Amazon, Delta Air Lines, Chevron, IBM, General Motors, Molson Coors, Eli Lilly. What do these companies have in common? They paid no US federal taxes last year.
Thanks to President Trump’s 2017 tax law, the number of Fortune 500 companies that pay no federal taxes roughly doubled to 60, according to an analysis by the Institute on Taxation and Economic Policy, a research group. Some of those companies effectively paid negative taxes, because they received a refund.
The number of companies paying no taxes has risen for two main reasons. First, the revised tax law expanded some corporate tax breaks, such as the one for the purchase of machinery and vehicles. Second, the law reduced the top-line corporate tax rate, which means that some companies now have a small enough tax bill that they can wipe it out entirely with tax breaks.
Altogether, the law led to a 31 percent decline in corporate-tax revenue last year. That decline has helped cause an increase in the deficit passing the cost to future generations.
Even before the law change, American companies weren’t paying very much in taxes.
“At a time when the public’s confidence in elected officials and institutions is especially low, the specter of big corporations avoiding all taxes on billions in profits sends a strong and corrosive signal that the tax system is stacked against them, in favor of corporations and the wealthiest Americans,” writes Matthew Gardner, the lead author of the Institute on Taxation report.
Where’s the sense in that?
Source: New York Times, Institute on Taxation and Economic Policy
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