Posted: 07/03/2012 11:22 am Updated: 07/03/2012 11:22 am
One scandal-ridden company has managed to essentially avoid paying U.S. income taxes for more than two decades.
Since its founding 23 years ago, Chesapeake has paid about 1 percent in taxes of its $5.5 billion in pretax profits, Bloomberg reports. Because of the risk that oil and gas companies could drill into a well that ends up being dry, they are allowed a loophole to stave off paying taxes on a large percentage of income. Less than a single percent of Chesapeake’s wells turned up dry last year.
Chesapeake has been marred by scandal in recent months. Investors stripped Aubrey McClendon, the company’s founder, of his chairmanship last month after reports surfaced that he, among other corporate governance issues, accepted a personal loan from a company that was working with Chesapeake.
Still, Chesapeake isn’t the only major company to use a loophole in an aim to lower its tax bill. Thirty of America’s most profitable companies paid nothing in income taxes over the last three years, according to a November report from the Citizens for Tax Justice. In addition, nearly 300 companies paid an average tax rate of 18.5 percent between 2008 and 2010. The U.S. corporate tax rate is technically 35 percent.
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