Procter & Gamble, the Cincinnati-based company behind Pampers nappies and Tide detergent, reported a federal tax burden in 1969 that was 40 per cent of its total profits, a typical rate in those days.
More than four decades later, P&G is a very different company, with operations that span the globe. It also reports paying a very different portion of its profits in federal taxes: 15 per cent.
The world's biggest maker of consumer products isn't the only one. Most of the 30 companies listed on the country's most famous stock index, the Dow Jones industrial average, have seen a dramatically smaller percentage of their profits go to US coffers over time, even as their share prices have driven the Dow to an all-time high.
A Washington Post analysis found that in the late 1960s and early 1970s, companies in the current Dow 30 routinely cited US federal tax expenses that were 25 to 50 per cent of their worldwide profits. Now, most are reporting less than half that share.
The reason is not simply a few loopholes tucked deep in the tax code. It's far bigger: the slow but steady transformation of the American multinational after years of globalisation. Companies now have an unprecedented ability to move their capital around the world, and the corporate tax code has not kept up with the changes.
Just the opposite, in fact. Experts say the US code has encouraged companies to shift their income overseas where it is more lightly taxed. Many firms, in turn, have discovered that just as they can move their manufacturing to other parts of the world, so, too, can they shift their income to far-flung tax havens such as the Cayman Islands.
The result is lower revenue in the US that could pay for infrastructure, education and other services that support domestic growth - and that make life easier for US firms.
As momentum builds for President Barack Obama and Congress to overhaul the corporate tax code, this steep decline in tax expenses as a share of profits is a critical factor in the debate. And increased globalisation has made the task of fixing the tax code much more difficult than the country's last overhaul in 1986.
Company executives have complained for years that their firms face the highest tax burden in the world, citing the United States' 35 per cent top corporate tax rate as the highest among developed economies.
P&G chief executive Bob McDonald was among 20 business executives - including other leaders of Dow 30 companies such as General Electric's Jeffrey Immelt and Wal-Mart's Michael Duke - who met Obama in November to discuss the country's fiscal issues, including the tax code.
The country needs to "make our tax system more competitive and ... reduce the corporate tax rate", said a statement from P&G ahead of the meeting.
Many companies argue that fixing the tax code would help improve economic growth, but that calculus has become more complicated as the interests of US multinationals appear less neatly tethered to the interests of the country. This phenomenon has become especially clear during the economic recovery, with firms booking record profits while many American families still struggle with the wreckage from the Great Recession.
"When you get US businesses coming to Washington and talking about, 'We need to do this and that for the US economy,' what does that even mean?" said Doug Shackelford, a professor of taxes at the University of North Carolina's Kenan-Flagler Business School.
"Who are they referring to? Is it US workers? Is it US shareholders?"
At first blush, the decline in corporate taxation could be a result of simple maths. The top US corporate tax rate - that 35 per cent that companies complain about - is actually down from 48 per cent in 1971.
But that's only part of the story.
A major factor is that profits earned abroad, which in theory are subject to the same US tax rate, often are taxed much more lightly, and companies are earning more overseas than ever.
Of the 25 companies in the Dow 30 that break down their pretax income between domestic and foreign sources, 14 earned more money overseas than they did in the United States in the most recent annual filings available.
Any dollar earned abroad does not get taxed by the US government until it flows back to the parent company. A JP Morgan report estimates there is US$1.7 trillion of foreign earnings being held untaxed overseas by more than 1000 US firms.
Companies have also found ways to shift their income across national boundaries, roving from country to country in search of the lowest tax burden. Ed Kleinbard, a tax professor at the University of Southern California, has dubbed these moveable earnings "stateless income".
The trend has revolutionised company tax planning, especially in businesses that rely on intellectual property.
The Senate Permanent Subcommittee on Investigations found that from 2009 to 2011, Microsoft, a member of the Dow 30, was able to shift offshore almost half its net revenue from US retail sales, or roughly US$21b, by transferring intellectual-property rights to a Puerto Rican subsidiary. As a result, the subcommittee found that Microsoft saved up to US$4.5b in taxes on products sold in this country.
William J Sample, Microsoft's corporate vice president of worldwide tax, said in response that the company complies with tax rules in all the places it operates, paying billions each year in total taxes.
In 2012, Microsoft reported a tax expense that was the lowest-ever percentage of its total income, according to available data. The figure was 10 per cent in 2012, compared with 33 per cent in 1987, the oldest year for which information is available.
And it's not just tech firms enjoying lower rates.
Out of all the firms in the Dow 30, 22 have seen a drop of more than 10 percentage points between the oldest year in which data is available and the most recent year.
McDonald's, the world's biggest restaurant chain, reported a US federal tax expense in 1973 that was more than 37 per cent of its total profit that year, compared with 14 per cent in 2012. The maker of Otis elevators and Black Hawk helicopters, United Technologies, reported an expense in 1969 that was 47 per cent of profits. Now, it is 5.8 per cent.
By contrast, energy firms such as Exxon Mobil and Chevron have seen their numbers stay flat and low over the years, often less than 10 per cent of total profits.
Data for financial firms, such as Bank of America and JPMorgan Chase, was available going back only to the early 1990s and did not show a noticeable downward trend in their numbers.
Robert Willens, who has been a corporate tax expert for more than 40 years, said he has noticed an unprecedented level of enthusiasm for reducing taxes.
"Maybe it's just the pressure to produce profits," Willens said. "I think people realise now that it's not difficult to avoid US taxes ... and investors are demanding consistently improving performance."
According to a Congressional Research Service report from this past January, US multinationals in 2008 reported 43 per cent of their overseas profits in Bermuda, Ireland, Luxembourg, the Netherlands and Switzerland, all places famous for having among the lowest tax rates in the world.
The same report noted that profits reported in Bermuda have risen from 260 per cent of the country's economic output in 1999 to more than 1000 per cent in 2008.
None of this has stopped companies from coming to Washington and making their case that they are paying way too much in taxes. And they are getting a full hearing as some top lawmakers move to overhaul the corporate tax code.
The current system represents the worst of two worlds: It charges a relatively high rate, yet many companies don't actually pay it.
One of the strangest things about the corporate tax debate is that it is nearly impossible to figure out the amount companies are actually paying. Nowhere is there a straightforward number showing how much in federal taxes a firm pays to the US Treasury every year.
Instead, firms list a "current tax provision" number that is an accountant's estimate used to calculate earnings but that is not meant to equal the size of the company's US federal tax bill.
After doing its analysis, The Washington Post contacted every company in the Dow 30 and asked to see the actual figures paid to the federal government every year. No company provided the information.
Over the long run, tax experts say, the publicly available numbers, however flawed, offer the closest look an outsider can get at what a company pays.
And while many companies hold their money overseas, a number of executives have said that they would be willing to bring some of that money back to this country if the US tax rate were not so high.
"The US system for taxing its corporate citizens on their global income ... is an outdated remnant that inhibits our ability to compete globally," said Gregory J. Hayes, chief financial officer of United Technologies, in testimony before the House Ways and Means Committee in May 2011. "It was designed when the US was the dominant economy and before globalisation became an unmistakable market reality."
Some momentum is now building for changes to the code, driven mainly by Republican Dave Camp, chairman of Ways and Means. Camp has said he is interested in lowering the top corporate rate to 25 per cent. He also favours exempting 95 per cent of overseas earnings from US taxation when that income is brought back to the United States.
These signals have sent US firms scrambling to lobby for tax law changes that would benefit their industries. But what helps one group of companies can very well hurt another. As a recent report from the law firm K&L Gates warned business clients, If You're Not At the Table, You're On the Menu.
It is not just the United States trying to figure out how to tax multinationals. Worldwide there is an increasing tension between businesses that have gone more global and national governments that still have to find a way to raise revenue to pay for domestic services.
The problem has become worse as countries adopt tax policies designed to attract more jobs and investment, only to wake up and discover that the firms doing business in their borders have found ways to pay near-zero tax bills.
"From a company's perspective, they're just minimising their global taxes," said Shackelford, the North Carolina professor. "They don't care if that tax dollar goes through Berlin or London or the US or wherever."
A recent report by the Organisation for Economic Cooperation and Development sounded an alarm, noting that multinationals are using "more aggressive" tactics to reduce their taxes. "What is at stake is the integrity of the corporate income tax," the report said.
In the United Kingdom recently, the coffee giant Starbucks faced massive protests and parliamentary hearings when reports showed the company had paid almost no taxes in the past three years, despite revenue of more than US$600m in 2011.
Starbucks had not broken any law but eventually agreed to pay US$30m to make peace.
"[Countries] want the jobs, they want the investment, so they put in incentives to do that," Shackelford said. "Companies take advantage, and then [politicians] get mad that they don't pay the taxes. It's a little hard to have it both ways."
- Bloomberg/Washington Post