Greater than 50 giant US corporations – together with Nike and FedEx – paid no federal taxes over the previous yr

Top line

At least 55 prominent US companies benefited from Trump-era tax cuts and took advantage of loopholes in tax legislation. In 2020, they paid $ 0 corporation tax on billion-dollar economic policy profits, according to a report released Friday by the Institute on Taxation and.

55 companies would have paid a total of $ 8.5 billion last year if they had paid 21 percent … [+] Guess on their winnings.

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Key factors

Analysts found that the 55 companies, all of which are part of the S&P 500 or Fortune 500, would have paid a total of $ 8.5 billion last year if they had a profit of 21% (the federal corporate income tax rate) paid on their winnings.

Not only did they avoid paying taxes on their profits, but these companies received $ 3.5 billion in tax breaks, according to ITEP, a left-wing, nonprofit research group that analyzed each company’s annual financial statements.

Stock option tax breaks for executives, a provision that allows companies to write off capital investments, federal research and experimentation credits, and renewable energy tax breaks were some of the legal deductions and exemptions these companies used to drastically reduce their tax burden.

26 of the 55 companies, including Nike, which reported more than $ 2.8 billion in pre-tax income last year, and FedEx, which generated $ 1.2 billion, have had the last three years, according to the report Avoid paying federal income taxes.

In a statement emailed to Forbes, a FedEx spokesperson said, “The CARES bill, passed in March 2020, has helped companies like FedEx navigate a fast-changing economy and market Find your way around and continue to invest in capital, hire team members, and fund employee retirement plans. “

Key background:

In December 2017, then-President Trump signed the Tax Cuts and Employment Act and introduced far-reaching changes to tax law. In addition to lowering the corporate rate from 35% to 21%, the $ 1.5 trillion bill provided tax breaks for pass-through business owners whose profits would be taxed by the individual code. Although tax returns are not made public, the Securities and Exchange Commission requires public companies to disclose pre-tax income. ITEP analysts were able to use this data and other information published by each company to determine each company’s effective tax rate.

Against:

Alan D. Viard of the American Enterprise Institute, a conservative research group, told the New York Times that “the fact that many companies don’t pay taxes means that there are many regulations and preferences,” he added. It doesn’t tell you whether they are good or bad or indifferent. It is at most a starting point, certainly not an end point. “

What to look out for:

Earlier this week, the Biden government, which aims to fund infrastructure investments by generating $ 2 trillion in revenue over 15 years, outlined its plans to increase the corporate tax rate from 21% to 28%. The president’s plan would also place a minimum tax rate of 15% on the profits of large corporations, even if those corps received various deductions and exemptions. Speaking on Wednesday about his new infrastructure spending plan, Biden said, “A firefighter, a teacher who pays 22% – Amazon and 90 other big companies that don’t pay federal taxes? I’ll put an end to this.”

Crucial quote:

“The key here is that the president firmly believes that the biggest companies and those that have done very well over the past few decades should pay a little more,” said National Economic Council deputy director Bharat Ramamurti.

Big number:

$ 2.4 trillion. This is the amount of money a previously proposed Biden tax plan would raise between 2021 and 2030, according to the Tax Policy Center.

Further reading:

Who will be the biggest loser from Biden’s tax hikes? (Forbes)

Biden Will Push For Tax Hikes For Large Businesses And High Earners, Says Economic Aide (Forbes)

55 companies paid $ 0 in federal taxes on 2020 profits (ITEP)