As the Biden administration seeks to raise taxes on corporations, a new study finds that at least 55 of America’s largest corporations failed to pay billions of dollars in profits last year.
The tax bill passed by the Republican Congress in 2017, signed by President Donald Trump, reduced the corporate tax rate from 21% to 35%. However, according to the analysis, dozens of Fortune 500 companies were able to further reduce their tax bill, sometimes to zero, a number of legal exemptions, which became the main part of the tax code.
Salesforce, Archer-Daniels-Midland and Consolidated Edison were mentioned in a report by the Washington-based left-wing research group Taxation and Economic Policy Institute.
Twenty-six of these companies, including FedEx, Duke Energy և Nike, have been able to avoid paying federal income tax for the past three years, even though they reported $ 77 billion in total revenue. Many also received millions of dollars in tax breaks.
Company tax returns are private, but corporations are required to file financial statements that include federal income tax expense. The institute used this data, as well as other information provided by each company on its pre-tax revenues.
Catherine Butler, Duke Energy spokeswoman, said in an email that the company was “fully compliant with federal tax laws as part of our investment efforts to help our customers և communities.”
He noted that the depreciation of bonuses aimed at boosting investment in renewable energy has “caused Duke’s cash tax liabilities to be deferred for future periods, but that does not eliminate them.” According to 2020 According to the latest figures, Duke has a deferred federal tax balance of $ 9 billion to be paid in the future.
DTE Energy, a Detroit-based utility that was also found to have failed to pay federal taxes for three years, said last year was largely due to large investments in new wind technology to modernize aging infrastructure. “Utilization of these federal tax savings for utilities is passed on to utility customers in the form of lower utility bills,” the statement said.
The provision of the 2017 tax bill allowed businesses to immediately write off the price of any new equipment և cars.
The $ 2.2 trillion Coronavirus Aid Act, passed last year to help businesses տնտեսական families survive the economic devastation of the coronavirus, contains a provision that temporarily allows businesses to use 2020 losses to offset gains made in previous years.
DTE used the provision to get an expedited loan repayment, which represents $ 220 million in alternative minimum taxes previously paid.
FedEx also used the provisions of the bailout act, using losses in 2020 to reduce tax bills compared to previous years, when the tax rate was higher.
The report is the latest food to be discussed in the review of the tax code. Policy makers, business leaders և tax experts claim that there are many deductions և loans for a good reason. Promote research and development, stimulate expansion և smooth the business cycle. is calculated for one year.
“The fact that many companies do not pay taxes says that there are many provisions and preferences,” said Alan D. Wiard, a resident scientist at the American Institute of Conservative Research Group. “It does not tell you whether they are good or bad or indifferent. At most, it is a starting point, of course, it is not an end. “
He noted that the Biden administration itself has supported tax credits for green energy investments.
The Institute for Taxation and Economic Policy has been reporting on corporate taxes for decades. During the 2020 presidential campaign, its results took center stage, with Democratic candidates arguing that the tax code was deeply flawed.
Tax avoidance strategies include a mix of old standards and new innovations. Companies, for example, have saved billions by allowing top executives to buy discounted stock options in the future and then deduct the loss as a loss.
The Biden administration recently announced plans to raise the corporate tax rate to 28%, setting a kind of minimum tax that would limit the number of zero payers. The White House estimates that the revisions will raise $ 2 trillion over 15 years to fund the president’s ambitious infrastructure program.
Proponents say that in addition to profitability, the rewrite will help make the tax code fairer by demanding that individuals and companies at the top of the income scale pay more. But Republicans have warned that taxes on Biden’s proposal, which Senate Minority Leader Sen. Mitch McConnell called “massive,” will exclude bipartisan support.
Matt Gardner, a senior fellow at the Tax Institute, commented on the proposed reviews. “If I were to make a list of things I would like to do with corporate tax reform, this outline addresses all of these issues.”
Withdrawals and exemptions will not disappear, but other changes such as the minimum tax will reduce their value, he said.