The economic downturn may have brought in heavy losses for them, but Citigroup & Motorola, led by India-born CEOs, still are among the highest tax payers.
The economic downturn has brought in heavy losses for them, but Citigroup and Motorola -- two American corporate giants led by India-born CEOs -- also rank among the biggest contributors to Uncle Sam's tax kitty.
In a list compiled by US magazine BusinessWeek, Vikram Pandit-led banking behemoth Citigroup and Sanjay Jha-led mobile phone major Motorola have been named among the firms paying highest rate of taxes, with the total tax paid by the two exceeding their annual income.
With a four-year average tax rate of 106.3 per cent, Citi is ranked sixth and Motorola is at the seventh position with 106 per cent of income paid in taxes.
At the same time, Adobe Systems, Cognizant and Hartford Financial -- three other US companies led by persons of Indian origin -- figure in a separate list of 50 firms paying the least rates of taxes.
Surprisingly, the overall tax rate charged in the US is close to 400 per cent in one case, although majority of the American companies pay less than 35 per cent -- the official corporate tax rate in the US,
BusinessWeek said.
The list of 50 highest tax paying companies is topped by internet security solutions provider Verisign with a four-year average tax rate of 391.3 per cent.
Verisign is followed by another IT firm Fidelity National Information Services (254.8 per cent), Zions Bancorporation (226.1 per cent), Eastman Kodak (142.1 per cent) and Sun Microsystems (139.5 per cent) in the top five.
The list of 50 companies paying lowest rate of tax is topped by energy firm Range Resources (0.4 per cent), while Shantanu Narayen-led Adobe is ranked at 26th (8.3 per cent), Francisco D'Souza-led Cognizant at 37th (10.2 per cent) and Ramani Ayer-led Hartfold Financial is at 39th (10.4 per cent).
The lists were compiled by
BusinessWeek with help from data tracker Capital IQ and is based on the tax burdens of companies in the US wide-based benchmark index S&P 500 index.
"We looked at the companies in the S&P 500 index, excluding those with two or more recent years of losses, and instead of the 'effective tax rate' companies calculate and
apply to their income statement, pulled out the figure companies disclose as cash taxes paid," the magazine said.
"To minimize the impact of one-time anomalies, we then averaged the last four years' numbers," it added.
Citi clocked an annual loss of USD 27.7 billion, while Motorola also suffered a loss of USD 4.2 billion in 2008, but previously the two companies were profitable.
According to the magazine, "cash taxes paid" for the latest year by Citi stood at USD 3,170 million while Motorola's was USD 407 million.
Other companies in the list include Goodyear Tire & Rubber, CB Richard Ellis Group, The New York Times, Goldman Sachs, Morgan Stanley, Bank of America and Wells Fargo.
Those named among the 50 companies paying lowest rate of taxes included Boeing, Amazon.com, Yahoo, Time Warner, Xerox, Convergys, Apple, Hewlett-Packard, eBay and Monster Worldwide.
BusinessWeek pointed out that the list features players whose tax burdens ranged widely, from essentially nothing to almost 400 per cent of pre-tax income a year.
"Troubled industries with weakening profits had the highest tax rates: The auto sector averaged 45.5 per cent, banks paid 50.3 per cent, and real estate companies paid 66.1
per cent," it added.
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