55 firms paid no federal taxes in 2020

If you are one of those Americans who doesn’t like to pay federal taxes, here’s some disturbing news. Fifty-five of the United States largest corporations paid no federal income tax on more than $40 billion in profits in 2020.

The figures were compiled by the Institute on Taxation and Economic policy, a progressive think tank.

“Their total corporate tax breaks for last year, including $8.5 billion in tax avoidance and $3.5 billion in rebates, comes to $12 billion,” according to the study’s authors, Matthew Gardner and Steve Wamhoff.

They reported that the findings also underscore the favorable tax environment for big businesses in the wake of the 2017 Trump tax cuts.

Twenty-six corporations have paid no federal income taxes since 2017, including such household names as Nike, FedEx and Dish Network.

Combined, the 26 companies have booked more than $77 billion in profits since 2018, while receiving nearly $5 billion in rebates, for an effective three-year tax rate of negative 6 percent.

“By all appearances, the companies described in this report appear to be using entirely legal means to reduce their tax bills,” lead author Gardner said via email.

But that doesn’t mean the companies are “blameless.”

“Many of the tax provisions these companies are using exist because they themselves have lobbied heavily for their creation,” he said.

President Joe Biden has called for a higher corporate tax rate to fund his package of infrastructure investments, as well as higher minimum tax on income earned by American companies overseas. He told reporters that “we are asking corporate America to pay their fair share.”

The provisions include tax breaks for stock options given to chief executives as part of their pay packages, credit for research and experimentation and writeoffs for renewable energy and capital investments and the R&D, Gardner said.

The 2017 Tax Cuts and Jobs Act’s dramatic cut to the corporate income tax rate, from 35 to 21 percent, also plays a role in the limited tax liabilities facing many major corporations.

But Gardner says the generous carve-out, not the base-line itself, is driving much of the phenomenon.

President Biden has called for a higher corporate tax rate to fund his package of infrastructure investments, as well as a higher minimum tax on income earned by American companies overseas.

“We all want to see businesses investing more in the US, whether it’s creating productive capacity or just creating jobs,” Gardner said.