According to Citizens for Tax Justice, an advocacy group that is critical of corporate tax breaks, IBM's rebate check would top US$1.4 billion, while General Electric would receive US$671 million. Last week, IBM said it could meet investors expectations for fourth-quarter results. GE earned US$9.8 billion in the first nine months of the year, a 6.8 percent increase from the comparable period last year.
Minimum tax may survive
Sending US$25 billion in checks to profitable corporations may not pass the Senate. But the repeal of the minimum tax, which became law in 1986 to make sure that profitable corporations pay some taxes regardless of the breaks they receive, could survive.
That is because in recent years, while more individuals, even those with modest incomes, have been skewered by the minimum tax, corporations have found ways to pay less of the tax, according to Robert McIntyre, director of Citizens for Tax Justice.
In 1998, for example, corporations paid US$3.3 billion under the law, down from US$8.1 billion in 1990. Individuals, on the other hand, paid US$5 billion in 1998, up from US$830 million in 1990.
The number of taxpayers qualifying for the minimum tax numbered 132,000 in 1990, and McIntyre estimates that 2.3 million people will pay the tax this year. The surge makes a repeal expensive, of course.
"Repealing the corporate AMT and eliminating taxes on some of our wealthiest corporations would be both unfair and grossly insulting to America's hardworking, taxpaying families," McIntyre said.
Another aspect of the House bill that aids a small but powerful group of large, multinational corporations is the plan to make a temporary tax break for companies with financial operations permanent.
The tax break lets companies shield income earned in those businesses from taxes by shifting money to offshore subsidiaries.
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