Big Business in America is not paying anywhere near the amount of federal taxes that the statutory corporate rate dictates, according to Congress’ watchdog agency.

Corporations with at least $10 million in assets paid only one-third of the tax rate, the Government Accountability Office (GAO) found.

The rate is 35%, but the companies examined by the GAO paid an average of only 12.6% in 2010.

Peter Schroeder at The Hill noted that even if corporations’ tax payments to foreign governments, states and local governments were factored in, the rate paid came out to only 17%.

Companies have been getting away with paying much less than required through a combination of exemptions, deferrals, tax credits, and other incentives, the GAO concluded.

The study (pdf) was requested by Senators Carl Levin (D-Michigan) and Tom Coburn (R-Oklahoma), both of whom expressed frustration over the news.

“When some U.S. corporations use unjustifiable loopholes and offshore gimmicks to avoid paying Uncle Sam, their tax burden is shifted onto hardworking American families and small business,” Levin said in a statement. “Today’s GAO report quantifies just how much of the corporate tax burden has been shifted onto other taxpayers: America’s large, profitable corporations are now paying a lower tax rate than our teachers and firefighters.”

Coburn said it was “especially wrong to ask families who are struggling to make ends meet to subsidize special breaks for corporations. We would be better off with a code that eliminated these loopholes so we can lower rates for both corporations and individuals.”

-Noel Brinkerhoff

To Learn More:

GAO: Corporations Pay One-Third of Statutory Rate (by Peter Schroeder, The Hill)

GAO: Big Companies Paid A 12.6% Effective Federal Income Tax Rate (by Janet Novack, Forbes)

Corporate Income Tax: Effective Tax Rates Can Differ Significantly from the Statutory Rate (U.S. Government Accountability Office) (pdf)

CEO Group Launches Campaign to Reduce Corporate Tax Rate to 25% (and Keep the Loopholes) (by Noel Brinkerhoff, AllGov)                

Corporate Tax Rate Too High? Not for GE…2.3% over 10 Years (by Noel Brinkerhoff and David Wallechinsky, AllGov)             

39 of the Biggest Corporations Paid a Lower Tax Rate than the Average American (by David Wallechinsky, AllGov)