Dozens of profitable U.S. companies haven’t had federal tax spending since Trump’s rate cut


More than two dozen large American companies have made a total of $ 77 billion in domestic benefits in the past three years without any expectation of having to pay immediate federal taxes on their bounty. In fact, they haven’t spent a single dollar on current federal taxes since Donald Trump pushed for a massive tax cut for corporations in the first year of his presidency, according to a new study.

Many of those same companies had together paid billions of dollars in annual taxes before Trump’s presidency.

For example, Salesforce.com has made $ 4.2 billion in the last three years before taxes. But since 2018, the software company has not set aside money to pay federal taxes, according to its filings with securities regulators. In fact, Salesforce posted $ 4 million in tax credits since 2018. In the three years before Trump’s tax cut, Salesforce earned much less but spent much more in taxes: $ 35 million on $ 500 million in profit.

A Salesforce spokesperson did not respond to a question from CBS MoneyWatch about how much the company has paid in taxes.

The study, from the liberal-leaning Institute for Tax and Economic Policy, comes as the national debate intensifies over whether corporations pay their fair share in taxes. This week, President Joe Biden said he hopes to significantly raise taxes on corporations to help pay for a $ 2 trillion plan to upgrade the nation’s infrastructure, which could cost the federal government billions of dollars.

On Friday, Biden said his infrastructure proposal it is a “one-time investment in a generation in the future, paid for by asking large corporations, many of which do not pay taxes, to pay their fair share.”


Biden Details $ 2 Trillion Infrastructure Plan …

02:11

Earlier this week, Biden outlined a plan increase what American businesses pay in federal taxes by $ 2 trillion over the next decade. It includes imposing a minimum corporate tax rate of 15% based on the income that companies report to investors.

How much in corporate taxes under the Biden plan?

Had Biden’s plan been in place, the 26 profitable companies highlighted in the ITEP study together would have paid at least $ 11.6 billion in federal taxes since 2018, instead of the nearly $ 5 billion in tax credits they collected. during that time.

“There is already a suspicion that large corporations are not paying their fair share,” said Matthew Gardner, ITEP principal investigator and one of the study’s authors. “A finding like this will support that point of view.”

While it is clear that companies are paying significantly less than they did before Trump’s tax cuts, it is less certain how much less a given company is contributing in taxes. The reason: Businesses, like individuals, can keep their tax returns and payments private.

However, public companies that report their earnings to investors must also provide in their financial statements a rough estimate of how much they might have to pay in taxes over the next 12 months and any tax expenses they may face in the future. They are also required to spell out to whom those taxes are likely to be paid, such as the federal government, a state, or foreign governments.

The ITEP study focused on the current amount of federal income tax that companies listed on the S&P 500 stock index spent in the past three years. Accounting experts have traditionally said that the figure offers a pretty good estimate of what companies may have paid in federal taxes. Less helpfully, the provisions of the 2017 tax cut law have made that figure less reliable.

For example, ITEP identified FedEx as a company that has not paid federal taxes in the last three years. The The delivery giant has previously disputed that claim, saying he pays annual federal income taxes while refusing to disclose how much. FedEx financial statements show that its cash accounts, another way of measuring corporate profits, fell by $ 400 million due to tax payments over the past three years.

Enviously low tax rates

Still, what many American businesses pay in taxes could provoke envy among individual taxpayers. A recent financial filing indicated that Zoom, whose revenue and earnings have increased over the coronavirus pandemic, I had no federal tax expenses for 2020 despite the record profits of the video conferencing company.

According to a CBS MoneyWatch analysis of FactSet data, the median effective corporate tax rate for companies on the S&P 500 last year was just 18%, up from 23% in 2017. In particular, that’s for all taxes. paid. Look only at federal income taxes and the effective rates for those businesses are likely to be much lower.

Duke Energy, for example, had US pre-tax earnings of nearly $ 8 billion over the past three years. Duke not only paid zero federal taxes during that time, but also posted a federal income tax credit of just over $ 1.2 billion, according to ITEP.

In response to the study, Duke Energy told the New York Times that investments in renewable energy have allowed it to delay, but not eliminate, its federal tax obligations. The company’s most recent annual financial filing recorded a liability of $ 9 billion for future federal tax payments.

Other major companies that ITEP investigators say have not paid federal taxes in recent years despite making big profits include Internet and television provider Dish Network and sporting goods company Nike.

On Friday, in response to the study, Vermont Senator Bernie Sanders tweeted that a $ 120 pair of Nike Air Force 1 shoes would cost him more than the company paid in taxes over the past three years.

A Nike spokesperson did not respond to a request for comment.

ITEP also identified 55 companies that made money in the past, but did not appear to have paid any money in federal taxes on those earnings. For example, the study said cable company Charter Communications made $ 3.6 billion during the pandemic, but posted a tax credit last year of $ 7 million.

Charter Communications did not respond to a request for comment.

.

Source link