The Institute on Taxation and Economic Policy (ITEP.ORG) has done an analysis of 379 corporations and their tax burdens since the Republican Party and Donald Trump gave them the enormous tax cuts that most Americans were dead-set against. “Corporate Tax Avoidance In The First Year of The Trump Tax Law” is available here for viewing or downloading. The findings are what we have come to expect: Big companies got big returns from the tax cuts, and on top of that, most corporations still couldn’t resist exploiting loopholes allowing them to pay even less than the meager amount set out by the Republican Party.
- The 379 profitable corporations identified in this study paid an effective federal income tax rate of 11.3 percent on their 2018 income, slightly more than half the statutory 21 percent tax
- 91 corporations did not pay federal income taxes on their 2018 U.S. income. These corporations include Amazon, Chevron, Halliburton and IBM. An ITEP study released in April 2019 examined 2018 Fortune 500 filings released to date and found 60 companies paid zero in federal income taxes. Now, all companies have released their 2018 financial filings, and this report reflects that.
- Another 56 companies paid effective tax rates between 0 percent and 5 percent on their 2018 income. Their average effective tax rate was 2 percent.
They are supposed to pay out 21 percent, but by hiding money offshore and by tucking it into CEO “stock options” allowing them to claim lower total profits, most too-big-to-fail businesses continue to pay half of what is already not a fair share of anything. The review found that even the 57 companies that paid slightly higher rates than the statutory 21 percent were frequently paying out previously deferred tax debt. That already owed the government and were catching up on that money while not actually paying what, by law, they should be paying now.
Of the 91 corporations not paying anything in federal income taxes, here are the top 10 most profitable:
- Amazon.com
- Delta Air Lines
- Starbucks
- Chevron
- General Motors
- EOG Resources
- Occidental Petroleum
- Duke Energy
- Dominion Resources
- Honeywell International
In all 10 of those examples, their effective tax rates are negative. Poor, poor corporations. No wonder they keep cutting jobs while recording record profits and C-suite executive salaries. How’d you like that deal?
In total, the 379 corporations enjoyed $73.9 billion dollars in corporate welfare. Of course, like all acute inequalities, only a handful of the biggest companies received the lions share of that sweet public money. ITEP says that 25 of the largest corporations made up half—$37.1 billion—of those pocketed tax dollars.
Going through the years in “effective tax rates,” from President Ronald Reagan until now, ITEP says that “the 11.3 percent effective tax rate found in this study is likely the lowest effective tax rate in the last 40 years, well below the 14.1 percent effective tax rate that shocked President Reagan into supporting loophole closing reforms.” Keep in mind, even Reagan Republicans needed to do something about how egregious their low effective tax rate was in 1986, for optics’ sake. The current crew couldn’t care less, because they are all in on undemocratic rule of law.
