A report issued late Tuesday by the Citizens for Tax Justice and the Institute on Taxation & Economic Policy includes Wisconsin Energy as one of 26 U.S. corporations that paid no federal income tax during the period 2008 to 2012. The report is similar to a report issued in 2011 by the same groups for the years 2008 to 2010.
The situation is a direct result of steps taken in 2008 by Congress and President George W. Bush to modify the tax laws in an effort to stimulate the economy. Those steps were repeatedly extended and expanded through the end of 2013 under President Barack Obama, increasing their value. Accelerated depreciation tax breaks have been available for decades, but the expanded depreciation tax breaks were specifically enacted by Congress to provide an incentive for companies to invest in their businesses and spark economic growth. By all accounts, the strategy worked.
Wisconsin Energy is one of many companies that have taken full legal advantage of the federal government’s tax depreciation incentives.
Responding to the report, David Hughes, Wisconsin Energy assistant treasurer, said, “The vast majority of the tax benefits permitted under the country’s tax laws have already been passed on to our customers and used to significantly lower their utility rates over the period of this report.
“During the period 2008 to 2012, the State of Wisconsin did not follow the enhanced depreciation tax provisions enacted by the federal government to encourage capital investment and spur economic growth, so we have and will continue to be a tax-paying entity in Wisconsin.”
Hughes also noted that, “though federal taxes may not have been paid during this period, the law requires these taxes to be paid back in future years. That means Wisconsin Energy will be paying more than $300 million in federal taxes related to these years in the future.”
Because Wisconsin Energy and other electric and natural gas utilities are allowed, by law, to claim accelerated depreciation on capital investments, half of the 26 companies on the list were in the utility industry. Others included Pepco Holdings, PG&E, Integrys Energy Group, American Electric Power, Duke Energy, FirstEnergy, NextEra Energy, Consolidated Edison, Northeast Utilities, CenterPoint Energy, CMS Energy and Atmos Energy.