9BUSINESSTHE NEW YORK TIMES TUESDAY, MAY 3, 2011
professor at the University ofSouthern California who washead of the Congressional jointcommittee on taxes. This has pro-found implications for business-es, the economy and the federalbudget.
As Congress wrestles with howto get the deficit under control,one big point of contention iswhether spending cuts will needto be accompanied by an in-crease in taxes on some individ-uals or businesses. Facing a full-court press from business lead-ers who say the tax system is out-dated and onerous, PresidentObama, Congress and businessleaders have been warily negoti-ating various proposals, thoughmostly about whether to cut thetop corporate rate and to tightentax laws and not about whetherto increase revenue.
The United States is virtuallyalone in trying to tax its multi-national corporations on theirforeign earnings, but it allowscompanies to avoid those taxesindefinitely by keeping profitsoverseas. That encourages com-panies to use accounting maneu-vers to shift profits to low-taxcountries and to invest profitsoffshore, says David S. Miller, apartner at Cadwalader, Wicker-sham & Taft in New York.
Honeywell International, theNew Jersey company that makesthings as diverse as aerospacecomponents and First Alertsmoke detectors, reported in reg-ulatory filings that in the last fiveyears, it paid cash income taxesin the United States and abroadequal to 15 percent of its profits.On Friday, a Honeywell spokes-woman pointed out that the com-pany had since made a large pen-sion contribution, which effec-tively cut its profits and made itstax rate closer to 22 percent.
A major domestic competitor,United Technologies, reported anaverage of 24 percent over thattime. A German rival, Siemens,reported 29 percent of its totalprofit.
In addition to being complexand uneven, the United Statescorporate tax code is inefficientand has become a diminishingsource of revenue. Corporate tax-es accounted for about 9 percentof all federal revenue in 2010. At$191 billion, they were equal to 1.3percent of the nation’s gross do-mestic product. Most industrialcountries collect more from com-panies, about 2.5 percent of out-put. Only a portion of that dis-parity can be explained by themany types of businesses in theUnited States that elect to betaxed at an individual rate.
“Whether the test is fairness orefficiency, the U.S. system getsreally low marks,” said MichelleHanlon, an M.I.T. professor whosays the country needs to com-pletely revamp the way it taxescorporations.
Not all American companiesare willing or able to reduce theirtaxes drastically. Taxes varymore by industry here thanabroad, according to a study re-leased in February by Kevin S.Markle of Dartmouth and Doug-las A. Shackelford of the Uni-versity of North Carolina. At thehigh end, American retailers paid31 percent in total income taxes,construction 30 percent and man-ufacturers 26 percent. Financialservices companies paid an aver-age of 20 percent, real estate 19
percent and mining 6 percent.(Measuring taxes paid by com-
panies is imprecise because taxfilings remain private. In manycases, the estimates reported in acompany’s financial filings withregulators overstate taxes paid ina year because they include de-ferred taxes. Nonetheless, aca-demics, economists and electedofficials use the estimates forcomparative purposes.)
Because some companies areso effective at minimizing taxes,the average works out to far lessthan the official rate. UnitedStates companies pay about aquarter of their profits in federalincome taxes, a few percentagepoints higher than the rate paidby companies in most other ma-jor industrial countries, accord-ing to a number of studies and
tax experts.Assorted proposals being dis-
cussed in Washington call for therate to be lowered officially toabout 25 percent and some taxbreaks to be eliminated so thatrevenue remains unchanged.
But some prominent businessleaders, including the chief exec-utive of Procter & Gamble, arepushing for the rate to be re-duced without reining in tax shel-ters. That would make the UnitedStates virtually the only countryto change corporate taxes in re-cent years in a way that ended upadding to its deficit.
“One fact we know is that in allof the countries that have low-ered their corporate rates in re-cent years, they still collected thesame amount in revenues ormore,” said Reuven S. Avi-Yonah,
an international tax lawyer whoteaches at the University ofMichigan. “This means that theywere broadening the base of theprofits that corporations were ac-tually taxed on.”
Procter & Gamble, whoseproducts include Tide detergentand Crest toothpaste, paid an av-erage of 24 percent of its profitsin worldwide income taxes overthe last three years, according toregulatory filings. That is nearlythe same rate reported by twobig European rivals, Unileverand Henkel.
Yet Robert A. McDonald,P.& G.’s top executive, testifiedbefore a Congressional commit-tee this year about the need tocut the United States tax ratewithout ending tax breaks andshelters. “We need a tax systemthat addresses today’s hyper-competitive global marketplace,”Mr. McDonald said, arguing thatthe playing field was tilted awayfrom American businesses.
Many liberal groups counterthat ending the breaks, subsidiesand shelters in the corporate taxcode could provide enoughmoney to lower the rate severalpercentage points and still in-crease revenue.
Furthermore, some businessowners complain that the Ameri-can system unfairly rewards dis-ingenuous bookkeeping ratherthan innovation. It forces compa-nies to compete “based not onproduct quality and services, buton accounting gymnastics,” saidPaul Egerman, former chairmanand chief executive of eScription,a medical transcription service inBoston.
No one is certain how muchcreative accounting costs the fed-eral government in lost revenue,but most estimates say it easilyexceeds $50 billion a year. Tar-geted tax preferences, whichCongress created to intentionallybenefit specific companies or in-dustries, cost an estimated $100billion more a year.
Many tax analysts are skepti-cal that Congress, business lead-ers and the Obama administra-tion will be able to reach a dealbefore the 2012 election.
“It’s human nature that peopleare going to fight harder to pre-serve a benefit they already havethan to get some new benefit,”said Clint Stretch, a principal atDeloitte Tax and a former coun-sel to the Congressional JointCommittee on Taxation. “Theonly way tax reform makes ev-eryone happy is if everyone wins.And with the federal budgetwhere it is today, that’s not pos-sible.”
ERIC MILLER/REUTERS
Honeywell International in Minnesota. In the last five years, the company said, about 22 percent of its profit went to income taxes.
U.S. Business Has High Tax Rates but Pays LessFrom Page A1
DOUG MILLS/THE NEW YORK TIMES
Edward D. Kleinbard, third from left, former head of the Congressional joint committee on taxes,said American multinational corporations had become “world leaders in tax avoidance.”
EFFECTIVE RATE, 2008* STATUTORY RATE, 2010†
Advocates for cutting the corporate tax rate in the United States usually cite the statutory limit, but the average effective tax rate is much lower. As a share of gross domestic product, companies pay less in the United States than elsewhere.
A Lighter Burden
THE NEW YORK TIMES
Source: Organization of Economic Cooperation and Development; PricewaterhouseCoopers
† Includes national, state and local rates. Countries that have significant state and local rates include the United States, Japan and Germany.
* Latest available data. Figures for 2009 would also not be typical because of the worldwide economic crisis.
§ Weighted average, excluding the United States.
The effective rate is based on data from 1,000 large corporations worldwide. The rate is calculated as total income taxes divided by pretax income. The figures exclude companies with pretax losses and oil and gas companies,which are often subject to atypical surcharges.
Japan
United States
France
Belgium
Germany
Spain
Britain
Sweden
Greece
Ireland
O.E.C.D.
39.5
39.2
34.4
34.0
30.2
30.0
28.0
26.3
24.0
12.5
29.6
%
§
46.3
27.1
24.1
22.4
31.1
21.4
27.4
23.8
21.4
19.2
24.9
%
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
% FEDERAL CORPORATE TAXES AS SHARE OF G.D.P.
’75 ’80 ’85 ’95 ’05 ’09’90 ’00
Members of the Organization of Economic Cooperation and Development
United States
By MARJORIE CONNELLY
While most Americans say cor-porations do not pay their fairshare in taxes, they still prefercuts in government spending toincreasing taxes on corporationsas a means of cutting the federalbudget deficit, according to a re-cent New York Times/CBS Newspoll.
But when given a choice be-tween raising taxes on corpora-tions and raising taxes on house-holds that make more than$250,000 a year, almost two-thirdsof respondents opt for taxingbusinesses.
There is a strong partisan di-vide: A majority of Republicansand independents favor cuttinggovernment spending over rais-ing taxes on businesses, whileDemocrats are evenly divided.Democrats strongly support in-creasing corporate taxes ratherthan adding to the taxes of afflu-ent households; Republicans andindependents are closely divided.
In general, however, few Amer-icans back increasing taxes onAmerican businesses: only 37percent said corporate taxesshould be increased to help re-duce the federal budget deficit.The rest agree with an alterna-tive argument that increased tax-es would discourage Americancompanies from creating jobsand hurt them in the global mar-ketplace. Thirty-two percentwould rather see corporate taxesremain as they are now and 26percent said taxes on corporate
profits should be decreased. “If you increase taxes, you lim-
it the ability to produce and com-pete, especially in a global mar-ket,” Larry Williams, 70, of Hoo-ver, Ala., said in a follow-up in-terview. “If we increase taxes onmanufacturers, they will turnaround and send the work over-seas because that’s the only waythey can survive,” said Mr. Wil-liams, a retired business owner.
Six in 10 Americans surveyedthink companies use their taxsavings to give bonuses to execu-tives and dividends to sharehold-ers. About a quarter, 23 percent,said they thought tax savingswere mostly reinvested back inthe corporation and only 4 per-cent said savings were used tocreate new jobs for Americanworkers.
Almost half, 46 percent, said allcompanies should be taxed at thesame rate. About a third saidsome industries deserved a taxbreak. Small businesses, greencompanies and those in thehealth care industry were mostfrequently mentioned as deserv-ing of tax breaks. “In this econ-omy we should be supportingsmaller business owners, whowill, hopefully, eventually turninto larger business owners,”said Scott Cochran, 34, a furnituredesigner who owns his own busi-ness in Columbus, Ohio.
The nationwide telephone sur-vey was conducted March 2 to 7with 1,266 adults and has a mar-gin of sampling error of plus orminus three percentage points.The complete methodology andquestionnaire are available atNYTimes.com.
Based on telephone interviews conductedMarch 2-7 with 1,266 adults. THE NEW YORK TIMES
Even though Americans think corporations pay less than their fair share in taxes, they express little support for raising taxes on American companies. According to a recent New York Times/CBS News poll, the public would rather cut government spending to help reduce the budget deficit than tax corporate profits more.
Marina Stefan contributed re-porting.
Articles in this series are examin-ing efforts by businesses to lowertheir taxes, and the debate overhow to improve the tax system.
nytimes.com/businessday
But Nobody Pays That
ADVERTISING - Top media buyingagency has entry level position avail-able immediately. Requirements: Col-lege grad, detail oriented, computer lit-erate&cancrunchnumbers.
Brooklyn-based bank seeks a qualifiedcandidate forBSA/AMLOfficer. Keyre-sponsibilities include: evaluating exist-ing programs, developing, implement-ing, managing, and enhancing pro-grams to ensure compliance with ap-plicable Bank Secrecy Act, AML andOFAC regulations. Ideal candidate pos-sesses a BA degree & 5-7 years BSA,AML, & OFAC experience. Please for-ward your resume and salary require-ments to:
ATTN:HUMANRESOURCESPOBOX110127
BROOKLYN,NY11211-9975 EOE
Const. SENIOR PROJECT MGRSeeking a dedicated detail-orientedprofessionalw/ superiormgmt, organi-zational, analytical & planning skills.Min. 10yrsconsecutiveexperasaP.M.,must be able to manage several pro-jects ranging up to 30+ million dollars,exclntwriting&oral & leadershipskills.Exclntsal. bonus & benes pckg. (EOE)e-mail res. to: [email protected]
ConstructionESTIMATOR/PROJECT MANAGERNewYorkMetroareacontractor seeksexperienced degreed civil engineerwith construction experience in esti-mating heavy and railroad track work.Local candidates only, Salary com-mensurate with experience. Send re-sumeto: [email protected]
DENTAL OFFICESin Bronx (Whitestone Bridge)/ Queens(Glendale). Busy insurance/privatepractice, seeking a General DentistPT/FT; Periodontist PT; ReceptionistFT and Dental Assistant FT
PLUMBINGESTIMATORLargeplumb-ing co. seeks exp Comm/Resid Plumb-ing Est, 6-fig annual salary, health plan,vac/hol. Exp in high-rise resid/off const.comp lit. Email: [email protected]
RESTAURANT-Line cooks, experienceonly saute & grill. Large Fire IslandRestaurant, May-September, live-in.Faxresumeto: 631-665-7663
SECRETARY/RECEPTIONISTDiversified position. Phones, data en-try, greet visitors, time & attendance,payroll distribution, MSWord, EXCEL,some ACCESS. Motivated, ability toprioritize and take initiative. 50+wpmtyping. Sal comm.w/exp.FAXoremailresume with sal req. to 212-618-1135.NYS Task Force, 250 Broadway, NY10007.
Systems Analyst: Design & installservers. Plan, develop, test and docu-ment computer programs, applyingknowledge of programming tech-niques and computer systems; Eval.user request for app. support, for fin. orHRmgmt todetermine response timesandprovideresolutionsbasedonSLAs;Consultw/user to identify current oper-atingprocedures&clarify programob-jectives; Prepare flow charts & dia-grams to illustrate sequence of stepsprogram must follow and to describelogical operations involved; Analyze,review,&alter programto increaseop-erational efficiency or adapt to new re-qmnt; Write manual for users to de-scribe installation & operational proce-dures; Provide tech. assist to programuser utilizing ITIL procedures; M.S plus1 yr of exp or B.S + 5 yrs of relevant expreqd.Mail resumes toADS Inc, 156 Jeri-choTpke,FloralPark,NY11001.
SALESREPS -Majorbeveragedistribu-tor looking for reps to promote its Wine& Spirits Portfolio in 5 boroughs andSouth Fork of Nassau Co. Car a must.Email resumeto:[email protected]
FOX AGENCYONLYBABY& CHILDCARE
212-753-2806 LIC259725
NANNY **PROFESSIONAL**Needed for NYC working couple. Live-in. MUST be legal. Top Salary. CallMon-Fri 212-889-6609 Pavillion #624499
CO−OPS & CONDOSMANHATTAN
WESTSIDE(830)
Manhattan UnfurnishedOne & Two Rooms 874
Manhattan Apts. UnfurnishedThree, Four & Five Rms. 878
Manhattan Apts. UnfurnishedSix Rooms and Over 882
QueensCo−ops & Condos 1325
Help Wanted 2600
SALESOPPORTUNITIES
Household Help Wtd.Employment Services 3104
Nxxx,2011-05-03,B,009,Bs-BW,E3
ences, which Congress created to intentionally benefit specific companies or industries, cost an estimated $100 billion more a year.
Many tax analysts are skeptical that Con-gress, business leaders and the Obama admin-istration will be able to reach a deal before the 2012 election.
“It’s human nature that people are going to
fight harder to preserve a benefit they already have than to get some new benefit,” said Clint Stretch, a principal at Deloitte Tax and a former counsel to the Congressional Joint Committee on Taxation. “The only way tax reform makes everyone happy is if everyone wins. And with the federal budget where it is today, that’s not possible.” n
Ø Ø N B9BUSINESSTHE NEW YORK TIMES TUESDAY, MAY 3, 2011
professor at the University ofSouthern California who washead of the Congressional jointcommittee on taxes. This has pro-found implications for business-es, the economy and the federalbudget.
As Congress wrestles with howto get the deficit under control,one big point of contention iswhether spending cuts will needto be accompanied by an in-crease in taxes on some individ-uals or businesses. Facing a full-court press from business lead-ers who say the tax system is out-dated and onerous, PresidentObama, Congress and businessleaders have been warily negoti-ating various proposals, thoughmostly about whether to cut thetop corporate rate and to tightentax laws and not about whetherto increase revenue.
The United States is virtuallyalone in trying to tax its multi-national corporations on theirforeign earnings, but it allowscompanies to avoid those taxesindefinitely by keeping profitsoverseas. That encourages com-panies to use accounting maneu-vers to shift profits to low-taxcountries and to invest profitsoffshore, says David S. Miller, apartner at Cadwalader, Wicker-sham & Taft in New York.
Honeywell International, theNew Jersey company that makesthings as diverse as aerospacecomponents and First Alertsmoke detectors, reported in reg-ulatory filings that in the last fiveyears, it paid cash income taxesin the United States and abroadequal to 15 percent of its profits.On Friday, a Honeywell spokes-woman pointed out that the com-pany had since made a large pen-sion contribution, which effec-tively cut its profits and made itstax rate closer to 22 percent.
A major domestic competitor,United Technologies, reported anaverage of 24 percent over thattime. A German rival, Siemens,reported 29 percent of its totalprofit.
In addition to being complexand uneven, the United Statescorporate tax code is inefficientand has become a diminishingsource of revenue. Corporate tax-es accounted for about 9 percentof all federal revenue in 2010. At$191 billion, they were equal to 1.3percent of the nation’s gross do-mestic product. Most industrialcountries collect more from com-panies, about 2.5 percent of out-put. Only a portion of that dis-parity can be explained by themany types of businesses in theUnited States that elect to betaxed at an individual rate.
“Whether the test is fairness orefficiency, the U.S. system getsreally low marks,” said MichelleHanlon, an M.I.T. professor whosays the country needs to com-pletely revamp the way it taxescorporations.
Not all American companiesare willing or able to reduce theirtaxes drastically. Taxes varymore by industry here thanabroad, according to a study re-leased in February by Kevin S.Markle of Dartmouth and Doug-las A. Shackelford of the Uni-versity of North Carolina. At thehigh end, American retailers paid31 percent in total income taxes,construction 30 percent and man-ufacturers 26 percent. Financialservices companies paid an aver-age of 20 percent, real estate 19
percent and mining 6 percent.(Measuring taxes paid by com-
panies is imprecise because taxfilings remain private. In manycases, the estimates reported in acompany’s financial filings withregulators overstate taxes paid ina year because they include de-ferred taxes. Nonetheless, aca-demics, economists and electedofficials use the estimates forcomparative purposes.)
Because some companies areso effective at minimizing taxes,the average works out to far lessthan the official rate. UnitedStates companies pay about aquarter of their profits in federalincome taxes, a few percentagepoints higher than the rate paidby companies in most other ma-jor industrial countries, accord-ing to a number of studies and
tax experts.Assorted proposals being dis-
cussed in Washington call for therate to be lowered officially toabout 25 percent and some taxbreaks to be eliminated so thatrevenue remains unchanged.
But some prominent businessleaders, including the chief exec-utive of Procter & Gamble, arepushing for the rate to be re-duced without reining in tax shel-ters. That would make the UnitedStates virtually the only countryto change corporate taxes in re-cent years in a way that ended upadding to its deficit.
“One fact we know is that in allof the countries that have low-ered their corporate rates in re-cent years, they still collected thesame amount in revenues ormore,” said Reuven S. Avi-Yonah,
an international tax lawyer whoteaches at the University ofMichigan. “This means that theywere broadening the base of theprofits that corporations were ac-tually taxed on.”
Procter & Gamble, whoseproducts include Tide detergentand Crest toothpaste, paid an av-erage of 24 percent of its profitsin worldwide income taxes overthe last three years, according toregulatory filings. That is nearlythe same rate reported by twobig European rivals, Unileverand Henkel.
Yet Robert A. McDonald,P.& G.’s top executive, testifiedbefore a Congressional commit-tee this year about the need tocut the United States tax ratewithout ending tax breaks andshelters. “We need a tax systemthat addresses today’s hyper-competitive global marketplace,”Mr. McDonald said, arguing thatthe playing field was tilted awayfrom American businesses.
Many liberal groups counterthat ending the breaks, subsidiesand shelters in the corporate taxcode could provide enoughmoney to lower the rate severalpercentage points and still in-crease revenue.
Furthermore, some businessowners complain that the Ameri-can system unfairly rewards dis-ingenuous bookkeeping ratherthan innovation. It forces compa-nies to compete “based not onproduct quality and services, buton accounting gymnastics,” saidPaul Egerman, former chairmanand chief executive of eScription,a medical transcription service inBoston.
No one is certain how muchcreative accounting costs the fed-eral government in lost revenue,but most estimates say it easilyexceeds $50 billion a year. Tar-geted tax preferences, whichCongress created to intentionallybenefit specific companies or in-dustries, cost an estimated $100billion more a year.
Many tax analysts are skepti-cal that Congress, business lead-ers and the Obama administra-tion will be able to reach a dealbefore the 2012 election.
“It’s human nature that peopleare going to fight harder to pre-serve a benefit they already havethan to get some new benefit,”said Clint Stretch, a principal atDeloitte Tax and a former coun-sel to the Congressional JointCommittee on Taxation. “Theonly way tax reform makes ev-eryone happy is if everyone wins.And with the federal budgetwhere it is today, that’s not pos-sible.”
ERIC MILLER/REUTERS
Honeywell International in Minnesota. In the last five years, the company said, about 22 percent of its profit went to income taxes.
U.S. Business Has High Tax Rates but Pays LessFrom Page A1
DOUG MILLS/THE NEW YORK TIMES
Edward D. Kleinbard, third from left, former head of the Congressional joint committee on taxes,said American multinational corporations had become “world leaders in tax avoidance.”
EFFECTIVE RATE, 2008* STATUTORY RATE, 2010†
Advocates for cutting the corporate tax rate in the United States usually cite the statutory limit, but the average effective tax rate is much lower. As a share of gross domestic product, companies pay less in the United States than elsewhere.
A Lighter Burden
THE NEW YORK TIMES
Source: Organization of Economic Cooperation and Development; PricewaterhouseCoopers
† Includes national, state and local rates. Countries that have significant state and local rates include the United States, Japan and Germany.
* Latest available data. Figures for 2009 would also not be typical because of the worldwide economic crisis.
§ Weighted average, excluding the United States.
The effective rate is based on data from 1,000 large corporations worldwide. The rate is calculated as total income taxes divided by pretax income. The figures exclude companies with pretax losses and oil and gas companies,which are often subject to atypical surcharges.
Japan
United States
France
Belgium
Germany
Spain
Britain
Sweden
Greece
Ireland
O.E.C.D.
39.5
39.2
34.4
34.0
30.2
30.0
28.0
26.3
24.0
12.5
29.6
%
§
46.3
27.1
24.1
22.4
31.1
21.4
27.4
23.8
21.4
19.2
24.9
%
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
% FEDERAL CORPORATE TAXES AS SHARE OF G.D.P.
’75 ’80 ’85 ’95 ’05 ’09’90 ’00
Members of the Organization of Economic Cooperation and Development
United States
By MARJORIE CONNELLY
While most Americans say cor-porations do not pay their fairshare in taxes, they still prefercuts in government spending toincreasing taxes on corporationsas a means of cutting the federalbudget deficit, according to a re-cent New York Times/CBS Newspoll.
But when given a choice be-tween raising taxes on corpora-tions and raising taxes on house-holds that make more than$250,000 a year, almost two-thirdsof respondents opt for taxingbusinesses.
There is a strong partisan di-vide: A majority of Republicansand independents favor cuttinggovernment spending over rais-ing taxes on businesses, whileDemocrats are evenly divided.Democrats strongly support in-creasing corporate taxes ratherthan adding to the taxes of afflu-ent households; Republicans andindependents are closely divided.
In general, however, few Amer-icans back increasing taxes onAmerican businesses: only 37percent said corporate taxesshould be increased to help re-duce the federal budget deficit.The rest agree with an alterna-tive argument that increased tax-es would discourage Americancompanies from creating jobsand hurt them in the global mar-ketplace. Thirty-two percentwould rather see corporate taxesremain as they are now and 26percent said taxes on corporate
profits should be decreased. “If you increase taxes, you lim-
it the ability to produce and com-pete, especially in a global mar-ket,” Larry Williams, 70, of Hoo-ver, Ala., said in a follow-up in-terview. “If we increase taxes onmanufacturers, they will turnaround and send the work over-seas because that’s the only waythey can survive,” said Mr. Wil-liams, a retired business owner.
Six in 10 Americans surveyedthink companies use their taxsavings to give bonuses to execu-tives and dividends to sharehold-ers. About a quarter, 23 percent,said they thought tax savingswere mostly reinvested back inthe corporation and only 4 per-cent said savings were used tocreate new jobs for Americanworkers.
Almost half, 46 percent, said allcompanies should be taxed at thesame rate. About a third saidsome industries deserved a taxbreak. Small businesses, greencompanies and those in thehealth care industry were mostfrequently mentioned as deserv-ing of tax breaks. “In this econ-omy we should be supportingsmaller business owners, whowill, hopefully, eventually turninto larger business owners,”said Scott Cochran, 34, a furnituredesigner who owns his own busi-ness in Columbus, Ohio.
The nationwide telephone sur-vey was conducted March 2 to 7with 1,266 adults and has a mar-gin of sampling error of plus orminus three percentage points.The complete methodology andquestionnaire are available atNYTimes.com.
Based on telephone interviews conductedMarch 2-7 with 1,266 adults. THE NEW YORK TIMES
Even though Americans think corporations pay less than their fair share in taxes, they express little support for raising taxes on American companies. According to a recent New York Times/CBS News poll, the public would rather cut government spending to help reduce the budget deficit than tax corporate profits more.
Marina Stefan contributed re-porting.
Articles in this series are examin-ing efforts by businesses to lowertheir taxes, and the debate overhow to improve the tax system.
nytimes.com/businessday
But Nobody Pays That
ADVERTISING - Top media buyingagency has entry level position avail-able immediately. Requirements: Col-lege grad, detail oriented, computer lit-erate&cancrunchnumbers.
Brooklyn-based bank seeks a qualifiedcandidate forBSA/AMLOfficer. Keyre-sponsibilities include: evaluating exist-ing programs, developing, implement-ing, managing, and enhancing pro-grams to ensure compliance with ap-plicable Bank Secrecy Act, AML andOFAC regulations. Ideal candidate pos-sesses a BA degree & 5-7 years BSA,AML, & OFAC experience. Please for-ward your resume and salary require-ments to:
ATTN:HUMANRESOURCESPOBOX110127
BROOKLYN,NY11211-9975 EOE
Const. SENIOR PROJECT MGRSeeking a dedicated detail-orientedprofessionalw/ superiormgmt, organi-zational, analytical & planning skills.Min. 10yrsconsecutiveexperasaP.M.,must be able to manage several pro-jects ranging up to 30+ million dollars,exclntwriting&oral & leadershipskills.Exclntsal. bonus & benes pckg. (EOE)e-mail res. to: [email protected]
ConstructionESTIMATOR/PROJECT MANAGERNewYorkMetroareacontractor seeksexperienced degreed civil engineerwith construction experience in esti-mating heavy and railroad track work.Local candidates only, Salary com-mensurate with experience. Send re-sumeto: [email protected]
DENTAL OFFICESin Bronx (Whitestone Bridge)/ Queens(Glendale). Busy insurance/privatepractice, seeking a General DentistPT/FT; Periodontist PT; ReceptionistFT and Dental Assistant FT
PLUMBINGESTIMATORLargeplumb-ing co. seeks exp Comm/Resid Plumb-ing Est, 6-fig annual salary, health plan,vac/hol. Exp in high-rise resid/off const.comp lit. Email: [email protected]
RESTAURANT-Line cooks, experienceonly saute & grill. Large Fire IslandRestaurant, May-September, live-in.Faxresumeto: 631-665-7663
SECRETARY/RECEPTIONISTDiversified position. Phones, data en-try, greet visitors, time & attendance,payroll distribution, MSWord, EXCEL,some ACCESS. Motivated, ability toprioritize and take initiative. 50+wpmtyping. Sal comm.w/exp.FAXoremailresume with sal req. to 212-618-1135.NYS Task Force, 250 Broadway, NY10007.
Systems Analyst: Design & installservers. Plan, develop, test and docu-ment computer programs, applyingknowledge of programming tech-niques and computer systems; Eval.user request for app. support, for fin. orHRmgmt todetermine response timesandprovideresolutionsbasedonSLAs;Consultw/user to identify current oper-atingprocedures&clarify programob-jectives; Prepare flow charts & dia-grams to illustrate sequence of stepsprogram must follow and to describelogical operations involved; Analyze,review,&alter programto increaseop-erational efficiency or adapt to new re-qmnt; Write manual for users to de-scribe installation & operational proce-dures; Provide tech. assist to programuser utilizing ITIL procedures; M.S plus1 yr of exp or B.S + 5 yrs of relevant expreqd.Mail resumes toADS Inc, 156 Jeri-choTpke,FloralPark,NY11001.
SALESREPS -Majorbeveragedistribu-tor looking for reps to promote its Wine& Spirits Portfolio in 5 boroughs andSouth Fork of Nassau Co. Car a must.Email resumeto:[email protected]
FOX AGENCYONLYBABY& CHILDCARE
212-753-2806 LIC259725
NANNY **PROFESSIONAL**Needed for NYC working couple. Live-in. MUST be legal. Top Salary. CallMon-Fri 212-889-6609 Pavillion #624499
CO−OPS & CONDOSMANHATTAN
WESTSIDE(830)
Manhattan UnfurnishedOne & Two Rooms 874
Manhattan Apts. UnfurnishedThree, Four & Five Rms. 878
