A new study has found that at least 55 of America’s largest companies paid zero taxes last year, despite making billions of dollars in profits. It’s infuriating.
As the New York Times reports, that 2017 tax bill eagerly passed by Republicans in Congress and signed with great fanfare by the former guy, reduced the corporate tax rate to 21 percent from 35 percent. On top of that gift,
dozens of Fortune 500 companies were able to further shrink their tax bill — sometimes to zero — thanks to a range of legal deductions and exemptions that have become staples of the tax code, according to the analysis…
Twenty-six of the companies listed, including FedEx, Duke Energy and Nike, were able to avoid paying any federal income tax for the last three years even though they reported a combined income of $77 billion. Many also received millions of dollars in tax rebates.
As Bernie Sanders has reportedly noted, if you paid 135 for a pair of Nike shoes, you paid more for them than Nike paid in taxes.
The Times article has a list of the most profitable companies that paid no taxes last year.
Publicly traded corporations have to file financial reports, and those reports include the amounts they’ve paid in federal income taxes. When challenged about their ability to avoid paying taxes, most respond that they “fully comply” with the laws. Which is undoubtedly true. (Okay, maybe not for those with accounts in offshore tax havens…Although that tactic is more common among filthy rich individuals than corporations…)
It’s relatively simply to “fully comply” with tax provisions (aka “loopholes”) that are intended to encourage socially useful behaviors like investing in clean energy or modernizing aging equipment.
The $2.2 trillion CARES Act, passed last year to help businesses and families survive the economic devastation wrought by the pandemic, included a provision that temporarily allowed businesses to use losses in 2020 to offset profits earned in previous years, according to the institute.
Several of these deductions and credits are justifiable. Others, much less so.
I agree with Elizabeth Warren, who has been quoted as saying that giant corporations with billions of dollars of profit shouldn’t be able to pay $0 in federal taxes. According to the Times, today’s tax avoidance strategies include a mix of old standards and what the report calls “new innovations”. It’s hard to argue, for example, for the social benefit of allowing companies to save billions of dollars by characterizing the purchase of discounted stock options by their top executives as a loss, which they then deduct.
The Biden administration announced this week that it planned to increase the corporate tax rate to 28 percent, and establish a kind of minimum tax that would limit the number of zero-payers. The White House estimated that the revisions would raise $2 trillion over 15 years, which will be used to fund the president’s ambitious infrastructure plan.
Supporters say that in addition to yielding revenue, the rewrite would help make the tax code more equitable, requiring individuals and companies at the top of the income ladder to pay more. But Republicans have signaled that the tax increases in the Biden proposal — which Senator Mitch McConnell of Kentucky, the minority leader, called “massive” — will preclude bipartisan support.
Individual taxpayers have long had to contend with the Alternative Minimum Tax. That provision was created in the 1960s, with the goal of preventing high-income taxpayers from using various deductions and credits to avoid the individual income tax. There’s no reason why a similar mechanism shouldn’t apply to corporate giants using provisions of the tax code to avoid paying any taxes on massive profits.
Meanwhile, It would be illuminating if a Congressional committee were to examine the credits and deductions allowed by the current tax code, and eliminate those that no longer make much sense. (Some never did.)
If nothing else, it would be interesting to see how the Republican supporters of these provisions would defend them.
This actually thread actually correlates well with yesterday’s thread!
These corporations would benefit greatly from an infrastructure bill. Beefing up America’s infrastructure would definitely help corporations and their manufacturing and shipping capabilities. So would cost less for them to conduct business, and, the Republican corporate welfare program allows someone else (middle-class taxpayer) to pay for it.
So, the burden is upon the middle-class taxpayer. Or, the minimum wage earner who holds 2 or 3 jobs while making just enough to not be eligible for SNAP, or, medical insurance, or, certain tax breaks, or, housing!
Do you think that disabled individuals or the elderly should have to pay more in income tax than multibillion or trillion dollar international American-based corporations? Joe Manchin, kyrsten Sinema, or Chris Coons must think that that’s okay, because they’ve already come out against any fiddling with the Republican corporate welfare program (we won’t even get into the filibuster). And, they need to be called out on it! They need to explain to their Democratic colleagues and those that they represent, why they are resistant to making corporations pay their fair share, and are willing to allow the working class Americans to pay the way of these corporations and their hoarding of cash and stock buybacks amongst other issues!
It’s all tied together, the mute response of corporations concerning the right to vote, or, human rights and dignity, are directly related to the Republican corporate welfare program that they passed a couple of years back. And, they are beholden to those Republicans, hence Mitch McConnell reminding them of that fact. Will there be enough of a public uproar to override a tsunami? In 2006 it was, but the dynamics were much different back then when corporations spoke up and spoke out for fairness in voting rights, and the right of all citizens to be treated with dignity and not have their human rights trampled on!
Really,
Corrupt organizations are running rampant in today’s society!
There are plenty of corrupt con artists in the world, but their ability to affect sea changes in society is nil.
Corrupt organizations, i.e. certain religious institutions deceive billions of individuals on the nature of God, or the trustworthiness of Scripture itself.
Corporate greed allows manufacturers to pollute the environment with impunity! As they have no conscience because they are not people, they are a cabal of grifters at the top, they have no compassion or empathy for those who they depend on for profits or the environment that they are destroying.
Then you have the Governmental enablers that continue to pass laws or repeal laws on equality for all civil society. To slowly bring back laws that treat large swaths of the citizenry unfairly, to refuse to pass laws to even make lynching of some of those citizens illegal! To keep people poor and scraping for healthcare and education and housing and food, and all of this is supposed to be okay?
None of this is okay!
To change this current narrative that’s been going on in this country for centuries and in the world for millennia, you would have to have a world changing collective movement to bring about fairness and equity, for human dignity, for compassion and empathy. But none of the above-mentioned organizations really have shown the desire for that to happen, because it cuts into their control and authority over those they claim to be concerned about or that they represent!
As John stated; those corporations would “greatly benefit” from President Biden’s Infrastructure Bill but don’t want to pay for it by paying their fair share of taxes…rather like churches. I suppose to some CEOs; their corporations ARE their religion. They consider they have already paid for the infrastructure via Citizens United when they bought the loyalty of those politicians. Now McConnell wants corporations to stay out of politics but continue sending them unlimited amounts of money. McConnell and the Trump Republicans want to maintain the status quo while living off of the sweat and tax rates paid by the indentured American workers who can no longer afford to support them in the style to which they have become accustomed.
Ever since President Lincoln and the Republicans introduced the income tax legislators have earned their keep by selling provisions of the tax code by the word in exchange for contributions to their election campaigns.
According to the Tax Foundation, “In 1980, corporate tax rates worldwide averaged 40.11 percent, and 46.52 percent when weighted by GDP. Since then, countries have recognized the impact that high corporate tax rates have on business investment decisions so that in 2020, the average is now 23.85 percent, and 25.85 when weighted by GDP, for 177 separate tax jurisdictions.”
So, while our infrastructure degrades to its current level of a C-, corporations have been paying less in taxes. While we’ve raged wars in multiple countries, corporations have enjoyed declining tax rates.
What’s fascinating is they’ve also enjoyed corporate personhood and have reaped the rewards of privatizing governments and resources across the globe, which has taken place since the 80s.
Also, what the article won’t discuss, and most Americans don’t understand our Central Bank’s use to prop up corporations with free money. In March 2020, the Fed was pumping trillions a day into the stock markets to benefit corporations and their owners. The press won’t explain to you how the Oligarchs managed to increase their wealth during a global pandemic, or else the citizens may revolt.
Meanwhile, they want US workers (mainly those suffering from unemployment or underemployment) to be grateful for the few thousand they’ve sent you during the pandemic.
I’m not sure, but when the government directly subsidizes corporations and banks, it feels a little bit like socialism. Remember, corporations are people, too, in the words of Antonin Scalia.
It’s an upward shift (redistribution) in wealth and income from the working classes to corporations and their owners. Our society is working in reverse of how it’s supposed to due to the dynamics of unfettered capitalism and socialism for the bourgeoisie.
If you listen closely, the defenders of the oligarchy (both political parties), they all clamor about the affordability of a Green New Deal, Free College, Paying off Student Loans, etc… At the same time, they ignore the massive upward shift of wealth and income and theft from the treasury.
At least the notion of raising taxes gives us a break from Republican outrage over gender neutral potato heads and deletions from the massive Dr. Seuss library.
Amen, to that JoAnn!
As Christ said, Caesar’s things to Caesar, IE taxes……
The Sadducees and Pharisees of the Sanhedrin didn’t like that idea, and, that made it easier for them to have him executed.
I don’t know why any government would think it’s okay for religious organizations to live tax free considering most don’t treat civil society fairly. And, they tend to try and impose religious dogma into civil society which is even more diverse than the religious organizations of this planet.
Todd,
The bourgeois? No doubt about it! I love your comment today!
This has to be a “D” moment for the duped voter who thinks Republicans favor their interests. They do not. Republicans are only about corporate money that goes into their reelection campaigns. Full stop.
Joe Manchin needs to just out himself as a Republican. His pathetic “compromise” of 25% tax rate is laughable. Where did he get that number? Will he vote for the Infrastructure bill? Does he not realize that West Virginia will benefit hugely from it? BTW, the top tax rate during WW II and into Eisenhower’s administration was over 75%. That is when the middle class became the driver of our economy. Now, as others have stated, the tax burden has shifted from the people with the most money to those with much less. The poor don’t pay any taxes because, well, they don’t have any money. No wonder our politicians ignore them so easily.
Warren’s 1% wealth tax is a fart in a windstorm, but it will pay for so much… like teacher salaries. Eliminating ALL corporate tax loopholes will pay for the infrastructure bill AND the COVID relief bill before Biden leaves office.
Why on God’s green earth do people still think Republicans will best serve the nation. They do not. What Republicans do is enable those who seek to fulfill Marx’s prophecies of destroyed capitalism. How’s that for a marketing strategy?
The stated rate is not what corporations actually pay after loopholes kick in. Check this out:
https://www.washingtonpost.com/business/2019/12/16/corporations-paid-percent-tax-rate-last-year-steep-drop-under-president-trumps-law/
The worst loopholes are for those hardworking businesses who do nothing but play with money: private equity, hedge funds, real estate developers (hello Former).
this is a subject that i’ve followed since reagan,and why,the union,organized labor took a hit. wages,and the working class support your main street,and local needs. the overall crap that the republicans have sold everyone on tax cuts, really,for the working class,wouldn’t mean diddly. but look at who else and why..my needs came from my skin color and it’s rewards while i’ve watched every generation of color since i was born be regulated to the bottom while many,especially investors demanded a congress to pad their asses..that’s why ALEC,and the koch think tanks exist. the running for the republicans ticket demands their loyalty to nothing else. the Besssemer vote will tally the propaganda market for the next decade,and how,the city of birmingham itself ran with amazon to interfere with the voting and small,scale social media lies.
if bessemer wins,it will show how far the black population can help take back more control in labor,and finally show the less fortunate what a labor move can do.. even mcconnell is sweating nickels for his thugs.. the only bitch i have with the infrastructure bill is,
telecom,and broadband,don’t allow it to get a nickel,they had 20,years to invest in it,and they gave it all away to the investors and its own need to invest outside this country, its publically traded,get the investor to upgrade,by law.. the states have held a monopoly in the targeting and bidding of towers and areas, guess who gets the area,and for what? the highest bidder which means rural areas will never get covered unless its demanded by goverment. how many people died here in NoDak because we couldn’t call into 911 to get help during the oil boom,,our NPR here doesn’t even know,,,or do they care. not much for a free press in NoDak..
This unwillingness to tax the extremely wealthy people and corporations supports the idea that power corrupts. It is also the outcome of those who believe in Ayn Rand’s philosphy of objectivism.
Yes, Joe Manchin sounds more like a Republican to me.
Anton Scalia, in my opinion, has undermined our democracy and contributed to the deficit of the federal budget with his opinion that corporations are people. And while Republicans regard those on welfare and food stamps with a jaded eye, they refuse to see how their policies create corporate welfare while holding the poor with disdain.
The court has also said money is free speech. So if money is free speech, then giving people water and food who are standing in line at a voting poll should also be free speech.
I wonder if the next generations will have marches like we did in the 60’s over the inequity of wealth, the cost of going to college, global warming etc. I hope that leaders rise up from their generations who will be empowered to change the political and economic landscape of this country. I hope they make the corporate plutocracy fall to their knees.
Robin – indeed the young are marching in the surf and bars (re the “me v/s we”) – didn’t you see them in Miami at Spring Break? Dream on….
An old saw says, “You can’t take it with you.” A more recent wag has added, “But how you got it may determine where you go.”
The corporate tax rate, which under Eisenhower was 92% and is now since the Trump-Ryan atrocity 21%, is a Trojan Horse for the rich and corporate class to employ to keep the hoi polloi’s eyes focussed on the wrong issue. The rate is immaterial when you don’t pay anything or very little due to congressionally defined (with the help of lobbying tax lawyers) credits and deductions, which is where the real goodies are that gave us, for instance, a Boeing profit of a few years ago of 11 billion dollars and zero tax liability (upon which I wrote at the time > When does the revolution begin? It didn’t, as we have had our collective attention diverted by stories about sex deviants, insurrection, socialist Democrats etc. The Hamptons and Koch Industries have done a masterful job in keeping the lid on any meaningful changes in the internal revenue and bankruptcy codes with their relatively inexpensive “campaign contributions” aka bribes.
There are some stirrings of revolt. Biden talks of anyone who makes a profit’s liability to pay a yet undetermined tax irrespective of deductions and credits, Yellen talks of an international agreement among countries who have been playing the tax games in support of multinational corporate searches for cheap labor, “home offices,” and low tax rates (see Apple/Ireland), and three Democratic senators have just filed a bill that will, among other things, tax American multinational corporations on overseas profits – all salutary, but I fear, inadequate to meet our need for revenues to fund Biden’s bold initiatives and stop the Keynesian flow into our deficit.
Even with such faint stirrings of change in the internal revenue code, I see them as superficial and a bone thrown to the hoi polloi to keep us out of the streets. What is desperately needed if we are to join the 21st century is a wholesale redo of the internal revenue code and its current giveaway provisions to the rich and corporate class (ditto as to the bankruptcy code). When? Yesterday.
None of these problems are fixable as long as the law allows corporation/PACs to purchase the services of a Representative or Senator for a specific price and then demand the distortion of tax law in favor of the purchaser. Indeed, this is the basic premise of Republicanism. Citizens United was the death knell of democracy and will remain so as long as it is in force. I grow weary of Todd’s overuse of the term “oligarchy,” yet he is not wrong in his assumption that money rules America. Now that shame has been removed as a consideration for politicians and a party, that governance will continue.
Innovation grows the economy and has been very successful at it in the last decade and longer. How that “pot” is distributed among all of the stakeholders in the economy is a political decision. That’s why the wealthier any stakeholder becomes the more they invest in political influencing.
Republicans take enough of that influencing money to want to treat the country like it was a failing company to the workers who depend on it. Republicans say “I hate doing this but you all have to take a pay cut in order to keep your jobs and work much harder and for longer”. “Meanwhile, we have to pay the executives more to become smarter to figure out how to maneuver around this obstacle.”
Democrats still believe that they work for the majority, which is the class that all of the workers are in, not the minority which includes all of the executives. Republicans depend on Fox News and the like who are over the air tabloids broadcasting Republican advertising instead of the truth whole and nothing but.
Republicans, like the slaveholders of the past, look for ways to defeat democracy and therefore the majority, in order to empower the minority of big donors.
It’s not complicated. The drastic action myth has to be defeated before the country does actually go out of business. We have to make bold moves now because the minority has been successful since and before McConnell joined the Senate and we have much catching up with the rest of the world to do.
Piketty noted that those who are rich obtain better rates of return on their investments than those who are not. Thus Podunk State College with 100 grand to invest cannot obtain a rate of return with 100 grand to invest greater than, for instance, a Harvard Endowment Fund with a billion to invest, nor can a Harvard Endowment investment of a mere billion dollars enjoy a rate of return greater than a superrich investor with 20 billion to invest – and so on.
Piketty thought that the superrich with profits via both production and return on investment should reinvest such profits back into the economy from which they arose in the form of ending wage inequality and agreement to higher taxes, and while Piketty did not write this, I have often wondered if the profits of the superrich sent to Swiss banks does not end up elsewhere via bonding and other esoteric means in, for instance, financing China’s market economy and modernizing its infrastructure etc., and if so, how that is possible unless we will have reached the ultimate in a profit-driven world, i. e., capitalism’s greed for profits in backdoor financing of socialism’s future success, an arrangement Marx would never believe could happen.
Possible? What isn’t in these days of moving billions of dollars across territorial lines with the flick of a computer button in search of a buck?
Vernon, so do you want Mitch McConnell to be majority leader and for the GOP to run the Senate?That’s what happens if Joe Manchin becomes a Republican.
Trump won West Virginia by 42 points in 2016 and 39 points in 2020. In between those election, Machin won WV by 3 points. He’s probably the only Democrat in WV who could win a statewide election.
Manchin isn’t going to be with the more liberal Democrats on a lot of issues, but there are numerous issues in which he votes with the other Democrats. Would you rather have a Republican Senator from West Virginia who NEVER votes with the Democrats? Because that is your choice – Manchin or a Republican.
Every night, Democrats should thank God for Joe Manchin and pray for his good health. And while down there, it wouldn’t hurt to say a similar prayer for Democratic Senator Jon Tester of Montana, another state Trump won easily in 2016 and 2020.
Paul Ogden – big kudos for bringing (God forbid) reality into the world of “our way or the highway”.
Paul,
No. I just think Manchin is gumming up the works that need implementing. If WV is so damned red, how did they put him in the Senate, you ask? Maybe is votes with the Democrats are just window dressing so he can keep getting elected.
My solution, since you offer none, is to ignore Manchin and work toward getting Democrats in the Senate in Wisconsin, Texas, Maine and Ohio. That should end the speculation.
Gerald – the 92% rate was the marginal rate for individuals – the corporate tax rate was 52% under Ike, and after a little lowering, was pushed up to 53% under LBJ in 1968 (the all time high). It has been ticking down ever since with the biggest drops under Reagan and Trump.
But as Sheila is pointing out, it isn’t the rates, its the provisions that allow rich corporations (like rich individuals) to pay nothing while reaping huge profits.