New report: 3 Michigan companies among "Dirty 30" tax avoiders

Jan 18, 2012

A new report says three Michigan companies spent more on lobbying than they did in corporate income taxes between 2008 and 2010.

Those companies include Michigan’s two biggest utilities, DTE and Consumers Energy. It also includes Ann Arbor-based freight hauler Con-way.

The numbers show how corporations use lobbying to shape the tax code to their benefit, says Dan Smith, one of the report’s authors with the US Public Interest Research Group (PIRG).

“The fact that these corporations can spend more money on lobbying than they do on taxes makes a mockery of both our tax code and our democracy,” Smith adds.

In fact, all three Michigan companies had an effective negative tax rate during those years—meaning they got more back in rebates and credits than they paid.

But DTE and Consumers Energy suggest their place on the list is misleading. That’s in part because some of the recent tax incentives they were awarded, as part of the 2009 stimulus package, were for infrastructure improvements. About a third of the “Dirty 30” companies are utilities.

“Those tax incentives are helping us invest more than $6.5 billion in Michigan to improve customer and the environment,” says Consumers spokesman Jeff Holyfield, adding that Consumers paid over $200 million in state and local taxes during that period.

A Con-way spokesman declined immediate comment.

The PIRG/Center for Tax Justice report also looked more broadly at 280  “consistently profitable” Fortune 500 companies that pay significantly less than the official 35% corporate income tax rate.

The study found that in aggregate, those companies took in more than $220 billion in tax breaks, while spending $2 billion on lobbying expenses.

Though it didn’t make the “Dirty 30” list, one other Michigan company—Kellogg—was named as a top tax avoider.